HB 1337 2003
1	CHAMBER ACTION
2
3
4
5
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. 20.055, 103.091, 110.1127, 112.215, 215.555,
25	215.559, 287.059, 288.901, 391.221, 401.245, 408.05,
26	408.7056, 440.13, 440.20, 440.24, 440.38, 440.381,
27	440.385, 440.386, 440.44, 440.52, 440.525, 553.74,.624.05,
28	624.155, 624.303, 624.316, 624.317, 624.404, 624.4072,
29	624.413, 624.424, 624.476, 624.477, 625.01115, 625.121,
30	625.151, 625.317, 625.325, and 626.015, F.S., to revise
31	and conform; amending s. 20.121, F.S., to revise and
32	conform; authorizing the Division of Consumer Services to
33	request certain information; providing procedures and
34	requirements for providing such information; authorizing
35	the division to impose administrative penalties; requiring
36	the division to report certain violations; authorizing the
37	Department 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, 626.9545, 626.9551, 626.9561,
62	626.9571, 626.9581, 626.9591, 626.9601, 626.9611,
63	626.9621, 626.9631, 626.9641, 626.9651, 626.989, 626.9892,
64	626.99, 626.9911, 626.9912, 626.9913, 626.9914, 626.9915,
65	626.9916, 626.9919, 626.9921, 626.9922, 626.99235,
66	626.99245, 626.9925, 626.9926, 626.9927, 626.99272,
67	626.99285, 626.99295, 627.0628, 627.0629, 627.311,
68	627.3111, 627.351, 627.3511, 627.3513, 627.3515, 627.357,
69	627.4236, 627.6488, 627.6699, 627.7015, 628.4615, 628.917,
70	631.021, 631.025, 631.031, 631.051, 631.081, 631.152,
71	631.221, 631.231, 631.361, 631.371, 631.391, 631.392,
72	631.398, 631.54, 631.55, 631.56, 631.57, 631.59, 631.60,
73	631.62, 631.66, 631.714, 631.72, 631.722, 631.723,
74	631.727, 631.813, 631.814, 631.821, 631.823, 631.825,
75	631.904, 631.911, 631.912, 631. 917, 631.918, 631.931,
76	634.3284, 634.430, 634.433, 636.067, 641.183, 641.185,
77	641.19, 641.2017, 641.2018, 641.21, 641.215, 641.22,
78	641.225, 641.227, 641.228, 641.23, 641.234, 641.2342,
79	641.25, 641.255, 641.26, 641.27, 641.28, 641.281, 641.284,
80	641.285, 641.29, 641.3007, 641.305, 641.31, 641.3105,
81	641.31071, 641.31074, 641.315, 641.3154, 641.3155,
82	641.316, 641.35, 641.35, 641.36, 641.365, 641.385,
83	641.39001, 641.3903, 641.3905, 641.3907, 641.3909,
84	641.3911, 641.3913, 641.3917, 641.3922, 641.402, 641.403,
85	641.,405, 641.406, 641.4065, 641.407, 641.409, 641.41,
86	641.412, 641.418, 641.42, 641.421, 641.424, 641.437,
87	641.443, 641.444, 641.445, 641.446, 641.447, 641.448,
88	641.45, 641.452, 641.453, 641.454, 641.455, 641.457,
89	641.48, 641.49, 641.495, 641.511, 641.511, 641.512,
90	641.52, 641.54, 641.55, 641.58, 642.0475, 651.119, 252.62,
91	288.778, 288.99, 289.051, 289.081, 289.121, 420.101,
92	494.00125, 494.00421 517.021, 517.03, 517.051, 517.061,
93	517.07, 517.075, 517.081, 517.082, 517.101, 517.111,
94	517.12, 517.1201, 517.1203, 517.1204, 517.121, 517.131,
95	517.141, 517.151, 517.161, 517.181, 517.191, 517.201,
96	517.2015, 517.221, 517.241, 517.301, 517.302 517.313,
97	517.315, 517.32, 520.996, 520.9965, 537.008, 537.009,
98	537.011, 537.013, 537.016, 537.017, 559.725, 560.128,
99	560.129, 560.404, 609.05, and 655.012, F.S., to revise and
100	conform; protecting the validity of certain administrative
101	and judicial actions; providing for substitution of
102	parties; providing for continuation and effect of certain
103	certificates of authority, forms, licenses, rates,
104	filings, and actions; transferring and renumbering s.
105	627.3111, F.S., as 624.23, F.S.; repealing s. 624.305,
106	F.S., relating to prohibited interests; providing for
107	controlling effect; providing an effective date.
108
109	Be It Enacted by the Legislature of the State of Florida:
110	Section 1. Subsection (1) of section 20.055, Florida
111	Statutes, is amended to read:
112	20.055 Agency inspectors general.--
113	(1) For the purposes of this section:
114	(a) "State agency" means each department created pursuant
115	to this chapter, and also includes the Executive Office of the
116	Governor, the Department of Military Affairs, the Board of
117	Regents, the Fish and Wildlife Conservation Commission, the
118	Public Service Commission, the Office of Insurance Regulation of
119	the Financial Services Commission, the Office of Financial
120	Institutions and Securities Regulation of the Financial Services
121	Commission,and the state courts system.
122	(b) "Agency head" means the Governor, a Cabinet officer, a
123	secretary as defined in s. 20.03(5), or an executive director as
124	defined in s. 20.03(6). It also includes the chair of the Public
125	Service Commission, the Director of the Office of Insurance
126	Regulation of the Financial Services Commission, the Director of
127	the Office of Financial Institutions and Securities Regulation
128	of the Financial Services Commission,and the Chief Justice of
129	the State Supreme Court.
130	Section 2. Section 20.121, Florida Statutes, is amended to
131	read:
132	20.121 Department of Financial Services.--There is created
133	a Department of Financial Services.
134	(1) DEPARTMENT HEAD.--The head of the Department of
135	Financial Services is the Chief Financial Officer.
136	(2) DIVISIONS.--The Department of Financial Services shall
137	consist of the following divisions:
138	(a) The Division of Accounting and Auditing, which shall
139	include the following bureau and office:
140	1. The Bureau of Unclaimed Property.
141	2. The Office of Fiscal Integrity which shall function as
142	a criminal justice agency for purposes of ss. 943.045-943.08 and
143	shall have a separate budget. The office may conduct
144	investigations within or outside this state as the bureau deems
145	necessary to aid in the enforcement of this section. If during
146	an investigation the office has reason to believe that any
147	criminal law of this state has or may have been violated, the
148	office shall refer any records tending to show such violation to
149	state or federal law enforcement or prosecutorial agencies and
150	shall provide investigative assistance to those agencies as
151	required.
152	(b) The Division of State Fire Marshal.
153	(c) The Division of Risk Management.
154	(d) The Division of Treasury, which shall include a Bureau
155	of Deferred Compensation responsible for administering the
156	Government Employees Deferred Compensation Plan established
157	under s. 112.215 for state employees.
158	(e) The Division of Insurance Fraud.
159	(f) The Division of Rehabilitation and Liquidation.
160	(g) The Division of Insurance Agents and Agency Services.
161	(h) The Division of Consumer Services, which shall include
162	a Bureau of Funeral and Cemetery Services.
163	1. The Division of Consumer Services shall perform the
164	following functions concerning products or services regulated by
165	the Department of Financial Services or by either office of the
166	Financial Services Commission:
167	a. Receive inquiries and complaints from consumers;
168	b. Prepare and disseminate such information as the
169	department deems appropriate to inform or assist consumers;
170	c. Provide direct assistance and advocacy for consumers
171	who request such assistance or advocacy;
172	d. With respect to apparent or potential violations of law
173	or applicable rules by a person or entity licensed by the
174	department or by either office of the commission, report such
175	apparent or potential violation to the appropriate division of
176	the department or office of the commission, which may take such
177	further action as it deems appropriate.
178	2. Any person licensed or issued a certificate of
179	authority by the department or by the Office of Insurance
180	Regulation shall respond, in writing, to the Division of
181	Consumer Services within 20 days after receipt of a written
182	request for information from the division concerning a consumer
183	complaint. The response must address the issues and allegations
184	raised in the complaint. The division may, in its discretion,
185	impose an administrative penalty for failure to comply with this
186	subparagraph in an amount up to $2,500 per violation upon any
187	entity licensed by the department or the Office of Insurance
188	Regulation and $250 for the first violation, $500 for the second
189	violation, and up $1,000 per violation thereafter upon any
190	individual licensed by the department or the Office of Insurance
191	Regulation.
192	3. The department may adopt rules to implement the
193	provisions of this paragraph.
194	4. The powers, duties, and responsibilities expressed or
195	granted in this paragraph shall not limit the powers, duties,
196	and responsibilities of the Department of Financial Services,
197	the Financial Services Commission, the Office of the Insurance
198	Regulation, or the Office of Financial Institutions and
199	Securities Regulation as provided by law.
200	(i) The Division of Workers' Compensation.
201	(j) The Division of Administration.
202	(k) The Division of Legal Services.
203	(l) The Division of Information Systems.
204	(m) The Office of Insurance Consumer Advocate.
205	(3) FINANCIAL SERVICES COMMISSION.--Effective January 7,
206	2003, there is created within the Department of Financial
207	Services the Financial Services Commission, composed of the
208	Governor, the Attorney General, the Chief Financial Officer, and
209	the Commissioner of Agriculture, which shall for purposes of
210	this section be referred to as the commission. Commission
211	members shall serve as agency head of the Financial Services
212	Commission. The commission shall be a separate budget entity
213	and shall be exempt from the provisions of s. 20.052. Commission
214	action shall be by majority vote consisting of at least three
215	affirmative votes. The commission shall not be subject to
216	control, supervision, or direction by the Department of
217	Financial Services in any manner, including purchasing,
218	transactions involving real or personal property, personnel, or
219	budgetary matters.
220	(a) Structure.--The major structural unit of the
221	commission is the office. Each office shall be headed by a
222	director. The following offices are established:
223	1. The Office of Insurance Regulation, which shall be
224	responsible for all activities concerning insurers and other
225	risk bearing entities, including licensing, rates, policy forms,
226	market conduct, claims, adjusters, issuance of certificates of
227	authority, solvency, viatical settlements, premium financing,
228	and administrative supervision, as provided under the insurance
229	code or chapter 636. The head of the Office of Insurance
230	Regulation is the Director of the Office of Insurance
231	Regulation.
232	2. The Office of Financial Institutions and Securities
233	Regulation, also to be known as the Office of Financial
234	Regulation,which shall be responsible for all activities of the
235	Financial Services Commission relating to the regulation of
236	banks, credit unions, other financial institutions, finance
237	companies, and the securities industry. The head of the office
238	is the Director of the Office of Financial Institutions and
239	Securities Regulation. The Office of Financial Institutions and
240	Securities Regulation shall include a Bureau of Financial
241	Investigations, which shall function as a criminal justice
242	agency for purposes of ss. 943.045-943.08 and shall have a
243	separate budget. The bureau may conduct investigations within
244	or outside this state as the bureau deems necessary to aid in
245	the enforcement of this section. If, during an investigation,
246	the office has reason to believe that any criminal law of this
247	state has or may have been violated, the office shall refer any
248	records tending to show such violation to state or federal law
249	enforcement or prosecutorial agencies and shall provide
250	investigative assistance to those agencies as required.
251	(b) Organization.--The commission shall establish by rule
252	any additional organizational structure of the offices. It is
253	the intent of the Legislature to provide the commission with the
254	flexibility to organize the offices in any manner they determine
255	appropriate to promote both efficiency and accountability.
256	(c) Powers.--Commission members shall serve as the agency
257	head for purposes of rulemaking under ss. 120.536-120.565 by the
258	commission and all subunits of the commission. Each director is
259	agency head for purposes of final agency action under chapter
260	120 for all areas within the regulatory authority delegated to
261	the director's office.
262	(d) Appointment and qualifications of directors.--The
263	commission shall appoint or remove each director by a majority
264	vote consisting of at least three affirmative votes, with both
265	the Governor and the Chief Financial Officer on the prevailing
266	side. The minimum qualifications of the directors are as
267	follows:
268	1. Prior to appointment as director, the Director of the
269	Office of Insurance Regulation must have had, within the
270	previous 10 years, at least 5 years of responsible private
271	sector experience working full time in areas within the scope of
272	the subject matter jurisdiction of the Office of Insurance
273	Regulation or at least 5 years of experience as a senior
274	examiner or other senior employee of a state or federal agency
275	having regulatory responsibility over insurers or insurance
276	agencies.
277	2. Prior to appointment as director, the Director of the
278	Office of Financial Institutions and Securities Regulation must
279	have had, within the previous 10 years, at least 5 years of
280	responsible private sector experience working full time in areas
281	within the subject matter jurisdiction of the Office of
282	Financial Institutions and Securities Regulation or at least 5
283	years of experience as a senior examiner or other senior
284	employee of a state or federal agency having regulatory
285	responsibility over financial institutions, finance companies,
286	or securities companies.
287	(e) Administrative support.--The offices shall have a
288	sufficient number of attorneys, examiners, investigators, other
289	professional personnel to carry out their responsibilities and
290	administrative personnel as determined annually in the
291	appropriations process. The Department of Financial Services
292	shall provide administrative and information systems support to
293	the offices.
294	(f) The commission and the offices may destroy general
295	correspondence files and any other records which they deem no
296	longer necessary to preserve in accordance with retention
297	schedules and destruction notices established under rules of the
298	Division of Library and Information Services, records and
299	information management program, of the Department of State. Such
300	schedules and notices relating to financial records of the
301	commission and offices shall be subject to the approval of the
302	Auditor General.
303	(g) The commission and offices may photograph,
304	microphotograph, or reproduce on film such documents and records
305	as they may select, in such manner that each page will be
306	exposed in exact conformity with the original. After
307	reproduction and filing, original documents and records may be
308	destroyed in accordance with the provisions of paragraph (f).
309	(h) The department, commission, and offices shall share
310	such information as is necessary to the implementation of their
311	respective powers, duties and functions prescribed by law. Any
312	such information made confidential or exempt from disclosure
313	pursuant to law shall not lose its confidential or exempt
314	status.
315	Section 3. Subsection (6) of section 103.091, Florida
316	Statutes, is amended to read:
317	103.091 Political parties.--
318	(6)(a)1.In addition to the members provided for in
319	subsection (1), each county executive committee shall include
320	all members of the Legislature who are residents of the county
321	and members of their respective political party and who shall be
322	known as at-large committeemen and committeewomen.
323	(b)2.Each state executive committee shall include, as at-
324	large committeemen and committeewomen, all members of the United
325	States Congress representing the State of Florida who are
326	members of the political party, all statewide elected officials
327	who are members of the party, and the President of the Senate or
328	the Minority Leader in the Senate, and the Speaker of the House
329	of Representatives or the Minority Leader in the House of
330	Representatives, whichever is a member of the political party,
331	and 20 members of the Legislature who are members of the
332	political party. Ten of the legislators shall be appointed with
333	the concurrence of the state chair of the respective party, as
334	follows: five to be appointed by the President of the Senate;
335	five by the Minority Leader in the Senate; five by the Speaker
336	of the House of Representatives; and five by the Minority Leader
337	in the House.
338	(c)3.When a political party allows any member of the
339	state executive committee to have more than one vote per person,
340	other than by proxy, in a matter coming before the state
341	executive committee, the 20 members of the Legislature appointed
342	under subparagraph 2. shall not be appointed to the state
343	executive committee and the following elected officials who are
344	members of that political party shall be appointed and shall
345	have the following votes:
346	1.a.Governor: a number equal to 15 percent of votes cast
347	by state executive committeemen and committeewomen;
348	2.b.Lieutenant Governor: a number equal to 5 percent of
349	the votes cast by state executive committeemen and
350	committeewomen;
351	3.c.Each member of the United States Senate representing
352	the state: a number equal to 10 percent of the votes cast by
353	state executive committeemen and committeewomen;
354	d. Secretary of State: a number equal to 5 percent of the
355	votes cast by state executive committeemen and committeewomen;
356	4.e.Attorney General: a number equal to 5 percent of the
357	votes cast by state executive committeemen and committeewomen;
358	5.f.Chief Financial OfficerComptroller: a number equal
359	to 5 percent of the votes cast by state executive committeemen
360	and committeewomen;
361	g. Treasurer: a number equal to 5 percent of the votes
362	cast by state executive committeemen and committeewomen;
363	6.h.Commissioner of Agriculture: a number equal to 5
364	percent of the votes cast by state executive committeemen and
365	committeewomen;
366	i. Commissioner of Education: a number equal to 5 percent
367	of the votes cast by state executive committeemen and
368	committeewomen;
369	7.j.President of the Senate: a number equal to 10 percent
370	of the votes cast by state executive committeemen and
371	committeewomen;
372	8.k.Minority leader of the Senate: a number equal to 10
373	percent of the votes cast by state executive committeemen and
374	committeewomen;
375	9.l.Speaker of the House of Representatives: a number
376	equal to 10 percent of the votes cast by state executive
377	committeemen and committeewomen;
378	10.m.Minority leader of the House of Representatives: a
379	number equal to 10 percent of the votes cast by state executive
380	committeemen and committeewomen; and
381	11.n.Each member of the United States House of
382	Representatives representing the state: a number equal to 1
383	percent of the votes cast by state executive committeemen and
384	committeewomen.
385	(d)1.4.a.The governing body of each state executive
386	committee as defined by party rule shall include as at-large
387	committeemen and committeewomen all statewide elected officials
388	who are members of such political party; up to four members of
389	the United States Congress representing the state who are
390	members of such political party and who shall be appointed by
391	the state chair on the basis of geographic representation; the
392	permanent presiding officer selected by the members of each
393	house of the Legislature who are members of such political
394	party; and the minority leader selected by the members of each
395	house of the Legislature who are members of such political
396	party.
397	2.b.All members of the governing body shall have one vote
398	per person.
399	Section 4. Paragraph (a) of subsection (2) of section
400	110.1127, Florida Statutes, is amended to read:
401	110.1127 Employee security checks.--
402	(2)(a) All positions within the Division of Treasury of
403	the Department of Financial ServicesInsuranceare deemed to be
404	positions of special trust or responsibility, and a person may
405	be disqualified for employment in any such position by reason
406	of:
407	1. The conviction or prior conviction of a crime which is
408	reasonably related to the nature of the position sought or held
409	by the individual; or
410	2. The entering of a plea of nolo contendere or, when a
411	jury verdict of guilty is rendered but adjudication of guilt is
412	withheld, with respect to a crime which is reasonably related to
413	the nature of the position sought or held by the individual.
414	Section 5. Subsection (4), paragraph (a) of subsection
415	(6), paragraphs (a), (d), (f), and(h) of subsection (8),
416	paragraph (b) of subsection (10), and subsections (11) and (12)
417	of section 112.215, Florida Statutes, are amended to read:
418	112.215 Government employees; deferred compensation
419	program.--
420	(4)(a) The Chief Financial OfficerTreasurer, with the
421	approval of the State Board of Administration, shall establish
422	such plan or plans of deferred compensation for state employees,
423	including all such investment vehicles or products incident
424	thereto, as may be available through, or offered by, qualified
425	companies or persons, and may approve one or more such plans for
426	implementation by and on behalf of the state and its agencies
427	and employees.
428	(b) If the Chief Financial OfficerTreasurerdeems it
429	advisable, he or she shall have the power, with the approval of
430	the State Board of Administration, to create a trust or other
431	special funds for the segregation of funds or assets resulting
432	from compensation deferred at the request of employees of the
433	state or its agencies and for the administration of such
434	program.
435	(c) The Chief Financial OfficerTreasurer, with the
436	approval of the State Board of Administration, may delegate
437	responsibility for administration of the plan to a person the
438	Chief Financial OfficerTreasurerdetermines to be qualified,
439	compensate such person, and, directly or through such person or
440	pursuant to a collective bargaining agreement, contract with a
441	private corporation or institution to provide such services as
442	may be part of any such plan or as may be deemed necessary or
443	proper by the Chief Financial OfficerTreasureror such person,
444	including, but not limited to, providing consolidated billing,
445	individual and collective recordkeeping and accountings, asset
446	purchase, control, and safekeeping, and direct disbursement of
447	funds to employees or other beneficiaries. The Chief Financial
448	OfficerTreasurermay authorize a person, private corporation,
449	or institution to make direct disbursement of funds under the
450	plan to an employee or other beneficiary only upon the order of
451	the Comptroller to the Treasurer.
452	(d) In accordance with such approved plan, and upon
453	contract or agreement with an eligible employee, deferrals of
454	compensation may be accomplished by payroll deductions made by
455	the appropriate officer or officers of the state, with such
456	funds being thereafter held and administered in accordance with
457	the plan.
458	(6)(a) No deferred compensation plan of the state shall
459	become effective until approved by the State Board of
460	Administration and the Chief Financial OfficerTreasureris
461	satisfied by opinion from such federal agency or agencies as may
462	be deemed necessary that the compensation deferred thereunder
463	and/or the investment products purchased pursuant to the plan
464	will not be included in the employee's taxable income under
465	federal or state law until it is actually received by such
466	employee under the terms of the plan, and that such compensation
467	will nonetheless be deemed compensation at the time of deferral
468	for the purposes of social security coverage, for the purposes
469	of the state retirement system, and for any other retirement,
470	pension, or benefit program established by law.
471	(8)(a) There is herebycreated a Deferred Compensation
472	Advisory Council composed of seven members.
473	1. One member shall be appointed by the Speaker of the
474	House of Representatives and the President of the Senate jointly
475	and shall be an employee of the legislative branch.
476	2. One member shall be appointed by the Chief Justice of
477	the Supreme Court and shall be an employee of the judicial
478	branch.
479	3. One member shall be appointed by the chair of the
480	Public Employees Relations Commission and shall be a nonexempt
481	public employee.
482	4. The remaining four members shall be employed by the
483	executive branch and shall be appointed as follows:
484	a. One member shall be appointed by the Chancellor of the
485	State University System and shall be an employee of the
486	university system.
487	b. One member shall be appointed by the Chief Financial
488	OfficerTreasurer and shall be an employee of the Chief
489	Financial OfficerTreasurer.
490	c. One member shall be appointed by the Governor and shall
491	be an employee of the executive branch.
492	d. One member shall be appointed by the Executive Director
493	of the State Board of AdministrationComptrollerand shall be an
494	employee of the Executive Director of the State Board of
495	AdministrationComptroller.
496	(d) The council shall meet at the call of its chair, at
497	the request of a majority of its membership, or at the request
498	of the Chief Financial OfficerTreasurer, but not less than
499	twice a year. The business of the council shall be presented to
500	the council in the form of an agenda. The agenda shall be set
501	by the Chief Financial OfficerTreasurerand shall include items
502	of business requested by the council members.
503	(f) The council shall make a report of each meeting to the
504	Chief Financial OfficerTreasurer, which shall show the names of
505	the members present and shall include a record of its
506	discussions, recommendations, and actions taken. The Chief
507	Financial OfficerTreasurershall keep the records of the
508	proceedings of each meeting on file and shall make the records
509	available to any interested person or group.
510	(h) The advisory council shall provide assistance and
511	recommendations to the Chief Financial OfficerTreasurer
512	relating to the provisions of the plan, the insurance or
513	investment options to be offered under the plan, and any other
514	contracts or appointments deemed necessary by the council and
515	the Chief Financial OfficerTreasurerto carry out the
516	provisions of this act. The Chief Financial OfficerTreasurer
517	shall inform the council of the manner in which each council
518	recommendation is being addressed. The Chief Financial Officer
519	Treasurershall provide the council, at least annually, a report
520	on the status of the deferred compensation program, including,
521	but not limited to, information on participant enrollment,
522	amount of compensation deferred, total plan assets, product
523	provider performance, and participant satisfaction with the
524	program.
525	(10)
526	(b)1. There is created in the State Treasury the Deferred
527	Compensation Trust Fund, through which the Chief Financial
528	OfficerTreasureras trustee shall hold moneys, pensions,
529	annuities, or other benefits accrued or accruing under and
530	pursuant to 26 U.S.C. s. 457 and the deferred compensation plan
531	provided for therein and adopted by this state; and
532	a. All amounts of compensation deferred thereunder;
533	b. All property and rights purchased with such amounts;
534	and
535	c. All income attributable to such amounts, property, or
536	rights.
537	2. Notwithstanding the mandates of 26 U.S.C. s. 457(b)(6),
538	all of the assets specified in subparagraph 1. shall be held in
539	trust for the exclusive benefit of participants and their
540	beneficiaries as mandated by 26 U.S.C. s. 457(g)(1).
541	(11) With respect to any funds held pursuant to a deferred
542	compensation plan, any plan provider which is a bank or savings
543	association and which provides time deposit accounts and
544	certificates of deposit as an investment product to the plan
545	participants may, with the approval of the State Board of
546	Administration for providers in the state plan, or with the
547	approval of the appropriate official or body designated under
548	subsection (5) for a plan of a county, municipality, other
549	political subdivision, or constitutional county officer, be
550	exempt from the provisions of chapter 280 requiring it to be a
551	qualified public depository, provided:
552	(a) The bank or savings association shall, to the extent
553	that the time deposit accounts or certificates of deposit are
554	not insured by the Federal Deposit Insurance Corporation or the
555	Federal Savings and Loan Insurance Corporation, deposit or issue
556	pledge collateral with the Chief Financial OfficerTreasurerfor
557	all state funds held by it under a deferred compensation plan,
558	or with such other appropriate official for all public funds
559	held by it under a deferred compensation plan of a county,
560	municipality, other political subdivision, or constitutional
561	county officer, in an amount which equals at least 150 percent
562	of all uninsured deferred compensation funds then held.
563	(b) Said collateral shall be of the kind permitted by s.
564	280.13 and shall be pledged in the manner provided for by the
565	applicable provisions of chapter 280.
566
567	The Chief Financial OfficerTreasurershall have all the
568	applicable powers provided in ss. 280.04, 280.05, and 280.08
569	relating to the sale or other disposition of the pledged
570	collateral.
571	(12) The Chief Financial OfficerTreasurermay adopt any
572	rule necessary to administer and implement this act with respect
573	to deferred compensation plans for state employees.
574	Section 6. Paragraph (c) of subsection (2), paragraph (d)
575	of subsection (4), and paragraphs (a), (b), and (c) of
576	subsection (6) of section 215.555, Florida Statutes, are amended
577	to read:
578	215.555 Florida Hurricane Catastrophe Fund.--
579	(2) DEFINITIONS.--As used in this section:
580	(c) "Covered policy" means any insurance policy covering
581	residential property in this state, including, but not limited
582	to, any homeowner's, mobile home owner's, farm owner's,
583	condominium association, condominium unit owner's, tenant's, or
584	apartment building policy, or any other policy covering a
585	residential structure or its contents issued by any authorized
586	insurer, including the Citizens Property Insurance Corporation
587	andany joint underwriting association or similar entity created
588	pursuant to law. The term "covered policy" includes any
589	collateral protection insurance policy covering personal
590	residences which protects both the borrower's and the lender's
591	financial interests, in an amount at least equal to the coverage
592	for the dwelling in place under the lapsed homeowner's policy,
593	if such policy can be accurately reported as required in
594	subsection(5). Additionally, covered policies include policies
595	covering the peril of wind removed from the Florida Residential
596	Property and Casualty Joint Underwriting Association or from the
597	Citizens Property Insurance Corporation, created pursuant to s.
598	627.351(6), or from the Florida Windstorm Underwriting
599	Association, created pursuant to s. 627.351(2), by an authorized
600	insurer under the terms and conditions of an executed assumption
601	agreement between the authorized insurer and eithersuch
602	association. Each assumption agreement between theeither
603	association and such authorized insurer must be approved by the
604	Florida Department of Insurance or the Office of Insurance
605	Regulationprior to the effective date of the assumption, and
606	the Department of Insurance or the Office of Insurance
607	Regulationmust provide written notification to the board within
608	15 working days after such approval. "Covered policy" does not
609	include any policy that excludes wind coverage or hurricane
610	coverage or any reinsurance agreement and does not include any
611	policy otherwise meeting this definition which is issued by a
612	surplus lines insurer or a reinsurer.
613	(4) REIMBURSEMENT CONTRACTS.--
614	(d)1. For purposes of determining potential liability and
615	to aid in the sound administration of the fund, the contract
616	shall require each insurer to report such insurer's losses from
617	each covered event on an interim basis, as directed by the
618	board. The contract shall require the insurer to report to the
619	board no later than December 31 of each year, and quarterly
620	thereafter, its reimbursable losses from covered events for the
621	year. The contract shall require the board to determine and pay,
622	as soon as practicable after receiving these reports of
623	reimbursable losses, the initial amount of reimbursement due and
624	adjustments to this amount based on later loss information. The
625	adjustments to reimbursement amounts shall require the board to
626	pay, or the insurer to return, amounts reflecting the most
627	recent calculation of losses.
628	2. In determining reimbursements pursuant to this
629	subsection, the contract shall provide that the board shall:
630	a. First reimburse insurers writing covered policies,
631	which insurers are in full compliance with this section and have
632	petitioned the Office of Insurance RegulationDepartment of
633	Insuranceand qualified as limited apportionment companies under
634	s. 627.351(2)(b)3. The amount of such reimbursement shall be
635	the lesser of $10 million or an amount equal to 10 times the
636	insurer's reimbursement premium for the current year. The
637	amount of reimbursement paid under this sub-subparagraph may not
638	exceed the full amount of reimbursement promised in the
639	reimbursement contract. This sub-subparagraph does not apply
640	with respect to any contract year in which the year-end
641	projected cash balance of the fund, exclusive of any bonding
642	capacity of the fund, exceeds $2 billion. Only one member of any
643	insurer group may receive reimbursement under this sub-
644	subparagraph.
645	b. Next pay to each insurer such insurer's projected
646	payout, which is the amount of reimbursement it is owed, up to
647	an amount equal to the insurer's share of the actual premium
648	paid for that contract year, multiplied by the actual claims-
649	paying capacity available for that contract year; provided,
650	entities created pursuant to s. 627.351 shall be further
651	reimbursed in accordance with sub-subparagraph c.
652	c. Thereafter, establish, based on reimbursable losses,
653	the prorated reimbursement level at the highest level for which
654	any remaining fund balance or bond proceeds are sufficient to
655	reimburse entities created pursuant to s. 627.351 for losses
656	exceeding the amounts payable pursuant to sub-subparagraph b.
657	for the current contract year.
658	(6) REVENUE BONDS.--
659	(a) General provisions.--
660	1. Upon the occurrence of a hurricane and a determination
661	that the moneys in the fund are or will be insufficient to pay
662	reimbursement at the levels promised in the reimbursement
663	contracts, the board may take the necessary steps under
664	paragraph (b) or paragraph (c) for the issuance of revenue bonds
665	for the benefit of the fund. The proceeds of such revenue bonds
666	may be used to make reimbursement payments under reimbursement
667	contracts; to refinance or replace previously existing
668	borrowings or financial arrangements; to pay interest on bonds;
669	to fund reserves for the bonds; to pay expenses incident to the
670	issuance or sale of any bond issued under this section,
671	including costs of validating, printing, and delivering the
672	bonds, costs of printing the official statement, costs of
673	publishing notices of sale of the bonds, and related
674	administrative expenses; or for such other purposes related to
675	the financial obligations of the fund as the board may
676	determine. The term of the bonds may not exceed 30 years. The
677	board may pledge or authorize the corporation to pledge all or a
678	portion of all revenues under subsection (5) and under
679	subparagraph 3. to secure such revenue bonds and the board may
680	execute such agreements between the board and the issuer of any
681	revenue bonds and providers of other financing arrangements
682	under paragraph (7)(b) as the board deems necessary to evidence,
683	secure, preserve, and protect such pledge. If reimbursement
684	premiums received under subsection (5) or earnings on such
685	premiums are used to pay debt service on revenue bonds, such
686	premiums and earnings shall be used only after the use of the
687	moneys derived from assessments under subparagraph 3. The
688	funds, credit, property, or taxing power of the state or
689	political subdivisions of the state shall not be pledged for the
690	payment of such bonds. The board may also enter into agreements
691	under paragraph (b) or paragraph (c) for the purpose of issuing
692	revenue bonds in the absence of a hurricane upon a determination
693	that such action would maximize the ability of the fund to meet
694	future obligations.
695	2. The Legislature finds and declares that the issuance of
696	bonds under this subsection is for the public purpose of paying
697	the proceeds of the bonds to insurers, thereby enabling insurers
698	to pay the claims of policyholders to assure that policyholders
699	are able to pay the cost of construction, reconstruction,
700	repair, restoration, and other costs associated with damage to
701	property of policyholders of covered policies after the
702	occurrence of a hurricane. Revenue bonds may not be issued under
703	this subsection until validated under chapter 75. The validation
704	of at least the first obligations incurred pursuant to this
705	subsection shall be appealed to the Supreme Court, to be handled
706	on an expedited basis.
707	3. If the board determines that the amount of revenue
708	produced under subsection (5) is insufficient to fund the
709	obligations, costs, and expenses of the fund and the
710	corporation, including repayment of revenue bonds, the board
711	shall direct the Office of Insurance RegulationDepartment of
712	Insuranceto levy an emergency assessment on each insurer
713	writing property and casualty business in this state. Pursuant
714	to the emergency assessment, each such insurer shall pay to the
715	corporation by July 1 of each year an amount set by the board
716	not exceeding 2 percent of its gross direct written premium for
717	the prior year from all property and casualty business in this
718	state except for workers' compensation, except that, if the
719	Governor has declared a state of emergency under s. 252.36 due
720	to the occurrence of a covered event, the amount of the
721	assessment for the contract year may be increased to an amount
722	not exceeding 4 percent of such premium. Any assessment
723	authority not used for the contract year may be used for a
724	subsequent contract year. If, for a subsequent contract year,
725	the board determines that the amount of revenue produced under
726	subsection (5) is insufficient to fund the obligations, costs,
727	and expenses of the fund and the corporation, including
728	repayment of revenue bonds for that contract year, the board
729	shall direct the Office of Insurance RegulationDepartment of
730	Insuranceto levy an emergency assessment up to an amount not
731	exceeding the amount of unused assessment authority from a
732	previous contract year or years, plus an additional 2 percent if
733	the Governor has declared a state of emergency under s. 252.36
734	due to the occurrence of a covered event. Any assessment
735	authority not used for the contract year may be used for a
736	subsequent contract year. As used in this subsection, the term
737	"property and casualty business" includes all lines of business
738	identified on Form 2, Exhibit of Premiums and Losses, in the
739	annual statement required by s. 624.424 and any rules adopted
740	under such section, except for those lines identified as
741	accident and health insurance. The annual assessments under this
742	subparagraph shall continue as long as the revenue bonds issued
743	with respect to which the assessment was imposed are
744	outstanding, unless adequate provision has been made for the
745	payment of such bonds pursuant to the documents authorizing
746	issuance of the bonds. An insurer shall not at any time be
747	subject to aggregate annual assessments under this subparagraph
748	of more than 2 percent of premium, except that in the case of a
749	declared emergency, an insurer shall not at any time be subject
750	to aggregate annual assessments under this subparagraph of more
751	than 6 percent of premium; provided, no more than 4 percent may
752	be assessed for any one contract year. Any rate filing or
753	portion of a rate filing reflecting a rate change attributable
754	entirely to the assessment levied under this subparagraph shall
755	be deemed approved when made, subject to the authority of the
756	Office of Insurance RegulationDepartment of Insuranceto
757	require actuarial justification as to the adequacy of any rate
758	at any time. If the rate filing reflects only a rate change
759	attributable to the assessment under this paragraph, the filing
760	may consist of a certification so stating. The assessments
761	otherwise payable to the corporation pursuant to this
762	subparagraph shall be paid instead to the fund unless and until
763	the Office of Insurance RegulationDepartment of Insurancehas
764	received from the corporation and the fund a notice, which shall
765	be conclusive and upon which the Office of Insurance Regulation
766	Department of Insurancemay rely without further inquiry, that
767	the corporation has issued bonds and the fund has no agreements
768	in effect with local governments pursuant to paragraph (b). On
769	or after the date of such notice and until such date as the
770	corporation has no bonds outstanding, the fund shall have no
771	right, title, or interest in or to the assessments, except as
772	provided in the fund's agreements with the corporation.
773	(b) Revenue bond issuance through counties or
774	municipalities.--
775	1. If the board elects to enter into agreements with local
776	governments for the issuance of revenue bonds for the benefit of
777	the fund, the board shall enter into such contracts with one or
778	more local governments, including agreements providing for the
779	pledge of revenues, as are necessary to effect such issuance.
780	The governing body of a county or municipality is authorized to
781	issue bonds as defined in s. 125.013 or s. 166.101 from time to
782	time to fund an assistance program, in conjunction with the
783	Florida Hurricane Catastrophe Fund, for the purposes set forth
784	in this section or for the purpose of paying the costs of
785	construction, reconstruction, repair, restoration, and other
786	costs associated with damage to properties of policyholders of
787	covered policies due to the occurrence of a hurricane by
788	assuring that policyholders located in this state are able to
789	recover claims under property insurance policies after a covered
790	event.
791	2. In order to avoid needless and indiscriminate
792	proliferation, duplication, and fragmentation of such assistance
793	programs, any local government may provide for the payment of
794	fund reimbursements, regardless of whether or not the losses for
795	which reimbursement is made occurred within or outside of the
796	territorial jurisdiction of the local government.
797	3. The state hereby covenants with holders of bonds issued
798	under this paragraph that the state will not repeal or abrogate
799	the power of the board to direct the Office of Insurance
800	RegulationDepartment of Insuranceto levy the assessments and
801	to collect the proceeds of the revenues pledged to the payment
802	of such bonds as long as any such bonds remain outstanding
803	unless adequate provision has been made for the payment of such
804	bonds pursuant to the documents authorizing the issuance of such
805	bonds.
806	4. There shall be no liability on the part of, and no
807	cause of action shall arise against any members or employees of
808	the governing body of a local government for any actions taken
809	by them in the performance of their duties under this paragraph.
810	(c) Florida Hurricane Catastrophe Fund Finance
811	Corporation.--
812	1. In addition to the findings and declarations in
813	subsection (1), the Legislature also finds and declares that:
814	a. The public benefits corporation created under this
815	paragraph will provide a mechanism necessary for the cost-
816	effective and efficient issuance of bonds. This mechanism will
817	eliminate unnecessary costs in the bond issuance process,
818	thereby increasing the amounts available to pay reimbursement
819	for losses to property sustained as a result of hurricane
820	damage.
821	b. The purpose of such bonds is to fund reimbursements
822	through the Florida Hurricane Catastrophe Fund to pay for the
823	costs of construction, reconstruction, repair, restoration, and
824	other costs associated with damage to properties of
825	policyholders of covered policies due to the occurrence of a
826	hurricane.
827	c. The efficacy of the financing mechanism will be
828	enhanced by the corporation's ownership of the assessments, by
829	the insulation of the assessments from possible bankruptcy
830	proceedings, and by covenants of the state with the
831	corporation's bondholders.
832	2.a. There is created a public benefits corporation, which
833	is an instrumentality of the state, to be known as the Florida
834	Hurricane Catastrophe Fund Finance Corporation.
835	b. The corporation shall operate under a five-member board
836	of directors consisting of the Governor or a designee, the Chief
837	Financial OfficerComptroller or a designee, the Attorney
838	GeneralTreasureror a designee, the director of the Division of
839	Bond Finance of the State Board of Administration, and the
840	senior employee of the State Board of Administration responsible
841	for operationschief operating officerof the Florida Hurricane
842	Catastrophe Fund.
843	c. The corporation has all of the powers of corporations
844	under chapter 607 and under chapter 617, subject only to the
845	provisions of this subsection.
846	d. The corporation may issue bonds and engage in such
847	other financial transactions as are necessary to provide
848	sufficient funds to achieve the purposes of this section.
849	e. The corporation may invest in any of the investments
850	authorized under s. 215.47.
851	f. There shall be no liability on the part of, and no
852	cause of action shall arise against, any board members or
853	employees of the corporation for any actions taken by them in
854	the performance of their duties under this paragraph.
855	3.a. In actions under chapter 75 to validate any bonds
856	issued by the corporation, the notice required by s. 75.06 shall
857	be published only in Leon County and in two newspapers of
858	general circulation in the state, and the complaint and order of
859	the court shall be served only on the State Attorney of the
860	Second Judicial Circuit.
861	b. The state hereby covenants with holders of bonds of the
862	corporation that the state will not repeal or abrogate the power
863	of the board to direct the Office of Insurance Regulation
864	Department of Insuranceto levy the assessments and to collect
865	the proceeds of the revenues pledged to the payment of such
866	bonds as long as any such bonds remain outstanding unless
867	adequate provision has been made for the payment of such bonds
868	pursuant to the documents authorizing the issuance of such
869	bonds.
870	4. The bonds of the corporation are not a debt of the
871	state or of any political subdivision, and neither the state nor
872	any political subdivision is liable on such bonds. The
873	corporation does not have the power to pledge the credit, the
874	revenues, or the taxing power of the state or of any political
875	subdivision. The credit, revenues, or taxing power of the state
876	or of any political subdivision shall not be deemed to be
877	pledged to the payment of any bonds of the corporation.
878	5.a. The property, revenues, and other assets of the
879	corporation; the transactions and operations of the corporation
880	and the income from such transactions and operations; and all
881	bonds issued under this paragraph and interest on such bonds are
882	exempt from taxation by the state and any political subdivision,
883	including the intangibles tax under chapter 199 and the income
884	tax under chapter 220. This exemption does not apply to any tax
885	imposed by chapter 220 on interest, income, or profits on debt
886	obligations owned by corporations other than the Florida
887	Hurricane Catastrophe Fund Finance Corporation.
888	b. All bonds of the corporation shall be and constitute
889	legal investments without limitation for all public bodies of
890	this state; for all banks, trust companies, savings banks,
891	savings associations, savings and loan associations, and
892	investment companies; for all administrators, executors,
893	trustees, and other fiduciaries; for all insurance companies and
894	associations and other persons carrying on an insurance
895	business; and for all other persons who are now or may hereafter
896	be authorized to invest in bonds or other obligations of the
897	state and shall be and constitute eligible securities to be
898	deposited as collateral for the security of any state, county,
899	municipal, or other public funds. This sub-subparagraph shall be
900	considered as additional and supplemental authority and shall
901	not be limited without specific reference to this sub-
902	subparagraph.
903	6. The corporation and its corporate existence shall
904	continue until terminated by law; however, no such law shall
905	take effect as long as the corporation has bonds outstanding
906	unless adequate provision has been made for the payment of such
907	bonds pursuant to the documents authorizing the issuance of such
908	bonds. Upon termination of the existence of the corporation, all
909	of its rights and properties in excess of its obligations shall
910	pass to and be vested in the state.
911	Section 7. Subsection (5) of section 215.559, Florida
912	Statutes, is amended to read:
913	215.559 Hurricane Loss Mitigation Program.--
914	(5) Except for the program set forth in subsection (3),
915	the Department of Community Affairs shall develop the programs
916	set forth in this section in consultation with an advisory
917	council consisting of a representative designated by the Chief
918	Financial OfficerDepartment of Insurance, a representative
919	designated by the Florida Home Builders Association, a
920	representative designated by the Florida Insurance Council, a
921	representative designated by the Federation of Manufactured Home
922	Owners, a representative designated by the Florida Association
923	of Counties, and a representative designated by the Florida
924	Manufactured Housing Association.
925	Section 8. Paragraph (a) of subsection (2) of section
926	287.059, Florida Statutes, is amended to read:
927	287.059 Private attorney services.--
928	(2) No agency shall contract for private attorney services
929	without the prior written approval of the Attorney General,
930	except that such written approval is not required for private
931	attorney services:
932	(a) Procured by the Executive Office of the Governor,
933	offices under the jurisdiction of the Financial Services
934	Commission,or any department under the exclusive jurisdiction
935	of a single Cabinet officer.
936	Section 9. Paragraph (c) of subsection (3) of section
937	288.901, Florida Statutes, is amended to read:
938	288.901 Enterprise Florida, Inc.; creation; membership;
939	organization; meetings; disclosure.--
940	(3) Enterprise Florida, Inc., shall be governed by a board
941	of directors. The board of directors shall consist of the
942	following members:
943	(c) The Chief Financial OfficerSecretary of Labor and
944	Employment Security or the Chief Financial Officer’ssecretary's
945	designee.
946	Section 10. Subsection (2) of section 391.221, Florida
947	Statutes, is amended to read:
948	391.221 Statewide Children's Medical Services Network
949	Advisory Council.--
950	(2) The council shall be composed of 12 members
951	representing the private health care provider sector, families
952	with children who have special health care needs, the Agency for
953	Health Care Administration, the Department of Financial Services
954	Insurance, the Florida Chapter of the American Academy of
955	Pediatrics, an academic health center pediatric program, and the
956	health insurance industry. Members shall be appointed for 4-
957	year, staggered terms. In no case shall an employee of the
958	Department of Health serve as a member or as an ex officio
959	member of the advisory council. A vacancy shall be filled for
960	the remainder of the unexpired term in the same manner as the
961	original appointment. A member may not be appointed to more
962	than two consecutive terms. However, a member may be
963	reappointed after being off the council for at least 2 years.
964	Section 11. Paragraph (b) of subsection (2) of section
965	401.245, Florida Statutes, is amended to read:
966	401.245 Emergency Medical Services Advisory Council.--
967	(2)
968	(b) Representation on the Emergency Medical Services
969	Advisory Council shall include: two licensed physicians who are
970	"medical directors" as defined in s. 401.23(15) or whose medical
971	practice is closely related to emergency medical services; two
972	emergency medical service administrators, one of whom is
973	employed by a fire service; two certified paramedics, one of
974	whom is employed by a fire service; two certified emergency
975	medical technicians, one of whom is employed by a fire service;
976	one emergency medical services educator; one emergency nurse;
977	one hospital administrator; one representative of air ambulance
978	services; one representative of a commercial ambulance operator;
979	and two laypersons who are in no way connected with emergency
980	medical services, one of whom is a representative of the
981	elderly. Ex officio members of the advisory council from state
982	agencies shall include, but shall not be limited to,
983	representatives from the Department of Education, the Department
984	of Management Services, the State Fire MarshalDepartment of
985	Insurance, the Department of Highway Safety and Motor Vehicles,
986	the Department of Transportation, and the Department of
987	Community Affairs.
988	Section 12. Paragraph (a) of subsection (8) of section
989	408.05, Florida Statutes, is amended to read:
990	408.05 State Center for Health Statistics.--
991	(8) STATE COMPREHENSIVE HEALTH INFORMATION SYSTEM ADVISORY
992	COUNCIL.--
993	(a) There is established in the agency the State
994	Comprehensive Health Information System Advisory Council to
995	assist the center in reviewing the comprehensive health
996	information system and to recommend improvements for such
997	system. The council shall consist of the following members:
998	1. An employee of the Executive Office of the Governor, to
999	be appointed by the Governor.
1000	2. An employee of the Department of Financial Services
1001	Department of Insurance, to be appointed by the Chief Financial
1002	OfficerInsurance Commissioner.
1003	3. An employee of the Department of Education, to be
1004	appointed by the Commissioner of Education.
1005	4. Ten persons, to be appointed by the Secretary of Health
1006	Care Administration, representing other state and local
1007	agencies, state universities, the Florida Association of
1008	Business/Health Coalitions, local health councils, professional
1009	health-care-related associations, consumers, and purchasers.
1010	Section 13. Section 408.7056, Florida Statutes, is amended
1011	to read:
1012	408.7056 Statewide Provider and Subscriber Assistance
1013	Program.--
1014	(1) As used in this section, the term:
1015	(a) "Agency" means the Agency for Health Care
1016	Administration.
1017	(b) "Department" means the Department of Financial
1018	ServicesInsurance.
1019	(c) "Grievance procedure" means an established set of
1020	rules that specify a process for appeal of an organizational
1021	decision.
1022	(d) "Health care provider" or "provider" means a state-
1023	licensed or state-authorized facility, a facility principally
1024	supported by a local government or by funds from a charitable
1025	organization that holds a current exemption from federal income
1026	tax under s. 501(c)(3) of the Internal Revenue Code, a licensed
1027	practitioner, a county health department established under part
1028	I of chapter 154, a prescribed pediatric extended care center
1029	defined in s. 400.902, a federally supported primary care
1030	program such as a migrant health center or a community health
1031	center authorized under s. 329 or s. 330 of the United States
1032	Public Health Services Act that delivers health care services to
1033	individuals, or a community facility that receives funds from
1034	the state under the Community Alcohol, Drug Abuse, and Mental
1035	Health Services Act and provides mental health services to
1036	individuals.
1037	(e) "Managed care entity" means a health maintenance
1038	organization or a prepaid health clinic certified under chapter
1039	641, a prepaid health plan authorized under s. 409.912, or an
1040	exclusive provider organization certified under s. 627.6472.
1041	(f) "Office" means the Office of Insurance Regulation of
1042	the Financial Services Commission.
1043	(g)(f)"Panel" means a statewide provider and subscriber
1044	assistance panel selected as provided in subsection (11).
1045	(2) The agency shall adopt and implement a program to
1046	provide assistance to subscribers and providers, including those
1047	whose grievances are not resolved by the managed care entity to
1048	the satisfaction of the subscriber or provider. The program
1049	shall consist of one or more panels that meet as often as
1050	necessary to timely review, consider, and hear grievances and
1051	recommend to the agency or the officedepartmentany actions
1052	that should be taken concerning individual cases heard by the
1053	panel. The panel shall hear every grievance filed by subscribers
1054	and providers on behalf of subscribers, unless the grievance:
1055	(a) Relates to a managed care entity's refusal to accept a
1056	provider into its network of providers;
1057	(b) Is part of an internal grievance in a Medicare managed
1058	care entity or a reconsideration appeal through the Medicare
1059	appeals process which does not involve a quality of care issue;
1060	(c) Is related to a health plan not regulated by the state
1061	such as an administrative services organization, third-party
1062	administrator, or federal employee health benefit program;
1063	(d) Is related to appeals by in-plan suppliers and
1064	providers, unless related to quality of care provided by the
1065	plan;
1066	(e) Is part of a Medicaid fair hearing pursued under 42
1067	C.F.R. ss. 431.220 et seq.;
1068	(f) Is the basis for an action pending in state or federal
1069	court;
1070	(g) Is related to an appeal by nonparticipating providers,
1071	unless related to the quality of care provided to a subscriber
1072	by the managed care entity and the provider is involved in the
1073	care provided to the subscriber;
1074	(h) Was filed before the subscriber or provider completed
1075	the entire internal grievance procedure of the managed care
1076	entity, the managed care entity has complied with its timeframes
1077	for completing the internal grievance procedure, and the
1078	circumstances described in subsection (6) do not apply;
1079	(i) Has been resolved to the satisfaction of the
1080	subscriber or provider who filed the grievance, unless the
1081	managed care entity's initial action is egregious or may be
1082	indicative of a pattern of inappropriate behavior;
1083	(j) Is limited to seeking damages for pain and suffering,
1084	lost wages, or other incidental expenses, including accrued
1085	interest on unpaid balances, court costs, and transportation
1086	costs associated with a grievance procedure;
1087	(k) Is limited to issues involving conduct of a health
1088	care provider or facility, staff member, or employee of a
1089	managed care entity which constitute grounds for disciplinary
1090	action by the appropriate professional licensing board and is
1091	not indicative of a pattern of inappropriate behavior, and the
1092	agency or officedepartmenthas reported these grievances to the
1093	appropriate professional licensing board or to the health
1094	facility regulation section of the agency for possible
1095	investigation; or
1096	(l) Is withdrawn by the subscriber or provider. Failure
1097	of the subscriber or the provider to attend the hearing shall be
1098	considered a withdrawal of the grievance.
1099	(3) The agency shall review all grievances within 60 days
1100	after receipt and make a determination whether the grievance
1101	shall be heard. Once the agency notifies the panel, the
1102	subscriber or provider, and the managed care entity that a
1103	grievance will be heard by the panel, the panel shall hear the
1104	grievance either in the network area or by teleconference no
1105	later than 120 days after the date the grievance was filed. The
1106	agency shall notify the parties, in writing, by facsimile
1107	transmission, or by phone, of the time and place of the hearing.
1108	The panel may take testimony under oath, request certified
1109	copies of documents, and take similar actions to collect
1110	information and documentation that will assist the panel in
1111	making findings of fact and a recommendation. The panel shall
1112	issue a written recommendation, supported by findings of fact,
1113	to the provider or subscriber, to the managed care entity, and
1114	to the agency or the officedepartmentno later than 15 working
1115	days after hearing the grievance. If at the hearing the panel
1116	requests additional documentation or additional records, the
1117	time for issuing a recommendation is tolled until the
1118	information or documentation requested has been provided to the
1119	panel. The proceedings of the panel are not subject to chapter
1120	120.
1121	(4) If, upon receiving a proper patient authorization
1122	along with a properly filed grievance, the agency requests
1123	medical records from a health care provider or managed care
1124	entity, the health care provider or managed care entity that has
1125	custody of the records has 10 days to provide the records to the
1126	agency. Failure to provide requested medical records may result
1127	in the imposition of a fine of up to $500. Each day that
1128	records are not produced is considered a separate violation.
1129	(5) Grievances that the agency determines pose an
1130	immediate and serious threat to a subscriber's health must be
1131	given priority over other grievances. The panel may meet at the
1132	call of the chair to hear the grievances as quickly as possible
1133	but no later than 45 days after the date the grievance is filed,
1134	unless the panel receives a waiver of the time requirement from
1135	the subscriber. The panel shall issue a written recommendation,
1136	supported by findings of fact, to the officedepartmentor the
1137	agency within 10 days after hearing the expedited grievance.
1138	(6) When the agency determines that the life of a
1139	subscriber is in imminent and emergent jeopardy, the chair of
1140	the panel may convene an emergency hearing, within 24 hours
1141	after notification to the managed care entity and to the
1142	subscriber, to hear the grievance. The grievance must be heard
1143	notwithstanding that the subscriber has not completed the
1144	internal grievance procedure of the managed care entity. The
1145	panel shall, upon hearing the grievance, issue a written
1146	emergency recommendation, supported by findings of fact, to the
1147	managed care entity, to the subscriber, and to the agency or the
1148	officedepartmentfor the purpose of deferring the imminent and
1149	emergent jeopardy to the subscriber's life. Within 24 hours
1150	after receipt of the panel's emergency recommendation, the
1151	agency or officedepartmentmay issue an emergency order to the
1152	managed care entity. An emergency order remains in force until:
1153	(a) The grievance has been resolved by the managed care
1154	entity;
1155	(b) Medical intervention is no longer necessary; or
1156	(c) The panel has conducted a full hearing under
1157	subsection (3) and issued a recommendation to the agency or the
1158	officedepartment, and the agency or officedepartmenthas
1159	issued a final order.
1160	(7) After hearing a grievance, the panel shall make a
1161	recommendation to the agency or the officedepartmentwhich may
1162	include specific actions the managed care entity must take to
1163	comply with state laws or rules regulating managed care
1164	entities.
1165	(8) A managed care entity, subscriber, or provider that is
1166	affected by a panel recommendation may within 10 days after
1167	receipt of the panel's recommendation, or 72 hours after receipt
1168	of a recommendation in an expedited grievance, furnish to the
1169	agency or officedepartmentwritten evidence in opposition to
1170	the recommendation or findings of fact of the panel.
1171	(9) No later than 30 days after the issuance of the
1172	panel's recommendation and, for an expedited grievance, no later
1173	than 10 days after the issuance of the panel's recommendation,
1174	the agency or the officedepartmentmay adopt the panel's
1175	recommendation or findings of fact in a proposed order or an
1176	emergency order, as provided in chapter 120, which it shall
1177	issue to the managed care entity. The agency or office
1178	departmentmay issue a proposed order or an emergency order, as
1179	provided in chapter 120, imposing fines or sanctions, including
1180	those contained in ss. 641.25 and 641.52. The agency or the
1181	officedepartmentmay reject all or part of the panel's
1182	recommendation. All fines collected under this subsection must
1183	be deposited into the Health Care Trust Fund.
1184	(10) In determining any fine or sanction to be imposed,
1185	the agency and the officedepartmentmay consider the following
1186	factors:
1187	(a) The severity of the noncompliance, including the
1188	probability that death or serious harm to the health or safety
1189	of the subscriber will result or has resulted, the severity of
1190	the actual or potential harm, and the extent to which provisions
1191	of chapter 641 were violated.
1192	(b) Actions taken by the managed care entity to resolve or
1193	remedy any quality-of-care grievance.
1194	(c) Any previous incidents of noncompliance by the managed
1195	care entity.
1196	(d) Any other relevant factors the agency or office
1197	departmentconsiders appropriate in a particular grievance.
1198	(11) The panel shall consist of the Insurance Consumer
1199	Advocate, established by s. 627.0613, or the Insurance Consumer
1200	Advocate’s designee, two members employed by the agency, and two
1201	members employed by the department, chosen by their respective
1202	agencies; a consumer appointed by the Governor; a physician
1203	appointed by the Governor, as a standing member; and physicians
1204	who have expertise relevant to the case to be heard, on a
1205	rotating basis. The agency may contract with a medical director
1206	and a primary care physician who shall provide additional
1207	technical expertise to the panel. The medical director shall be
1208	selected from a health maintenance organization with a current
1209	certificate of authority to operate in Florida.
1210	(12) Every managed care entity shall submit a quarterly
1211	report to the agency and the officedepartmentlisting the
1212	number and the nature of all subscribers' and providers'
1213	grievances which have not been resolved to the satisfaction of
1214	the subscriber or provider after the subscriber or provider
1215	follows the entire internal grievance procedure of the managed
1216	care entity. The agency shall notify all subscribers and
1217	providers included in the quarterly reports of their right to
1218	file an unresolved grievance with the panel.
1219	(13) Any information which would identify a subscriber or
1220	the spouse, relative, or guardian of a subscriber and which is
1221	contained in a report obtained by the officeDepartment of
1222	Insurancepursuant to this section is confidential and exempt
1223	from the provisions of s. 119.07(1) and s. 24(a), Art. I of the
1224	State Constitution.
1225	(14) A proposed order issued by the agency or office
1226	departmentwhich only requires the managed care entity to take a
1227	specific action under subsection (7) is subject to a summary
1228	hearing in accordance with s. 120.574, unless all of the parties
1229	agree otherwise. If the managed care entity does not prevail at
1230	the hearing, the managed care entity must pay reasonable costs
1231	and attorney's fees of the agency or the officedepartment
1232	incurred in that proceeding.
1233	(15)(a) Any information which would identify a subscriber
1234	or the spouse, relative, or guardian of a subscriber which is
1235	contained in a document, report, or record prepared or reviewed
1236	by the panel or obtained by the agency pursuant to this section
1237	is confidential and exempt from the provisions of s. 119.07(1)
1238	and s. 24(a), Art. I of the State Constitution.
1239	(b) Meetings of the panel shall be open to the public
1240	unless the provider or subscriber whose grievance will be heard
1241	requests a closed meeting or the agency or the department of
1242	Insurancedetermines that information of a sensitive personal
1243	nature which discloses the subscriber's medical treatment or
1244	history; or information which constitutes a trade secret as
1245	defined by s. 812.081; or information relating to internal risk
1246	management programs as defined in s. 641.55(5)(c), (6), and (8)
1247	may be revealed at the panel meeting, in which case that portion
1248	of the meeting during which such sensitive personal information,
1249	trade secret information, or internal risk management program
1250	information is discussed shall be exempt from the provisions of
1251	s. 286.011 and s. 24(b), Art. I of the State Constitution. All
1252	closed meetings shall be recorded by a certified court reporter.
1253
1254	This subsection is subject to the Open Government Sunset Review
1255	Act of 1995 in accordance with s. 119.15, and shall stand
1256	repealed on October 2, 2003, unless reviewed and saved from
1257	repeal through reenactment by the Legislature.
1258	Section 14. Subsections (11) and (12) of section 440.13,
1259	Florida Statutes, are amended to read:
1260	440.13 Medical services and supplies; penalty for
1261	violations; limitations.--
1262	(11) AUDITS BY AGENCY FOR HEALTH CARE ADMINISTRATION AND
1263	THE DEPARTMENT OF INSURANCE; JURISDICTION.--
1264	(a) The Agency for Health Care Administration may
1265	investigate health care providers to determine whether providers
1266	are complying with this chapter and with rules adopted by the
1267	agency, whether the providers are engaging in overutilization,
1268	and whether providers are engaging in improper billing
1269	practices. If the agency finds that a health care provider has
1270	improperly billed, overutilized, or failed to comply with agency
1271	rules or the requirements of this chapter it must notify the
1272	provider of its findings and may determine that the health care
1273	provider may not receive payment from the carrier or may impose
1274	penalties as set forth in subsection (8) or other sections of
1275	this chapter. If the health care provider has received payment
1276	from a carrier for services that were improperly billed or for
1277	overutilization, it must return those payments to the carrier.
1278	The agency may assess a penalty not to exceed $500 for each
1279	overpayment that is not refunded within 30 days after
1280	notification of overpayment by the agency or carrier.
1281	(b) The department shall monitor carriers as provided in
1282	this chapter and the Office of Insurance Regulation shalland
1283	audit insurers and group self-insurance fundscarriersas
1284	provided in s. 624.3161, to determine if medical bills are paid
1285	in accordance with this section and department rules of the
1286	department and Financial Services Commission, respectively. Any
1287	employer, if self-insured, or carrier found by the department or
1288	Office of Insurance Regulationdivisionnot to be within 90
1289	percent compliance as to the payment of medical bills after July
1290	1, 1994, must be assessed a fine not to exceed 1 percent of the
1291	prior year's assessment levied against such entity under s.
1292	440.51 for every quarter in which the entity fails to attain 90-
1293	percent compliance. The department shall fine or otherwise
1294	discipline an employer or carrier, pursuant to this chapter, the
1295	insurance code, or rules adopted by the department, and the
1296	Office of Insurance Regulation shall fine or otherwise
1297	discipline an insurer or group self-insurance fund pursuant to
1298	the insurance code or rules adopted by the Financial Services
1299	Commission,for each late payment of compensation that is below
1300	the minimum 90-percent performance standard. Any carrier that is
1301	found to be not in compliance in subsequent consecutive quarters
1302	must implement a medical-bill review program approved by the
1303	department or officedivision, and an insurer or group self-
1304	insurance fundthe carrieris subject to disciplinary action by
1305	the Office of Insurance RegulationDepartment of Insurance.
1306	(c) The agency has exclusive jurisdiction to decide any
1307	matters concerning reimbursement, to resolve any overutilization
1308	dispute under subsection (7), and to decide any question
1309	concerning overutilization under subsection (8), which question
1310	or dispute arises after January 1, 1994.
1311	(d) The following agency actions do not constitute agency
1312	action subject to review under ss. 120.569 and 120.57 and do not
1313	constitute actions subject to s. 120.56: referral by the entity
1314	responsible for utilization review; a decision by the agency to
1315	refer a matter to a peer review committee; establishment by a
1316	health care provider or entity of procedures by which a peer
1317	review committee reviews the rendering of health care services;
1318	and the review proceedings, report, and recommendation of the
1319	peer review committee.
1320	(12) CREATION OF THREE-MEMBER PANEL; GUIDES OF MAXIMUM
1321	REIMBURSEMENT ALLOWANCES.--
1322	(a) A three-member panel is created, consisting of the
1323	Chief Financial OfficerInsurance Commissioner, or the Chief
1324	Financial Officer'sInsurance Commissioner'sdesignee, and two
1325	members to be appointed by the Governor, subject to confirmation
1326	by the Senate, one member who, on account of present or previous
1327	vocation, employment, or affiliation, shall be classified as a
1328	representative of employers, the other member who, on account of
1329	previous vocation, employment, or affiliation, shall be
1330	classified as a representative of employees. The panel shall
1331	determine statewide schedules of maximum reimbursement
1332	allowances for medically necessary treatment, care, and
1333	attendance provided by physicians, hospitals, ambulatory
1334	surgical centers, work-hardening programs, pain programs, and
1335	durable medical equipment. The maximum reimbursement allowances
1336	for inpatient hospital care shall be based on a schedule of per
1337	diem rates, to be approved by the three-member panel no later
1338	than March 1, 1994, to be used in conjunction with a
1339	precertification manual as determined by the agency. All
1340	compensable charges for hospital outpatient care shall be
1341	reimbursed at 75 percent of usual and customary charges. Until
1342	the three-member panel approves a schedule of per diem rates for
1343	inpatient hospital care and it becomes effective, all
1344	compensable charges for hospital inpatient care must be
1345	reimbursed at 75 percent of their usual and customary charges.
1346	Annually, the three-member panel shall adopt schedules of
1347	maximum reimbursement allowances for physicians, hospital
1348	inpatient care, hospital outpatient care, ambulatory surgical
1349	centers, work-hardening programs, and pain programs. However,
1350	the maximum percentage of increase in the individual
1351	reimbursement allowance may not exceed the percentage of
1352	increase in the Consumer Price Index for the previous year. An
1353	individual physician, hospital, ambulatory surgical center, pain
1354	program, or work-hardening program shall be reimbursed either
1355	the usual and customary charge for treatment, care, and
1356	attendance, the agreed-upon contract price, or the maximum
1357	reimbursement allowance in the appropriate schedule, whichever
1358	is less.
1359	(b) As to reimbursement for a prescription medication, the
1360	reimbursement amount for a prescription shall be the average
1361	wholesale price times 1.2 plus $4.18 for the dispensing fee,
1362	except where the carrier has contracted for a lower amount. Fees
1363	for pharmaceuticals and pharmaceutical services shall be
1364	reimbursable at the applicable fee schedule amount. Where the
1365	employer or carrier has contracted for such services and the
1366	employee elects to obtain them through a provider not a party to
1367	the contract, the carrier shall reimburse at the schedule,
1368	negotiated, or contract price, whichever is lower.
1369	(c) Reimbursement for all fees and other charges for such
1370	treatment, care, and attendance, including treatment, care, and
1371	attendance provided by any hospital or other health care
1372	provider, ambulatory surgical center, work-hardening program, or
1373	pain program, must not exceed the amounts provided by the
1374	uniform schedule of maximum reimbursement allowances as
1375	determined by the panel or as otherwise provided in this
1376	section. This subsection also applies to independent medical
1377	examinations performed by health care providers under this
1378	chapter. Until the three-member panel approves a uniform
1379	schedule of maximum reimbursement allowances and it becomes
1380	effective, all compensable charges for treatment, care, and
1381	attendance provided by physicians, ambulatory surgical centers,
1382	work-hardening programs, or pain programs shall be reimbursed at
1383	the lowest maximum reimbursement allowance across all 1992
1384	schedules of maximum reimbursement allowances for the services
1385	provided regardless of the place of service. In determining the
1386	uniform schedule, the panel shall first approve the data which
1387	it finds representative of prevailing charges in the state for
1388	similar treatment, care, and attendance of injured persons. Each
1389	health care provider, health care facility, ambulatory surgical
1390	center, work-hardening program, or pain program receiving
1391	workers' compensation payments shall maintain records verifying
1392	their usual charges. In establishing the uniform schedule of
1393	maximum reimbursement allowances, the panel must consider:
1394	1. The levels of reimbursement for similar treatment,
1395	care, and attendance made by other health care programs or
1396	third-party providers;
1397	2. The impact upon cost to employers for providing a level
1398	of reimbursement for treatment, care, and attendance which will
1399	ensure the availability of treatment, care, and attendance
1400	required by injured workers;
1401	3. The financial impact of the reimbursement allowances
1402	upon health care providers and health care facilities, including
1403	trauma centers as defined in s. 395.4001, and its effect upon
1404	their ability to make available to injured workers such
1405	medically necessary remedial treatment, care, and attendance.
1406	The uniform schedule of maximum reimbursement allowances must be
1407	reasonable, must promote health care cost containment and
1408	efficiency with respect to the workers' compensation health care
1409	delivery system, and must be sufficient to ensure availability
1410	of such medically necessary remedial treatment, care, and
1411	attendance to injured workers; and
1412	4. The most recent average maximum allowable rate of
1413	increase for hospitals determined by the Health Care Board under
1414	chapter 408.
1415	(d) In addition to establishing the uniform schedule of
1416	maximum reimbursement allowances, the panel shall:
1417	1. Take testimony, receive records, and collect data to
1418	evaluate the adequacy of the workers' compensation fee schedule,
1419	nationally recognized fee schedules and alternative methods of
1420	reimbursement to certified health care providers and health care
1421	facilities for inpatient and outpatient treatment and care.
1422	2. Survey certified health care providers and health care
1423	facilities to determine the availability and accessibility of
1424	workers' compensation health care delivery systems for injured
1425	workers.
1426	3. Survey carriers to determine the estimated impact on
1427	carrier costs and workers' compensation premium rates by
1428	implementing changes to the carrier reimbursement schedule or
1429	implementing alternative reimbursement methods.
1430	4. Submit recommendations on or before January 1, 2003,
1431	and biennially thereafter, to the President of the Senate and
1432	the Speaker of the House of Representatives on methods to
1433	improve the workers' compensation health care delivery system.
1434
1435	The agency and the department, as requested,divisionshall
1436	provide data to the panel, including but not limited to,
1437	utilization trends in the workers' compensation health care
1438	delivery system. The agencydivisionshall provide the panel
1439	with an annual report regarding the resolution of medical
1440	reimbursement disputes and any actions pursuant to s. 440.13(8).
1441	The departmentdivisionshall provide administrative support and
1442	service to the panel to the extent requested by the panel.
1443	Section 15. Paragraph (c) of subsection (8) and
1444	subsections (10), (15), (16), and (17) of section 440.20,
1445	Florida Statutes, are amended to read:
1446	440.20 Time for payment of compensation; penalties for
1447	late payment.--
1448	(8) In addition to any other penalties provided by this
1449	chapter for late payment, if any installment of compensation is
1450	not paid when it becomes due, the employer, carrier, or
1451	servicing agent shall pay interest thereon at the rate of 12
1452	percent per year from the date the installment becomes due until
1453	it is paid, whether such installment is payable without an order
1454	or under the terms of an order. The interest payment shall be
1455	the greater of the amount of interest due or $5.
1456	(c) In order to ensure carrier compliance under this
1457	chapter and provisions of the Florida Insurance Code, the office
1458	departmentshall monitor the performance of carriers by
1459	conducting market conduct examinations, as provided in s.
1460	624.3161, and conducting investigations, as provided in s.
1461	624.317. The department shall establish by rule minimum
1462	performance standards for carriers to ensure that a minimum of
1463	90 percent of all compensation benefits are timely paid. The
1464	department shall fine a carrier as provided in s. 440.13(11)(b)
1465	up to $50 for each late payment of compensation that is below
1466	the minimum 90 percent performance standard. This paragraph does
1467	not affect the imposition of any penalties or interest due to
1468	the claimant. If a carrier contracts with a servicing agent to
1469	fulfill its administrative responsibilities under this chapter,
1470	the payment practices of the servicing agent are deemed the
1471	payment practices of the carrier for the purpose of assessing
1472	penalties against the carrier.
1473	(10) Whenever the department deems it advisable, it may
1474	require any employer to make a deposit with the Chief Financial
1475	OfficerTreasurerto secure the prompt and convenient payments
1476	of such compensation; and payments therefrom upon any awards
1477	shall be made upon order of the department or judge of
1478	compensation claims.
1479	(15)(a) The officedepartmentshall examine on an ongoing
1480	basis claims files in accordance with s. 624.3161 and may impose
1481	fines pursuant to s. 624.310(5) and this chapter in order to
1482	identify questionable claims-handling techniques, questionable
1483	patterns or practices of claims, or a pattern of repeated
1484	unreasonably controverted claims by carriers, as defined in s.
1485	440.02, providing services to employees pursuant to this
1486	chapter. If the officedepartmentfinds such questionable
1487	techniques, patterns, or repeated unreasonably controverted
1488	claims as constitute a general business practice of a carrier,
1489	as defined in s. 440.02, the officedepartmentshall take
1490	appropriate action so as to bring such general business
1491	practices to a halt pursuant to s. 440.38(3) or may impose
1492	penalties pursuant to s. 624.4211. The department and officemay
1493	initiate investigations of questionable techniques, patterns,
1494	practices, or repeated unreasonably controverted claims. The
1495	Financial Services Commissiondepartmentmay by rule establish
1496	forms and procedures for corrective action plans and for
1497	auditing carriers.
1498	(b) As to any examination, investigation, or hearing being
1499	conducted under this chapter, the department and office
1500	Insurance Commissioner or his or her designee:
1501	1. May administer oaths, examine and cross-examine
1502	witnesses, receive oral and documentary evidence; and
1503	2. Shall have the power to subpoena witnesses, compel
1504	their attendance and testimony, and require by subpoena the
1505	production of books, papers, records, files, correspondence,
1506	documents, or other evidence which is relevant to the inquiry.
1507	(c) If any person refuses to comply with any such subpoena
1508	or to testify as to any matter concerning which she or he may be
1509	lawfully interrogated, the Circuit Court of Leon County or of
1510	the county wherein such examination, investigation, or hearing
1511	is being conducted, or of the county wherein such person
1512	resides, may, on the application of the department or the
1513	office, issue an order requiring such person to comply with the
1514	subpoena and to testify.
1515	(d) Subpoenas shall be served, and proof of such service
1516	made, in the same manner as if issued by a circuit court.
1517	Witness fees, costs, and reasonable travel expenses, if claimed,
1518	shall be allowed the same as for testimony in a circuit court.
1519	(e) The department shall publish annually a report which
1520	indicates the promptness of first payment of compensation
1521	records of each carrier or self-insurer so as to focus attention
1522	on those carriers or self-insurers with poor payment records for
1523	the preceding year. The department and the officeshall take
1524	appropriate steps so as to cause such poor carrier payment
1525	practices to halt pursuant to s. 440.38(3). In addition, the
1526	department shall take appropriate action so as to halt such poor
1527	payment practices of self-insurers. "Poor payment practice"
1528	means a practice of late payment sufficient to constitute a
1529	general business practice.
1530	(f) The Financial Services Commission, in consultation
1531	with the department, shall adoptpromulgaterules providing
1532	guidelines to carriers, as defined in s. 440.02, self-insurers,
1533	and employers to indicate behavior that may be construed as
1534	questionable claims-handling techniques, questionable patterns
1535	of claims, repeated unreasonably controverted claims, or poor
1536	payment practices.
1537	(16) No penalty assessed under this section may be
1538	recouped by any carrier or self-insurer in the rate base, the
1539	premium, or any rate filing. The officeDepartment of Insurance
1540	shall enforce this subsection.
1541	(17) The Financial Services Commissiondepartmentmay by
1542	rule establish audit procedures and set standards for the
1543	Automated Carrier Performance System.
1544	Section 16. Subsections (2) and (3) of section 440.24,
1545	Florida Statutes, is amended to read:
1546	440.24 Enforcement of compensation orders; penalties.--
1547	(2) In any case where the employer is insured and the
1548	carrier fails to comply with any compensation order of a judge
1549	of compensation claims or court within 10 days after such order
1550	becomes final, the department shall notify the office of such
1551	failure and the office shallthereuponsuspend the license of
1552	such carrier to do an insurance business in this state, until
1553	such carrier has complied with such order.
1554	(3) In any case where the employer is a self-insurer and
1555	fails to comply with any compensation order of a judge of
1556	compensation claims or court within 10 days after such order
1557	becomes final, the department of Insurancemay suspend or revoke
1558	any authorization previously given to the employer to be a self-
1559	insurer, and the Florida Self-Insurers Guaranty Association,
1560	Incorporated, may call or sue upon the surety bond or exercise
1561	its rights under the letter of credit deposited by the self-
1562	insurer with the association as a qualifying security deposit as
1563	may be necessary to satisfy the order.
1564	Section 17. Subsections (1), (2), (3), and (4) of section
1565	440.38, Florida Statutes, are amended to read:
1566	440.38 Security for compensation; insurance carriers and
1567	self-insurers.--
1568	(1) Every employer shall secure the payment of
1569	compensation under this chapter:
1570	(a) By insuring and keeping insured the payment of such
1571	compensation with any stock company or mutual company or
1572	association or exchange, authorized to do business in the state;
1573	(b) By furnishing satisfactory proof to the Florida Self-
1574	Insurers Guaranty Association, Incorporated, created in s.
1575	440.385, that it has the financial strength necessary to ensure
1576	timely payment of all current and future claims individually and
1577	on behalf of its subsidiary and affiliated companies with
1578	employees in this state and receiving an authorization from the
1579	department of Insuranceto pay such compensation directly. The
1580	association shall review the financial strength of applicants
1581	for membership, current members, and former members and make
1582	recommendations to the department of Insuranceregarding their
1583	qualifications to self-insure in accordance with this section
1584	and ss. 440.385 and 440.386. The department shall act in
1585	accordance with the recommendations unless it finds by clear and
1586	convincing evidence that the recommendations are erroneous.
1587	1. As a condition of authorization under paragraph (a),
1588	the association may recommend that the department of Insurance
1589	require an employer to deposit with the association a qualifying
1590	security deposit. The association shall recommend the type and
1591	amount of the qualifying security deposit and shall prescribe
1592	conditions for the qualifying security deposit, which shall
1593	include authorization for the association to call the qualifying
1594	security deposit in the case of default to pay compensation
1595	awards and related expenses of the association. As a condition
1596	to authorization to self-insure, the employer shall provide
1597	proof that the employer has provided for competent personnel
1598	with whom to deliver benefits and to provide a safe working
1599	environment. The employer shall also provide evidence that it
1600	carries reinsurance at levels that will ensure the financial
1601	strength and actuarial soundness of such employer in accordance
1602	with rules adopted by the department of Insurance. The
1603	department of Insurancemay by rule require that, in the event
1604	of an individual self-insurer's insolvency, such qualifying
1605	security deposits and reinsurance policies are payable to the
1606	association. Any employer securing compensation in accordance
1607	with the provisions of this paragraph shall be known as a self-
1608	insurer and shall be classed as a carrier of her or his own
1609	insurance. The employer shall, if requested, provide the
1610	association an actuarial report signed by a member of the
1611	American Academy of Actuaries providing an opinion of the
1612	appropriate present value of the reserves, using a 4-percent
1613	discount rate, for current and future compensation claims. If
1614	any member or former member of the association refuses to timely
1615	provide such a report, the association may obtain an order from
1616	a circuit court requiring the member to produce such a report
1617	and ordering any other relief that the court determines is
1618	appropriate. The association may recover all reasonable costs
1619	and attorney's fees in such proceedings.
1620	2. If the employer fails to maintain the foregoing
1621	requirements, the association shall recommend to the department
1622	of Insurancethat the department revoke the employer's authority
1623	to self-insure, unless the employer provides to the association
1624	the certified opinion of an independent actuary who is a member
1625	of the American Academy of Actuaries as to the actuarial present
1626	value of the employer's determined and estimated future
1627	compensation payments based on cash reserves, using a 4-percent
1628	discount rate, and a qualifying security deposit equal to 1.5
1629	times the value so certified. The employer shall thereafter
1630	annually provide such a certified opinion until such time as the
1631	employer meets the requirements of subparagraph 1. The
1632	qualifying security deposit shall be adjusted at the time of
1633	each such annual report. Upon the failure of the employer to
1634	timely provide such opinion or to timely provide a security
1635	deposit in an amount equal to 1.5 times the value certified in
1636	the latest opinion, the association shall provide that
1637	information to the department of Insurancealong with a
1638	recommendation, and the department of Insuranceshall then
1639	revoke such employer's authorization to self-insure. Failure to
1640	comply with this subparagraph constitutes an immediate serious
1641	danger to the public health, safety, or welfare sufficient to
1642	justify the summary suspension of the employer's authorization
1643	to self-insure pursuant to s. 120.68.
1644	3. Upon the suspension or revocation of the employer's
1645	authorization to self-insure, the employer shall provide to the
1646	association the certified opinion of an independent actuary who
1647	is a member of the American Academy of Actuaries of the
1648	actuarial present value of the determined and estimated future
1649	compensation payments of the employer for claims incurred while
1650	the member exercised the privilege of self-insurance, using a
1651	discount rate of 4 percent. The employer shall provide such an
1652	opinion at 6-month intervals thereafter until such time as the
1653	latest opinion shows no remaining value of claims. With each
1654	such opinion, the employer shall deposit with the association a
1655	qualifying security deposit in an amount equal to the value
1656	certified by the actuary. The association has a cause of action
1657	against an employer, and against any successor of the employer,
1658	who fails to timely provide such opinion or who fails to timely
1659	maintain the required security deposit with the association. The
1660	association shall recover a judgment in the amount of the
1661	actuarial present value of the determined and estimated future
1662	compensation payments of the employer for claims incurred while
1663	the employer exercised the privilege of self-insurance, together
1664	with attorney's fees. For purposes of this section, the
1665	successor of an employer means any person, business entity, or
1666	group of persons or business entities, which holds or acquires
1667	legal or beneficial title to the majority of the assets or the
1668	majority of the shares of the employer.
1669	4. A qualifying security deposit shall consist, at the
1670	option of the employer, of:
1671	a. Surety bonds, in a form and containing such terms as
1672	prescribed by the association, issued by a corporation surety
1673	authorized to transact surety business by the officeDepartment
1674	of Insurance, and whose policyholders' and financial ratings, as
1675	reported in A.M. Best's Insurance Reports, Property-Liability,
1676	are not less than "A" and "V", respectively.
1677	b. Irrevocable letters of credit in favor of the
1678	association issued by financial institutions located within this
1679	state, the deposits of which are insured through the Federal
1680	Deposit Insurance Corporation.
1681	5. The qualifying security deposit shall be held by the
1682	association exclusively for the benefit of workers' compensation
1683	claimants. The security shall not be subject to assignment,
1684	execution, attachment, or any legal process whatsoever, except
1685	as necessary to guarantee the payment of compensation under this
1686	chapter. No surety bond may be terminated, and no letter of
1687	credit may be allowed to expire, without 90 days' prior written
1688	notice to the association and deposit by the self-insuring
1689	employer of some other qualifying security deposit of equal
1690	value within 10 business days after such notice. Failure to
1691	provide such written notice or failure to timely provide
1692	qualifying replacement security after such notice shall
1693	constitute grounds for the association to call or sue upon the
1694	surety bond or to exercise its rights under a letter of credit.
1695	Current self-insured employers must comply with this section on
1696	or before December 31, 2001, or upon the maturity of existing
1697	security deposits, whichever occurs later. The department of
1698	Insurancemay specify by rule the amount of the qualifying
1699	security deposit required prior to authorizing an employer to
1700	self-insure and the amount of net worth required for an employer
1701	to qualify for authorization to self-insure;
1702	(c) By entering into a contract with a public utility
1703	under an approved utility-provided self-insurance program as set
1704	forth in s. 624.46225 in effect as of July 1, 1983. The
1705	departmentdivisionshall adopt rules to implement this
1706	paragraph;
1707	(d) By entering into an interlocal agreement with other
1708	local governmental entities to create a local government pool
1709	pursuant to s. 624.4622;
1710	(e) In accordance with s. 440.135, an employer, other than
1711	a local government unit, may elect coverage under the Workers'
1712	Compensation Law and retain the benefit of the exclusiveness of
1713	liability provided in s. 440.11 by obtaining a 24-hour health
1714	insurance policy from an authorized property and casualty
1715	insurance carrier or an authorized life and health insurance
1716	carrier, or by participating in a fully or partially self-
1717	insured 24-hour health plan that is established or maintained by
1718	or for two or more employers, so long as the law of this state
1719	is not preempted by the Employee Retirement Income Security Act
1720	of 1974, Pub. L. No. 93-406, or any amendment to that law, which
1721	policy or plan must provide, for at least occupational injuries
1722	and illnesses, medical benefits that are comparable to those
1723	required by this chapter. A local government unit, as a single
1724	employer, in accordance with s. 440.135, may participate in the
1725	24-hour health insurance coverage plan referenced in this
1726	paragraph. Disputes and remedies arising under policies issued
1727	under this section are governed by the terms and conditions of
1728	the policies and under the applicable provisions of the Florida
1729	Insurance Code and rules adopted under the insurance code and
1730	other applicable laws of this state. The 24-hour health
1731	insurance policy may provide for health care by a health
1732	maintenance organization or a preferred provider organization.
1733	The premium for such 24-hour health insurance policy shall be
1734	paid entirely by the employer. The 24-hour health insurance
1735	policy may use deductibles and coinsurance provisions that
1736	require the employee to pay a portion of the actual medical care
1737	received by the employee. If an employer obtains a 24-hour
1738	health insurance policy or self-insured plan to secure payment
1739	of compensation as to medical benefits, the employer must also
1740	obtain an insurance policy or policies that provide indemnity
1741	benefits as follows:
1742	1. If indemnity benefits are provided only for
1743	occupational-related disability, such benefits must be
1744	comparable to those required by this chapter.
1745	2. If indemnity benefits are provided for both
1746	occupational-related and nonoccupational-related disability,
1747	such benefits must be comparable to those required by this
1748	chapter, except that they must be based on 60 percent of the
1749	average weekly wages.
1750	3. The employer shall provide for each of its employees
1751	life insurance with a death benefit of $100,000.
1752	4. Policies providing coverage under this subsection must
1753	use prescribed and acceptable underwriting standards, forms, and
1754	policies approved by the Department of Insurance. If any
1755	insurance policy that provides coverage under this section is
1756	canceled, terminated, or nonrenewed for any reason, the
1757	cancellation, termination, or nonrenewal is ineffective until
1758	the self-insured employer or insurance carrier or carriers
1759	notify the division and the Department of Insurance of the
1760	cancellation, termination, or nonrenewal, and until the division
1761	has actually received the notification. The division must be
1762	notified of replacement coverage under a workers' compensation
1763	and employer's liability insurance policy or plan by the
1764	employer prior to the effective date of the cancellation,
1765	termination, or nonrenewal; or
1766	(e)(f)By entering into a contract with an individual
1767	self-insurer under an approved individual self-insurer-provided
1768	self-insurance program as set forth in s. 624.46225. The
1769	departmentdivisionmay adopt rules to administer this
1770	subsection.
1771	(2)(a) The department of Insuranceshall adopt rules by
1772	which businesses may become qualified to provide underwriting
1773	claims-adjusting, loss control, and safety engineering services
1774	to self-insurers.
1775	(b) The department of Insuranceshall adopt rules
1776	requiring self-insurers to file any reports necessary to fulfill
1777	the requirements of this chapter. Any self-insurer who fails to
1778	file any report as prescribed by the rules adopted by the
1779	department of Insuranceshall be subject to a civil penalty.
1780	(3)(a) The license of any stock company or mutual company
1781	or association or exchange authorized to do insurance business
1782	in the state shall for good cause, upon recommendation of the
1783	departmentdivision, be suspended or revoked by the office
1784	Department of Insurance. No suspension or revocation shall
1785	affect the liability of any carrier already incurred.
1786	(b) The department of Insuranceshall suspend or revoke
1787	any authorization to a self-insurer for failure to comply with
1788	this section or for good cause, as defined by rule of the
1789	department of Insurance. No suspension or revocation shall
1790	affect the liability of any self-insurer already incurred.
1791	(c) Violation of s. 440.381 by a self-insurance fund shall
1792	result in the imposition of a fine not to exceed $1,000 per
1793	audit if the self-insurance fund fails to act on said audits by
1794	correcting errors in employee classification or accepted
1795	applications for coverage where it knew employee classifications
1796	were incorrect. Such fines shall be levied by the department
1797	divisionand deposited into the Workers' Compensation
1798	Administration Trust Fund.
1799	(4)(a) A carrier of insurance, including the parties to
1800	any mutual, reciprocal, or other association, may not write any
1801	compensation insurance under this chapter without a certificate
1802	of authoritypermit from the officeDepartment of Insurance.
1803	Such certificate of authoritypermitshall be given, upon
1804	application therefor, to any insurance or mutual or reciprocal
1805	insurance association upon the office'sdepartment'sbeing
1806	satisfied of the solvency of such corporation or association and
1807	its ability to perform all its undertakings. The office
1808	Department of Insurance may revoke any certificate of authority
1809	permitso issued for violation of any provision of this chapter.
1810	(b) A carrier of insurance, including the parties to any
1811	mutual, reciprocal, or other association, may not write any
1812	compensation insurance under this chapter unless such carrier
1813	has a claims adjuster, either in-house or under contract,
1814	situated within this state. Self-insurers whose compensation
1815	payments are administered through a third party and carriers of
1816	insurance shall maintain a claims adjuster within this state
1817	during any period for which there are any open claims against
1818	such self-insurer or carrier arising under the compensation
1819	insurance written by the self-insurer or carrier. Individual
1820	self-insurers whose compensation payments are administered by
1821	employees of the self-insurer shall not be required to have
1822	their claims adjuster situated within this state. Individual
1823	self-insurers shall not be required to have their claims
1824	adjusters situated within this state.
1825	Section 18. Subsections (1) and (3) of section 440.381,
1826	Florida Statutes, are amended to read:
1827	440.381 Application for coverage; reporting payroll;
1828	payroll audit procedures; penalties.--
1829	(1) Applications by an employer to a carrier for coverage
1830	required by s. 440.38 must be made on a form prescribed by the
1831	Financial Services CommissionDepartment of Insurance. The
1832	Financial Services CommissionDepartment of Insuranceshall
1833	adopt rules for applications for coverage required by s. 440.38.
1834	The rules must provide that an application include information
1835	on the employer, the type of business, past and prospective
1836	payroll, estimated revenue, previous workers' compensation
1837	experience, employee classification, employee names, and any
1838	other information necessary to enable a carrier to accurately
1839	underwrite the applicant. The rules must include a provision
1840	that a carrier or self-insurance fund may require that an
1841	employer update an application monthly to reflect any change in
1842	the required application information.
1843	(3) The Financial Services Commission, in consultation
1844	with the department,shall establish by rule minimum
1845	requirements for audits of payroll and classifications in order
1846	to ensure that the appropriate premium is charged for workers'
1847	compensation coverage. The rules shall ensure that audits
1848	performed by both carriers and employers are adequate to provide
1849	that all sources of payments to employees, subcontractors, and
1850	independent contractors have been reviewed and that the accuracy
1851	of classification of employees has been verified. The rules
1852	shall provide that employers in all classes other than the
1853	construction class be audited not less frequently than
1854	biennially and may provide for more frequent audits of employers
1855	in specified classifications based on factors such as amount of
1856	premium, type of business, loss ratios, or other relevant
1857	factors. In no event shall employers in the construction class,
1858	generating more than the amount of premium required to be
1859	experience rated, be audited less than annually. The annual
1860	audits required for construction classes shall consist of
1861	physical onsite audits. Payroll verification audit rules must
1862	include, but need not be limited to, the use of state and
1863	federal reports of employee income, payroll and other accounting
1864	records, certificates of insurance maintained by subcontractors,
1865	and duties of employees. At the completion of an audit, the
1866	employer or officer of the corporation and the auditor must
1867	print and sign their names on the audit document and attach
1868	proof of identification to the audit document.
1869	Section 19. Section 440.385, Florida Statutes, is amended
1870	to read:
1871	440.385 Florida Self-Insurers Guaranty Association,
1872	Incorporated.--
1873	(1) CREATION OF ASSOCIATION.--
1874	(a) There is created a nonprofit corporation to be known
1875	as the "Florida Self-Insurers Guaranty Association,
1876	Incorporated," hereinafter referred to as "the association."
1877	Upon incorporation of the association, all individual self-
1878	insurers as defined in ss. 440.02(23)(a) and 440.38(1)(b), other
1879	than individual self-insurers which are public utilities or
1880	governmental entities, shall be members of the association as a
1881	condition of their authority to individually self-insure in this
1882	state. The association shall perform its functions under a plan
1883	of operation as established and approved under subsection (5)
1884	and shall exercise its powers and duties through a board of
1885	directors as established under subsection (2). The association
1886	shall have those powers granted or permitted corporations not
1887	for profit, as provided in chapter 617. The activities of the
1888	association shall be subject to review by the department of
1889	Insurance. The department of Insuranceshall have oversight
1890	responsibility as set forth in this section. The association is
1891	specifically authorized to enter into agreements with this state
1892	to perform specified services.
1893	(b) A member may voluntarily withdraw from the association
1894	when the member voluntarily terminates the self-insurance
1895	privilege and pays all assessments due to the date of such
1896	termination. However, the withdrawing member shall continue to
1897	be bound by the provisions of this section relating to the
1898	period of his or her membership and any claims charged pursuant
1899	thereto. The withdrawing member who is a member on or after
1900	January 1, 1991, shall also be required to provide to the
1901	association upon withdrawal, and at 12-month intervals
1902	thereafter, satisfactory proof, including, if requested by the
1903	association, a report of known and potential claims certified by
1904	a member of the American Academy of Actuaries, that it continues
1905	to meet the standards of s. 440.38(1)(b)1. in relation to claims
1906	incurred while the withdrawing member exercised the privilege of
1907	self-insurance. Such reporting shall continue until the
1908	withdrawing member demonstrates to the association that there is
1909	no remaining value to claims incurred while the withdrawing
1910	member was self-insured. If a withdrawing member fails or
1911	refuses to timely provide an actuarial report to the
1912	association, the association may obtain an order from a circuit
1913	court requiring the member to produce such a report and ordering
1914	any other relief that the court determines appropriate. The
1915	association is entitled to recover all reasonable costs and
1916	attorney's fees expended in such proceedings. If during this
1917	reporting period the withdrawing member fails to meet the
1918	standards of s. 440.38(1)(b)1., the withdrawing member who is a
1919	member on or after January 1, 1991, shall thereupon, and at 6-
1920	month intervals thereafter, provide to the association the
1921	certified opinion of an independent actuary who is a member of
1922	the American Academy of Actuaries of the actuarial present value
1923	of the determined and estimated future compensation payments of
1924	the member for claims incurred while the member was a self-
1925	insurer, using a discount rate of 4 percent. With each such
1926	opinion, the withdrawing member shall deposit with the
1927	association security in an amount equal to the value certified
1928	by the actuary and of a type that is acceptable for qualifying
1929	security deposits under s. 440.38(1)(b). The withdrawing member
1930	shall continue to provide such opinions and to provide such
1931	security until such time as the latest opinion shows no
1932	remaining value of claims. The association has a cause of
1933	action against a withdrawing member, and against any successor
1934	of a withdrawing member, who fails to timely provide the
1935	required opinion or who fails to maintain the required deposit
1936	with the association. The association shall be entitled to
1937	recover a judgment in the amount of the actuarial present value
1938	of the determined and estimated future compensation payments of
1939	the withdrawing member for claims incurred during the time that
1940	the withdrawing member exercised the privilege of self-
1941	insurance, together with reasonable attorney's fees. The
1942	association is also entitled to recover reasonable attorney's
1943	fees in any action to compel production of any actuarial report
1944	required by this section. For purposes of this section, the
1945	successor of a withdrawing member means any person, business
1946	entity, or group of persons or business entities, which holds or
1947	acquires legal or beneficial title to the majority of the assets
1948	or the majority of the shares of the withdrawing member.
1949	(2) BOARD OF DIRECTORS.--The board of directors of the
1950	association shall consist of nine persons and shall be organized
1951	as established in the plan of operation. All board members shall
1952	be experienced in self-insurance in this state. Each director
1953	shall serve for a 4-year term and may be reappointed.
1954	Appointments after January 1, 2002, shall be made by the
1955	department of Insuranceupon recommendation of members of the
1956	association. Any vacancy on the board shall be filled for the
1957	remaining period of the term in the same manner as appointments
1958	other than initial appointments are made. Each director shall be
1959	reimbursed for expenses incurred in carrying out the duties of
1960	the board on behalf of the association.
1961	(3) POWERS AND DUTIES.--
1962	(a) Upon creation of the Insolvency Fund pursuant to the
1963	provisions of subsection (4), the association is obligated for
1964	payment of compensation under this chapter to insolvent members'
1965	employees resulting from incidents and injuries existing prior
1966	to the member becoming an insolvent member and from incidents
1967	and injuries occurring within 30 days after the member has
1968	become an insolvent member, provided the incidents giving rise
1969	to claims for compensation under this chapter occur during the
1970	year in which such insolvent member is a member of the guaranty
1971	fund and was assessable pursuant to the plan of operation, and
1972	provided the employee makes timely claim for such payments
1973	according to procedures set forth by a court of competent
1974	jurisdiction over the delinquency or bankruptcy proceedings of
1975	the insolvent member. Such obligation includes only that amount
1976	due the injured worker or workers of the insolvent member under
1977	this chapter. In no event is the association obligated to a
1978	claimant in an amount in excess of the obligation of the
1979	insolvent member. The association shall be deemed the insolvent
1980	employer for purposes of this chapter to the extent of its
1981	obligation on the covered claims and, to such extent, shall have
1982	all rights, duties, and obligations of the insolvent employer as
1983	if the employer had not become insolvent. However, in no event
1984	shall the association be liable for any penalties or interest.
1985	(b) The association may:
1986	1. Employ or retain such persons as are necessary to
1987	handle claims and perform other duties of the association.
1988	2. Borrow funds necessary to effect the purposes of this
1989	section in accord with the plan of operation.
1990	3. Sue or be sued.
1991	4. Negotiate and become a party to such contracts as are
1992	necessary to carry out the purposes of this section.
1993	5. Purchase such reinsurance as is determined necessary
1994	pursuant to the plan of operation.
1995	6. Review all applicants for membership in the association
1996	to determine whether the applicant is qualified for membership
1997	under the law. The association shall recommend to the department
1998	of Insurancethat the application be accepted or rejected based
1999	on the criteria set forth in s. 440.38(1)(b). The department of
2000	Insuranceshall approve or disapprove the application as
2001	provided in paragraph (6)(a).
2002	7. Collect and review financial information from employers
2003	and make recommendations to the department of Insurance
2004	regarding the appropriate security deposit and reinsurance
2005	amounts necessary for an employer to demonstrate that it has the
2006	financial strength necessary to ensure the timely payment of all
2007	current and future claims. The association may audit and examine
2008	an employer to verify the financial strength of its current and
2009	former members. If the association determines that a current or
2010	former self-insured employer does not have the financial
2011	strength necessary to ensure the timely payment of all current
2012	and estimated future claims, the association may recommend to
2013	the department of Insurancethat the department:
2014	a. Revoke the employer's self-insurance privilege.
2015	b. Require the employer to provide a certified opinion of
2016	an independent actuary who is a member of the American Academy
2017	of Actuaries as to the actuarial present value of the employer's
2018	estimated current and future compensation payments, using a 4-
2019	percent discount rate.
2020	c. Require an increase in the employer's security deposit
2021	in an amount determined by the association to be necessary to
2022	ensure payment of compensation claims. The department of
2023	Insuranceshall act on such recommendations as provided in
2024	paragraph (6)(a). The association has a cause of action against
2025	an employer, and against any successor of an employer, who fails
2026	to provide an additional security deposit required by the
2027	department of Insurance. The association shall file an action
2028	in circuit court to recover a judgment in the amount of the
2029	requested additional security deposit together with reasonable
2030	attorney's fees. For the purposes of this section, the
2031	successor of an employer is any person, business entity, or
2032	group of persons or business entities which holds or acquires
2033	legal or beneficial title to the majority of the assets or the
2034	majority of the shares of the employer.
2035	8. Charge fees to any member of the association to cover
2036	the actual costs of examining the financial and safety
2037	conditions of that member.
2038	9. Charge an applicant for membership in the association a
2039	fee sufficient to cover the actual costs of examining the
2040	financial condition of the applicant.
2041	10. Implement any procedures necessary to ensure
2042	compliance with regulatory actions taken by the department of
2043	Insurance.
2044	(c)1. To the extent necessary to secure funds for the
2045	payment of covered claims and also to pay the reasonable costs
2046	to administer them, the association, subject to approval by the
2047	department of Insurance, shall levy assessments based on the
2048	annual written premium each employer would have paid had the
2049	employer not been self-insured. Every assessment shall be made
2050	as a uniform percentage of the figure applicable to all
2051	individual self-insurers, provided that the assessment levied
2052	against any self-insurer in any one year shall not exceed 1
2053	percent of the annual written premium during the calendar year
2054	preceding the date of the assessment. Assessments shall be
2055	remitted to and administered by the board of directors in the
2056	manner specified by the approved plan. Each employer so
2057	assessed shall have at least 30 days' written notice as to the
2058	date the assessment is due and payable. The association shall
2059	levy assessments against any newly admitted member of the
2060	association so that the basis of contribution of any newly
2061	admitted member is the same as previously admitted members,
2062	provision for which shall be contained in the plan of operation.
2063	2. If, in any one year, funds available from such
2064	assessments, together with funds previously raised, are not
2065	sufficient to make all the payments or reimbursements then
2066	owing, the funds available shall be prorated, and the unpaid
2067	portion shall be paid as soon thereafter as sufficient
2068	additional funds become available.
2069	3. Funds may be allocated or paid from the Workers'
2070	Compensation Administration Trust Fund to contract with the
2071	association to perform services required by law. However, no
2072	state funds of any kind shall be allocated or paid to the
2073	association or any of its accounts for payment of covered claims
2074	or related expenses except those state funds accruing to the
2075	association by and through the assignment of rights of an
2076	insolvent employer. The department of Insurancemay not levy any
2077	assessment on the association.
2078	(4) INSOLVENCY FUND.--Upon the adoption of a plan of
2079	operation, there shall be created an Insolvency Fund to be
2080	managed by the association.
2081	(a) The Insolvency Fund is created for purposes of meeting
2082	the obligations of insolvent members incurred while members of
2083	the association and after the exhaustion of any security
2084	deposit, as required under this chapter. However, if such
2085	security deposit or reinsurance policy is payable to the
2086	association, the association shall commence to provide benefits
2087	out of the Insolvency Fund and be reimbursed from the security
2088	deposit or reinsurance policy. The method of operation of the
2089	Insolvency Fund shall be defined in the plan of operation as
2090	provided in subsection (5).
2091	(b) The department of Insuranceshall have the authority
2092	to audit the financial soundness of the Insolvency Fund
2093	annually.
2094	(c) The department of Insurancemay offer certain
2095	amendments to the plan of operation to the board of directors of
2096	the association for purposes of assuring the ongoing financial
2097	soundness of the Insolvency Fund and its ability to meet the
2098	obligations of this section.
2099	(5) PLAN OF OPERATION.--The association shall operate
2100	pursuant to a plan of operation approved by the board of
2101	directors. The plan of operation in effect on January 1, 2002,
2102	and approved by the Department of Labor and Employment Security
2103	shall remain in effect. However, any amendments to the plan
2104	shall not become effective until approved by the Department of
2105	Financial ServicesInsurance.
2106	(a) The purpose of the plan of operation shall be to
2107	provide the association and the board of directors with the
2108	authority and responsibility to establish the necessary programs
2109	and to take the necessary actions to protect against the
2110	insolvency of a member of the association. In addition, the
2111	plan shall provide that the members of the association shall be
2112	responsible for maintaining an adequate Insolvency Fund to meet
2113	the obligations of insolvent members provided for under this act
2114	and shall authorize the board of directors to contract and
2115	employ those persons with the necessary expertise to carry out
2116	this stated purpose. By January 1, 2003, the board of directors
2117	shall submit to the department of Insurancea proposed plan of
2118	operation for the administration of the association. The
2119	department of Insuranceshall approve the plan by order,
2120	consistent with this section. The department of Insuranceshall
2121	approve any amendments to the plan, consistent with this
2122	section, which are determined appropriate to carry out the
2123	duties and responsibilities of the association.
2124	(b) All member employers shall comply with the plan of
2125	operation.
2126	(c) The plan of operation shall:
2127	1. Establish the procedures whereby all the powers and
2128	duties of the association under subsection (3) will be
2129	performed.
2130	2. Establish procedures for handling assets of the
2131	association.
2132	3. Establish the amount and method of reimbursing members
2133	of the board of directors under subsection (2).
2134	4. Establish procedures by which claims may be filed with
2135	the association and establish acceptable forms of proof of
2136	covered claims. Notice of claims to the receiver or liquidator
2137	of the insolvent employer shall be deemed notice to the
2138	association or its agent, and a list of such claims shall be
2139	submitted periodically to the association or similar
2140	organization in another state by the receiver or liquidator.
2141	5. Establish regular places and times for meetings of the
2142	board of directors.
2143	6. Establish procedures for records to be kept of all
2144	financial transactions of the association and its agents and the
2145	board of directors.
2146	7. Provide that any member employer aggrieved by any final
2147	action or decision of the association may appeal to the
2148	department of Insurancewithin 30 days after the action or
2149	decision.
2150	8. Establish the procedures whereby recommendations of
2151	candidates for the board of directors shall be submitted to the
2152	department of Insurance.
2153	9. Contain additional provisions necessary or proper for
2154	the execution of the powers and duties of the association.
2155	(d) The plan of operation may provide that any or all of
2156	the powers and duties of the association, except those specified
2157	under subparagraphs (c)1. and 2., be delegated to a corporation,
2158	association, or other organization which performs or will
2159	perform functions similar to those of this association or its
2160	equivalent in two or more states. Such a corporation,
2161	association, or organization shall be reimbursed as a servicing
2162	facility would be reimbursed and shall be paid for its
2163	performance of any other functions of the association. A
2164	delegation of powers or duties under this subsection shall take
2165	effect only with the approval of both the board of directors and
2166	the department of Insuranceand may be made only to a
2167	corporation, association, or organization which extends
2168	protection which is not substantially less favorable and
2169	effective than the protection provided by this section.
2170	(6) POWERS AND DUTIES OF DEPARTMENT OF INSURANCE.--The
2171	department of Insuranceshall:
2172	(a) Review recommendations of the association concerning
2173	whether current or former self-insured employers or members of
2174	the association have the financial strength necessary to ensure
2175	the timely payment of all current and estimated future claims.
2176	If the association determines an employer does not have the
2177	financial strength necessary to ensure the timely payment of all
2178	current and future claims and recommends action pursuant to
2179	paragraph (3)(b), the department shall take such action as
2180	necessary to order the employer to comply with the
2181	recommendation, unless the department finds by clear and
2182	convincing evidence that the recommendation is erroneous.
2183	(b) Contract with the association for services, which may
2184	include, but are not limited to:
2185	1. Processing applications for self-insurance.
2186	2. Collecting and reviewing financial statements and loss
2187	reserve information from individual self-insurers.
2188	3. Collecting and maintaining files for original security
2189	deposit documents and reinsurance policies from individual self-
2190	insurers and, if necessary, perfecting security interests in
2191	security deposits.
2192	4. Processing compliance documentation for individual
2193	self-insurers and providing copies of such documentation to the
2194	department.
2195	5. Collecting all data necessary to calculate annual
2196	premium for all individual self-insurers, including individual
2197	self-insurers that are public utilities or governmental
2198	entities, and providing such calculated annual premium to the
2199	departmentdivisionfor assessment purposes.
2200	6. Inspecting and auditing annually, if necessary, the
2201	payroll and other records of each individual self-insurer,
2202	including individual self-insurers that are public utilities or
2203	governmental entities, in order to determine the wages paid by
2204	each individual self-insurer, the premium such individual self-
2205	insurer would have to pay if insured, and all payments of
2206	compensation made by such individual self-insurer during each
2207	prior period with the results of such audit provided to the
2208	departmentdivision. For purposes of this section, the payroll
2209	records of each individual self-insurer shall be open to
2210	inspection and audit by the association and the department, or
2211	their authorized representatives, during regular business hours.
2212	7. Processing applications and making recommendations with
2213	respect to the qualification of a business to be approved to
2214	provide or continue to provide services to individual self-
2215	insurers in the areas of underwriting, claims adjusting, loss
2216	control, and safety engineering.
2217	8. Providing legal representation to implement the
2218	administration and audit of individual self-insurers and making
2219	recommendations regarding prosecution of any administrative or
2220	legal proceedings necessitated by the regulation of the
2221	individual self-insurers by the department.
2222	(c) Contract with an attorney or attorneys recommended by
2223	the association for representation of the department in any
2224	administrative or legal proceedings necessitated by the
2225	recommended regulation of the individual self-insurers.
2226	(d) Direct the association to require from each individual
2227	self-insurer, at such time and in accordance with such
2228	regulations as the department prescribes, reports relating to
2229	wages paid, the amount of premiums such individual self-insurer
2230	would have to pay if insured, and all payments of compensation
2231	made by such individual self-insurer during each prior period
2232	and to determine the amounts paid by each individual self-
2233	insurer and the amounts paid by all individual self-insurers
2234	during such period. For purposes of this section, the payroll
2235	records of each individual self-insurer shall be open to annual
2236	inspection and audit by the association and the department, or
2237	their authorized representative, during regular business hours,
2238	and if any audit of such records of an individual self-insurer
2239	discloses a deficiency in the amount reported to the association
2240	or in the amounts paid to the departmentdivisionby an
2241	individual self-insurer for its assessment for the Workers'
2242	Compensation Administration Trust Fund, the department or the
2243	association may assess the cost of such audit against the
2244	individual self-insurer.
2245	(e) Require that the association notify the member
2246	employers and any other interested parties of the determination
2247	of insolvency and of their rights under this section. Such
2248	notification shall be by mail at the last known address thereof
2249	when available; but, if sufficient information for notification
2250	by mail is not available, notice by publication in a newspaper
2251	of general circulation shall be sufficient.
2252	(f) Suspend or revoke the authority of any member employer
2253	failing to pay an assessment when due or failing to comply with
2254	the plan of operation to self-insure in this state. As an
2255	alternative, the department may levy a fine on any member
2256	employer failing to pay an assessment when due. Such fine shall
2257	not exceed 5 percent of the unpaid assessment per month, except
2258	that no fine shall be less than $100 per month.
2259	(g) Revoke the designation of any servicing facility if
2260	the department finds that claims are being handled
2261	unsatisfactorily.
2262	(7) EFFECT OF PAID CLAIMS.--
2263	(a) Any person who recovers from the association under
2264	this section shall be deemed to have assigned his or her rights
2265	to the association to the extent of such recovery. Every
2266	claimant seeking the protection of this section shall cooperate
2267	with the association to the same extent as such person would
2268	have been required to cooperate with the insolvent member. The
2269	association shall have no cause of action against the employee
2270	of the insolvent member for any sums the association has paid
2271	out, except such causes of action as the insolvent member would
2272	have had if such sums had been paid by the insolvent member. In
2273	the case of an insolvent member operating on a plan with
2274	assessment liability, payments of claims by the association
2275	shall not operate to reduce the liability of the insolvent
2276	member to the receiver, liquidator, or statutory successor for
2277	unpaid assessments.
2278	(b) The receiver, liquidator, or statutory successor of an
2279	insolvent member shall be bound by settlements of covered claims
2280	by the association or a similar organization in another state.
2281	The court having jurisdiction shall grant such claims priority
2282	against the assets of the insolvent member equal to that to
2283	which the claimant would have been entitled in the absence of
2284	this section. The expense of the association or similar
2285	organization in handling claims shall be accorded the same
2286	priority as the expenses of the liquidator.
2287	(c) The association shall file periodically with the
2288	receiver or liquidator of the insolvent member statements of the
2289	covered claims paid by the association and estimates of
2290	anticipated claims on the association, which shall preserve the
2291	rights of the association against the assets of the insolvent
2292	member.
2293	(8) NOTIFICATION OF INSOLVENCIES.--To aid in the detection
2294	and prevention of employer insolvencies: Upon determination by
2295	majority vote that any member employer may be insolvent or in a
2296	financial condition hazardous to the employees thereof or to the
2297	public, it shall be the duty of the board of directors to notify
2298	the department of Insuranceof any information indicating such
2299	condition.
2300	(9) EXAMINATION OF THE ASSOCIATION.--The association shall
2301	be subject to examination and regulation by the department of
2302	Insurance. No later than March 30 of each year, the board of
2303	directors shall submit an audited financial statement for the
2304	preceding calendar year in a form approved by the department.
2305	(10) IMMUNITY.--There shall be no liability on the part
2306	of, and no cause of action of any nature shall arise against,
2307	any member employer, the association or its agents or employees,
2308	the board of directors, or the department of Insuranceor its
2309	representatives for any action taken by them in the performance
2310	of their powers and duties under this section.
2311	(11) STAY OF PROCEEDINGS; REOPENING OF DEFAULT
2312	JUDGMENTS.--All proceedings in which an insolvent employer is a
2313	party, or is obligated to defend a party, in any court or before
2314	any quasi-judicial body or administrative board in this state
2315	shall be stayed for up to 6 months, or for such additional
2316	period from the date the employer becomes an insolvent member,
2317	as is deemed necessary by a court of competent jurisdiction to
2318	permit proper defense by the association of all pending causes
2319	of action as to any covered claims arising from a judgment under
2320	any decision, verdict, or finding based on the default of the
2321	insolvent member. The association, either on its own behalf or
2322	on behalf of the insolvent member, may apply to have such
2323	judgment, order, decision, verdict, or finding set aside by the
2324	same court or administrator that made such judgment, order,
2325	decision, verdict, or finding and shall be permitted to defend
2326	against such claim on the merits. If requested by the
2327	association, the stay of proceedings may be shortened or waived.
2328	(12) LIMITATION ON CERTAIN ACTIONS.--Notwithstanding any
2329	other provision of this chapter, a covered claim, as defined
2330	herein, with respect to which settlement is not effected and
2331	pursuant to which suit is not instituted against the insured of
2332	an insolvent member or the association within 1 year after the
2333	deadline for filing claims with the receiver of the insolvent
2334	member, or any extension of the deadline, shall thenceforth be
2335	barred as a claim against the association.
2336	(13) CORPORATE INCOME TAX CREDIT.--Any sums acquired by a
2337	member by refund, dividend, or otherwise from the association
2338	shall be payable within 30 days of receipt to the Department of
2339	Revenue for deposit with the Chief Financial OfficerTreasurer
2340	to the credit of the General Revenue Fund. All provisions of
2341	chapter 220 relating to penalties and interest on delinquent
2342	corporate income tax payments apply to payments due under this
2343	subsection.
2344	Section 20. Subsections (2), (3), and (4) of section
2345	440.386, Florida Statutes, are amended to read:
2346	440.386 Individual self-insurers' insolvency;
2347	conservation; liquidation.--
2348	(2) COMMENCEMENT OF DELINQUENCY PROCEEDING.--The
2349	department of Insuranceor the Florida Self-Insurers Guaranty
2350	Association, Incorporated, may commence a delinquency proceeding
2351	by application to the court for an order directing the
2352	individual self-insurer to show cause why the department or
2353	association should not have the relief sought. On the return of
2354	such order to show cause, and after a full hearing, the court
2355	shall either deny the application or grant the application,
2356	together with such other relief as the nature of the case and
2357	the interests of the claimants, creditors, stockholders,
2358	members, subscribers, or public may require. The department and
2359	the association shall give reasonable written notice to each
2360	other of all hearings which pertain to an adjudication of
2361	insolvency of a member individual self-insurer.
2362	(3) GROUNDS FOR LIQUIDATION.--The department of Insurance
2363	or the association may apply to the court for an order
2364	appointing a receiver and directing the receiver to liquidate
2365	the business of a domestic individual self-insurer if such
2366	individual self-insurer is insolvent.
2367	(4) GROUNDS FOR CONSERVATION; FOREIGN INDIVIDUAL SELF-
2368	INSURERS.--
2369	(a) The department of Insuranceor the association may
2370	apply to the court for an order appointing a receiver or
2371	ancillary receiver, and directing the receiver to conserve the
2372	assets within this state, of a foreign individual self-insurer
2373	if such individual self-insurer is insolvent.
2374	(b) An order to conserve the assets of an individual self-
2375	insurer shall require the receiver forthwith to take possession
2376	of the property of the receiver within the state and to conserve
2377	it, subject to the further direction of the court.
2378	Section 21. Subsections (3), (4), and (6) of section
2379	440.44, Florida Statutes, are amended to read:
2380	440.44 Workers' compensation; staff organization.--
2381	(3) EXPENDITURES.--The department, the agency, the office,
2382	the Department of Education, and the director of the Division of
2383	Administrative Hearings shall make such expenditures, including
2384	expenditures for personal services and rent at the seat of
2385	government and elsewhere, for law books; for telephone services
2386	and WATS lines; for books of reference, periodicals, equipment,
2387	and supplies; and for printing and binding as may be necessary
2388	in the administration of this chapter. All expenditures in the
2389	administration of this chapter shall be allowed and paid as
2390	provided in s. 440.50 upon the presentation of itemized vouchers
2391	therefor approved by the department, the agency, the office,the
2392	Department of Education, or the director of the Division of
2393	Administrative Hearings.
2394	(4) PERSONNEL ADMINISTRATION.--Subject to the other
2395	provisions of this chapter, the department, the agency, the
2396	office,the Department of Education, and the Division of
2397	Administrative Hearings may appoint, and prescribe the duties
2398	and powers of, bureau chiefs, attorneys, accountants, medical
2399	advisers, technical assistants, inspectors, claims examiners,
2400	and such other employees as may be necessary in the performance
2401	of their duties under this chapter.
2402	(6) SEAL.--The department and the judges of compensation
2403	claims shall have a seal upon which shall be inscribed the words
2404	"State of Florida Department of Financial Services
2405	Insurance--Seal" and "Division of Administrative
2406	Hearings--Seal," respectively.
2407	Section 22. Subsections (3) and (4) of section 440.52,
2408	Florida Statutes, are amended to read:
2409	440.52 Registration of insurance carriers; notice of
2410	cancellation or expiration of policy; suspension or revocation
2411	of authority.--
2412	(3) If the department finds, after due notice and a
2413	hearing at which the insurance carrier is entitled to be heard
2414	in person or by counsel and present evidence, that the insurance
2415	carrier has repeatedly failed to comply with its obligations
2416	under this chapter, the department may request the office to
2417	suspend or revoke the authorization of such insurance carrier to
2418	write workers' compensation insurance under this chapter. Such
2419	suspension or revocation shall not affect the liability of any
2420	such insurance carrier under policies in force prior to the
2421	suspension or revocation.
2422	(4) In addition to the penalties prescribed in subsection
2423	(3), violation of s. 440.381 by an insurance carrier shall
2424	result in the imposition of a fine not to exceed $1,000 per
2425	audit, if the insurance carrier fails to act on said audits by
2426	correcting errors in employee classification or accepted
2427	applications for coverage where it knew employee classifications
2428	were incorrect. Such fines shall be levied by the office
2429	Department of Insurance and deposited into the Insurance
2430	Commissioner'sRegulatory Trust Fund.
2431	Section 23. Section 440.525, Florida Statutes, is amended
2432	to read:
2433	440.525 Examination of carriers.--The department and
2434	officemay examine each carrier as often as is warranted to
2435	ensure that carriers are fulfilling their obligations under this
2436	chapterthe law. The examination may cover any period of the
2437	carrier's operations since the last previous examination.
2438	Section 24. Paragraph (k) of subsection (1) of section
2439	553.74, Florida Statutes, is amended to read:
2440	553.74 Florida Building Commission.--
2441	(1) The Florida Building Commission is created and shall
2442	be located within the Department of Community Affairs for
2443	administrative purposes. Members shall be appointed by the
2444	Governor subject to confirmation by the Senate. The commission
2445	shall be composed of 23 members, consisting of the following:
2446	(k) One member who represents the Department of Financial
2447	ServicesInsurance.
2448	Section 25. Effective October 1, 2003, paragraph (k) of
2449	subsection (1) of section 553.74, Florida Statutes, as amended
2450	by chapter 2002-293, Laws of Florida, is amended to read:
2451	553.74 Florida Building Commission.--
2452	(1) The Florida Building Commission is created and shall
2453	be located within the Department of Community Affairs for
2454	administrative purposes. Members shall be appointed by the
2455	Governor subject to confirmation by the Senate. The commission
2456	shall be composed of 23 members, consisting of the following:
2457	(k) One member who represents the Department of Financial
2458	ServicesInsurance.
2459
2460	Any person serving on the commission under paragraph (c) or
2461	paragraph (h) on October 1, 2003, and who has served less than
2462	two full terms is eligible for reappointment to the commission
2463	regardless of whether he or she meets the new qualification.
2464	Section 26. Section 624.05, Florida Statutes, is amended
2465	to read:
2466	624.05 "Department," "commission," and "office"
2467	defined.--As used in the Insurance Code:
2468	(1) "Department" means the Department of Financial
2469	Services. The term does not mean the Financial Services
2470	Commission or any office of the Financial Services Commission
2471	Insurance of this state, unless the context otherwise requires.
2472	(2) "Commission" means the Financial Services Commission.
2473	(3) "Office" means the Office of Insurance Regulation of
2474	the Financial Services Commission.
2475	Section 27. Subsection (5) of section 624.155, Florida
2476	Statutes, is amended to read:
2477	624.155 Civil remedy.--
2478	(5) This section shall not be construed to authorize a
2479	class action suit against an insurer or a civil action against
2480	the commission, the office, or the department or any of their,
2481	its employees, or the Insurance Commissioner,or to create a
2482	cause of action when a health insurer refuses to pay a claim for
2483	reimbursement on the ground that the charge for a service was
2484	unreasonably high or that the service provided was not medically
2485	necessary.
2486	Section 28. Section 624.303, Florida Statutes, is amended
2487	to read:
2488	624.303 Seal; certified copies as evidence.--
2489	(1) The department, commission, and office shall eachhave
2490	an official seal by which its respectiveproceedings are
2491	authenticated.
2492	(2) All certificates executed by the department or office,
2493	other than licenses of agents, solicitors, or adjusters or
2494	similar licenses or permits, shall bear its respectiveseal.
2495	(3) Any written instrument purporting to be a copy of any
2496	action, proceeding, or finding of fact by the department,
2497	commission, or office or any record of the department,
2498	commission, or officeor copy of any document on file in its
2499	office when authenticated under hand of the respective agency
2500	head or his or her designeecommissionerby the seal shall be
2501	accepted by all the courts of this state as prima facie evidence
2502	of its contents.
2503	Section 29. Section 624.316, Florida Statutes, is amended
2504	to read:
2505	624.316 Examination of insurers.--
2506	(1)(a) The officedepartmentshall examine the affairs,
2507	transactions, accounts, records, and assets of each authorized
2508	insurer and of the attorney in fact of a reciprocal insurer as
2509	to its transactions affecting the insurer as often as it deems
2510	advisable, except as provided in this section. The examination
2511	may include examination of the affairs, transactions, accounts,
2512	and records relating directly or indirectly to the insurer and
2513	of the assets of the insurer's managing general agents and
2514	controlling or controlled person, as defined in s. 625.012. The
2515	examination shall be pursuant to a written order of the office
2516	department. Such order shall expire upon receipt by the office
2517	departmentof the written report of the examination.
2518	(b) As a part of its examination procedure, the office
2519	departmentshall examine each insurer regarding all of the
2520	information required by s. 627.915.
2521	(c) The officedepartmentshall examine each insurer
2522	according to accounting procedures designed to fulfill the
2523	requirements of generally accepted insurance accounting
2524	principles and practices and good internal control and in
2525	keeping with generally accepted accounting forms, accounts,
2526	records, methods, and practices relating to insurers. To
2527	facilitate uniformity in examinations, the commissiondepartment
2528	may adopt, by rule, the Market and Financial Conduct Examiners
2529	Examination Handbook and the Financial Condition Examiners
2530	Handbook of the National Association of Insurance Commissioners,
2531	20021990, and may adopt subsequent amendments thereto, if the
2532	examination methodology remains substantially consistent.
2533	(2)(a) Except as provided in paragraph (f), the office
2534	departmentmay examine each insurer as often as may be warranted
2535	for the protection of the policyholders and in the public
2536	interest, and shall examine each domestic insurer not less
2537	frequently than once every 3 years. The examination shall cover
2538	the preceding 3 fiscal years of the insurer and shall be
2539	commenced within 12 months after the end of the most recent
2540	fiscal year being covered by the examination. The examination
2541	may cover any period of the insurer's operations since the last
2542	previous examination. The examination may include examination of
2543	events subsequent to the end of the most recent fiscal year and
2544	the events of any prior period that affect the present financial
2545	condition of the insurer. In lieu of making its own examination,
2546	the officedepartmentmay accept an independent certified public
2547	accountant's audit report prepared on a statutory basis
2548	consistent with the Florida Insurance Code on that specific
2549	company. The officedepartmentmay not accept the report in lieu
2550	of the requirement imposed by paragraph (1)(b). When an
2551	examination is conducted by the officedepartmentfor the sole
2552	purpose of examining the 3 preceding fiscal years of the insurer
2553	within 12 months after the opinion date of an independent
2554	certified public accountant's audit report prepared on a
2555	statutory basis on that specific company consistent with the
2556	Florida Insurance Code, the cost of the examination as charged
2557	to the insurer pursuant to s. 624.320 shall be reduced by the
2558	cost to the insurer of the independent certified public
2559	accountant's audit reports. Requests for the reduction in cost
2560	of examination must be submitted to the officedepartmentin
2561	writing no later than 90 days after the conclusion of the
2562	examination and shall include sufficient documentation to
2563	support the charges incurred for the statutory audit performed
2564	by the independent certified public accountant.
2565	(b) The officedepartmentshall examine each insurer
2566	applying for an initial certificate of authority to transact
2567	insurance in this state before granting the initial certificate.
2568	(c) In lieu of making its own examination, the office
2569	departmentmay accept a full report of the last recent
2570	examination of a foreign insurer, certified to by the insurance
2571	supervisory official of another state.
2572	(d) The examination by the officedepartmentof an alien
2573	insurer shall be limited to the alien insurer's insurance
2574	transactions and affairs in the United States, except as
2575	otherwise required by the officedepartment.
2576	(e) The commissiondepartmentshall adopt rules providing
2577	that, upon agreement between the officedepartmentand the
2578	insurer, an examination under this section may be conducted by
2579	independent certified public accountants, actuaries meeting
2580	criteria specified by rule, and reinsurance specialists meeting
2581	criteria specified by rule. The rules shall provide:
2582	1. That the agreement of the insurer is not required if
2583	the officedepartmentreasonably suspects criminal misconduct on
2584	the part of the insurer.
2585	2. That the officedepartmentshall provide the insurer
2586	with a list of three firms acceptable to the officedepartment,
2587	and that the insurer shall select the firm to conduct the
2588	examination from the list provided by the officedepartment.
2589	3. That the insurer being examined must make payment for
2590	the examination directly to the firm performing the examination
2591	in accordance with the rates and terms agreed to by the office
2592	department, the insurer, and the firm performing the
2593	examination.
2594	4. That if the examination is conducted without the
2595	consent of the insurer, the insurer must pay all reasonable
2596	charges of the examining firm if the examination finds
2597	impairment, insolvency, or criminal misconduct on the part of
2598	the insurer.
2599	(f)1.
2600	a. An examination under this section must be conducted at
2601	least once every year with respect to a domestic insurer that
2602	has continuously held a certificate of authority for less than 3
2603	years. The examination must cover the preceding fiscal year or
2604	the period since the last examination of the insurer. The office
2605	departmentmay limit the scope of the examination.
2606	b. The officedepartmentmay not accept an independent
2607	certified public accountant's audit report in lieu of an
2608	examination required by this subparagraph.
2609	c. An insurer may not be required to pay more than $25,000
2610	to cover the costs of any one examination under this
2611	subparagraph.
2612	2. An examination under this section must be conducted not
2613	less frequently than once every 5 years with respect to an
2614	insurer that has continuously held a certificate of authority,
2615	without a change in ownership subject to s. 624.4245 or s.
2616	628.461, for more than 15 years. The examination must cover the
2617	preceding 5 fiscal years of the insurer or the period since the
2618	last examination of the insurer. This subparagraph does not
2619	limit the ability of the officedepartmentto conduct more
2620	frequent examinations.
2621	Section 30. Section 624.317, Florida Statutes, is amended
2622	to read:
2623	624.317 Investigation of agents, adjusters,
2624	administrators, service companies, and others.--If it has reason
2625	to believe that any person has violated or is violating any
2626	provision of this code, or upon the written complaint signed by
2627	any interested person indicating that any such violation may
2628	exist:,
2629	(1)The department shall conduct such investigation as it
2630	deems necessary of the accounts, records, documents, and
2631	transactions pertaining to or affecting the insurance affairs of
2632	any:
2633	(1) general agent, surplus line agent, managing general
2634	agent,adjuster, administrator, service company, or other
2635	person.
2636	(2) insurance agent, customer representative, service
2637	representative, or other person subject to its jurisdictionor
2638	solicitor, subject to the requirements of s. 626.601.
2639	(2) The office shall conduct such investigation as it
2640	deems necessary of the accounts, records, documents, and
2641	transactions pertaining to or affecting the insurance affairs of
2642	any:
2643	(a) Adjuster, administrator, service company, or other
2644	person subject to its jurisdiction.
2645	(b)(3)Person having a contract or power of attorney under
2646	which she or he enjoys in fact the exclusive or dominant right
2647	to manage or control an insurer.
2648	(c)(4)Person engaged in or proposing to be engaged in the
2649	promotion or formation of:
2650	1.(a)A domestic insurer;
2651	2.(b)An insurance holding corporation; or
2652	3.(c)A corporation to finance a domestic insurer or in
2653	the production of the domestic insurer's business.
2654	Section 31. Subsections (2), (3), (4), (5), and (7) of
2655	section 624.404, Florida Statutes, are amended to read:
2656	624.404 General eligibility of insurers for certificate of
2657	authority.--To qualify for and hold authority to transact
2658	insurance in this state, an insurer must be otherwise in
2659	compliance with this code and with its charter powers and must
2660	be an incorporated stock insurer, an incorporated mutual
2661	insurer, or a reciprocal insurer, of the same general type as
2662	may be formed as a domestic insurer under this code; except
2663	that:
2664	(2) No foreign or alien insurer or exchange shall be
2665	authorized to transact insurance in this state unless it is
2666	otherwise qualified therefor under this code and has operated
2667	satisfactorily for at least 3 years in its state or country of
2668	domicile; however, the officedepartmentmay waive the 3-year
2669	requirement if the foreign or alien insurer or exchange:
2670	(a) Has operated successfully and has capital and surplus
2671	of $5 million;
2672	(b) Is the wholly owned subsidiary of an insurer which is
2673	an authorized insurer in this state;
2674	(c) Is the successor in interest through merger or
2675	consolidation of an authorized insurer; or
2676	(d) Provides a product or service not readily available to
2677	the consumers of this state.
2678	(3)(a) The officedepartmentshall not grant or continue
2679	authority to transact insurance in this state as to any insurer
2680	the management, officers, or directors of which are found by it
2681	to be incompetent or untrustworthy; or so lacking in insurance
2682	company managerial experience as to make the proposed operation
2683	hazardous to the insurance-buying public; or so lacking in
2684	insurance experience, ability, and standing as to jeopardize the
2685	reasonable promise of successful operation; or which it has good
2686	reason to believe are affiliated directly or indirectly through
2687	ownership, control, reinsurance transactions, or other insurance
2688	or business relations, with any person or persons whose business
2689	operations are or have been marked, to the detriment of
2690	policyholders or stockholders or investors or creditors or of
2691	the public, by manipulation of assets, accounts, or reinsurance
2692	or by bad faith.
2693	(b) The officedepartmentshall not grant or continue
2694	authority to transact insurance in this state as to any insurer
2695	if any person, including any subscriber, stockholder, or
2696	incorporator, who exercises or has the ability to exercise
2697	effective control of the insurer, or who influences or has the
2698	ability to influence the transaction of the business of the
2699	insurer, does not possess the financial standing and business
2700	experience for the successful operation of the insurer.
2701	(c) The officedepartmentmay deny, suspend, or revoke the
2702	authority to transact insurance in this state of any insurer if
2703	any person, including any subscriber, stockholder, or
2704	incorporator, who exercises or has the ability to exercise
2705	effective control of the insurer, or who influences or has the
2706	ability to influence the transaction of the business of the
2707	insurer, has been found guilty of, or has pleaded guilty or nolo
2708	contendere to, any felony or crime punishable by imprisonment of
2709	1 year or more under the law of the United States or any state
2710	thereof or under the law of any other country which involves
2711	moral turpitude, without regard to whether a judgment of
2712	conviction has been entered by the court having jurisdiction in
2713	such case. However, in the case of an insurer operating under a
2714	subsisting certificate of authority, the insurer shall remove
2715	any such person immediately upon discovery of the conditions set
2716	forth in this paragraph when applicable to such person or upon
2717	the order of the officedepartment, and the failure to so act by
2718	said insurer shall be grounds for revocation or suspension of
2719	the insurer's certificate of authority.
2720	(d) The officedepartmentmay deny, suspend, or revoke the
2721	authority of an insurer to transact insurance in this state if
2722	any person, including any subscriber, stockholder, or
2723	incorporator, who exercises or has the ability to exercise
2724	effective control of the insurer, or who influences or has the
2725	ability to influence the transaction of the business of the
2726	insurer, which person the officedepartmenthas good reason to
2727	believe is now or was in the past affiliated directly or
2728	indirectly, through ownership interest of 10 percent or more,
2729	control, or reinsurance transactions, with any business,
2730	corporation, or other entity that has been found guilty of or
2731	has pleaded guilty or nolo contendere to any felony or crime
2732	punishable by imprisonment for 1 year or more under the laws of
2733	the United States, any state, or any other country, regardless
2734	of adjudication. However, in the case of an insurer operating
2735	under a subsisting certificate of authority, the insurer shall
2736	immediately remove such person or immediately notify the office
2737	departmentof such person upon discovery of the conditions set
2738	forth in this paragraph, either when applicable to such person
2739	or upon order of the officedepartment; the failure to remove
2740	such person, provide such notice, or comply with such order
2741	constitutes grounds for suspension or revocation of the
2742	insurer's certificate of authority.
2743	(4)(a) No authorized insurer shall act as a fronting
2744	company for any unauthorized insurer which is not an approved
2745	reinsurer.
2746	(b) A "fronting company" is an authorized insurer which by
2747	reinsurance or otherwise generally transfers more than 50
2748	percent to one unauthorized insurer which does not meet the
2749	requirements of s. 624.610(3)(a), (b), or (c), or more than 75
2750	percent to two or more unauthorized insurers which do not meet
2751	the requirements of s. 624.610(3)(a), (b), or (c), of the entire
2752	risk of loss on all of the insurance written by it in this
2753	state, or on one or more lines of insurance, on all of the
2754	business produced through one or more agents or agencies, or on
2755	all of the business from a designated geographical territory,
2756	without obtaining the prior approval of the officedepartment.
2757	(c) The officedepartmentmay, in its discretion, approve
2758	a transfer of risk in excess of the limits in paragraph (b) upon
2759	presentation of evidence, satisfactory to the officedepartment,
2760	that the transfer would be in the best interests of the
2761	financial condition of the insurer and in the best interests of
2762	the policyholders.
2763	(5) No insurer shall be authorized to transact insurance
2764	in this state which, during the 3 years immediately preceding
2765	its application for a certificate of authority, has violated any
2766	of the insurance laws of this state and after being informed of
2767	such violation has failed to correct the same; except that, if
2768	all other requirements are met, the officedepartmentmay
2769	nevertheless issue a certificate of authority to such an insurer
2770	upon the filing by the insurer of a sworn statement of all such
2771	insurance so written in violation of law, and upon payment to
2772	the officedepartmentof a sum of money as additional filing fee
2773	equivalent to all premium taxes and other state taxes and fees
2774	as would have been payable by the insurer if such insurance had
2775	been lawfully written by an authorized insurer under the laws of
2776	this state. This fee, when collected, shall be deposited to the
2777	credit of the Insurance Commissioner'sRegulatory Trust Fund.
2778	(7) For the purpose of satisfying the requirements of ss.
2779	624.407 and 624.408, the investment portfolio of an insurer
2780	applying for an initial certificate of authority to do business
2781	in this state shall value its bonds and stocks in accordance
2782	with the provisions of the latest edition of the publication
2783	"Purposes and Procedures Manual of the NAIC Securities Valuation
2784	Office""Valuations of Securities"by the National Association
2785	of Insurance Commissioners, July 1, 20021990, and subsequent
2786	amendments thereto, if the valuation methodology remains
2787	substantially unchanged.
2788	Section 32. Subsection (1) of section 624.4072, Florida
2789	Statutes, is amended to read:
2790	624.4072 Minority-owned property and casualty insurers;
2791	limited exemption for taxation and assessments.--
2792	(1) A minority business that is at least 51 percent owned
2793	by minority persons, as defined in s. 288.703(3), initially
2794	issued a certificate of authority in this state as an authorized
2795	insurer after May 1, 1998, and before January 1, 2002, to write
2796	property and casualty insurance shall be exempt, for a period
2797	not to exceed 10 years from the date of receiving its
2798	certificate of authority, from the following taxes and
2799	assessments:
2800	(a) Taxes imposed under ss. 175.101, 185.08, and 624.509;
2801	(b) Assessments by the Citizens Property Insurance
2802	CorporationFlorida Residential Property and Casualty Joint
2803	Underwriting Association or by the Florida Windstorm
2804	Underwriting Association, as provided under s. 627.351, except
2805	for emergency assessments collected from policyholders pursuant
2806	to s. 627.351(6)(b)3.d.s. 627.351(2)(b)2.d.(III) and(6)(b)3.d.
2807	Any such insurer shall be a member insurer of the Citizens
2808	Property Insurance CorporationFlorida Windstorm Underwriting
2809	Association and the Florida Residential Property and Casualty
2810	Joint Underwriting Association. The premiums of such insurer
2811	shall be included in determining, for the Citizens Property
2812	Insurance CorporationFlorida Windstorm Underwriting
2813	Association, the aggregate statewide direct written premium for
2814	property insurance and in determining, for the Florida
2815	Residential Property and Casualty Joint Underwriting
2816	Association, the aggregate statewide direct written premium for
2817	the subject lines of business for all member insurers.
2818	Section 33. Subsection (1) of section 624.413, Florida
2819	Statutes, is amended to read:
2820	624.413 Application for certificate of authority.--
2821	(1) To apply for a certificate of authority, an insurer
2822	shall file its application therefor with the officedepartment,
2823	upon a form adopted by the commission and furnished by the
2824	officeit, showing its name; location of its home office and, if
2825	an alien insurer, its principal office in the United States;
2826	kinds of insurance to be transacted; state or country of
2827	domicile; and such additional information as the commission
2828	department may reasonably requiresrequire, together with the
2829	following documents:
2830	(a) One copy of its corporate charter, articles of
2831	incorporation, existing and proposed nonfacultative reinsurance
2832	contracts, declaration of trust, or other charter documents,
2833	with all amendments thereto, certified by the public official
2834	with whom the originals are on file in the state or country of
2835	domicile.
2836	(b) If a mutual insurer, a copy of its bylaws, as amended,
2837	certified by its secretary or other officer having custody
2838	thereof.
2839	(c) If a foreign or alien reciprocal insurer, a copy of
2840	the power of attorney of its attorney in fact and of its
2841	subscribers' agreement, if any, certified by the attorney in
2842	fact; and, if a domestic reciprocal insurer, the declaration
2843	provided for in s. 629.081.
2844	(d) A copy of its financial statement as of December 31
2845	next preceding, containing information generally included in
2846	insurer financial statements prepared in accordance with
2847	generally accepted insurance accounting principles and practices
2848	and in a form generally utilized by insurers for financial
2849	statements, sworn to by at least two executive officers of the
2850	insurer, or certified by the public official having supervision
2851	of insurance in the insurer's state of domicile or of entry into
2852	the United States. To facilitate uniformity in financial
2853	statements, the commissiondepartmentmay by rule adopt the form
2854	for financial statements approved by the National Association of
2855	Insurance Commissioners in 20021990, and may adopt subsequent
2856	amendments thereto if the form remains substantially consistent.
2857	(e) Supplemental quarterly financial statements for each
2858	calendar quarter since the beginning of the year of its
2859	application for the certificate of authority, sworn to by at
2860	least two of its executive officers. To facilitate uniformity in
2861	financial statements, the commissiondepartmentmay by rule
2862	adopt the form for quarterly financial statements approved by
2863	the National Association of Insurance Commissioners in 2002
2864	1990, and may adopt subsequent amendments thereto if the form
2865	remains substantially consistent.
2866	(f) If a foreign or alien insurer, a copy of the report of
2867	the most recent examination of the insurer certified by the
2868	public official having supervision of insurance in its state of
2869	domicile or of entry into the United States. The end of the
2870	most recent year covered by the examination must be within the
2871	3-year period preceding the date of application. In lieu of the
2872	certified examination report, the officedepartmentmay accept
2873	an audited certified public accountant's report prepared on a
2874	basis consistent with the insurance laws of the insurer's state
2875	of domicile, certified by the public official having supervision
2876	of insurance in its state of domicile or of entry into the
2877	United States.
2878	(g) If a foreign or alien insurer, a certificate of
2879	compliance from the public official having supervision of
2880	insurance in its state or country of domicile showing that it is
2881	duly organized and authorized to transact insurance therein and
2882	the kinds of insurance it is so authorized to transact.
2883	(h) If a foreign or alien insurer, a certificate of the
2884	public official having custody of any deposit maintained by the
2885	insurer in another state in lieu of a deposit or part thereof
2886	required in this state under s. 624.411 or s. 624.412, showing
2887	the amount of such deposit and the assets or securities of which
2888	comprised.
2889	(i) If a life insurer, a certificate of valuation.
2890	(j) If an alien insurer, a copy of the appointment and
2891	authority of its United States manager, certified by its officer
2892	having custody of its records.
2893	Section 34. Section 624.424, Florida Statutes, is amended
2894	to read:
2895	624.424 Annual statement and other information.--
2896	(1)(a) Each authorized insurer shall file with the office
2897	departmentfull and true statements of its financial condition,
2898	transactions, and affairs. An annual statement covering the
2899	preceding calendar year shall be filed on or before March 1, and
2900	quarterly statements covering the periods ending on March 31,
2901	June 30, and September 30 shall be filed within 45 days after
2902	each such date. The officedepartmentmay, for good cause, grant
2903	an extension of time for filing of an annual or quarterly
2904	statement. The statements shall contain information generally
2905	included in insurers' financial statements prepared in
2906	accordance with generally accepted insurance accounting
2907	principles and practices and in a form generally utilized by
2908	insurers for financial statements, sworn to by at least two
2909	executive officers of the insurer or, if a reciprocal insurer,
2910	by the oath of the attorney in fact or its like officer if a
2911	corporation. To facilitate uniformity in financial statements
2912	and to facilitate officedepartment analysis, the commission
2913	departmentmay by rule adopt the form for financial statements
2914	approved by the National Association of Insurance Commissioners
2915	in 20021990, and may adopt subsequent amendments thereto if the
2916	methodology remains substantially consistent, and may by rule
2917	require each insurer to submit to the officedepartmentor such
2918	organization as the officedepartmentmay designate all or part
2919	of the information contained in the financial statement in a
2920	computer-readable form compatible with the electronic data
2921	processing system specified by the officedepartment.
2922	(b) Each insurer's annual statement must contain a
2923	statement of opinion on loss and loss adjustment expense
2924	reserves made by a member of the American Academy of Actuaries
2925	or by a qualified loss reserve specialist, under criteria
2926	established by rule of the commissiondepartment. In adopting
2927	the rule, the commissiondepartmentmust consider any criteria
2928	established by the National Association of Insurance
2929	Commissioners. The officedepartmentmay require semiannual
2930	updates of the annual statement of opinion as to a particular
2931	insurer if the officedepartmenthas reasonable cause to believe
2932	that such reserves are understated to the extent of materially
2933	misstating the financial position of the insurer. Workpapers in
2934	support of the statement of opinion must be provided to the
2935	officedepartmentupon request. This paragraph does not apply to
2936	life insurance or title insurance.
2937	(c) The commissiondepartmentmay by rule require reports
2938	or filings required under the insurance code to be submitted by
2939	electronic means in a computer-readable formon a computer-
2940	diskettecompatible with the electronic data processing
2941	equipment specified by the commissiondepartment.
2942	(2) The statement of an alien insurer shall be verified by
2943	the insurer's United States manager or other officer duly
2944	authorized. It shall be a separate statement, to be known as
2945	its general statement, of its transactions, assets, and affairs
2946	within the United States unless the officedepartmentrequires
2947	otherwise. If the officedepartmentrequires a statement as to
2948	the insurer's affairs elsewhere, the insurer shall file such
2949	statement with the officedepartmentas soon as reasonably
2950	possible.
2951	(3) Each insurer having a deposit as required under s.
2952	624.411 shall file with the officedepartmentannually with its
2953	annual statement a certificate to the effect that the assets so
2954	deposited have a market value equal to or in excess of the
2955	amount of deposit so required.
2956	(4) At the time of filing, the insurer shall pay the fee
2957	for filing its annual statement in the amount specified in s.
2958	624.501.
2959	(5) The officedepartmentmay refuse to continue, or may
2960	suspend or revoke, the certificate of authority of an insurer
2961	failing to file its annual or quarterly statements and
2962	accompanying certificates when due.
2963	(6) In addition to information called for and furnished in
2964	connection with its annual or quarterly statements, an insurer
2965	shall furnish to the officedepartmentas soon as reasonably
2966	possible such information as to its transactions or affairs as
2967	the officedepartmentmay from time to time request in writing.
2968	All such information furnished pursuant to the office's
2969	department'srequest shall be verified by the oath of two
2970	executive officers of the insurer or, if a reciprocal insurer,
2971	by the oath of the attorney in fact or its like officers if a
2972	corporation.
2973	(7) The signatures of all such persons when written on
2974	annual or quarterly statements or other reports required by this
2975	section shall be presumed to have been so written by authority
2976	of the person whose signature is affixed thereon. The affixing
2977	of any signature by anyone other than the purported signer
2978	constitutes a felony of the second degree, punishable as
2979	provided in s. 775.082, s. 775.083, or s. 775.084.
2980	(8)(a) All authorized insurers must have conducted an
2981	annual audit by an independent certified public accountant and
2982	must file an audited financial report with the officedepartment
2983	on or before June 1 for the preceding year ending December 31.
2984	The officedepartmentmay require an insurer to file an audited
2985	financial report earlier than June 1 upon 90 days' advance
2986	notice to the insurer. The officedepartmentmay immediately
2987	suspend an insurer's certificate of authority by order if an
2988	insurer's failure to file required reports, financial
2989	statements, or information required by this subsection or rule
2990	adopted pursuant thereto creates a significant uncertainty as to
2991	the insurer's continuing eligibility for a certificate of
2992	authority.
2993	(b) Any authorized insurer otherwise subject to this
2994	section having direct premiums written in this state of less
2995	than $1 million in any calendar year and fewerlessthan 1,000
2996	policyholders or certificateholders of directly written policies
2997	nationwide at the end of such calendar year is exempt from this
2998	section for such year unless the officedepartmentmakes a
2999	specific finding that compliance is necessary in order for the
3000	officedepartmentto carry out its statutory responsibilities.
3001	However, any insurer having assumed premiums pursuant to
3002	contracts or treaties or reinsurance of $1 million or more is
3003	not exempt. Any insurer subject to an exemption must submit by
3004	March 1 following the year to which the exemption applies an
3005	affidavit sworn to by a responsible officer of the insurer
3006	specifying the amount of direct premiums written in this state
3007	and number of policyholders or certificateholders.
3008	(c) The board of directors of an insurer shall hire the
3009	certified public accountant that prepares the audit required by
3010	this subsection and the board shall establish an audit committee
3011	of three or more directors of the insurer or an affiliated
3012	company. The audit committee shall be responsible for discussing
3013	audit findings and interacting with the certified public
3014	accountant with regard to her or his findings. The audit
3015	committee shall be comprised solely of members who are free from
3016	any relationship that, in the opinion of its board of directors,
3017	would interfere with the exercise of independent judgment as a
3018	committee member. The audit committee shall report to the board
3019	any findings of adverse financial conditions or significant
3020	deficiencies in internal controls that have been noted by the
3021	accountant. The insurer may request the officedepartmentto
3022	waive this requirement of the audit committee membership based
3023	upon unusual hardship to the insurer.
3024	(d) An insurer may not use the same accountant or partner
3025	of an accounting firm responsible for preparing the report
3026	required by this subsection for more than 7 consecutive years.
3027	Following this period, the insurer may not use such accountant
3028	or partner for a period of 2 years, but may use another
3029	accountant or partner of the same firm. An insurer may request
3030	the officedepartmentto waive this prohibition based upon an
3031	unusual hardship to the insurer and a determination that the
3032	accountant is exercising independent judgment that is not unduly
3033	influenced by the insurer considering such factors as the number
3034	of partners, expertise of the partners or the number of
3035	insurance clients of the accounting firm; the premium volume of
3036	the insurer; and the number of jurisdictions in which the
3037	insurer transacts business.
3038	(e) The commissiondepartmentshall adopt rules to
3039	implement this subsection, which rules must be in substantial
3040	conformity with the 19981990Model Rule Requiring Annual
3041	Audited Financial Reports adopted by the National Association of
3042	Insurance Commissioners, except where inconsistent with the
3043	requirements of this subsection. Any exception to, waiver of, or
3044	interpretation of accounting requirements of the commission
3045	departmentmust be in writing and signed by an authorized
3046	representative of the officedepartment. No insurer may raise as
3047	a defense in any action, any exception to, waiver of, or
3048	interpretation of accounting requirements, unless previously
3049	issued in writing by an authorized representative of the office
3050	department.
3051	(9)(a) Each authorized insurer shall, pursuant to s.
3052	409.910(20), provide records and information to the Agency for
3053	Health Care Administration to identify potential insurance
3054	coverage for claims filed with that agency and its fiscal agents
3055	for payment of medical services under the Medicaid program.
3056	(b) Each authorized insurer shall, pursuant to s.
3057	409.2561(5)(c), notify the Medicaid agency of a cancellation or
3058	discontinuance of a policy within 30 days if the insurer
3059	received notification from the Medicaid agency to do so.
3060	(c) Any information provided by an insurer under this
3061	subsection does not violate any right of confidentiality or
3062	contract that the insurer may have with covered persons. The
3063	insurer is immune from any liability that it may otherwise incur
3064	through its release of such information to the Agency for Health
3065	Care Administration.
3066	(10) Each insurer or insurer group doing business in this
3067	state shall file on a quarterly basis in conjunction with
3068	financial reports required by paragraph (1)(a) a supplemental
3069	report on an individual and group basis on a form prescribed by
3070	the commissiondepartmentwith information on personal lines and
3071	commercial lines residential property insurance policies in this
3072	state. The supplemental report shall include separate
3073	information for personal lines property policies and for
3074	commercial lines property policies and totals for each item
3075	specified, including premiums written for each of the property
3076	lines of business as described in ss. 215.555(2)(c) and
3077	627.351(6)(a). The report shall include the following
3078	information for each county on a monthly basis:
3079	(a) Total number of policies in force at the end of each
3080	month.
3081	(b) Total number of policies canceled.
3082	(c) Total number of policies nonrenewed.
3083	(d) Number of policies canceled due to hurricane risk.
3084	(e) Number of policies nonrenewed due to hurricane risk.
3085	(f) Number of new policies written.
3086	(g) Total dollar value of structure exposure under
3087	policies that include wind coverage.
3088	(h) Number of policies that exclude wind coverage.
3089	Section 35. Subsections (2), (3), and (4) of section
3090	624.476, Florida Statutes, are amended to read:
3091	624.476 Impaired self-insurance funds.--
3092	(2) If any fund levies an assessment pursuant to
3093	subsection (1), the officedepartmentshall require the fund to
3094	consent to administrative supervision under part VI of this
3095	chapter. The officedepartmentmay waive the requirement to
3096	consent to administrative supervision for good cause.
3097	(3) If the trustees fail to make an assessment as required
3098	by subsection(1), the officedepartmentshall order the trustees
3099	to do so. If the deficiency is not sufficiently made up within
3100	60 days after the date of the order, the fund shall be deemed
3101	insolvent and grounds shall exist to proceed against the fund as
3102	provided for in part I of chapter 631.
3103	(4) Notwithstanding the requirement of the fund to make an
3104	assessment pursuant to subsection (1) or subsection (3), the
3105	officedepartment may at any time request that the departmentto
3106	be appointed receiver for purposes of rehabilitation or
3107	liquidation if it is able to demonstrate that any grounds for
3108	rehabilitation or liquidation exist pursuant to s. 631.051 or s.
3109	631.061.
3110	Section 36. Section 624.477, Florida Statutes, is amended
3111	to read:
3112	624.477 Liquidation, rehabilitation, reorganization, and
3113	conservation.--Any rehabilitation, liquidation, conservation, or
3114	dissolution of a self-insurance fund shall be conducted under
3115	the supervision of the office and department, which shall each
3116	have all power with respect thereto granted to the fund under
3117	part I of chapter 631 governing the rehabilitation, liquidation,
3118	conservation, or dissolution of insurers and including all
3119	grounds for the appointment of a receiver contained in ss.
3120	631.051 and 631.061.
3121	Section 37. Section 625.01115, Florida Statutes, is
3122	amended to read:
3123	625.01115 Definitions.--As used in this chapter, the term
3124	"statutory accounting principles" means accounting principles as
3125	defined in the National Association of Insurance Commissioners
3126	Accounting Practices and Procedures Manual as of March 2002 and
3127	subsequent amendments thereto if the methodology remains
3128	substantially consistenteffective January 1, 2001.
3129	Section 38. Subsections (2), (3), and (4), paragraphs (c),
3130	(d), (g), (h), (i), and (j) of subsection (5), paragraph (e) of
3131	subsection (6), subsection (10), paragraph(b) of subsection
3132	(12), and subsection (14) of section 625.121, Florida Statutes,
3133	are amended to read:
3134	625.121 Standard Valuation Law; life insurance.--
3135	(2) ANNUAL VALUATION.--The officedepartmentshall
3136	annually value, or cause to be valued, the reserve liabilities,
3137	hereinafter called "reserves," for all outstanding life
3138	insurance policies and annuity and pure endowment contracts of
3139	every life insurer doing business in this state, and may certify
3140	the amount of any such reserves, specifying the mortality table
3141	or tables, rate or rates of interest, and methods, net-level
3142	premium method or others, used in the calculation of such
3143	reserves. In the case of an alien insurer, such valuation shall
3144	be limited to its insurance transactions in the United States.
3145	In calculating such reserves, the officedepartmentmay use
3146	group methods and approximate averages for fractions of a year
3147	or otherwise. It may accept in its discretion the insurer's
3148	calculation of such reserves. In lieu of the valuation of the
3149	reserves herein required of any foreign or alien insurer, it may
3150	accept any valuation made or caused to be made by the insurance
3151	supervisory official of any state or other jurisdiction when
3152	such valuation complies with the minimum standard herein
3153	provided and if the official of such state or jurisdiction
3154	accepts as sufficient and valid for all legal purposes the
3155	certificate of valuation of the officedepartmentwhen such
3156	certificate states the valuation to have been made in a
3157	specified manner according to which the aggregate reserves would
3158	be at least as large as if they had been computed in the manner
3159	prescribed by the law of that state or jurisdiction. When any
3160	such valuation is made by the officedepartment, it may use the
3161	actuary of the officedepartmentor employ an actuary for the
3162	purpose; and the reasonable compensation of the actuary, at a
3163	rate approved by the officedepartment, and reimbursement of
3164	travel expenses pursuant to s. 624.320 upon demand by the office
3165	department, supported by an itemized statement of such
3166	compensation and expenses, shall be paid by the insurer. When a
3167	domestic insurer furnishes the officedepartmentwith a
3168	valuation of its outstanding policies as computed by its own
3169	actuary or by an actuary deemed satisfactory for the purpose by
3170	the officedepartment, the valuation shall be verified by the
3171	actuary of the officedepartmentwithout cost to the insurer.
3172	(3) ACTUARIAL OPINION OF RESERVES.--
3173	(a)1. Each life insurance company doing business in this
3174	state shall annually submit the opinion of a qualified actuary
3175	as to whether the reserves and related actuarial items held in
3176	support of the policies and contracts specified by the
3177	commissiondepartmentby rule are computed appropriately, are
3178	based on assumptions which satisfy contractual provisions, are
3179	consistent with prior reported amounts, and comply with
3180	applicable laws of this state. The commissiondepartmentby rule
3181	shall define the specifics of this opinion and add any other
3182	items determined to be necessary to its scope.
3183	2. The opinion shall be submitted with the annual
3184	statement reflecting the valuation of such reserve liabilities
3185	for each year ending on or after December 31, 1992.
3186	3. The opinion shall apply to all business in force,
3187	including individual and group health insurance plans, in the
3188	form and substance acceptable to the officedepartmentas
3189	specified by rule of the commission.
3190	4. The commissiondepartmentmay adopt rules providing the
3191	standards of the actuarial opinion consistent with standards
3192	adopted by the Actuarial Standards Board on December 31, 2002
3193	October 1, 1991, and subsequent revisions thereto, provided that
3194	the standards remain substantially consistent.
3195	5. In the case of an opinion required to be submitted by a
3196	foreign or alien company, the officedepartmentmay accept the
3197	opinion filed by that company with the insurance supervisory
3198	official of another state if the officedepartmentdetermines
3199	that the opinion reasonably meets the requirements applicable to
3200	a company domiciled in this state.
3201	6. For the purposes of this subsection, "qualified
3202	actuary" means a member in good standing of the American Academy
3203	of Actuaries who also meets the requirements specified by rule
3204	of the commissiondepartment.
3205	7. Disciplinary action by the officedepartmentagainst
3206	the company or the qualified actuary shall be in accordance with
3207	the insurance code and related rules adopted by the commission
3208	department.
3209	8. A memorandum in the form and substance specified by
3210	rule shall be prepared to support each actuarial opinion.
3211	9. If the insurance company fails to provide a supporting
3212	memorandum at the request of the officedepartmentwithin a
3213	period specified by rule of the commission, or if the office
3214	departmentdetermines that the supporting memorandum provided by
3215	the insurance company fails to meet the standards prescribed by
3216	rule of the commission, the officedepartmentmay engage a
3217	qualified actuary at the expense of the company to review the
3218	opinion and the basis for the opinion and prepare such
3219	supporting memorandum as is required by the officedepartment.
3220	10. Except as otherwise provided in this paragraph, any
3221	memorandum or other material in support of the opinion is
3222	confidential and exempt from the provisions of s. 119.07(1);
3223	however, the memorandum or other material may be released by the
3224	officedepartmentwith the written consent of the company, or to
3225	the American Academy of Actuaries upon request stating that the
3226	memorandum or other material is required for the purpose of
3227	professional disciplinary proceedings and setting forth
3228	procedures satisfactory to the officedepartmentfor preserving
3229	the confidentiality of the memorandum or other material. If any
3230	portion of the confidential memorandum is cited by the company
3231	in its marketing or is cited before any governmental agency
3232	other than a state insurance department or is released by the
3233	company to the news media, no portion of the memorandum is
3234	confidential.
3235	(b) In addition to the opinion required by subparagraph
3236	(a)1., the officedepartment may, pursuant to commissionby
3237	rule,require an opinion of the same qualified actuary as to
3238	whether the reserves and related actuarial items held in support
3239	of the policies and contracts specified by the commission
3240	departmentby rule, when considered in light of the assets held
3241	by the company with respect to the reserves and related
3242	actuarial items, including but not limited to the investment
3243	earnings on the assets and considerations anticipated to be
3244	received and retained under the policies and contracts, make
3245	adequate provision for the company's obligations under the
3246	policies and contracts, including, but not limited to, the
3247	benefits under, and expenses associated with, the policies and
3248	contracts.
3249	(c) The commissiondepartmentmay provide by rule for a
3250	transition period for establishing any higher reserves which the
3251	qualified actuary may deem necessary in order to render the
3252	opinion required by this subsection.
3253	(4) MINIMUM STANDARD FOR VALUATION OF POLICIES AND
3254	CONTRACTS ISSUED BEFORE OPERATIVE DATE OF STANDARD NONFORFEITURE
3255	LAW.--The minimum standard for the valuation of all such
3256	policies and contracts issued prior to the operative date of s.
3257	627.476 (Standard Nonforfeiture Law) shall be any basis
3258	satisfactory to the officedepartment. Any basis satisfactory to
3259	the former Department of Insuranceon the effective date of this
3260	code shall be deemed to meet such minimum standards.
3261	(5) MINIMUM STANDARD FOR VALUATION OF POLICIES AND
3262	CONTRACTS ISSUED ON OR AFTER OPERATIVE DATE OF STANDARD
3263	NONFORFEITURE LAW.--Except as otherwise provided in paragraph
3264	(h) and subsections (6), (11), and (14), the minimum standard
3265	for the valuation of all such policies and contracts issued on
3266	or after the operative date of s. 627.476 (Standard
3267	Nonforfeiture Law for Life Insurance) shall be the
3268	commissioners' reserve valuation method defined in subsections
3269	(7), (11), and (14); 5 percent interest for group annuity and
3270	pure endowment contracts and 3.5 percent interest for all other
3271	such policies and contracts, or in the case of life insurance
3272	policies and contracts, other than annuity and pure endowment
3273	contracts, issued on or after July 1, 1973, 4 percent interest
3274	for such policies issued prior to October 1, 1979, and 4.5
3275	percent interest for such policies issued on or after October 1,
3276	1979; and the following tables:
3277	(c) For individual annuity and pure endowment contracts,
3278	excluding any disability and accidental death benefits in such
3279	policies, the 1937 Standard Annuity Mortality Table or, at the
3280	option of the insurer, the Annuity Mortality Table for 1949,
3281	Ultimate, or any modification of either of these tables approved
3282	by the officedepartment.
3283	(d) For group annuity and pure endowment contracts,
3284	excluding any disability and accidental death benefits in such
3285	policies, the Group Annuity Mortality Table for 1951; any
3286	modification of such table approved by the officedepartment;
3287	or, at the option of the insurer, any of the tables or
3288	modifications of tables specified for individual annuity and
3289	pure endowment contracts.
3290	(g) For group life insurance, life insurance issued on the
3291	substandard basis, and other special benefits, such tables as
3292	may be approved by the officedepartmentas being sufficient
3293	with relation to the benefits provided by such policies.
3294	(h) Except as provided in subsection (6), the minimum
3295	standard for the valuation of all individual annuity and pure
3296	endowment contracts issued on or after the operative date of
3297	this paragraph and for all annuities and pure endowments
3298	purchased on or after such operative date under group annuity
3299	and pure endowment contracts shall be the commissioners' reserve
3300	valuation method defined in subsection (7) and the following
3301	tables and interest rates:
3302	1. For individual annuity and pure endowment contracts
3303	issued prior to October 1, 1979, excluding any disability and
3304	accidental death benefits in such contracts, the 1971 Individual
3305	Annuity Mortality Table, or any modification of this table
3306	approved by the officedepartment, and 6 percent interest for
3307	single-premium immediate annuity contracts and 4 percent
3308	interest for all other individual annuity and pure endowment
3309	contracts.
3310	2. For individual single-premium immediate annuity
3311	contracts issued on or after October 1, 1979, and prior to
3312	October 1, 1986, excluding any disability and accidental death
3313	benefits in such contracts, the 1971 Individual Annuity
3314	Mortality Table, or any modification of this table approved by
3315	the officedepartment, and 7.5 percent interest. For such
3316	contracts issued on or after October 1, 1986, the 1983
3317	Individual Annual Mortality Table, or any modification of such
3318	table approved by the officedepartment, and the applicable
3319	calendar year statutory valuation interest rate as described in
3320	subsection (6).
3321	3. For individual annuity and pure endowment contracts
3322	issued on or after October 1, 1979, and prior to October 1,
3323	1986, other than single-premium immediate annuity contracts,
3324	excluding any disability and accidental death benefits in such
3325	contracts, the 1971 Individual Annuity Mortality Table, or any
3326	modification of this table approved by the officedepartment,
3327	and 5.5 percent interest for single-premium deferred annuity and
3328	pure endowment contracts and 4.5 percent interest for all other
3329	such individual annuity and pure endowment contracts. For such
3330	contracts issued on or after October 1, 1986, the 1983
3331	Individual Annual Mortality Table, or any modification of such
3332	table approved by the officedepartment, and the applicable
3333	calendar year statutory valuation interest rate as described in
3334	subsection (6).
3335	4. For all annuities and pure endowments purchased prior
3336	to October 1, 1979, under group annuity and pure endowment
3337	contracts, excluding any disability and accidental death
3338	benefits purchased under such contracts, the 1971 Group Annuity
3339	Mortality Table, or any modification of this table approved by
3340	the officedepartment, and 6 percent interest.
3341	5. For all annuities and pure endowments purchased on or
3342	after October 1, 1979, and prior to October 1, 1986, under group
3343	annuity and pure endowment contracts, excluding any disability
3344	and accidental death benefits purchased under such contracts,
3345	the 1971 Group Annuity Mortality Table, or any modification of
3346	this table approved by the officedepartment, and 7.5 percent
3347	interest. For such contracts purchased on or after October 1,
3348	1986, the 1983 Group Annuity Mortality Table, or any
3349	modification of such table approved by the officedepartment,
3350	and the applicable calendar year statutory valuation interest
3351	rate as described in subsection (6).
3352
3353	After July 1, 1973, any insurer may have filedfile with the
3354	former Department of Insurancea written notice of its election
3355	to comply with the provisions of this paragraph after a
3356	specified date before January 1, 1979, which shall be the
3357	operative date of this paragraph for such insurer. However, an
3358	insurer may elect a different operative date for individual
3359	annuity and pure endowment contracts from that elected for group
3360	annuity and pure endowment contracts. If an insurer makes no
3361	such election, the operative date of this paragraph for such
3362	insurer shall be January 1, 1979.
3363	(i) In lieu of the mortality tables specified in this
3364	subsection, and subject to rules previously adopted by the
3365	former Department of Insurance, the insurance company may, at
3366	its option:
3367	1. Substitute the applicable 1958 CSO or CET Smoker and
3368	Nonsmoker Mortality Tables, in lieu of the 1980 CSO or CET
3369	mortality table standard, for policies issued on or after the
3370	operative date of s. 627.476(9) and before January 1, 1989.
3371	2. Substitute the applicable 1980 CSO or CET Smoker and
3372	Nonsmoker Mortality Tables in lieu of the 1980 CSO or CET
3373	mortality table standard;
3374	3. Use the Annuity 2000 Mortality Table for determining
3375	the minimum standard of valuation for individual annuity and
3376	pure endowment contracts issued on or after January 1, 1998, and
3377	before July 1, 1998the operative date of this section until the
3378	department, on a date certain that is on or after January 1,
3379	1998, adopts by rule that table for determining the minimum
3380	standard for valuation purposes.
3381	4. Use the 1994 GAR Table for determining the minimum
3382	standard of valuation for annuities and pure endowments
3383	purchased on or after January 1, 1998, and before July 1, 1998,
3384	the operative date of this sectionunder group annuity and pure
3385	endowment contracts until the department, on a date certain that
3386	is on or after January 1, 1998, adopts by rule that table for
3387	determining the minimum standard for valuation purposes.
3388	(j) The commissiondepartmentmay adopt by rule the model
3389	regulation for valuation of life insurance policies as approved
3390	by the National Association of Insurance Commissioners in March
3391	1999, including tables of select mortality factors, and may make
3392	the regulation effective for policies issued on or afterJanuary
3393	1, 2000.
3394	(6) MINIMUM STANDARD OF VALUATION.--
3395	(e) The interest rate index shall be the Moody's Corporate
3396	Bond Yield Average-Monthly Average Corporates as published by
3397	Moody's Investors Service, Inc., as long as this index is
3398	calculated by using substantially the same methodology as used
3399	by it on January 1, 1981. If Moody's corporate bond yield
3400	average ceases to be calculated in this manner, the interest
3401	rate index shall be the index approved by rule promulgated by
3402	the commissiondepartment. The methodology used in determining
3403	the index approved by rule shall be substantially the same as
3404	the methodology employed on January 1, 1981, for determining
3405	Moody's Corporate Bond Yield Average-Monthly Average Corporates
3406	as published by Moody's Investors Services, Inc.
3407	(10) LOWER VALUATIONS.--An insurer which at any time had
3408	adopted any standard of valuation producing greater aggregate
3409	reserves than those calculated according to the minimum standard
3410	herein provided may, with the approval of the officedepartment,
3411	adopt any lower standard of valuation, but not lower than the
3412	minimum herein provided; however, for the purposes of this
3413	subsection, the holding of additional reserves previously
3414	determined by a qualified actuary to be necessary to render the
3415	opinion required by subsection (3) shall not be deemed to be the
3416	adoption of a higher standard of valuation.
3417	(12) ALTERNATE METHOD FOR DETERMINING RESERVES IN CERTAIN
3418	CASES.--In the case of any plan of life insurance which provides
3419	for future premium determination, the amounts of which are to be
3420	determined by the insurer based on then estimates of future
3421	experience, or in the case of any plan of life insurance or
3422	annuity which is of such a nature that the minimum reserves
3423	cannot be determined by the methods described in subsection (7),
3424	the reserves which are held under any such plan shall:
3425	(b) Be computed by a method which is consistent with the
3426	principles of this section, as determined by rules promulgated
3427	by the commissiondepartment.
3428	(14) MINIMUM STANDARDS FOR HEALTH PLANS.--The commission
3429	departmentshall adopt a rule containing the minimum standards
3430	applicable to the valuation of health plans in accordance with
3431	sound actuarial principles.
3432	Section 39. Subsections (1), (2), and (4) of section
3433	625.151, Florida Statutes, are amended to read:
3434	625.151 Valuation of other securities.--
3435	(1) Securities, other than those referred to in s.
3436	625.141, held by an insurer shall be valued, in the discretion
3437	of the officedepartment, at their market value, or at their
3438	appraised value, or at prices determined by it as representing
3439	their fair market value.
3440	(2) Preferred or guaranteed stocks or shares while paying
3441	full dividends may be carried at a fixed value in lieu of market
3442	value, at the discretion of the officedepartmentand in
3443	accordance with such method of valuation as it may approve.
3444	(4) No valuations under this section shall be inconsistent
3445	with any applicable valuation or method contained in the latest
3446	edition of the publication "Valuation of Securities" published
3447	by the National Association of Insurance Commissioners or its
3448	successor organization; provided that such valuation methodology
3449	is substantially similar to the methodology used by the National
3450	Association of Insurance Commissioners in its July 1, 2002,1988
3451	edition of such publication.
3452	Section 40. Section 625.317, Florida Statutes, is amended
3453	to read:
3454	625.317 Corporate bonds and debentures.--An insurer may
3455	invest in bonds, notes, or other interest-bearing or interest-
3456	accruing obligations of any solvent corporation organized under
3457	the laws of the United States or Canada or under the laws of any
3458	state, the District of Columbia, any territory or possession of
3459	the United States, or any Province of Canada or in bonds or
3460	notes issued by the Citizens Property Insurance Corporation as
3461	authorized by s. 627.351(6)Florida Windstorm Underwriting
3462	Association or a private nonprofit corporation, a private
3463	nonprofit unincorporated association, or a nonprofit mutual
3464	company organized by that association, all as authorized in s.
3465	627.351(2)(c), or any subsidiary or affiliate thereof authorized
3466	by the Department of Insurance to issue such bonds or notes.
3467	Section 41. Subsection (4) of section 625.325, Florida
3468	Statutes, is amended to read:
3469	625.325 Investments in subsidiaries and related
3470	corporations.--
3471	(4) DEBT OBLIGATIONS.--Debt obligations, other than
3472	mortgage loans, made under the authority of this section must
3473	meet amortization requirements in accordance with the latest
3474	edition of the publication "Valuation of Securities" by the
3475	National Association of Insurance Commissioners or its successor
3476	organization; provided that such amortization methodology is
3477	substantially similar to the methodology used by the National
3478	Association of Insurance Commissioners in its July 1, 2002,1988
3479	edition of such publication.
3480	Section 42. Subsections (6) and (11) of section 626.015,
3481	Florida Statutes, are amended, and present subsections (7)-(19)
3482	of said section are renumbered as subsections (6)-(18),
3483	respectively, to read:
3484	626.015 Definitions.--As used in this part:
3485	(6) "Department" means the Department of Insurance.
3486	(10)(11)"License" means a document issued by the
3487	department or officeauthorizing a person to be appointed to
3488	transact insurance or adjust claims for the kind, line, or class
3489	of insurance identified in the document.
3490	Section 43. Section 626.016, Florida Statutes, is created
3491	to read:
3492	626.016 Powers and duties of department, commission, and
3493	office.--
3494	(1) The powers and duties of the Chief Financial Officer
3495	and the department specified in part I of this chapter apply
3496	only with respect to insurance agents, managing general agents,
3497	reinsurance intermediaries, viatical settlement brokers,
3498	customer representatives, service representatives, and agencies.
3499	(2) The powers and duties of the commission and office
3500	specified in part I of this chapter apply only with respect to
3501	insurance adjusters, service companies, administrators, and
3502	viatical settlement providers and contracts.
3503	(3) The department has jurisdiction to enforce provisions
3504	of parts VIII and IX of this chapter with respect to persons who
3505	engage in actions for which a license issued by the department
3506	is legally required. The office has jurisdiction to enforce
3507	provisions of parts VIII and IX of this chapter with respect to
3508	persons who engage in actions for which a license or certificate
3509	of authority issued by the office is legally required. For
3510	persons who violate a provision of this chapter for whom a
3511	license or certificate of authority issued by either the
3512	department or office is not required, either the department or
3513	office may take administrative action against such person as
3514	authorized by this chapter, pursuant to agreement between the
3515	office and department.
3516	(4) Nothing in this section is intended to limit the
3517	authority of the department and the Division of Insurance Fraud,
3518	as specified in s. 626.989.
3519	Section 44. Subsection (16) of section 626.025, Florida
3520	Statutes, is amended to read:
3521	626.025 Consumer protections.--To transact insurance,
3522	agents shall comply with consumer protection laws, including the
3523	following, as applicable:
3524	(16) Any other licensing requirement, restriction, or
3525	prohibition designated a consumer protection by the Chief
3526	Financial OfficerInsurance Commissioner, but not inconsistent
3527	with the requirements of Subtitle C of the Gramm-Leach-Bliley
3528	Act, 15 U.S.C.A. ss. 6751 et seq.
3529	Section 45. Paragraph (a) of subsection (1) of section
3530	626.112, Florida Statutes, is amended to read:
3531	626.112 License and appointment required; agents, customer
3532	representatives, adjusters, insurance agencies, service
3533	representatives, managing general agents.--
3534	(1)(a) No person may be, act as, or advertise or hold
3535	himself or herself out to be an insurance agent, orcustomer
3536	representative, or adjusterunless he or she is currently
3537	licensed by the department and appointed by one or more
3538	insurers. No person may be, act as, or advertise or hold himself
3539	or herself out to be an insurance adjuster unless he or she is
3540	currently licensed by the office and appointed by one or more
3541	insurers.
3542
3543	However, an employee leasing company licensed pursuant to
3544	chapter 468 which is seeking to enter into a contract with an
3545	employer that identifies products and services offered to
3546	employees may deliver proposals for the purchase of employee
3547	leasing services to prospective clients of the employee leasing
3548	company setting forth the terms and conditions of doing
3549	business; classify employees as permitted by s. 468.529; collect
3550	information from prospective clients and other sources as
3551	necessary to perform due diligence on the prospective client and
3552	to prepare a proposal for services; provide and receive
3553	enrollment forms, plans, and other documents; and discuss or
3554	explain in general terms the conditions, limitations, options,
3555	or exclusions of insurance benefit plans available to the client
3556	or employees of the employee leasing company were the client to
3557	contract with the employee leasing company. Any advertising
3558	materials or other documents describing specific insurance
3559	coverages must identify and be from a licensed insurer or its
3560	licensed agent or a licensed and appointed agent employed by the
3561	employee leasing company. The employee leasing company may not
3562	advise or inform the prospective business client or individual
3563	employees of specific coverage provisions, exclusions, or
3564	limitations of particular plans. As to clients for which the
3565	employee leasing company is providing services pursuant to s.
3566	468.525(4), the employee leasing company may engage in
3567	activities permitted by ss. 626.7315, 626.7845, and 626.8305,
3568	subject to the restrictions specified in those sections. If a
3569	prospective client requests more specific information concerning
3570	the insurance provided by the employee leasing company, the
3571	employee leasing company must refer the prospective business
3572	client to the insurer or its licensed agent or to a licensed and
3573	appointed agent employed by the employee leasing company.
3574	Section 46. Section 626.161, Florida Statutes, is amended
3575	to read:
3576	626.161 Licensing forms.--The department shall prescribe
3577	and furnish all printed forms required in connection with the
3578	application for issuance of and termination of all licenses and
3579	appointments, except that, with respect to adjusters, the
3580	commission shall prescribe and the office shall furnish such
3581	forms.
3582	Section 47. Subsections (1), (2), and (5) of section
3583	626.171, Florida Statutes, are amended to read:
3584	626.171 Application for license.--
3585	(1) The department or officeshall not issue a license as
3586	agent, customer representative, adjuster, insurance agency,
3587	service representative, managing general agent, or reinsurance
3588	intermediary to any person except upon written application
3589	therefor filed with it, qualification therefor, and payment in
3590	advance of all applicable fees. Any such application shall be
3591	made under the oath of the applicant and be signed by the
3592	applicant. Beginning November 1, 2002, the department shall
3593	accept the uniform application for nonresident agent licensing.
3594	The department may adopt revised versions of the uniform
3595	application by rule.
3596	(2) In the application, the applicant shall set forth:
3597	(a) His or her full name, age, social security number,
3598	residence, and place of business.
3599	(b) Proof that he or she has completed or is in the
3600	process of completing any required prelicensing course.
3601	(c) Whether he or she has been refused or has voluntarily
3602	surrendered or has had suspended or revoked a license to solicit
3603	insurance by the department or by the supervising officials of
3604	any state.
3605	(d) Whether any insurer or any managing general agent
3606	claims the applicant is indebted under any agency contract or
3607	otherwise and, if so, the name of the claimant, the nature of
3608	the claim, and the applicant's defense thereto, if any.
3609	(e) Proof that the applicant meets the requirements for
3610	the type of license for which he or she is applying.
3611	(f) Such other or additional information as the department
3612	or officemay deem proper to enable it to determine the
3613	character, experience, ability, and other qualifications of the
3614	applicant to hold himself or herself out to the public as an
3615	insurance representative.
3616	(5) An application for a license as an agent, customer
3617	representative, adjuster, insurance agency, service
3618	representative, managing general agent, or reinsurance
3619	intermediary must be accompanied by a set of the individual
3620	applicant's fingerprints, or, if the applicant is not an
3621	individual, by a set of the fingerprints of the sole proprietor,
3622	majority owner, partners, officers, and directors, on a form
3623	adopted by rule of the department or commissionand accompanied
3624	by the fingerprint processing fee set forth in s. 624.501. The
3625	fingerprints shall be certified by a law enforcement officer.
3626	Section 48. Section 626.181, Florida Statutes, is amended
3627	to read:
3628	626.181 Number of applications for licensure
3629	required.--After a license as agent, customer representative, or
3630	adjuster has been issued to an individual, the same individual
3631	shall not be required to take another examination for a similar
3632	license, regardless, in the case of an agent, of the number of
3633	insurers to be represented by him or her as agent, unless:
3634	(1) Specifically ordered by the department or officeto
3635	complete a new application for license; or
3636	(2) During any period of 48 months since the filing of the
3637	original license application, such individual was not appointed
3638	as an agent, customer representative, or adjuster, unless the
3639	failure to be so appointed was due to military service, in which
3640	event the period within which a new application is not required
3641	may, in the discretion of the department or office, be extended
3642	to 12 months following the date of discharge from military
3643	service if the military service does not exceed 3 years, but in
3644	no event to extend under this clause for a period of more than 6
3645	years from the date of filing of the original application for
3646	license.
3647	Section 49. Section 626.191, Florida Statutes, is amended
3648	to read:
3649	626.191 Repeated applications.--The failure of an
3650	applicant to secure a license upon an application shall not
3651	preclude him or her from applying again as many times as
3652	desired, but the department or officeshall not give
3653	consideration to or accept any further application by the same
3654	individual for a similar license dated or filed within 30 days
3655	subsequent to the date the department or officedenied the last
3656	application, except as provided in s. 626.281.
3657	Section 50. Section 626.201, Florida Statutes, is amended
3658	to read:
3659	626.201 Investigation.--The department or officemay
3660	propound any reasonable interrogatories in addition to those
3661	contained in the application, to any applicant for license or
3662	appointment, or on any renewal, reinstatement, or continuation
3663	thereof, relating to his or her qualifications, residence,
3664	prospective place of business, and any other matter which, in
3665	the opinion of the department or office, is deemed necessary or
3666	advisable for the protection of the public and to ascertain the
3667	applicant's qualifications. The department or officemay, upon
3668	completion of the application, make such further investigation
3669	as it may deem advisable of the applicant's character,
3670	experience, background, and fitness for the license or
3671	appointment. Such an inquiry or investigation shall be in
3672	addition to any examination required to be taken by the
3673	applicant as hereinafter in this chapter provided.
3674	Section 51. Section 626.202, Florida Statutes, is amended
3675	to read:
3676	626.202 Fingerprinting requirements.--If there is a change
3677	in ownership or control of any entity licensed under this
3678	chapter, or if a new partner, officer, or director is employed
3679	or appointed, a set of fingerprints of the new owner, partner,
3680	officer, or director must be filed with the department or office
3681	within 30 days after the change. The acquisition of 10 percent
3682	or more of the voting securities of a licensed entity is
3683	considered a change of ownership or control. The fingerprints
3684	must be certified by a law enforcement officer and be
3685	accompanied by the fingerprint processing fee in s. 624.501.
3686	Section 52. Section 626.211, Florida Statutes, is amended
3687	to read:
3688	626.211 Approval, disapproval of application.--
3689	(1) If upon the basis of a completed application for
3690	license and such further inquiry or investigation as the
3691	department or officemay make concerning an applicant the
3692	department or officeis satisfied that, subject to any
3693	examination required to be taken and passed by the applicant for
3694	a license, the applicant is qualified for the license applied
3695	for and that all pertinent fees have been paid, it shall approve
3696	the application. The department or officeshall not deny,
3697	delay, or withhold approval of an application due to the fact
3698	that it has not received a criminal history report based on the
3699	applicant's fingerprints.
3700	(2) Upon approval of an applicant for license as agent,
3701	customer representative, or adjuster who is subject to written
3702	examination, the department or officeshall notify the applicant
3703	when and where he or she may take the required examination.
3704	(3) Upon approval of an applicant for license who is not
3705	subject to examination, the department or officeshall promptly
3706	issue the license.
3707	(4) If upon the basis of the completed application and
3708	such further inquiry or investigation the department or office
3709	deems the applicant to be lacking in any one or more of the
3710	required qualifications for the license applied for, the
3711	department or officeshall disapprove the application and notify
3712	the applicant, stating the grounds of disapproval.
3713	Section 53. Section 626.221, Florida Statutes, is amended
3714	to read:
3715	626.221 Examination requirement; exemptions.--
3716	(1) The department or officeshall not issue any license
3717	as agent, customer representative, or adjuster to any individual
3718	who has not qualified for, taken, and passed to the satisfaction
3719	of the department or officea written examination of the scope
3720	prescribed in s. 626.241.
3721	(2) However, no such examination shall be necessary in any
3722	of the following cases:
3723	(a) An applicant for renewal of appointment as an agent,
3724	customer representative, or adjuster, unless the department or
3725	officedetermines that an examination is necessary to establish
3726	the competence or trustworthiness of such applicant.
3727	(b) An applicant for limited license as agent for personal
3728	accident insurance, baggage and motor vehicle excess liability
3729	insurance, credit life or disability insurance, credit
3730	insurance, credit property insurance, in-transit and storage
3731	personal property insurance, or communications equipment
3732	property insurance or communication equipment inland marine
3733	insurance.
3734	(c) In the discretion of the department or office, an
3735	applicant for reinstatement of license or appointment as an
3736	agent, customer representative, or adjuster whose license has
3737	been suspended within 2 years prior to the date of application
3738	or written request for reinstatement.
3739	(d) An applicant who, within 2 years prior to application
3740	for license and appointment as an agent, customer
3741	representative, or adjuster, was a full-time salaried employee
3742	of the department or officeand had continuously been such an
3743	employee with responsible insurance duties for not less than 2
3744	years and who had been a licensee within 2 years prior to
3745	employment by the department or officewith the same class of
3746	license as that being applied for.
3747	(e) An individual who qualified as a managing general
3748	agent, service representative, customer representative, or all-
3749	lines adjuster by passing a general lines agent's examination
3750	and subsequently was licensed and appointed and has been
3751	actively engaged in all lines of property and casualty insurance
3752	may, upon filing an application for appointment, be licensed and
3753	appointed as a general lines agent for the same kinds of
3754	business without taking another examination if he or she holds
3755	any such currently effective license referred to in this
3756	paragraph or held the license within 24 months prior to the date
3757	of filing the application with the department.
3758	(f) A person who has been licensed and appointed by the
3759	departmentas a public adjuster or independent adjuster, or
3760	licensed and appointed either as an agent or company adjuster as
3761	to all property, casualty, and surety insurances, may be
3762	licensed and appointed as a company adjuster as to any of such
3763	insurances, or as an independent adjuster or public adjuster,
3764	without additional written examination if an application for
3765	appointment is filed with the officedepartmentwithin 24 months
3766	following the date of cancellation or expiration of the prior
3767	appointment.
3768	(g) A person who has been licensed by the departmentas an
3769	adjuster for motor vehicle, property and casualty, workers'
3770	compensation, and health insurance may be licensed as such an
3771	adjuster without additional written examination if his or her
3772	application for appointment is filed with the officedepartment
3773	within 24 months after cancellation or expiration of the prior
3774	license.
3775	(h) An applicant for temporary license, except as provided
3776	in this code.
3777	(i) An applicant for a life or health license who has
3778	received the designation of chartered life underwriter (CLU)
3779	from the American College of Life Underwriters and who has been
3780	engaged in the insurance business within the past 4 years,
3781	except that such an individual may be examined on pertinent
3782	provisions of this code.
3783	(j) An applicant for license as a general lines agent,
3784	customer representative, or adjuster who has received the
3785	designation of chartered property and casualty underwriter
3786	(CPCU) from the American Institute for Property and Liability
3787	Underwriters and who has been engaged in the insurance business
3788	within the past 4 years, except that such an individual may be
3789	examined on pertinent provisions of this code.
3790	(k) An applicant for license as a customer representative
3791	who has the designation of Accredited Advisor in Insurance (AAI)
3792	from the Insurance Institute of America, the designation of
3793	Certified Insurance Counselor (CIC) from the Society of
3794	Certified Insurance Service Counselors, the designation of
3795	Accredited Customer Service Representative (ACSR) from the
3796	Independent Insurance Agents of America, the designation of
3797	Certified Professional Service Representative (CPSR) from the
3798	National Association of Professional Insurance Agents, the
3799	designation of Certified Insurance Service Representative (CISR)
3800	from the Society of Certified Insurance Service Representatives.
3801	Also, an applicant for license as a customer representative who
3802	has the designation of Certified Customer Service Representative
3803	(CCSR) from the Florida Association of Insurance Agents, or the
3804	designation of Registered Customer Service Representative (RCSR)
3805	from a regionally accredited postsecondary institution in this
3806	state, or the designation of Professional Customer Service
3807	Representative (PCSR) from the Professional Career Institute,
3808	whose curriculum has been approved by the department and whose
3809	curriculum includes comprehensive analysis of basic property and
3810	casualty lines of insurance and testing at least equal to that
3811	of standard department testing for the customer representative
3812	license. The department shall adopt rules establishing standards
3813	for the approval of curriculum.
3814	(l) An applicant for license as an adjuster who has the
3815	designation of Accredited Claims Adjuster (ACA) from a
3816	regionally accredited postsecondary institution in this state,
3817	or the designation of Professional Claims Adjuster(PCA) from the
3818	Professional Career Institute, whose curriculum has been
3819	approved by the officedepartmentand whose curriculum includes
3820	comprehensive analysis of basic property and casualty lines of
3821	insurance and testing at least equal to that of standard office
3822	department testing for the all-lines adjuster license. The
3823	commissiondepartmentshall adopt rules establishing standards
3824	for the approval of curriculum.
3825	(m) An applicant qualifying for a license transfer under
3826	s. 626.292, if the applicant:
3827	1. Has successfully completed the prelicensing examination
3828	requirements in the applicant's previous state which are
3829	substantially equivalent to the examination requirements in this
3830	state, as determined by the departmentInsurance Commissioner of
3831	this state;
3832	2. Has received the designation of chartered property and
3833	casualty underwriter (CPCU) from the American Institute for
3834	Property and Liability Underwriters and has been engaged in the
3835	insurance business within the past 4 years if applying to
3836	transfer a general lines agent license; or
3837	3. Has received the designation of chartered life
3838	underwriter (CLU) from the American College of Life Underwriters
3839	and has been engaged in the insurance business within the past 4
3840	years, if applying to transfer a life or health agent license.
3841	(n) An applicant for a nonresident agent license, if the
3842	applicant:
3843	1. Has successfully completed prelicensing examination
3844	requirements in the applicant's home state which are
3845	substantially equivalent to the examination requirements in this
3846	state, as determined by the departmentInsurance Commissioner of
3847	this state, as a requirement for obtaining a resident license in
3848	his or her home state;
3849	2. Held a general lines agent license, life agent license,
3850	or health agent license prior to the time a written examination
3851	was required;
3852	3. Has received the designation of chartered property and
3853	casualty underwriter (CPCU) from the American Institute for
3854	Property and Liability Underwriters and has been engaged in the
3855	insurance business within the past 4 years, if an applicant for
3856	a nonresident license as a general lines agent; or
3857	4. Has received the designation of chartered life
3858	underwriter (CLU) from the American College of Life Underwriters
3859	and has been in the insurance business within the past 4 years,
3860	if an applicant for a nonresident license as a life agent or
3861	health agent.
3862	(3) An individual who is already licensed as a customer
3863	representative shall not be licensed as a general lines agent
3864	without application and examination for such license.
3865	Section 54. Section 626.231, Florida Statutes, is amended
3866	to read:
3867	626.231 Eligibility for examination.--No person shall be
3868	permitted to take an examination for license until his or her
3869	application for the license has been approved and the required
3870	fees have been received by the department or officeor a person
3871	designated by the department or officeto administer the
3872	examination.
3873	Section 55. Subsection (1) of section 626.241, Florida
3874	Statutes, is amended to read:
3875	626.241 Scope of examination.--
3876	(1) Each examination for a license as agent, customer
3877	representative, or adjuster shall be of such scope as is deemed
3878	by the department or officeto be reasonably necessary to test
3879	the applicant's ability and competence and knowledge of the
3880	kinds of insurance and transactions to be handled under the
3881	license applied for, of the duties and responsibilities of such
3882	a licensee, and of the pertinent provisions of the laws of this
3883	state.
3884	Section 56. Section 626.251, Florida Statutes, is amended
3885	to read:
3886	626.251 Time and place of examination; notice.--
3887	(1) The department or officeor a person designated by the
3888	department or officeshall mail written notice of the time and
3889	place of the examination to each applicant for license required
3890	to take an examination who will be eligible to take the
3891	examination as of the examination date. The notice shall be so
3892	mailed, postage prepaid, and addressed to the applicant at his
3893	or her address shown on the application for license or at such
3894	other address as requested by the applicant in writing filed
3895	with the department or officeprior to the mailing of the
3896	notice. Notice shall be deemed given when so mailed.
3897	(2) The examination shall be held in an adequate and
3898	designated examination center in this state.
3899	(3) The department or officeshall make an examination
3900	available to the applicant, to be taken as soon as reasonably
3901	possible after the applicant is eligible therefor. Any
3902	examination required under this part shall be available in this
3903	state at a designated examination center.
3904	Section 57. Section 626.261, Florida Statutes, is amended
3905	to read:
3906	626.261 Conduct of examination.--
3907	(1) The applicant for license shall appear in person and
3908	personally take the examination for license at the time and
3909	place specified by the department or officeor by a person
3910	designated by the department or office.
3911	(2) The examination shall be conducted by an employee of
3912	the department or officeor a person designated by the
3913	department or officefor that purpose.
3914	(3) The questions propounded shall be as prepared by the
3915	department or office, or by a person designated by the
3916	department or officefor that purpose, consistent with the
3917	applicable provisions of this code.
3918	(4) All examinations shall be given and graded in a fair
3919	and impartial manner and without unfair discrimination in favor
3920	of or against any particular applicant.
3921	Section 58. Section 626.266, Florida Statutes, is amended
3922	to read:
3923	626.266 Printing of examinations or related materials to
3924	preserve examination security.--A contract let for the
3925	development, administration, or grading of examinations or
3926	related materials by the department or officeof Insurance
3927	pursuant to the various agent, customer representative,
3928	solicitor, or adjuster licensing and examination provisions of
3929	this code may include the printing or furnishing of these
3930	examinations or related materials in order to preserve security.
3931	Any such contract shall be let as a contract for a contractual
3932	service pursuant to s. 287.057.
3933	Section 59. Subsection (1) of section 626.271, Florida
3934	Statutes, is amended to read:
3935	626.271 Examination fee; determination, refund.--
3936	(1) Prior to being permitted to take an examination, each
3937	applicant who is subject to examination shall pay to the
3938	department or office or a person designated by the department or
3939	officean examination fee. A separate and additional
3940	examination fee shall be payable for each separate class of
3941	license applied for, notwithstanding that all such examinations
3942	are taken on the same date and at the same place.
3943	Section 60. Section 626.281, Florida Statutes, is amended
3944	to read:
3945	626.281 Reexamination.--
3946	(1) Any applicant for license who has either:
3947	(a) Taken an examination and failed to make a passing
3948	grade, or
3949	(b) Failed to appear for the examination or to take or
3950	complete the examination at the time and place specified in the
3951	notice of the department or office,
3952
3953	may take additional examinations, after filing with the
3954	department or officean application for reexamination together
3955	with applicable fees. The failure of an applicant to pass an
3956	examination or the failure to appear for the examination or to
3957	take or complete the examination does not preclude the applicant
3958	from taking subsequent examinations.
3959	(2) The department or officemay require any individual
3960	whose license as an agent, customer representative, or adjuster
3961	has expired or has been suspended to pass an examination prior
3962	to reinstating or relicensing the individual as to any class of
3963	license. The examination fee shall be paid as to each
3964	examination.
3965	Section 61. Subsections (5) and (6) of section 626.2815,
3966	Florida Statutes, are amended to read:
3967	626.2815 Continuing education required; application;
3968	exceptions; requirements; penalties.--
3969	(5) The department of Insuranceshall refuse to renew the
3970	appointment of any agent who has not had his or her continuing
3971	education requirements certified unless the agent has been
3972	granted an extension by the department. The department may not
3973	issue a new appointment of the same or similar type, with any
3974	insurer, to an agent who was denied a renewal appointment for
3975	failure to complete continuing education as required until the
3976	agent completes his or her continuing education requirement.
3977	(6)(a) There is created an 11-member continuing education
3978	advisory board to be appointed by the Chief Financial Officer
3979	Insurance Commissioner and Treasurer. Appointments shall be for
3980	terms of 4 years. The purpose of the board is to advise the
3981	department in determining standards by which courses may be
3982	evaluated and categorized as basic, intermediate, or advanced.
3983	The board shall establish such criteria and the department shall
3984	implement such criteria by January 1, 1997.The board shall
3985	submit recommendations to the department of changes needed in
3986	such criteria not less frequently than every 2 years thereafter.
3987	The department shall require all approved course providers to
3988	submit courses for approval to the department using the
3989	criteria. All materials, brochures, and advertisements related
3990	to the approved courses must specify the level assigned to the
3991	course.
3992	(b) The board members shall be appointed as follows:
3993	1. Seven members representing agents of which at least one
3994	must be a representative from each of the following
3995	organizations: the Florida Association of Insurance Agents; the
3996	Florida Association of Life Underwriters; the Professional
3997	Insurance Agents of Florida, Inc.; the Florida Association of
3998	Health Underwriters; the Specialty Agents' Association; the
3999	Latin American Agents' Association; and the National Association
4000	of Insurance Women. Such board members must possess at least a
4001	bachelor's degree or higher from an accredited college or
4002	university with major coursework in insurance, risk management,
4003	or education or possess the designation of CLU, CPCU, CHFC, CFP,
4004	AAI, or CIC. In addition, each member must possess 5 years of
4005	classroom instruction experience or 5 years of experience in the
4006	development or design of educational programs or 10 years of
4007	experience as a licensed resident agent. Each organization may
4008	submit to the department a list of recommendations for
4009	appointment. If one organization does not submit a list of
4010	recommendations, the Chief Financial OfficerInsurance
4011	Commissionermay select more than one recommended person from a
4012	list submitted by other eligible organizations.
4013	2. Two members representing insurance companies at least
4014	one of whom must represent a Florida Domestic Company and one of
4015	whom must represent the Florida Insurance Council. Such board
4016	members must be employed within the training department of the
4017	insurance company. At least one such member must be a member of
4018	the Society of Insurance Trainers and Educators.
4019	3. One member representing the general public who is not
4020	directly employed in the insurance industry. Such board member
4021	must possess a minimum of a bachelor's degree or higher from an
4022	accredited college or university with major coursework in
4023	insurance, risk management, training, or education.
4024	4. One member, appointed by the Chief Financial Officer
4025	Insurance Commissioner, who represents the department.
4026	(c) The members of the board shall serve at the pleasure
4027	of the Chief Financial OfficerInsurance Commissioner and
4028	Treasurer. Each board member shall be entitled to reimbursement
4029	for expenses pursuant to s. 112.061. The board shall designate
4030	one member as chair. The board shall meet at the call of the
4031	chair or the Chief Financial OfficerInsurance Commissioner and
4032	Treasurer.
4033	Section 62. Section 626.2817, Florida Statutes, is amended
4034	to read:
4035	626.2817 Regulation of course providers, instructors,
4036	school officials, and monitor groups involved in prelicensure
4037	education for insurance agents and other licensees.--
4038	(1) Any course provider, instructor, school official, or
4039	monitor group must be approved by and registered with the
4040	department or officebefore offering prelicensure education
4041	courses for insurance agents and other licensees.
4042	(2) The department or commissionshall adopt rules
4043	establishing standards for the approval, registration,
4044	discipline, or removal from registration of course providers,
4045	instructors, school officials, and monitor groups. The standards
4046	must be designed to ensure that such persons have the knowledge,
4047	competence, and integrity to fulfill the educational objectives
4048	of the prelicensure requirements of this chapter and chapter 648
4049	and to assure that insurance agents and licensees are competent
4050	to engage in the activities authorized under the license.
4051	(3) The department or commissionshall adopt rules to
4052	establish a process for determining compliance with the
4053	prelicensure requirements of this chapter and chapter 648 and
4054	shall establish a prelicensure cycle for insurance agents and
4055	other licensees. The department or commissionshall adopt rules
4056	prescribing the forms necessary to administer the prelicensure
4057	requirements.
4058	Section 63. Section 626.291, Florida Statutes, is amended
4059	to read:
4060	626.291 Denial, issuance of license.--
4061	(1) Within 30 days after the applicant has completed any
4062	examination required under s. 626.221, the department or office
4063	or its designee shall provide a score report; and, if it finds
4064	that the applicant has received a passing grade, the department
4065	or officeshall within such period notify the applicant and
4066	issue and transmit the license to which such examination
4067	related. If it finds that the applicant did not make a passing
4068	grade on the examination for a particular license, the
4069	department or officeor its designee shall within this period
4070	provide notice to the applicant to that effect and of its denial
4071	of the license.
4072	(2) As to an applicant for a license for which no
4073	examination is required, the department or officeshall promptly
4074	issue the license applied for as soon as it has approved the
4075	application.
4076	(3) The department or officeshall not deny, delay, or
4077	withhold issuance of a license due to the fact that it has not
4078	received a criminal history report based on the applicant's
4079	fingerprints.
4080	Section 64. Paragraph (d) of subsection (2) of section
4081	626.292, Florida Statutes, is amended to read:
4082	626.292 Transfer of license from another state.--
4083	(2) To qualify for a license transfer, an individual
4084	applicant must meet the following requirements:
4085	(d) The individual shall satisfy prelicensing education
4086	requirements in this state, unless the completion of
4087	prelicensing education requirements was a prerequisite for
4088	licensure in the other state and the prelicensing education
4089	requirements in the other state are substantially equivalent to
4090	the prelicensing requirements of this state as determined by the
4091	departmentInsurance Commissioner of this state.
4092	Section 65. Section 626.301, Florida Statutes, is amended
4093	to read:
4094	626.301 Form and contents of licenses, in general.--Each
4095	license issued by the department or officeshall be in such form
4096	as the department or commissionmay designate and contain the
4097	licensee's name, lines of authority the licensee is authorized
4098	to transact, the licensee's personal identification number, the
4099	date of issuance, and any other information the department or
4100	commissiondeems necessary to fully identify the licensee and
4101	the authority being granted. The department or commissionmay by
4102	rule require photographs of applicants as a part of the
4103	licensing process.
4104	Section 66. Section 626.322, Florida Statutes, is amended
4105	to read:
4106	626.322 License, appointment; certain military
4107	installations.--A natural person, not a resident of this state,
4108	may be licensed and appointed to represent an authorized life
4109	insurer domiciled in this state or an authorized foreign life
4110	insurer which maintains a regional home office in this state,
4111	provided such person represents such insurer exclusively at a
4112	United States military installation located in a foreign
4113	country. The department may, upon request of the applicant and
4114	the insurer on application forms furnished by the department and
4115	upon payment of fees as prescribed in s. 624.501, issue a
4116	license and appointment to such person. The insurer shall
4117	certify to the department that the applicant has the necessary
4118	training to hold himself or herself out as a life insurance
4119	representative, and the insurer shall further certify that it is
4120	willing to be bound by the acts of such applicant within the
4121	scope of his or her employment. Appointments shall be continued
4122	as prescribed in s. 626.381 and upon payment of a fee as
4123	prescribed in s. 624.501, unless sooner terminated. Such fees
4124	received shall be credited to the Insurance Commissioner's
4125	Regulatory Trust Fund as provided for in s. 624.523.
4126	Section 67. Section 626.361, Florida Statutes, is amended
4127	to read:
4128	626.361 Effective date of appointments.--All appointments
4129	shall be submitted to the department or officeon a monthly
4130	basis no later than 45 days after the date of appointment. All
4131	appointments shall be effective as of the date requested on the
4132	appointment form.
4133	Section 68. Section 626.371, Florida Statutes, is amended
4134	to read:
4135	626.371 Payment of fees, taxes for appointment period
4136	without appointment.--If, upon application and qualification for
4137	an appointment and such investigation as the department or
4138	office may make, it appears to the department or officethat an
4139	individual who was formerly appointed has been actively engaged
4140	or is currently actively engaged as such an appointee, but
4141	without being appointed as required, the department or office
4142	may, if it finds that such failure to be appointed was an
4143	inadvertent error on the part of the insurer or employer so
4144	represented, nevertheless issue the appointment as applied for
4145	but subject to the condition that, before the appointment is
4146	issued, all fees and taxes which would have been due had the
4147	applicant been so appointed during such current and prior
4148	periods, together with a continuation fee for such current and
4149	prior terms of appointment, shall be paid to the department or
4150	office.
4151	Section 69. Subsections (2), (3), and (4), of section
4152	626.381, Florida Statutes, are amended to read:
4153	626.381 Renewal, continuation, reinstatement, or
4154	termination of appointment.--
4155	(2) Each appointing entity shall file with the department
4156	or officethe lists, statements, and information as to
4157	appointees whose appointments are being renewed or terminated,
4158	accompanied by payment of the applicable renewal fees and taxes
4159	as prescribed in s. 624.501, by a date set forth by the
4160	department or officefollowing the month during which the
4161	appointments will expire.
4162	(3) Renewal of an appointment which is received on a date
4163	set forth by the department or officein the succeeding month
4164	may be renewed by the department or officewithout penalty and
4165	shall be effective as of the day the appointment would have
4166	expired.
4167	(4) Renewal of an appointment which is received by the
4168	department or office after the date set by the department or
4169	office may be accepted and effectuated by the department or
4170	officein its discretion if an additional appointment,
4171	continuation, and reinstatement fee accompanies the renewal
4172	pursuant to s. 624.501.
4173	Section 70. Subsection (2) of section 626.431, Florida
4174	Statutes, is amended to read:
4175	626.431 Effect of expiration of license and appointment.--
4176	(2) When a licensee's last appointment for a particular
4177	class of insurance has been terminated or not renewed, the
4178	department or officemust notify the licensee that his or her
4179	eligibility for appointment as such an appointee will expire
4180	unless he or she is appointed prior to expiration of the 48-
4181	month period referred to in subsection (3).
4182	Section 71. Section 626.451, Florida Statutes, is amended
4183	to read:
4184	626.451 Appointment of agent or other representative.--
4185	(1) Each appointing entity appointing an agent, adjuster,
4186	service representative, customer representative, or managing
4187	general agent in this state shall file the appointment with the
4188	department or officeand, at the same time, pay the applicable
4189	appointment fee and taxes. Every appointment shall be subject
4190	to the prior issuance of the appropriate agent's, adjuster's,
4191	service representative's, customer representative's, or managing
4192	general agent's license.
4193	(2) As a part of each appointment there shall be a
4194	certified statement or affidavit of an appropriate officer or
4195	official of the appointing entity stating what investigation the
4196	appointing entity has made concerning the proposed appointee and
4197	his or her background and the appointing entity's opinion to the
4198	best of its knowledge and belief as to the moral character,
4199	fitness, and reputation of the proposed appointee and any other
4200	information the department or officemay reasonably require
4201	relative to the proposed appointee.
4202	(3) In the appointment of an agent, adjuster, service
4203	representative, customer representative, or managing general
4204	agent the appointing entity shall also certify therein that it
4205	is willing to be bound by the acts of the agent, adjuster,
4206	service representative, customer representative, or managing
4207	general agent, within the scope of his or her employment.
4208	(4) Each appointing entity shall advise the department or
4209	officein writing within 15 days after it or its general agent,
4210	officer, or other official becomes aware that an appointee has
4211	pleaded guilty or nolo contendere to or has been found guilty of
4212	a felony after being appointed.
4213	(5) Any law enforcement agency or state attorney's office
4214	that is aware that an agent, adjuster, service representative,
4215	customer representative, or managing general agent has pleaded
4216	guilty or nolo contendere to or has been found guilty of a
4217	felony shall notify the department or officeof such fact.
4218	(6) Upon the filing of an information or indictment
4219	against an agent, adjuster, service representative, customer
4220	representative, or managing general agent, the state attorney
4221	shall immediately furnish the department or officea certified
4222	copy of the information or indictment.
4223	Section 72. Section 626.461, Florida Statutes, is amended
4224	to read:
4225	626.461 Continuation of appointment of agent or other
4226	representative.--Subject to renewal or continuation by the
4227	appointing entity, the appointment of the agent, adjuster,
4228	solicitor, service representative, customer representative, or
4229	managing general agent shall continue in effect until the
4230	person's license is revoked or otherwise terminated, unless
4231	written notice of earlier termination of the appointment is
4232	filed with the department or officeby either the appointing
4233	entity or the appointee.
4234	Section 73. Subsections (2), (3), (4), and (5) of section
4235	626.471, Florida Statutes, are amended to read:
4236	626.471 Termination of appointment.--
4237	(2) As soon as possible and at all events within 30 days
4238	after terminating the appointment of an appointee, other than as
4239	to an appointment terminated by the appointing entity's failure
4240	to continue or renew it, the appointing entity shall file
4241	written notice thereof with the department or office, together
4242	with a statement that it has given the appointee notice thereof
4243	as provided in subsection (1) and shall file with the department
4244	or officethe reasons and facts involved in such termination as
4245	required under s. 626.511.
4246	(3) Upon termination of the appointment of an appointee,
4247	whether by failure to renew or continue the appointment, the
4248	appointing entity shall:
4249	(a) File with the department or officethe information
4250	required under s. 626.511.
4251	(b) Subject to the exceptions provided under subsection
4252	(1), continue the outstanding contracts transacted by an agent
4253	until the expiration date or anniversary date when the policy is
4254	a continuous policy with no expiration date. This paragraph
4255	shall not be construed to prohibit the cancellation of such
4256	contracts when not otherwise prohibited by law.
4257	(4) An appointee may terminate the appointment at any time
4258	by giving written notice thereof to the appointing entity and
4259	filing a copy of the notice with the department or office. Such
4260	termination shall be subject to the appointee's contract rights,
4261	if any.
4262	(5) Upon receiving notice of termination, the department
4263	or officeshall terminate the appointment.
4264	Section 74. Section 626.511, Florida Statutes, is amended
4265	to read:
4266	626.511 Reasons for termination; confidential
4267	information.--
4268	(1) Any insurer terminating the appointment of an agent;
4269	any general lines agent terminating the appointment of a
4270	customer representative or a crop hail or multiple-peril crop
4271	insurance agent; and any employer terminating the appointment of
4272	an adjuster, service representative, or managing general agent,
4273	whether such termination is by direct action of the appointing
4274	insurer, agent, or employer or by failure to renew or continue
4275	the appointment as provided, shall file with the department or
4276	officea statement of the reasons, if any, for and the facts
4277	relative to such termination. In the case of termination of the
4278	appointment of an agent, such information may be filed by the
4279	insurer or by the general agent of the insurer.
4280	(2) In the case of terminations by failure to renew or
4281	continue the appointment, the information required under
4282	subsection (1) shall be filed with the department or officeas
4283	soon as possible, and at all events within 30 days, after the
4284	date notice of intention not to so renew or continue was filed
4285	with the department or officeas required in this chapter. In
4286	all other cases, the information required under subsection (1)
4287	shall be filed with the department or officeat the time, or at
4288	all events within 10 days after, notice of the termination was
4289	filed with the department or office.
4290	(3) Any information, document, record, or statement
4291	furnished to the department or officeunder subsection (1) is
4292	confidential and exempt from the provisions of s. 119.07(1).
4293	Section 75. Subsections (2), (3), and (5) of section
4294	626.521, Florida Statutes, are amended to read:
4295	626.521 Character, credit reports.--
4296	(2) If requested by the department or office, the insurer,
4297	manager, general agent, general lines agent, or employer, as the
4298	case may be, shall furnish to the department or office on a form
4299	adopted by the department or commission andfurnished by the
4300	department or office, such information as it may reasonably
4301	require relative to such individual and investigation.
4302	(3) As to an applicant for an adjuster's or reinsurance
4303	intermediary's license who is to be self-employed, the
4304	department or officemay secure, at the cost of the applicant, a
4305	full detailed credit and character report made by an established
4306	and reputable independent reporting service relative to the
4307	applicant.
4308	(5) Information contained in credit or character reports
4309	furnished to or secured by the department or officeunder this
4310	section is confidential and exempt from the provisions of s.
4311	119.07(1).
4312	Section 76. Subsections (1) and (2) of section 626.541,
4313	Florida Statutes, are amended to read:
4314	626.541 Firm, corporate, and business names; officers;
4315	associates; notice of changes.--
4316	(1) Any licensed agent or adjuster doing business under a
4317	firm or corporate name or under any business name other than his
4318	or her own individual name shall, within 30 days after the
4319	initial transaction of insurance under such business name, file
4320	with the department or office, on forms adopted by the
4321	department or commission and furnished by the department or
4322	officeit, a written statement of the firm, corporate, or
4323	business name being so used, the address of any office or
4324	offices or places of business making use of such name, and the
4325	name and social security number of each officer and director of
4326	the corporation and of each individual associated in such firm
4327	or corporation as to the insurance transactions thereof or in
4328	the use of such business name.
4329	(2) In the event of any change of such name, or of any of
4330	the officers and directors, or of any of such addresses, or in
4331	the personnel so associated, written notice of such change must
4332	be filed with the department or officewithin 30 days by or on
4333	behalf of those licensees terminating any such firm, corporate,
4334	or business name or continuing to operate thereunder.
4335	Section 77. Section 626.551, Florida Statutes, is amended
4336	to read:
4337	626.551 Notice of change of address, name.--Every licensee
4338	shall notify the department or officein writing within 60 days
4339	after a change of name, residence address, principal business
4340	street address, or mailing address. Any licensed agent who has
4341	moved his or her residence from this state shall have his or her
4342	license and all appointments immediately terminated by the
4343	department or office. Failure to notify the department or office
4344	within the required time period shall result in a fine not to
4345	exceed $250 for the first offense and, for subsequent offenses,
4346	a fine of not less than $500 or suspension or revocation of the
4347	license pursuant to s. 626.611 or s. 626.621.
4348	Section 78. Subsections (1) and (2) of section 626.561,
4349	Florida Statutes, are amended to read:
4350	626.561 Reporting and accounting for funds.--
4351	(1) All premiums, return premiums, or other funds
4352	belonging to insurers or others received by an agent, customer
4353	representative, or adjuster in transactions under his or her
4354	license are trust funds received by the licensee in a fiduciary
4355	capacity. An agent shall keep the funds belonging to each
4356	insurer for which he or she is not appointed, other than a
4357	surplus lines insurer, in a separate account so as to allow the
4358	department or officeto properly audit such funds. The licensee
4359	in the applicable regular course of business shall account for
4360	and pay the same to the insurer, insured, or other person
4361	entitled thereto.
4362	(2) The licensee shall keep and make available to the
4363	department or officebooks, accounts, and records as will enable
4364	the department or officeto determine whether such licensee is
4365	complying with the provisions of this code. Every licensee shall
4366	preserve books, accounts, and records pertaining to a premium
4367	payment for at least 3 years after payment; provided, however,
4368	the preservation of records by computer or photographic
4369	reproductions or records in photographic form shall constitute
4370	compliance with this requirement. All other records shall be
4371	maintained in accordance with s. 626.748. The 3-year
4372	requirement shall not apply to insurance binders when no policy
4373	is ultimately issued and no premium is collected.
4374	Section 79. Section 626.591, Florida Statutes, is amended
4375	to read:
4376	626.591 Penalty for violation of s. 626.581.--
4377	(1) If any insurer oragent is found by the department to
4378	be in violation of s. 626.581, the department may, in its
4379	discretion, suspend or revoke the insurer's certificate of
4380	authority and the agent's license. If any insurer is found by
4381	the office to be in violation of s. 626.581, the office may, in
4382	its discretion, suspend or revoke the insurer's certificate of
4383	authority.
4384	(2)Any such suspension or revocation shall be for a
4385	period of not less than 6 months, and the insurer or agent shall
4386	not subsequently be authorized or licensed to transact insurance
4387	unless the office ordepartment is satisfied that the insurer or
4388	agent will not again violate any of the provisions of s.
4389	626.581.
4390	Section 80. Subsection (1) of section 626.592, Florida
4391	Statutes, is amended to read:
4392	626.592 Primary agents.--
4393	(1) Each person operating an insurance agency and each
4394	location of a multiple location agency shall designate a primary
4395	agent for each insurance agency location and shall file the name
4396	of the person so designated, and the address of the insurance
4397	agency location where he or she is primary agent, with the
4398	department of Insurance, on a form approved by the department.
4399	The designation of the primary agent may be changed at the
4400	option of the agency, and any change shall be effective upon
4401	notification to the department. Notice of change must be sent to
4402	the department within 30 days after such change.
4403	Section 81. Section 626.601, Florida Statutes, is amended
4404	to read:
4405	626.601 Improper conduct; inquiry; fingerprinting.--
4406	(1) The department or officemay, upon its own motion or
4407	upon a written complaint signed by any interested person and
4408	filed with the department or office, inquire into any alleged
4409	improper conduct of any licensed agent, adjuster, service
4410	representative, managing general agent, customer representative,
4411	title insurance agent, title insurance agency, continuing
4412	education course provider, instructor, school official, or
4413	monitor group under this code. The department or officemay
4414	thereafter initiate an investigation of any such licensee if it
4415	has reasonable cause to believe that the licensee has violated
4416	any provision of the insurance code. During the course of its
4417	investigation, the department or officeshall contact the
4418	licensee being investigated unless it determines that contacting
4419	such person could jeopardize the successful completion of the
4420	investigation or cause injury to the public.
4421	(2) In the investigation by the department or officeof
4422	the alleged misconduct, the licensee shall, whenever so required
4423	by the department or office, cause his or her books and records
4424	to be open for inspection for the purpose of such inquiries.
4425	(3) The complaints against any licensee may be informally
4426	alleged and need not be in any such language as is necessary to
4427	charge a crime on an indictment or information.
4428	(4) The expense for any hearings or investigations under
4429	this law, as well as the fees and mileage of witnesses, may be
4430	paid out of the appropriate fund.
4431	(5) If the department or office, after investigation, has
4432	reason to believe that a licensee may have been found guilty of
4433	or pleaded guilty or nolo contendere to a felony or a crime
4434	related to the business of insurance in this or any other state
4435	or jurisdiction, the department or officemay require the
4436	licensee to file with the department or officea complete set of
4437	his or her fingerprints, which shall be accompanied by the
4438	fingerprint processing fee set forth in s. 624.501. The
4439	fingerprints shall be certified by an authorized law enforcement
4440	officer.
4441	(6) The complaint and any information obtained pursuant to
4442	the investigation by the department or officeare confidential
4443	and are exempt from the provisions of s. 119.07, unless the
4444	department or officefiles a formal administrative complaint,
4445	emergency order, or consent order against the licensee. Nothing
4446	in this subsection shall be construed to prevent the department
4447	or officefrom disclosing the complaint or such information as
4448	it deems necessary to conduct the investigation, to update the
4449	complainant as to the status and outcome of the complaint, or to
4450	share such information with any law enforcement agency.
4451	Section 82. Section 626.611, Florida Statutes, is amended
4452	to read:
4453	626.611 Grounds for compulsory refusal, suspension, or
4454	revocation of agent's, title agency's, adjuster's, customer
4455	representative's, service representative's, or managing general
4456	agent's license or appointment.--The department or officeshall
4457	deny an application for, suspend, revoke, or refuse to renew or
4458	continue the license or appointment of any applicant, agent,
4459	title agency, adjuster, customer representative, service
4460	representative, or managing general agent, and it shall suspend
4461	or revoke the eligibility to hold a license or appointment of
4462	any such person, if it finds that as to the applicant, licensee,
4463	or appointee any one or more of the following applicable grounds
4464	exist:
4465	(1) Lack of one or more of the qualifications for the
4466	license or appointment as specified in this code.
4467	(2) Material misstatement, misrepresentation, or fraud in
4468	obtaining the license or appointment or in attempting to obtain
4469	the license or appointment.
4470	(3) Failure to pass to the satisfaction of the department
4471	or officeany examination required under this code.
4472	(4) If the license or appointment is willfully used, or to
4473	be used, to circumvent any of the requirements or prohibitions
4474	of this code.
4475	(5) Willful misrepresentation of any insurance policy or
4476	annuity contract or willful deception with regard to any such
4477	policy or contract, done either in person or by any form of
4478	dissemination of information or advertising.
4479	(6) If, as an adjuster, or agent licensed and appointed to
4480	adjust claims under this code, he or she has materially
4481	misrepresented to an insured or other interested party the terms
4482	and coverage of an insurance contract with intent and for the
4483	purpose of effecting settlement of claim for loss or damage or
4484	benefit under such contract on less favorable terms than those
4485	provided in and contemplated by the contract.
4486	(7) Demonstrated lack of fitness or trustworthiness to
4487	engage in the business of insurance.
4488	(8) Demonstrated lack of reasonably adequate knowledge and
4489	technical competence to engage in the transactions authorized by
4490	the license or appointment.
4491	(9) Fraudulent or dishonest practices in the conduct of
4492	business under the license or appointment.
4493	(10) Misappropriation, conversion, or unlawful withholding
4494	of moneys belonging to insurers or insureds or beneficiaries or
4495	to others and received in conduct of business under the license
4496	or appointment.
4497	(11) Unlawfully rebating, attempting to unlawfully rebate,
4498	or unlawfully dividing or offering to divide his or her
4499	commission with another.
4500	(12) Having obtained or attempted to obtain, or having
4501	used or using, a license or appointment as agent or customer
4502	representative for the purpose of soliciting or handling
4503	"controlled business" as defined in s. 626.730 with respect to
4504	general lines agents, s. 626.784 with respect to life agents,
4505	and s. 626.830 with respect to health agents.
4506	(13) Willful failure to comply with, or willful violation
4507	of, any proper order or rule of the department, commission, or
4508	officeor willful violation of any provision of this code.
4509	(14) Having been found guilty of or having pleaded guilty
4510	or nolo contendere to a felony or a crime punishable by
4511	imprisonment of 1 year or more under the law of the United
4512	States of America or of any state thereof or under the law of
4513	any other country which involves moral turpitude, without regard
4514	to whether a judgment of conviction has been entered by the
4515	court having jurisdiction of such cases.
4516	(15) Fraudulent or dishonest practice in submitting or
4517	aiding or abetting any person in the submission of an
4518	application for workers' compensation coverage under chapter 440
4519	containing false or misleading information as to employee
4520	payroll or classification for the purpose of avoiding or
4521	reducing the amount of premium due for such coverage.
4522	(16) Sale of an unregistered security that was required to
4523	be registered, pursuant to chapter 517.
4524	Section 83. Section 626.621, Florida Statutes, is amended
4525	to read:
4526	626.621 Grounds for discretionary refusal, suspension, or
4527	revocation of agent's, adjuster's, customer representative's,
4528	service representative's, or managing general agent's license or
4529	appointment.--The department or officemay, in its discretion,
4530	deny an application for, suspend, revoke, or refuse to renew or
4531	continue the license or appointment of any applicant, agent,
4532	adjuster, customer representative, service representative, or
4533	managing general agent, and it may suspend or revoke the
4534	eligibility to hold a license or appointment of any such person,
4535	if it finds that as to the applicant, licensee, or appointee any
4536	one or more of the following applicable grounds exist under
4537	circumstances for which such denial, suspension, revocation, or
4538	refusal is not mandatory under s. 626.611:
4539	(1) Any cause for which issuance of the license or
4540	appointment could have been refused had it then existed and been
4541	known to the department or office.
4542	(2) Violation of any provision of this code or of any
4543	other law applicable to the business of insurance in the course
4544	of dealing under the license or appointment.
4545	(3) Violation of any lawful order or rule of the
4546	department, commission, or office.
4547	(4) Failure or refusal, upon demand, to pay over to any
4548	insurer he or she represents or has represented any money coming
4549	into his or her hands belonging to the insurer.
4550	(5) Violation of the provision against twisting, as
4551	defined in s. 626.9541(1)(l).
4552	(6) In the conduct of business under the license or
4553	appointment, engaging in unfair methods of competition or in
4554	unfair or deceptive acts or practices, as prohibited under part
4555	IX of this chapter, or having otherwise shown himself or herself
4556	to be a source of injury or loss to the public or detrimental to
4557	the public interest.
4558	(7) Willful overinsurance of any property or health
4559	insurance risk.
4560	(8) Having been found guilty of or having pleaded guilty
4561	or nolo contendere to a felony or a crime punishable by
4562	imprisonment of 1 year or more under the law of the United
4563	States of America or of any state thereof or under the law of
4564	any other country, without regard to whether a judgment of
4565	conviction has been entered by the court having jurisdiction of
4566	such cases.
4567	(9) If a life agent, violation of the code of ethics.
4568	(10) Cheating on an examination required for licensure or
4569	violating test center or examination procedures published
4570	orally, in writing, or electronically at the test site by
4571	authorized representatives of the examination program
4572	administrator. Communication of test center and examination
4573	procedures must be clearly established and documented.
4574	(11) Failure to inform the department or officein writing
4575	within 30 days after pleading guilty or nolo contendere to, or
4576	being convicted or found guilty of, any felony or a crime
4577	punishable by imprisonment of 1 year or more under the law of
4578	the United States or of any state thereof, or under the law of
4579	any other country without regard to whether a judgment of
4580	conviction has been entered by the court having jurisdiction of
4581	the case.
4582	(12) Knowingly aiding, assisting, procuring, advising, or
4583	abetting any person in the violation of or to violate a
4584	provision of the insurance code or any order or rule of the
4585	department, commission, or office.
4586	Section 84. Section 626.631, Florida Statutes, is amended
4587	to read:
4588	626.631 Procedure for refusal, suspension, or revocation
4589	of license.--
4590	(1) If any licensee is convicted by a court of a violation
4591	of this code or a felony, the licenses and appointments of such
4592	person shall be immediately revoked by the department or office.
4593	The licensee may subsequently request a hearing pursuant to ss.
4594	120.569 and 120.57, and the department or officeshall expedite
4595	any such requested hearing. The sole issue at such hearing
4596	shall be whether the revocation should be rescinded because such
4597	person was not in fact convicted of a violation of this code or
4598	a felony.
4599	(2) The papers, documents, reports, or evidence of the
4600	department or officerelative to a hearing for revocation or
4601	suspension of a license or appointment pursuant to the
4602	provisions of this chapter and chapter 120 are confidential and
4603	exempt from the provisions of s. 119.07(1) until after the same
4604	have been published at the hearing. However, such papers,
4605	documents, reports, or items of evidence are subject to
4606	discovery in a hearing for revocation or suspension of a license
4607	or appointment.
4608	Section 85. Subsections (1) and (2) of section 626.641,
4609	Florida Statutes, are amended to read:
4610	626.641 Duration of suspension or revocation.--
4611	(1) The department or officeshall, in its order
4612	suspending a license or appointment or in its order suspending
4613	the eligibility of a person to hold or apply for such license or
4614	appointment, specify the period during which the suspension is
4615	to be in effect; but such period shall not exceed 2 years. The
4616	license, appointment, or eligibility shall remain suspended
4617	during the period so specified, subject, however, to any
4618	rescission or modification of the order by the department or
4619	office, or modification or reversal thereof by the court, prior
4620	to expiration of the suspension period. A license, appointment,
4621	or eligibility which has been suspended shall not be reinstated
4622	except upon request for such reinstatement; but the department
4623	or officeshall not grant such reinstatement if it finds that
4624	the circumstance or circumstances for which the license,
4625	appointment, or eligibility was suspended still exist or are
4626	likely to recur.
4627	(2) No person or appointee under any license or
4628	appointment revoked by the department or office, nor any person
4629	whose eligibility to hold same has been revoked by the
4630	department or office, shall have the right to apply for another
4631	license or appointment under this code within 2 years from the
4632	effective date of such revocation or, if judicial review of such
4633	revocation is sought, within 2 years from the date of final
4634	court order or decree affirming the revocation. The department
4635	or officeshall not, however, grant a new license or appointment
4636	or reinstate eligibility to hold such license or appointment if
4637	it finds that the circumstance or circumstances for which the
4638	eligibility was revoked or for which the previous license or
4639	appointment was revoked still exist or are likely to recur; if
4640	an individual's license as agent or customer representative or
4641	eligibility to hold same has been revoked upon the ground
4642	specified in s. 626.611(12), the department or officeshall
4643	refuse to grant or issue any new license or appointment so
4644	applied for.
4645	Section 86. Subsection (2) of section 626.661, Florida
4646	Statutes, is amended to read:
4647	626.661 Surrender of license.--
4648	(2) This section shall not be deemed to require the
4649	surrender to the department or officeof any license unless such
4650	surrender has been requested by the department or office.
4651	Section 87. Section 626.681, Florida Statutes, is amended
4652	to read:
4653	626.681 Administrative fine in lieu of or in addition to
4654	suspension, revocation, or refusal of license, appointment, or
4655	disapproval.--
4656	(1) Except as to insurance agencies, if the department or
4657	officefinds that one or more grounds exist for the suspension,
4658	revocation, or refusal to issue, renew, or continue any license
4659	or appointment issued under this chapter, or disapproval of a
4660	continuing education course provider, instructor, school
4661	official, or monitor groups, the department or officemay, in
4662	its discretion, in lieu of or in addition to such suspension or
4663	revocation, or in lieu of such refusal, or disapproval, and
4664	except on a second offense or when such suspension, revocation,
4665	or refusal is mandatory, impose upon the licensee, appointee,
4666	course provider, instructor, school official, or monitor group
4667	an administrative penalty in an amount up to $500 or, if the
4668	department or officehas found willful misconduct or willful
4669	violation on the part of the licensee, appointee, course
4670	provider, instructor, school official, or monitor group up to
4671	$3,500. The administrative penalty may, in the discretion of the
4672	department or office, be augmented by an amount equal to any
4673	commissions received by or accruing to the credit of the
4674	licensee or appointee in connection with any transaction as to
4675	which the grounds for suspension, revocation, or refusal
4676	related.
4677	(2) With respect to insurance agencies, if the department
4678	finds that one or more grounds exist for the suspension,
4679	revocation, or refusal to issue, renew, or continue any license
4680	issued under this chapter, the department may, in its
4681	discretion, in lieu of or in addition to such suspension or
4682	revocation, or in lieu of such refusal, impose upon the licensee
4683	an administrative penalty in an amount not to exceed $10,000 per
4684	violation. The administrative penalty may, in the discretion of
4685	the department, be augmented by an amount equal to any
4686	commissions received by or accruing to the credit of the
4687	licensee in connection with any transaction as to which the
4688	grounds for suspension, revocation, or refusal related.
4689	(3) The department or officemay allow the licensee,
4690	appointee, or continuing education course provider, instructor,
4691	school official, or monitor group a reasonable period, not to
4692	exceed 30 days, within which to pay to the department or office
4693	the amount of the penalty so imposed. If the licensee,
4694	appointee, course provider, instructor, school official, or
4695	monitor group fails to pay the penalty in its entirety to the
4696	department or officewithin the period so allowed, the license,
4697	appointments, approval, or status of that person shall stand
4698	suspended or revoked or issuance, renewal, or continuation shall
4699	be refused, as the case may be, upon expiration of such period.
4700	Section 88. Section 626.691, Florida Statutes, is amended
4701	to read:
4702	626.691 Probation.--
4703	(1) If the department or officefinds that one or more
4704	grounds exist for the suspension, revocation, or refusal to
4705	renew or continue any license or appointment issued under this
4706	part, the department or officemay, in its discretion, except
4707	when an administrative fine is not permissible under s. 626.681
4708	or when such suspension, revocation, or refusal is mandatory, in
4709	lieu of or in addition to such suspension or revocation, or in
4710	lieu of such refusal, or in connection with any administrative
4711	monetary penalty imposed under s. 626.681, place the offending
4712	licensee or appointee on probation for a period, not to exceed 2
4713	years, as specified by the department or officein its order.
4714	(2) As a condition to such probation or in connection
4715	therewith, the department or officemay specify in its order
4716	reasonable terms and conditions to be fulfilled by the
4717	probationer during the probation period. If during the
4718	probation period the department or officehas good cause to
4719	believe that the probationer has violated a term or condition,
4720	it shall suspend, revoke, or refuse to issue, renew, or continue
4721	the license or appointment of the probationer, as upon the
4722	original grounds referred to in subsection (1).
4723	Section 89. Section 626.692, Florida Statutes, is amended
4724	to read:
4725	626.692 Restitution.--If any ground exists for the
4726	suspension, revocation, or refusal of a license or appointment,
4727	the department or officemay, in addition to any other penalty
4728	authorized under this chapter, order the licensee to pay
4729	restitution to any person who has been deprived of money by the
4730	licensee's misappropriation, conversion, or unlawful withholding
4731	of moneys belonging to insurers, insureds, beneficiaries, or
4732	others. In no instance shall the amount of restitution required
4733	to be paid under this section exceed the amount of money
4734	misappropriated, converted, or unlawfully withheld. Nothing in
4735	this section limits or restricts a person's right to seek other
4736	remedies as provided for by law.
4737	Section 90. Section 626.7315, Florida Statutes, is amended
4738	to read:
4739	626.7315 Prohibition against the unlicensed transaction of
4740	general lines insurance.--With respect to any line of authority
4741	as defined in s. 626.015(6)(7), no individual shall, unless
4742	licensed as a general lines agent:
4743	(1) Solicit insurance or procure applications therefor;
4744	(2) In this state, receive or issue a receipt for any
4745	money on account of or for any insurer, or receive or issue a
4746	receipt for money from other persons to be transmitted to any
4747	insurer for a policy, contract, or certificate of insurance or
4748	any renewal thereof, even though the policy, certificate, or
4749	contract is not signed by him or her as agent or representative
4750	of the insurer;
4751	(3) Directly or indirectly represent himself or herself to
4752	be an agent of any insurer or as an agent, to collect or forward
4753	any insurance premium, or to solicit, negotiate, effect,
4754	procure, receive, deliver, or forward, directly or indirectly,
4755	any insurance contract or renewal thereof or any endorsement
4756	relating to an insurance contract, or attempt to effect the
4757	same, of property or insurable business activities or interests,
4758	located in this state;
4759	(4) In this state, engage or hold himself or herself out
4760	as engaging in the business of analyzing or abstracting
4761	insurance policies or of counseling or advising or giving
4762	opinions, other than as a licensed attorney at law, relative to
4763	insurance or insurance contracts, for fee, commission, or other
4764	compensation, other than as a salaried bona fide full-time
4765	employee so counseling and advising his or her employer relative
4766	to the insurance interests of the employer and of the
4767	subsidiaries or business affiliates of the employer;
4768	(5) In any way, directly or indirectly, make or cause to
4769	be made, or attempt to make or cause to be made, any contract of
4770	insurance for or on account of any insurer;
4771	(6) Solicit, negotiate, or in any way, directly or
4772	indirectly, effect insurance contracts, if a member of a
4773	partnership or association, or a stockholder, officer, or agent
4774	of a corporation which holds an agency appointment from any
4775	insurer; or
4776	(7) Receive or transmit applications for suretyship, or
4777	receive for delivery bonds founded on applications forwarded
4778	from this state, or otherwise procure suretyship to be effected
4779	by a surety insurer upon the bonds of persons in this state or
4780	upon bonds given to persons in this state.
4781	Section 91. Subsection (3) of section 626.732, Florida
4782	Statutes, is amended to read:
4783	626.732 Requirement as to knowledge, experience, or
4784	instruction.--
4785	(3) An individual who was or became qualified to sit for
4786	an agent's, customer representative's, or adjuster's examination
4787	at or during the time he or she was employed by the department
4788	or officeand who, while so employed, was employed in
4789	responsible insurance duties as a full-time bona fide employee
4790	shall be permitted to take an examination if application for
4791	such examination is made within 90 days after the date of
4792	termination of his or her employment with the department or
4793	office.
4794	Section 92. Section 626.742, Florida Statutes, is amended
4795	to read:
4796	626.742 Nonresident agents; service of process.--
4797	(1) Each licensed nonresident agent shall appoint the
4798	Chief Financial OfficerInsurance Commissioner and Treasureras
4799	his or her attorney to receive service of legal process issued
4800	against the agent in this state, upon causes of action arising
4801	within this state out of transactions under the agent's license
4802	and appointment. Service upon the Chief Financial Officer
4803	Insurance Commissioner and Treasureras attorney shall
4804	constitute effective legal service upon the agent.
4805	(2) The appointment of the Chief Financial Officer
4806	Insurance Commissioner and Treasurerfor service of process
4807	shall be irrevocable for as long as there could be any cause of
4808	action against the agent arising out of his or her insurance
4809	transactions in this state.
4810	(3) Duplicate copies of such legal process against such
4811	agent shall be served upon the Chief Financial OfficerInsurance
4812	Commissioner and Treasurerby a person competent to serve a
4813	summons.
4814	(4) Upon receiving such service, the Chief Financial
4815	OfficerInsurance Commissioner and Treasurershall forthwith
4816	send one of the copies of the process, by registered mail with
4817	return receipt requested, to the defendant agent at his or her
4818	last address of record with the department.
4819	(5) The Chief Financial OfficerInsurance Commissioner and
4820	Treasurershall keep a record of the day and hour of service
4821	upon him or her of all such legal process.
4822	Section 93. Subsections (4) and (7) of section 626.7451,
4823	Florida Statutes, are amended to read:
4824	626.7451 Managing general agents; required contract
4825	provisions.--No person acting in the capacity of a managing
4826	general agent shall place business with an insurer unless there
4827	is in force a written contract between the parties which sets
4828	forth the responsibility for a particular function, specifies
4829	the division of responsibilities, and contains the following
4830	minimum provisions:
4831	(4) Separate records of business written by the managing
4832	general agent shall be maintained unless the managing general
4833	agent is a controlled or controlling person. The insurer shall
4834	have access and the right to copy all accounts and records
4835	related to its business in a form usable by the insurer, and the
4836	department and officeshall have access to all books, bank
4837	accounts, and records of the managing general agent in a form
4838	usable to the department and office. The records shall be
4839	retained according to s. 626.561.
4840	(7) If the contract permits the managing general agent to
4841	settle claims on behalf of the insurer:
4842	(a) All claims must be reported to the company in a timely
4843	manner and all claims must be adjusted by properly licensed
4844	persons.
4845	(b) Notice shall be sent by the managing general agent to
4846	the insurer as soon as it becomes known that the claim:
4847	1. Exceeds the limit set by the insurer;
4848	2. Involves a coverage dispute;
4849	3. Exceeds the managing general agent's claims settlement
4850	authority;
4851	4. Is open for more than 6 months; or
4852	5. Is closed by payment of an amount set by the office
4853	departmentor an amount set by the insurer, whichever is less.
4854	(c) All claims files shall be the joint property of the
4855	insurer and managing general agent. However, upon an order of
4856	liquidation of the insurer the claims and related application
4857	files shall become the sole property of the insurer or its
4858	estate. The managing general agent shall have reasonable access
4859	to and the right to copy the files on a timely basis.
4860	(d) Any settlement authority granted to the managing
4861	general agent may be terminated for cause upon the insurer's
4862	written notice to the managing general agent or upon the
4863	termination of the contract. The insurer may suspend the
4864	settlement authority during the pendency of any dispute
4865	regarding the cause for termination.
4866
4867	For the purposes of this section and ss. 626.7453 and 626.7454,
4868	the term "controlling person" or "controlling" has the meaning
4869	set forth in s. 625.012(5)(b)1., and the term "controlled
4870	person" or "controlled" has the meaning set forth in s.
4871	625.012(5)(b)2.
4872	Section 94. Subsections (1), (5), and (6) of section
4873	626.7454, Florida Statutes, are amended to read:
4874	626.7454 Managing general agents; duties of insurers.--
4875	(1) The insurer shall have on file for each managing
4876	general agent with which it has done business an independent
4877	financial examination in a form acceptable to the office
4878	department.
4879	(5) Within 30 days after entering into or terminating a
4880	contract with a managing general agent, the insurer shall
4881	provide written notification of the appointment or termination
4882	to the department and office. Notices of appointment of a
4883	managing general agent shall include a statement of duties which
4884	the applicant is expected to perform on behalf of the insurer,
4885	the lines of insurance for which the applicant is to be
4886	authorized to act, and any other information the department or
4887	officemay request.
4888	(6) An insurer shall review its books and records on a
4889	quarterly basis to determine if any producer has become a
4890	managing general agent as defined in s. 626.015. If the insurer
4891	determines that a producer has become a managing general agent,
4892	the insurer shall promptly notify the producer and the
4893	department and officeof such determination and the insurer and
4894	producer must fully comply with the provisions of this section
4895	and ss. 626.7451, 626.7452, and 626.7453 within 30 days after
4896	such determination.
4897
4898	Subsections (1), (3), and (4) do not apply to a managing general
4899	agent that is a controlled or controlling person.
4900	Section 95. Subsections (6), (7), and (8) of section
4901	626.7491, Florida Statutes, are amended to read:
4902	626.7491 Business transacted with producer controlled
4903	property and casualty insurer.--
4904	(6) AUDIT COMMITTEE.--Every controlled insurer shall have
4905	an audit committee of the board of directors composed of
4906	independent directors. The audit committee shall annually meet
4907	with management, the insurer's independent certified public
4908	accountants, and an independent casualty actuary or other
4909	independent loss reserve specialist acceptable to the office
4910	departmentto review the adequacy of the insurer's loss
4911	reserves.
4912	(7) REPORTING REQUIREMENTS.--
4913	(a) In addition to any other required loss reserve
4914	certification, the controlled insurer shall, on April 1 of each
4915	year, file with the officedepartmentthe opinion of an
4916	independent casualty actuary, or such other independent loss
4917	reserve specialist acceptable to the officedepartment,
4918	reporting loss ratios for each line of business written and
4919	attesting to the adequacy of loss reserves established for
4920	losses incurred and outstanding as of the year end, including
4921	incurred but not reported losses, on business placed by the
4922	producer.
4923	(b) The controlled insurer shall annually report to the
4924	officedepartmentthe amount of commissions paid to the
4925	producer, the percentage such amount represents of the net
4926	premiums written, and comparable amounts and percentages paid to
4927	noncontrolling producers for placements of the same kinds of
4928	insurance.
4929	(8) PENALTIES.--
4930	(a) If the department believes that the controlling
4931	producer or any other person has not materially complied with
4932	this section, or any rule adopted or order issued hereunder, the
4933	department may order the controlling producer to cease placing
4934	business with the controlled insurer.
4935	(b) If, due to such material noncompliance, the controlled
4936	insurer or any policyholder thereof has suffered any loss or
4937	damage, the department or officemay maintain a civil action or
4938	intervene in an action brought by or on behalf of the insurer or
4939	policyholder for recovery of compensatory damages for the
4940	benefit of the insurer or policyholder or other appropriate
4941	relief.
4942	(c) If an order for liquidation or rehabilitation of the
4943	controlled insurer has been entered pursuant to chapter 631 and
4944	the receiver appointed under such order believes that the
4945	controlling producer or any other person has not materially
4946	complied with this section or any rule adopted or order issued
4947	hereunder and the insurer has suffered any loss or damage
4948	therefrom, the receiver may maintain a civil action for recovery
4949	of damages or other appropriate sanctions for the benefit of the
4950	insurer.
4951	(d) Nothing contained in this section shall affect the
4952	right of the department or officeto impose any other penalties
4953	provided for in the Florida Insurance Code.
4954	(e) Nothing contained in this section is intended to or
4955	shall in any manner alter or affect the rights of policyholders,
4956	claimants, creditors, or other third parties.
4957	Section 96. Paragraph (e) of subsection (3) and
4958	subsections (11) and (12) of section 626.7492, Florida Statutes,
4959	are amended to read:
4960	626.7492 Reinsurance intermediaries.--
4961	(3) LICENSURE.--
4962	(e) If the applicant for a reinsurance intermediary
4963	license is a nonresident, the applicant, as a condition
4964	precedent to receiving or holding a license, must designate the
4965	Chief Financial OfficerInsurance Commissioneras agent for
4966	service of process in the manner, and with the same legal
4967	effect, provided for by this section for designation of service
4968	of process upon unauthorized insurers. Such applicant shall also
4969	furnish the department with the name and address of a resident
4970	of this state upon whom notices or orders of the department or
4971	process affecting the nonresident reinsurance intermediary may
4972	be served. The licensee shall promptly notify the department in
4973	writing of each change in its designated agent for service of
4974	process, and the change shall not become effective until
4975	acknowledged by the department.
4976	(11) PENALTIES AND LIABILITIES.--
4977	(a) A reinsurance intermediary found by the department, or
4978	an insurer, or reinsurer found by the office,departmentto be
4979	in violation of any provision of this section must:
4980	1. For each separate violation pay a penalty in an amount
4981	not to exceed $5,000;
4982	2. Be subject to revocation or suspension of its license;
4983	and
4984	3. If a violation was committed by the reinsurance
4985	intermediary, the reinsurance intermediary must make restitution
4986	to the insurer, reinsurer, rehabilitator, or liquidator of the
4987	insurer or reinsurer for the net losses incurred by the insurer
4988	or reinsurer attributable to the violation.
4989	(b) Nothing contained in this section shall affect the
4990	right of the office ordepartment to impose any other penalties
4991	provided in the Florida Insurance Code.
4992	(c) Nothing contained in this section is intended to or
4993	shall in any manner limit or restrict the rights of
4994	policyholders, claimants, creditors, or other third parties or
4995	confer any rights to these persons.
4996	(12) No insurer or reinsurer may continue to use the
4997	services of a reinsurance intermediary on or after April 8,
4998	1992, unless such use is in compliance with this section.
4999	Section 97. Subsection (5) of section 626.752, Florida
5000	Statutes, is amended to read:
5001	626.752 Exchange of business.--
5002	(5) Within 15 days after the last day of each month, any
5003	insurer accepting business under this section shall report to
5004	the department the name, address, telephone number, and social
5005	security number of each agent from which the insurer received
5006	more than 24 personal lines risks during the calendar year,
5007	except for risks being removed from the Citizens Property
5008	Insurance CorporationResidential Property and Casualty Joint
5009	Underwriting Associationand placed with that insurer by a
5010	brokering agent. Once the insurer has reported pursuant to this
5011	subsection an agent's name to the department, additional reports
5012	on the same agent shall not be required. However, the fee set
5013	forth in s. 624.501 shall be paid for the agent by the insurer
5014	for each year until the insurer notifies the department that the
5015	insurer is no longer accepting business from the agent pursuant
5016	to this section. The insurer may require that the agent
5017	reimburse the insurer for the fee.
5018	Section 98. Subsection (2) of section 626.7845, Florida
5019	Statutes, is amended to read:
5020	626.7845 Prohibition against unlicensed transaction of
5021	life insurance.--
5022	(2) Except as provided in s. 626.112(6), with respect to
5023	any line of authority specified in s. 626.015(11)(12), no
5024	individual shall, unless licensed as a life agent:
5025	(a) Solicit insurance or annuities or procure
5026	applications; or
5027	(b) In this state, engage or hold himself or herself out
5028	as engaging in the business of analyzing or abstracting
5029	insurance policies or of counseling or advising or giving
5030	opinions to persons relative to insurance or insurance contracts
5031	other than:
5032	1. As a consulting actuary advising an insurer; or
5033	2. As to the counseling and advising of labor unions,
5034	associations, trustees, employers, or other business entities,
5035	the subsidiaries and affiliates of each, relative to their
5036	interests and those of their members or employees under
5037	insurance benefit plans.
5038	Section 99. Section 626.7851, Florida Statutes, is amended
5039	to read:
5040	626.7851 Requirement as to knowledge, experience, or
5041	instruction.--No applicant for a license as a life agent, except
5042	for a chartered life underwriter (CLU), shall be qualified or
5043	licensed unless within the 4 years immediately preceding the
5044	date the application for a license is filed with the department
5045	he or she has:
5046	(1) Successfully completed 40 hours of classroom courses
5047	in insurance satisfactory to the department at a school or
5048	college, or extension division thereof, or other authorized
5049	course of study, approved by the department. Courses must
5050	include instruction on the subject matter of unauthorized
5051	entities engaging in the business of insurance, to include the
5052	Florida Nonprofit Multiple-Employer Welfare Arrangement Act and
5053	the Employee Retirement Income Security Act, 29 U.S.C. ss. 1001
5054	et seq., as it relates to the provision of life insurance by
5055	employers to their employees and the regulation thereof;
5056	(2) Successfully completed a correspondence course in
5057	insurance satisfactory to the department and regularly offered
5058	by accredited institutions of higher learning in this state,
5059	approved by the department. Courses must include instruction on
5060	the subject matter of unauthorized entities engaging in the
5061	business of insurance, to include the Florida Nonprofit
5062	Multiple-Employer Welfare Arrangement Act and the Employee
5063	Retirement Income Security Act, 29 U.S.C. ss. 1001 et seq., as
5064	it relates to the provision of life insurance by employers to
5065	their employees and the regulation thereof;
5066	(3) Held an active license in life, or life and health,
5067	insurance in another state. This provision may not be utilized
5068	unless the other state grants reciprocal treatment to licensees
5069	formerly licensed in Florida; or
5070	(4) Been employed by the department or officefor at least
5071	1 year, full time in life or life and health insurance
5072	regulatory matters and who was not terminated for cause, and
5073	application for examination is made within 90 days after the
5074	date of termination of his or her employment with the department
5075	or office.
5076	Section 100. Section 626.8305, Florida Statutes, is
5077	amended to read:
5078	626.8305 Prohibition against the unlicensed transaction of
5079	health insurance.--Except as provided in s. 626.112(6), with
5080	respect to any line of authority specified in s. 626.015(7)(8),
5081	no individual shall, unless licensed as a health agent:
5082	(1) Solicit insurance or procure applications; or
5083	(2) In this state, engage or hold himself or herself out
5084	as engaging in the business of analyzing or abstracting
5085	insurance policies or of counseling or advising or giving
5086	opinions to persons relative to insurance contracts other than:
5087	(a) As a consulting actuary advising insurers; or
5088	(b) As to the counseling and advising of labor unions,
5089	associations, trustees, employers, or other business entities,
5090	the subsidiaries and affiliates of each, relative to their
5091	interests and those of their members or employees under
5092	insurance benefit plans.
5093	Section 101. Subsection (4) of section 626.8311, Florida
5094	Statutes, is amended to read:
5095	626.8311 Requirement as to knowledge, experience, or
5096	instruction.--No applicant for a license as a health agent,
5097	except for a chartered life underwriter (CLU), shall be
5098	qualified or licensed unless within the 4 years immediately
5099	preceding the date the application for license is filed with the
5100	department he or she has:
5101	(4) Been employed by the department or officefor at least
5102	1 year, full time in health insurance regulatory matters and who
5103	was not terminated for cause, and application for examination is
5104	made within 90 days after the date of termination of his or her
5105	employment with the department or office.
5106	Section 102. Subsection (1) of section 626.8427, Florida
5107	Statutes, is amended to read:
5108	626.8427 Number of applications for licensure required;
5109	exemption; effect of expiration of license.--
5110	(1) After a license as a title insurance agent has been
5111	issued to a title insurance agent, the agent is not required to
5112	file another license application for a similar license,
5113	irrespective of the number of insurers to be represented by the
5114	agent, unless:
5115	(a) The agent is specifically ordered by the department to
5116	complete a new application; or
5117	(b) During any period of 48 months since the filing of the
5118	original license application, the agent was not appointed,
5119	unless in the case of individuals the failure to be so appointed
5120	was due to military service, in which event the period within
5121	which a new application is not required may, in the discretion
5122	of the department of Insurance, be extended for 12 months
5123	following the date of discharge from military service if the
5124	military service does not exceed 3 years, but in no event shall
5125	the period be extended under this clause for a period of more
5126	than 6 years from the date of filing the original application.
5127	Section 103. Subsections (1) and (3) of section 626.8463,
5128	Florida Statutes, are amended to read:
5129	626.8463 Witnesses and evidence.--
5130	(1) As to the subject of any examination, investigation,
5131	or hearing being conducted by him or her under s. 624.5015, ss.
5132	626.8417-626.847, or s. 627.791, an examiner appointed by the
5133	department or officeof Insurancemay administer oaths, examine
5134	and cross-examine witnesses, and receive oral and documentary
5135	evidence and shall have the power to subpoena witnesses, compel
5136	their attendance and testimony, and require by subpoena the
5137	production of books, papers, records, files, correspondence,
5138	documents, or other evidence which the examiner deems relevant
5139	to the inquiry.
5140	(3) If a person refuses to comply with any such subpoena
5141	or to testify as to any matter concerning which the person may
5142	be lawfully interrogated, the circuit court in and for Leon
5143	County, or the county in which such examination, investigation,
5144	or hearing is being conducted, or the county in which such
5145	person resides, upon application by the department or office,
5146	may issue an order requiring such person to comply with the
5147	subpoena and to testify. A person who fails to obey such an
5148	order of the court may be punished by the court for contempt.
5149	Section 104. Section 626.8467, Florida Statutes, is
5150	amended to read:
5151	626.8467 Testimony compelled; immunity from prosecution.--
5152	(1) If a person asks to be excused from attending or
5153	testifying or from producing any books, papers, records,
5154	contracts, documents, or other evidence in connection with any
5155	examination, hearing, or investigation being conducted under s.
5156	624.5015, ss. 626.8417-626.847, or s. 627.791 by the department
5157	or officeor its examiner on the ground that the testimony or
5158	evidence required of the person may tend to incriminate him or
5159	her or subject him or her to a penalty or forfeiture and
5160	notwithstanding is directed to give such testimony or produce
5161	such evidence, the person must, if so directed by the Department
5162	of Financial ServicesInsuranceand the Department of Legal
5163	Affairs or by the office and the Department of Legal Affairs,
5164	nonetheless comply with such direction, but he or she shall not
5165	thereafter be prosecuted or subjected to any penalty or
5166	forfeiture for or on account of any transaction, matter, or
5167	thing concerning which he or she may have so testified or
5168	produced evidence, and no testimony so given or evidence
5169	produced shall be received against the person upon any criminal
5170	action, investigation, or proceeding. However, a person so
5171	testifying shall not be exempt from prosecution or punishment
5172	for any perjury committed by him or her in such testimony, and
5173	the testimony or evidence so given or produced shall be
5174	admissible against him or her upon any criminal action,
5175	investigation, or proceeding concerning such perjury; and such
5176	person shall not be exempt from the refusal, suspension, or
5177	revocation of any license or appointment, permission, or
5178	authority conferred or to be conferred pursuant to s. 624.5015,
5179	ss. 626.8417-626.847, or s. 627.791.
5180	(2) Any such person may execute, acknowledge, and file
5181	within the office of the Department of Financial Services or
5182	the office, as appropriate,Insurancea statement expressly
5183	waiving such immunity or privilege with respect to any
5184	transaction, matter, or thing specified in the statement, and
5185	thereupon the testimony of such person or such evidence in
5186	relation to such transaction, matter, or thing may be received
5187	or produced before any judge or justice, court, tribunal, or
5188	grand jury or otherwise and, if so received or produced, such
5189	person shall not be entitled to any immunity or privilege on
5190	account of any testimony he or she may so give or evidence so
5191	produced.
5192	Section 105. Section 626.847, Florida Statutes, is amended
5193	to read:
5194	626.847 Penalty for refusal to testify.--A person who
5195	refuses or fails, without lawful cause, to testify relative to
5196	the affairs of any title insurer or other person when subpoenaed
5197	under s. 626.8463 and requested by the department or officeof
5198	Insuranceto so testify is guilty of a misdemeanor of the second
5199	degree and, upon conviction, is punishable as provided in s.
5200	775.082 or s. 775.083.
5201	Section 106. Subsection (3) of section 626.8473, Florida
5202	Statutes, is amended to read:
5203	626.8473 Escrow; trust fund.--
5204	(3) All funds received by a title insurance agent to be
5205	held in trust shall be immediately placed in a financial
5206	institution that is located within this state and is a member of
5207	the Federal Deposit Insurance Corporation or the National Credit
5208	Union Share Insurance Fund. These funds shall be invested in an
5209	escrow account in accordance with the investment requirements
5210	and standards established for deposits and investments of state
5211	funds in s. 17.5718.10, where the funds shall be kept until
5212	disbursement thereof is properly authorized.
5213	Section 107. Section 626.8582, Florida Statutes, is
5214	amended to read:
5215	626.8582 "Nonresident public adjuster" defined.--A
5216	"nonresident public adjuster" is a person who:
5217	(1) Is not a resident of this state;
5218	(2) Is a currently licensed public adjuster in his or her
5219	state of residence for the type or kinds of insurance for which
5220	the licensee intends to adjust claims in this state or, if a
5221	resident of a state that does not license public adjusters, has
5222	passed the office'sdepartment'sadjuster examination as
5223	prescribed in s. 626.8732(1)(b); and
5224	(3) Is a self-employed public adjuster or associated with
5225	or employed by a public adjusting firm or other public adjuster.
5226	Section 108. Section 626.8584, Florida Statutes, is
5227	amended to read:
5228	626.8584 "Nonresident independent adjuster" defined.--A
5229	"nonresident independent adjuster" is a person who:
5230	(1) Is not a resident of this state;
5231	(2) Is a currently licensed independent adjuster in his or
5232	her state of residence for the type or kinds of insurance for
5233	which the licensee intends to adjust claims in this state or, if
5234	a resident of a state that does not license independent
5235	adjusters, has passed the office'sdepartment'sadjuster
5236	examination as prescribed in s. 626.8734(1)(b); and
5237	(3) Is a self-employed independent adjuster or associated
5238	with or employed by an independent adjusting firm or other
5239	independent adjuster.
5240	Section 109. Section 626.859, Florida Statutes, is amended
5241	to read:
5242	626.859 "Catastrophe" or "emergency" adjuster defined.--A
5243	"catastrophe" or "emergency" adjuster is a person who is not a
5244	licensed adjuster under this part, but who has been designated
5245	and certified to the officedepartmentby insurers as qualified
5246	to adjust claims, losses, or damages under policies or contracts
5247	of insurance issued by such insurer, and whom the office
5248	departmentmay license, in the event of a catastrophe or
5249	emergency, for the purposes and under the conditions which the
5250	officedepartmentshall fix and for the period of the emergency
5251	as the officedepartmentshall determine, to adjust claims,
5252	losses, or damages under the policies of insurance issued by the
5253	insurers.
5254	Section 110. Subsection (2) of section 626.861, Florida
5255	Statutes, is amended to read:
5256	626.861 Insurer's officers, insurer's employees,
5257	reciprocal insurer's representatives; adjustments by.--
5258	(2) If any such officer, employee, attorney, or agent in
5259	connection with the adjustment of any such claim, loss, or
5260	damage engages in any of the misconduct described in or
5261	contemplated by s. 626.611(6), the officedepartmentmay suspend
5262	or revoke the insurer's certificate of authority.
5263	Section 111. Subsection (2) of section 626.863, Florida
5264	Statutes, is amended to read:
5265	626.863 Licensed independent adjusters required; insurers'
5266	responsibility.--
5267	(2) Before referring any claim or loss, the insurer shall
5268	ascertain from the officedepartmentwhether the proposed
5269	independent adjuster is currently licensed and appointed as
5270	such. Having once ascertained that a particular person is so
5271	licensed and appointed, the insurer may assume that he or she
5272	will continue to be so licensed and appointed until the insurer
5273	has knowledge, or receives information from the office
5274	department, to the contrary.
5275	Section 112. Section 626.865, Florida Statutes, is amended
5276	to read:
5277	626.865 Public adjuster's qualifications, bond.--
5278	(1) The officedepartmentshall issue a license to an
5279	applicant for a public adjuster's license upon determining that
5280	the applicant has paid the applicable fees specified in s.
5281	624.501 and possesses the following qualifications:
5282	(a) Is a natural person at least 18 years of age.
5283	(b) Is a bona fide resident of this state.
5284	(c) Is trustworthy and has such business reputation as
5285	would reasonably assure that the applicant will conduct his or
5286	her business as insurance adjuster fairly and in good faith and
5287	without detriment to the public.
5288	(d) Has had sufficient experience, training, or
5289	instruction concerning the adjusting of damages or losses under
5290	insurance contracts, other than life and annuity contracts, is
5291	sufficiently informed as to the terms and effects of the
5292	provisions of those types of insurance contracts, and possesses
5293	adequate knowledge of the laws of this state relating to such
5294	contracts as to enable and qualify him or her to engage in the
5295	business of insurance adjuster fairly and without injury to the
5296	public or any member thereof with whom the applicant may have
5297	business as a public adjuster.
5298	(e) Has passed any required written examination.
5299	(2) At the time of application for license as a public
5300	adjuster, the applicant shall file with the officedepartmenta
5301	bond executed and issued by a surety insurer authorized to
5302	transact such business in this state, in the amount of $50,000,
5303	conditioned for the faithful performance of his or her duties as
5304	a public adjuster under the license applied for. The bond shall
5305	be in favor of the officedepartmentand shall specifically
5306	authorize recovery by the officedepartmentof the damages
5307	sustained in case the licensee is guilty of fraud or unfair
5308	practices in connection with his or her business as public
5309	adjuster. The aggregate liability of the surety for all such
5310	damages shall in no event exceed the amount of the bond. Such
5311	bond shall not be terminated unless at least 30 days' written
5312	notice is given to the licensee and filed with the office
5313	department.
5314	Section 113. Section 626.866, Florida Statutes, is amended
5315	to read:
5316	626.866 Independent adjuster's qualifications.--The office
5317	departmentshall issue a license to an applicant for an
5318	independent adjuster's license upon determining that the
5319	applicable license fee specified in s. 624.501 has been paid and
5320	that the applicant possesses the following qualifications:
5321	(1) Is a natural person at least 18 years of age.
5322	(2) Is a bona fide resident of this state.
5323	(3) Is trustworthy and has such business reputation as
5324	would reasonably assure that the applicant will conduct his or
5325	her business as insurance adjuster fairly and in good faith and
5326	without detriment to the public.
5327	(4) Has had sufficient experience, training, or
5328	instruction concerning the adjusting of damage or loss under
5329	insurance contracts, other than life and annuity contracts, is
5330	sufficiently informed as to the terms and the effects of the
5331	provisions of such types of contracts, and possesses adequate
5332	knowledge of the insurance laws of this state relating to such
5333	contracts as to enable and qualify him or her to engage in the
5334	business of insurance adjuster fairly and without injury to the
5335	public or any member thereof with whom he or she may have
5336	relations as an insurance adjuster and to adjust all claims in
5337	accordance with the policy or contract and the insurance laws of
5338	this state.
5339	(5) Has passed any required written examination.
5340	Section 114. Section 626.867, Florida Statutes, is amended
5341	to read:
5342	626.867 Company employee adjuster's qualifications.--The
5343	officedepartmentshall issue a license to an applicant for a
5344	company employee 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 of risks
5355	described in his or her application, is sufficiently informed as
5356	to the terms and the effects of the provisions of insurance
5357	contracts covering such risks, and possesses adequate knowledge
5358	of the insurance laws of this state relating to such insurance
5359	contracts as to enable and qualify him or her to engage in such
5360	business as 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 115. Subsection (5) of section 626.869, Florida
5367	Statutes, is amended to read:
5368	626.869 License, adjusters.--
5369	(5) Any person holding a license for 24 consecutive months
5370	or longer and who engages in adjusting workers' compensation
5371	insurance must, beginning in their birth month and every 2 years
5372	thereafter, have completed 24 hours of courses, 2 hours of which
5373	relate to ethics, in subjects designed to inform the licensee
5374	regarding the current workers' compensation laws of this state,
5375	so as to enable him or her to engage in business as a workers'
5376	compensation insurance adjuster fairly and without injury to the
5377	public and to adjust all claims in accordance with the policy or
5378	contract and the workers' compensation laws of this state. In
5379	order to qualify as an eligible course under this subsection,
5380	the course must:
5381	(a) Have a course outline approved by the office
5382	department.
5383	(b) Be taught at a school training facility or other
5384	location approved by the officedepartment.
5385	(c) Be taught by instructors with at least 5 years of
5386	experience in the area of workers' compensation, general lines
5387	of insurance, or other persons approved by the office
5388	department. However, a member of The Florida Bar is exempt from
5389	the 5 years' experience requirement.
5390	(d) Furnish the attendee a certificate of completion. The
5391	course provider shall send a roster to the officedepartmentin
5392	a format prescribed by the commissiondepartment.
5393	Section 116. Section 626.8695, Florida Statutes, is
5394	amended to read:
5395	626.8695 Primary adjuster.--
5396	(1) Each person operating an adjusting firm and each
5397	location of a multiple location adjusting firm must designate a
5398	primary adjuster for each such firm or location and must file
5399	with the officedepartmentthe name of such primary adjuster and
5400	the address of the firm or location where he or she is the
5401	primary adjuster, on a form approved by the commission
5402	department. The designation of the primary adjuster may be
5403	changed at the option of the adjusting firm. Any such change is
5404	effective upon notification to the officedepartment. Notice of
5405	change must be sent to the officedepartmentwithin 30 days
5406	after such change.
5407	(2)(a) For purposes of this section, a "primary adjuster"
5408	is the licensed adjuster who is responsible for the hiring and
5409	supervision of all individuals within an adjusting firm location
5410	who deal with the public and who acts in the capacity of a
5411	public adjuster as defined in s. 626.854, or an independent
5412	adjuster as defined in s. 626.855. An adjuster may be
5413	designated as a primary adjuster for only one adjusting firm
5414	location.
5415	(b) For purposes of this section, an "adjusting firm" is a
5416	location where an independent or public adjuster is engaged in
5417	the business of insurance.
5418	(3) The officedepartmentmay suspend or revoke the
5419	license of the primary adjuster if the adjusting firm employs
5420	any person who has had a license denied or any person whose
5421	license is currently suspended or revoked. However, if a person
5422	has been denied a license for failure to pass a required
5423	examination, he or she may be employed to perform clerical or
5424	administrative functions for which licensure is not required.
5425	(4) The primary adjuster in an unincorporated adjusting
5426	firm, or the primary adjuster in an incorporated adjusting firm
5427	in which no officer, director, or stockholder is an adjuster, is
5428	responsible and accountable for the acts of salaried employees
5429	under his or her direct supervision and control while acting on
5430	behalf of the adjusting firm. Nothing in this section renders
5431	any person criminally liable or subject to any disciplinary
5432	proceedings for any act unless the person personally committed
5433	or knew or should have known of the act and of the facts
5434	constituting a violation of this code.
5435	(5) The officedepartmentmay suspend or revoke the
5436	license of any adjuster who is employed by a person whose
5437	license is currently suspended or revoked.
5438	(6) An adjusting firm location may not conduct the
5439	business of insurance unless a primary adjuster is designated.
5440	Failure of the person operating the adjusting firm to designate
5441	a primary adjuster for the firm, or for each location, as
5442	applicable, on a form prescribed by the commissiondepartment
5443	within 30 days after inception of the firm or change of primary
5444	adjuster designation, constitutes grounds for requiring the
5445	adjusting firm to obtain an adjusting firm license pursuant to
5446	s. 626.8696.
5447	(7) Any adjusting firm may request, on a form prescribed
5448	by the commissiondepartment, verification from the office
5449	departmentof any person's current licensure status. If a
5450	request is mailed to the officedepartmentwithin 5 working days
5451	after the date an adjuster is hired, and the officedepartment
5452	subsequently notifies the adjusting firm that an employee's
5453	license is currently suspended, revoked, or has been denied, the
5454	license of the primary adjuster shall not be revoked or
5455	suspended if the unlicensed person is immediately dismissed from
5456	employment as an adjuster with the firm.
5457	Section 117. Subsections (1) and (5) of section 626.8696,
5458	Florida Statutes, are amended to read:
5459	626.8696 Application for adjusting firm license.--
5460	(1) The application for an adjusting firm license must
5461	include:
5462	(a) The name of each majority owner, partner, officer, and
5463	director of the adjusting firm.
5464	(b) The resident address of each person required to be
5465	listed in the application under paragraph (a).
5466	(c) The name of the adjusting firm and its principal
5467	business address.
5468	(d) The location of each adjusting firm office and the
5469	name under which each office conducts or will conduct business.
5470	(e) Any additional information which the commission
5471	departmentmay require.
5472	(5) An adjusting firm required to be licensed pursuant to
5473	s. 626.8695 must remain so licensed for a period of 3 years from
5474	the date of licensure, unless the license is suspended or
5475	revoked. The officedepartmentmay suspend or revoke the
5476	adjusting firm's authority to do business for activities
5477	occurring during the time the firm is licensed, regardless of
5478	whether the licensing period has terminated.
5479	Section 118. Section 626.8697, Florida Statutes, is
5480	amended to read:
5481	626.8697 Grounds for refusal, suspension, or revocation of
5482	adjusting firm license.--
5483	(1) The officedepartmentshall deny, suspend, revoke, or
5484	refuse to continue the license of any adjusting firm if it
5485	finds, as to any adjusting firm or as to any majority owner,
5486	partner, manager, director, officer, or other person who manages
5487	or controls the firm, that any of the following grounds exist:
5488	(a) Lack by the firm of one or more of the qualifications
5489	for the license as specified in this code.
5490	(b) Material misstatement, misrepresentation, or fraud in
5491	obtaining the license or in attempting to obtain the license.
5492	(2) The officedepartmentmay, in its discretion, deny,
5493	suspend, revoke, or refuse to continue the license of any
5494	adjusting firm if it finds that any of the following applicable
5495	grounds exist with respect to the firm or any owner, partner,
5496	manager, director, officer, or other person who is otherwise
5497	involved in the operation of the firm:
5498	(a) Any cause for which issuance of the license could have
5499	been refused had it then existed and been known to the office
5500	department.
5501	(b) Violation of any provision of this code or of any
5502	other law applicable to the business of insurance.
5503	(c) Violation of any order or rule of the office or
5504	commissiondepartment.
5505	(d) An owner, partner, manager, director, officer, or
5506	other person who manages or controls the firm having been found
5507	guilty of or having pleaded guilty or nolo contendere to a
5508	felony or a crime punishable by imprisonment of 1 year or more
5509	under the laws of the United States or of any state or under the
5510	laws of any other country, without regard to whether
5511	adjudication was made or withheld by the court.
5512	(e) Failure to inform the officedepartmentin writing
5513	within 30 days after a pleading by an owner, partner, manager,
5514	director, officer, or other person managing or controlling the
5515	firm of guilty or nolo contendere to, or being convicted or
5516	found guilty of, any felony or a crime punishable by
5517	imprisonment of 1 year or more under the laws of the United
5518	States or of any state, or under the laws of any other country,
5519	without regard to whether adjudication was made or withheld by
5520	the court.
5521	(f) Knowingly aiding, assisting, procuring, advising, or
5522	abetting any person in the violation of or to violate a
5523	provision of the insurance code or any order or rule of the
5524	office or commissiondepartment.
5525	(g) Knowingly employing any individual in a managerial
5526	capacity or in a capacity dealing with the public who is under
5527	an order of revocation or suspension issued by the office
5528	department.
5529	(h) Committing any of the following acts with such a
5530	frequency as to have made the operation of the adjusting firm
5531	hazardous to the insurance-buying public or other persons:
5532	1. Misappropriation, conversion, or unlawful or
5533	unreasonable withholding of moneys belonging to insurers or
5534	insureds or beneficiaries or claimants or to others and received
5535	in the conduct of business under the license.
5536	2. Misrepresentation or deception with regard to the
5537	business of insurance, dissemination of information, or
5538	advertising.
5539	3. Demonstrated lack of fitness or trustworthiness to
5540	engage in the business of insurance adjusting arising out of
5541	activities related to insurance adjusting or the adjusting firm.
5542	(i) Failure to appoint a primary adjuster.
5543	(3) In lieu of discretionary refusal, suspension, or
5544	revocation of an adjusting firm's license, the officedepartment
5545	may impose an administrative penalty of up to $1,000 for each
5546	violation or ground provided under this section, not to exceed
5547	an aggregate amount of $10,000 for all violations or grounds.
5548	(4) If any adjusting firm, having been licensed,
5549	thereafter has such license revoked or suspended, the firm shall
5550	terminate all adjusting activities while the license is revoked
5551	or suspended.
5552	Section 119. Section 626.8698, Florida Statutes, is
5553	amended to read:
5554	626.8698 Disciplinary guidelines for public
5555	adjusters.--The officedepartmentmay deny, suspend, or revoke
5556	the license of a public adjuster, and administer a fine not to
5557	exceed $5,000 per act, for any of the following:
5558	(1) Violating any provision of this chapter or a rule or
5559	order of the office or commissiondepartment;
5560	(2) Receiving payment or anything of value as a result of
5561	an unfair or deceptive practice;
5562	(3) Receiving or accepting any fee, kickback, or other
5563	thing of value pursuant to any agreement or understanding, oral
5564	or otherwise; entering into a split-fee arrangement with another
5565	person who is not a public adjuster; or being otherwise paid or
5566	accepting payment for services that have not been performed;
5567	(4) Violating s. 316.066 or s. 817.234;
5568	(5) Soliciting or otherwise taking advantage of a person
5569	who is vulnerable, emotional, or otherwise upset as the result
5570	of a trauma, accident, or other similar occurrence; or
5571	(6) Violating any ethical rule of the commission
5572	department.
5573	Section 120. Section 626.870, Florida Statutes, is amended
5574	to read:
5575	626.870 Application for license.--
5576	(1) Application for a license under this part shall be
5577	made as provided in s. 626.171 and related sections of this
5578	code.
5579	(2) The commissiondepartmentshall so prepare the form of
5580	the application as to elicit and require from the applicant the
5581	information necessary to enable the officedepartmentto
5582	determine whether the applicant possesses the qualifications
5583	prerequisite to issuance of the license to the applicant.
5584	(3) The commissiondepartmentmay, in its discretion,
5585	require that the application be supplemented by the certificate
5586	or affidavit of such person or persons as it deems necessary for
5587	its determination of the applicant's residence, business
5588	reputation, and reputation for trustworthiness. The commission
5589	department shall prescribe and the officemay furnish the forms
5590	for such certificates and affidavits.
5591	Section 121. Section 626.871, Florida Statutes, is amended
5592	to read:
5593	626.871 Reappointment after military service.--The office
5594	departmentmay, without requiring a further written examination,
5595	issue an appointment as an adjuster to a formerly licensed and
5596	appointed adjuster of this state who held a current adjuster's
5597	appointment at the time of entering service in the Armed Forces
5598	of the United States, subject to the following conditions:
5599	(1) The period of military service must not have been in
5600	excess of 3 years;
5601	(2) The application for the appointment must be filed with
5602	the officedepartmentand the applicable fee paid, within 12
5603	months following the date of honorable discharge of the
5604	applicant from the military service; and
5605	(3) The new appointment will be of the same type and class
5606	as that currently effective at the time the applicant entered
5607	military service; but, if such type and class of appointment is
5608	not being currently issued under this code, the new appointment
5609	shall be of that type and class or classes most closely
5610	resembling those of the former appointment.
5611	Section 122. Subsections (1) and (5) of section 626.872,
5612	Florida Statutes, are amended to read:
5613	626.872 Temporary license.--
5614	(1) The officedepartmentmay, in its discretion, issue a
5615	temporary license as an independent adjuster or as a company
5616	employee adjuster, subject to the following conditions:
5617	(a) The applicant must be an employee of an adjuster
5618	currently licensed by the officedepartment, an employee of an
5619	authorized insurer, or an employee of an established adjusting
5620	firm or corporation which is supervised by a currently licensed
5621	independent adjuster.
5622	(b) The application must be accompanied by a certificate
5623	of employment and a report as to the applicant's integrity and
5624	moral character on a form prescribed by the commission
5625	departmentand executed by the employer.
5626	(c) The applicant must be a natural person of at least 18
5627	years of age, must be a bona fide resident of this state, must
5628	be trustworthy, and must have such business reputation as would
5629	reasonably assure that the applicant will conduct his or her
5630	business as an adjuster fairly and in good faith and without
5631	detriment to the public.
5632	(d) The applicant's employer is responsible for the
5633	adjustment acts of any licensee under this section.
5634	(e) The applicable license fee specified must be paid
5635	before issuance of the temporary license.
5636	(f) The temporary license shall be effective for a period
5637	of 1 year, but subject to earlier termination at the request of
5638	the employer, or if the licensee fails to take an examination as
5639	an independent adjuster or company employee adjuster within 6
5640	months after issuance of the temporary license, or if suspended
5641	or revoked by the officedepartment.
5642	(5) The officedepartmentshall not issue a temporary
5643	license as an independent adjuster or as a company employee
5644	adjuster to any individual who has ever held such a license in
5645	this state.
5646	Section 123. Subsection (1) of section 626.873, Florida
5647	Statutes, is amended to read:
5648	626.873 Nonresident company employee adjusters.--
5649	(1) The officedepartmentshall, upon application
5650	therefor, issue a license to an applicant for a nonresident
5651	adjuster's license upon determining that the applicant has paid
5652	the applicable license fees required under s. 624.501 and:
5653	(a) Is a currently licensed insurance adjuster in his or
5654	her home state, if such state requires a license.
5655	(b) Is an employee of an insurer, or a wholly owned
5656	subsidiary of an insurer, admitted to do business in this state.
5657	(c) Has filed a certificate or letter of authorization
5658	from the insurance department of his or her home state, if such
5659	state requires an adjuster to be licensed, stating that he or
5660	she holds a current license or authorization to adjust insurance
5661	losses. Such certificate or authorization must be signed by the
5662	insurance commissioner, or his or her deputy, of the adjuster's
5663	home state and must reflect whether or not the adjuster has ever
5664	had his or her license or authorization in the adjuster's home
5665	state suspended or revoked and, if such is the case, the reason
5666	for such action.
5667	Section 124. Section 626.8732, Florida Statutes, is
5668	amended to read:
5669	626.8732 Nonresident public adjuster's qualifications,
5670	bond.--
5671	(1) The officedepartmentshall, upon application
5672	therefor, issue a license to an applicant for a nonresident
5673	public adjuster's license upon determining that the applicant
5674	has paid the applicable license fees required under s. 624.501
5675	and:
5676	(a) Is a natural person at least 18 years of age.
5677	(b) Has passed to the satisfaction of the office
5678	departmenta written Florida public adjuster's examination of
5679	the scope prescribed in s. 626.241(6); however, the requirement
5680	for such an examination does not apply to any of the following:
5681	1. An applicant who is licensed as a resident public
5682	adjuster in his or her state of residence, when that state
5683	requires the passing of a written examination in order to obtain
5684	the license and a reciprocal agreement with the appropriate
5685	official of that state has been entered into by the office
5686	department; or
5687	2. An applicant who is licensed as a nonresident public
5688	adjuster in a state other than his or her state of residence
5689	when the state of licensure requires the passing of a written
5690	examination in order to obtain the license and a reciprocal
5691	agreement with the appropriate official of the state of
5692	licensure has been entered into by the officedepartment.
5693	(c) Is self-employed as a public adjuster or associated
5694	with or employed by a public adjusting firm or other public
5695	adjuster. Applicants licensed as nonresident public adjusters
5696	under this section must be appointed as such in accordance with
5697	the provisions of ss. 626.112 and 626.451. Appointment fees in
5698	the amount specified in s. 624.501 must be paid to the office
5699	departmentin advance. The appointment of a nonresident public
5700	adjuster shall continue in force until suspended, revoked, or
5701	otherwise terminated, but subject to biennial renewal or
5702	continuation by the licensee in accordance with procedures
5703	prescribed in s. 626.381 for licensees in general.
5704	(d) Is trustworthy and has such business reputation as
5705	would reasonably assure that he or she will conduct his or her
5706	business as a nonresident public adjuster fairly and in good
5707	faith and without detriment to the public.
5708	(e) Has had sufficient experience, training, or
5709	instruction concerning the adjusting of damages or losses under
5710	insurance contracts, other than life and annuity contracts; is
5711	sufficiently informed as to the terms and effects of the
5712	provisions of those types of insurance contracts; and possesses
5713	adequate knowledge of the laws of this state relating to such
5714	contracts as to enable and qualify him or her to engage in the
5715	business of insurance adjuster fairly and without injury to the
5716	public or any member thereof with whom he or she may have
5717	business as a public adjuster.
5718	(2) The applicant shall furnish the following with his or
5719	her application:
5720	(a) A complete set of his or her fingerprints. The
5721	applicant's fingerprints must be certified by an authorized law
5722	enforcement officer. The officedepartmentmay not authorize an
5723	applicant to take the required examination or issue a
5724	nonresident public adjuster's license to the applicant until the
5725	officedepartmenthas received a report from the Florida
5726	Department of Law Enforcement and the Federal Bureau of
5727	Investigation relative to the existence or nonexistence of a
5728	criminal history report based on the applicant's fingerprints.
5729	(b) If currently licensed as a resident public adjuster in
5730	the applicant's state of residence, a certificate or letter of
5731	authorization from the licensing authority of the applicant's
5732	state of residence, stating that the applicant holds a current
5733	or comparable license to act as a public adjuster. The
5734	certificate or letter of authorization must be signed by the
5735	insurance commissioner or his or her deputy or the appropriate
5736	licensing official and must disclose whether the adjuster has
5737	ever had any license or eligibility to hold any license
5738	declined, denied, suspended, revoked, or placed on probation or
5739	whether an administrative fine or penalty has been levied
5740	against the adjuster and, if so, the reason for the action.
5741	(c) If the applicant's state of residence does not require
5742	licensure as a public adjuster and the applicant has been
5743	licensed as a resident insurance adjuster, agent, broker, or
5744	other insurance representative in his or her state of residence
5745	or any other state within the past 3 years, a certificate or
5746	letter of authorization from the licensing authority stating
5747	that the applicant holds or has held a license to act as such an
5748	insurance adjuster, agent, or other insurance representative.
5749	The certificate or letter of authorization must be signed by the
5750	insurance commissioner or his or her deputy or the appropriate
5751	licensing official and must disclose whether or not the
5752	adjuster, agent, or other insurance representative has ever had
5753	any license or eligibility to hold any license declined, denied,
5754	suspended, revoked, or placed on probation or whether an
5755	administrative fine or penalty has been levied against the
5756	adjuster and, if so, the reason for the action.
5757	(3) At the time of application for license as a
5758	nonresident public adjuster, the applicant shall file with the
5759	officedepartmenta bond executed and issued by a surety insurer
5760	authorized to transact surety business in this state, in the
5761	amount of $50,000, conditioned for the faithful performance of
5762	his or her duties as a nonresident public adjuster under the
5763	license applied for. The bond must be in favor of the office
5764	department and must specifically authorize recovery by the
5765	officedepartmentof the damages sustained if the licensee
5766	commits fraud or unfair practices in connection with his or her
5767	business as nonresident public adjuster. The aggregate liability
5768	of the surety for all the damages may not exceed the amount of
5769	the bond. The bond may not be terminated unless at least 30
5770	days' written notice is given to the licensee and filed with the
5771	officedepartment.
5772	(4) The usual and customary records pertaining to
5773	transactions under the license of a nonresident public adjuster
5774	must be retained for at least 3 years after completion of the
5775	adjustment and must be made available in this state to the
5776	officedepartmentupon request. The failure of a nonresident
5777	public adjuster to properly maintain records and make them
5778	available to the officedepartmentupon request constitutes
5779	grounds for the immediate suspension of the license issued under
5780	this section.
5781	(5) After licensure as a nonresident public adjuster, as a
5782	condition of doing business in this state, the licensee must
5783	annually on or before January 1, on a form prescribed by the
5784	commissiondepartment, submit an affidavit certifying that the
5785	licensee is familiar with and understands the insurance code and
5786	rules adopted thereunder and the provisions of the contracts
5787	negotiated or to be negotiated. Compliance with this filing
5788	requirement is a condition precedent to the issuance,
5789	continuation, reinstatement, or renewal of a nonresident public
5790	adjuster's appointment.
5791	Section 125. Subsections (1), (3), and (4) of section
5792	626.8734, Florida Statutes, are amended to read:
5793	626.8734 Nonresident independent adjuster's
5794	qualifications.--
5795	(1) The officedepartmentshall, upon application
5796	therefor, issue a license to an applicant for a nonresident
5797	independent adjuster's license upon determining that the
5798	applicant has paid the applicable license fees required under s.
5799	624.501 and:
5800	(a) Is a natural person at least 18 years of age.
5801	(b) Has passed to the satisfaction of the office
5802	departmenta written Florida independent adjuster's examination
5803	of the scope prescribed in s. 626.241(6); however, the
5804	requirement for the examination does not apply to any of the
5805	following:
5806	1. An applicant who is licensed as a resident independent
5807	adjuster in his or her state of residence when that state
5808	requires the passing of a written examination in order to obtain
5809	the license and a reciprocal agreement with the appropriate
5810	official of that state has been entered into by the office
5811	department; or
5812	2. An applicant who is licensed as a nonresident
5813	independent adjuster in a state other than his or her state of
5814	residence when the state of licensure requires the passing of a
5815	written examination in order to obtain the license and a
5816	reciprocal agreement with the appropriate official of the state
5817	of licensure has been entered into by the officedepartment.
5818	(c) Is self-employed or associated with or employed by an
5819	independent adjusting firm or other independent adjuster.
5820	Applicants licensed as nonresident independent adjusters under
5821	this section must be appointed as such in accordance with the
5822	provisions of ss. 626.112 and 626.451. Appointment fees in the
5823	amount specified in s. 624.501 must be paid to the office
5824	departmentin advance. The appointment of a nonresident
5825	independent adjuster shall continue in force until suspended,
5826	revoked, or otherwise terminated, but subject to biennial
5827	renewal or continuation by the licensee in accordance with
5828	procedures prescribed in s. 626.381 for licensees in general.
5829	(d) Is trustworthy and has such business reputation as
5830	would reasonably assure that he or she will conduct his or her
5831	business as a nonresident independent adjuster fairly and in
5832	good faith and without detriment to the public.
5833	(e) Has had sufficient experience, training, or
5834	instruction concerning the adjusting of damages or losses under
5835	insurance contracts, other than life and annuity contracts; is
5836	sufficiently informed as to the terms and effects of the
5837	provisions of those types of insurance contracts; and possesses
5838	adequate knowledge of the laws of this state relating to such
5839	contracts as to enable and qualify him or her to engage in the
5840	business of insurance adjuster fairly and without injury to the
5841	public or any member thereof with whom he or she may have
5842	business as an independent adjuster.
5843	(3) The usual and customary records pertaining to
5844	transactions under the license of a nonresident independent
5845	adjuster must be retained for at least 3 years after completion
5846	of the adjustment and must be made available in this state to
5847	the officedepartmentupon request. The failure of a nonresident
5848	independent adjuster to properly maintain records and make them
5849	available to the officedepartmentupon request constitutes
5850	grounds for the immediate suspension of the license issued under
5851	this section.
5852	(4) After licensure as a nonresident independent adjuster,
5853	as a condition of doing business in this state, the licensee
5854	must annually on or before January 1, on a form prescribed by
5855	the commissiondepartment, submit an affidavit certifying that
5856	the licensee is familiar with and understands the insurance laws
5857	and administrative rules of this state and the provisions of the
5858	contracts negotiated or to be negotiated. Compliance with this
5859	filing requirement is a condition precedent to the issuance,
5860	continuation, reinstatement, or renewal of a nonresident
5861	independent adjuster's appointment.
5862	Section 126. Section 626.8736, Florida Statutes, is
5863	amended to read:
5864	626.8736 Nonresident independent or public adjusters;
5865	service of process.--
5866	(1) Each licensed nonresident independent or public
5867	adjuster shall appoint the Chief Financial OfficerInsurance
5868	Commissioner and Treasurerand his or her successors in office
5869	as his or her attorney to receive service of legal process
5870	issued against the nonresident independent or public adjuster in
5871	this state, upon causes of action arising within this state out
5872	of transactions under his license and appointment. Service upon
5873	the Chief Financial OfficerInsurance Commissioner and Treasurer
5874	as attorney shall constitute effective legal service upon the
5875	nonresident independent or public adjuster.
5876	(2) The appointment of the Chief Financial Officer
5877	Insurance Commissioner and Treasurerfor service of process
5878	shall be irrevocable for as long as there could be any cause of
5879	action against the nonresident independent or public adjuster
5880	arising out of his or her insurance transactions in this state.
5881	(3) Duplicate copies of legal process against the
5882	nonresident independent or public adjuster shall be served upon
5883	the Chief Financial OfficerInsurance Commissioner and Treasurer
5884	by a person competent to serve a summons.
5885	(4) Upon receiving the service, the Chief Financial
5886	OfficerInsurance Commissioner and Treasurershall forthwith
5887	send one of the copies of the process, by registered mail with
5888	return receipt requested, to the defendant nonresident
5889	independent or public adjuster at his or her last address of
5890	record with the officedepartment.
5891	(5) The Chief Financial OfficerInsurance Commissioner and
5892	Treasurershall keep a record of the day and hour of service
5893	upon him or her of all legal process received under this
5894	section.
5895	Section 127. Section 626.8738, Florida Statutes, is
5896	amended to read:
5897	626.8738 Penalty for violation.--In addition to any other
5898	remedy imposed pursuant to this code, any person who acts as a
5899	resident or nonresident public adjuster or holds himself or
5900	herself out to be a public adjuster to adjust claims in this
5901	state, without being licensed by the officedepartmentas a
5902	public adjuster and appointed as a public adjuster, commits a
5903	felony of the third degree, punishable as provided in s.
5904	775.082, s. 775.083, or s. 775.084. Each act in violation of
5905	this section constitutes a separate offense.
5906	Section 128. Section 626.874, Florida Statutes, is amended
5907	to read:
5908	626.874 Catastrophe or emergency adjusters.--
5909	(1) In the event of a catastrophe or emergency, the office
5910	departmentmay issue a license, for the purposes and under the
5911	conditions which it shall fix and for the period of emergency as
5912	it shall determine, to persons who are residents or nonresidents
5913	of this state and who are not licensed adjusters under this part
5914	but who have been designated and certified to it as qualified to
5915	act as adjusters by independent resident adjusters or by an
5916	authorized insurer or by a licensed general lines agent to
5917	adjust claims, losses, or damages under policies or contracts of
5918	insurance issued by such insurers. The fee for the license
5919	shall be as provided in s. 624.501(12)(c).
5920	(2) If any person not a licensed adjuster who has been
5921	permitted to adjust such losses, claims, or damages under the
5922	conditions and circumstances set forth in subsection (1),
5923	engages in any of the misconduct described in or contemplated by
5924	ss. 626.611 and 626.621, the officedepartment, without notice
5925	and hearing, shall be authorized to issue its order denying such
5926	person the privileges granted under this section; and thereafter
5927	it shall be unlawful for any such person to adjust any such
5928	losses, claims, or damages in this state.
5929	Section 129. Section 626.878, Florida Statutes, is amended
5930	to read:
5931	626.878 Rules; code of ethics.--An adjuster shall
5932	subscribe to the code of ethics specified in the rules of the
5933	commissiondepartment.
5934	Section 130. Paragraphs (d) and (m) of subsection (1) of
5935	section 626.88, Florida Statutes, are amended to read:
5936	626.88 Definitions of "administrator" and "insurer".--
5937	(1) For the purposes of this part, an "administrator" is
5938	any person who directly or indirectly solicits or effects
5939	coverage of, collects charges or premiums from, or adjusts or
5940	settles claims on residents of this state in connection with
5941	authorized commercial self-insurance funds or with insured or
5942	self-insured programs which provide life or health insurance
5943	coverage or coverage of any other expenses described in s.
5944	624.33(1) or any person who, through a health care risk contract
5945	as defined in s. 641.234 with an insurer or health maintenance
5946	organization, provides billing and collection services to health
5947	insurers and health maintenance organizations on behalf of
5948	health care providers, other than any of the following persons:
5949	(d) A health care services plan, health maintenance
5950	organization, professional service plan corporation, or person
5951	in the business of providing continuing care, possessing a valid
5952	certificate of authority issued by the officedepartment, and
5953	the sales representatives thereof, if the activities of such
5954	entity are limited to the activities permitted under the
5955	certificate of authority.
5956	(m) A person approved by the department of Insurancewho
5957	administers only self-insured workers' compensation plans.
5958
5959	A person who provides billing and collection services to health
5960	insurers and health maintenance organizations on behalf of
5961	health care providers shall comply with the provisions of ss.
5962	627.6131, 641.3155, and 641.51(4).
5963	Section 131. Section 626.8805, Florida Statutes, is
5964	amended to read:
5965	626.8805 Certificate of authority to act as
5966	administrator.--
5967	(1) It is unlawful for any person to act as or hold
5968	himself or herself out to be an administrator in this state
5969	without a valid certificate of authority issued by the office
5970	departmentpursuant to ss. 626.88-626.894. To qualify for and
5971	hold authority to act as an administrator in this state, an
5972	administrator must otherwise be in compliance with this code and
5973	with its organizational agreement. The failure of any person to
5974	hold such a certificate while acting as an administrator shall
5975	subject such person to a fine of not less than $5,000 or more
5976	than $10,000 for each violation.
5977	(2) The administrator shall file with the office
5978	departmentan application for a certificate of authority upon a
5979	form to be adopted by the commission and furnished by the office
5980	department, which application shall include or have attached the
5981	following information and documents:
5982	(a) All basic organizational documents of the
5983	administrator, such as the articles of incorporation, articles
5984	of association, partnership agreement, trade name certificate,
5985	trust agreement, shareholder agreement, and other applicable
5986	documents, and all amendments to those documents.
5987	(b) The bylaws, rules, and regulations or similar
5988	documents regulating the conduct or the internal affairs of the
5989	administrator.
5990	(c) The names, addresses, official positions, and
5991	professional qualifications of the individuals who are
5992	responsible for the conduct of the affairs of the administrator,
5993	including all members of the board of directors, board of
5994	trustees, executive committee, or other governing board or
5995	committee, the principal officers in the case of a corporation,
5996	the partners or members in the case of a partnership or
5997	association, and any other person who exercises control or
5998	influence over the affairs of the administrator.
5999	(d) Annual statements or reports for the 3 most recent
6000	years, or such other information as the officedepartmentmay
6001	require in order to review the current financial condition of
6002	the applicant.
6003	(e) If the applicant is not currently acting as an
6004	administrator, a statement of the amounts and sources of the
6005	funds available for organization expenses and the proposed
6006	arrangements for reimbursement and compensation of incorporators
6007	or other principals.
6008	(3) The applicant shall make available for inspection by
6009	the officedepartmentcopies of all contracts with insurers or
6010	other persons utilizing the services of the administrator.
6011	(4) The officedepartmentshall not issue a certificate of
6012	authority if it determines that the administrator or any
6013	principal thereof is not competent, trustworthy, financially
6014	responsible, or of good personal and business reputation or has
6015	had an insurance license denied for cause by any state.
6016	(5) A certificate of authority issued under this section
6017	shall remain valid, unless suspended or revoked by the office
6018	department, so long as the certificateholder continues in
6019	business in this state.
6020	(6) A certificate of authority issued under this section
6021	shall indicate that the administrator is authorized to
6022	administer commercial self-insurance funds or life and health
6023	programs or both, except that a certificate of authority issued
6024	prior to October 1, 1988, does not authorize the administration
6025	of commercial self-insurance funds.
6026	Section 132. Section 626.8809, Florida Statutes, is
6027	amended to read:
6028	626.8809 Fidelity bond.--An administrator shall have and
6029	keep in full force and effect a fidelity bond equal to at least
6030	10 percent of the amount of the funds handled or managed
6031	annually by the administrator. However, the officedepartment
6032	may not require a bond greater than $500,000 unless the office
6033	department, after due notice to all interested parties and
6034	opportunity for hearing and after consideration of the record,
6035	requires an amount in excess of $500,000 but not more than 10
6036	percent of the amount of the funds handled or managed annually
6037	by the administrator.
6038	Section 133. Section 626.8814, Florida Statutes, is
6039	amended to read:
6040	626.8814 Disclosure of ownership or affiliation.--Each
6041	administrator shall identify to the officedepartmentany
6042	ownership interest or affiliation of any kind with any insurance
6043	company responsible for providing benefits directly or through
6044	reinsurance to any plan for which the administrator provides
6045	administrative services.
6046	Section 134. Subsection (2) of section 626.884, Florida
6047	Statutes, is amended to read:
6048	626.884 Maintenance of records by administrator; access;
6049	confidentiality.--
6050	(2) The officedepartmentshall have access to books and
6051	records maintained by the administrator for the purpose of
6052	examination, audit, and inspection. Information contained in
6053	such books and records is confidential and exempt from the
6054	provisions of s. 119.07(1) if the disclosure of such information
6055	would reveal a trade secret as defined in s. 688.002. However,
6056	the officedepartmentmay use such information in any proceeding
6057	instituted against the administrator.
6058	Section 135. Subsections (1) and (3) of section 626.89,
6059	Florida Statutes, are amended to read:
6060	626.89 Annual financial statement and filing fee; notice
6061	of change of ownership.--
6062	(1) Each authorized administrator shall file with the
6063	officedepartmenta full and true statement of its financial
6064	condition, transactions, and affairs. The statement shall be
6065	filed annually on or before March 1 or within such extension of
6066	time therefor as the officedepartmentfor good cause may have
6067	granted and shall be for the preceding calendar year. The
6068	statement shall be in such form and contain such matters as the
6069	commissiondepartmentprescribes and shall be verified by at
6070	least two officers of such administrator.
6071	(3) In addition, the administrator shall immediately
6072	notify the officedepartmentof any material change in its
6073	ownership.
6074	Section 136. Section 626.891, Florida Statutes, is amended
6075	to read:
6076	626.891 Grounds for suspension or revocation of
6077	certificate of authority.--
6078	(1) The certificate of authority of an administrator shall
6079	be suspended or revoked if the officedepartmentdetermines that
6080	the administrator:
6081	(a) Is in an unsound financial condition;
6082	(b) Has used or is using such methods or practices in the
6083	conduct of its business so as to render its further transaction
6084	of business in this state hazardous or injurious to insured
6085	persons or the public; or
6086	(c) Has failed to pay any judgment rendered against it in
6087	this state within 60 days after the judgment has become final.
6088	(2) The officedepartmentmay, in its discretion, suspend
6089	or revoke the certificate of authority of an administrator if it
6090	finds that the administrator:
6091	(a) Has violated any lawful rule or order of the
6092	commission or officedepartmentor any provision of this
6093	chapter;
6094	(b) Has refused to be examined or to produce its accounts,
6095	records, and files for examination, or if any of its officers
6096	has refused to give information with respect to its affairs or
6097	has refused to perform any other legal obligation as to such
6098	examination, when required by the officedepartment;
6099	(c) Has, without just cause, refused to pay proper claims
6100	or perform services arising under its contracts or has, without
6101	just cause, compelled insured persons to accept less than the
6102	amount due them or to employ attorneys or bring suit against the
6103	administrator to secure full payment or settlement of such
6104	claims;
6105	(d) Is or was affiliated with and under the same general
6106	management or interlocking directorate or ownership as another
6107	administrator which transacts business in this state without
6108	having a certificate of authority;
6109	(e) At any time fails to meet any qualification for which
6110	issuance of the certificate could have been refused had such
6111	failure then existed and been known to the officedepartment;
6112	(f) Has been convicted of, or has entered a plea of guilty
6113	or nolo contendere to, a felony relating to the business of
6114	insurance or insurance administration in this state or in any
6115	other state without regard to whether adjudication was withheld;
6116	or
6117	(g) Is under suspension or revocation in another state.
6118	(3) The officedepartmentmay, pursuant to s. 120.60, in
6119	its discretion and without advance notice or hearing thereon,
6120	immediately suspend the certificate of any administrator if it
6121	finds that one or more of the following circumstances exist:
6122	(a) The administrator is insolvent or impaired.
6123	(b) The fidelity bond required by s. 626.8809 is not
6124	maintained.
6125	(c) A proceeding for receivership, conservatorship,
6126	rehabilitation, or other delinquency proceeding regarding the
6127	administrator has been commenced in any state.
6128	(d) The financial condition or business practices of the
6129	administrator otherwise pose an imminent threat to the public
6130	health, safety, or welfare of the residents of this state.
6131	(4) The violation of this part by any insurer shall be a
6132	ground for suspension or revocation of the certificate of
6133	authority of that insurer in this state.
6134	Section 137. Section 626.892, Florida Statutes, is amended
6135	to read:
6136	626.892 Order of suspension or revocation of certificate
6137	of authority; notice.--
6138	(1) The suspension or revocation of a certificate of
6139	authority of an administrator shall be effected by order of the
6140	officedepartmentmailed to the administrator by registered or
6141	certified mail.
6142	(2) In its discretion, the officedepartmentmay cause
6143	notice of any such revocation or suspension to be published in
6144	one or more newspapers of general circulation published in this
6145	state.
6146	Section 138. Subsections (1), (3), and (4) of section
6147	626.894, Florida Statutes, are amended to read:
6148	626.894 Administrative fine in lieu of suspension or
6149	revocation.--
6150	(1) If the officedepartmentfinds that one or more
6151	grounds exist for the suspension or revocation of a certificate
6152	of authority issued under this part, the officedepartmentmay,
6153	in lieu of such suspension or revocation, impose a fine upon the
6154	administrator.
6155	(3) With respect to any knowing and willful violation of a
6156	lawful order or rule of the office or commissiondepartmentor a
6157	provision of this part, the officedepartmentmay impose a fine
6158	upon the administrator in an amount not to exceed $5,000 for
6159	each such violation. In no event may such fine exceed an
6160	aggregate amount of $25,000 for all knowing and willful
6161	violations arising out of the same action. In addition to such
6162	fine, the administrator shall make restitution when due in
6163	accordance with the provisions of subsection (2).
6164	(4) The failure of an administrator to make restitution
6165	when due as required under this section constitutes a willful
6166	violation of this part. However, if an administrator in good
6167	faith is uncertain as to whether any restitution is due or as to
6168	the amount of restitution due, it shall promptly notify the
6169	officedepartmentof the circumstances; and the failure to make
6170	restitution pending a determination of whether restitution is
6171	due or the amount of restitution due will not constitute a
6172	violation of this part.
6173	Section 139. Section 626.895, Florida Statutes, is amended
6174	to read:
6175	626.895 Definition of "service company" or "service
6176	agent".--For the purpose of this part, a "service company" is
6177	any business entity which has met all the requirements of ss.
6178	626.895-626.899, which does not control funds, and which has
6179	obtained officedepartmentapproval to contract with self-
6180	insurers or multiple-employer welfare arrangements for the
6181	purpose of providing all or any part of the services necessary
6182	to establish and maintain a multiple-employer welfare
6183	arrangement as defined in s. 624.437(1). The term "service
6184	agent" is synonymous with the term "service company" as used in
6185	this part.
6186	Section 140. Subsection (3) of section 626.896, Florida
6187	Statutes, is amended to read:
6188	626.896 Servicing requirements for self-insurers and
6189	multiple-employer welfare arrangements.--
6190	(3) It is the responsibility of the self-insurer or
6191	multiple-employer welfare arrangement to notify the office
6192	departmentwithin 90 days of changing its method of fulfilling
6193	its servicing requirements from those which were previously
6194	filed with the officedepartment.
6195	Section 141. Subsection (2) of section 626.897, Florida
6196	Statutes, is amended to read:
6197	626.897 Application for authorization to act as service
6198	company; bond.--
6199	(2) Any business desiring to act as a service company for
6200	individual self-insurers or multiple-employer welfare
6201	arrangements shall be approved by the officedepartment. Any
6202	business acting as a service company prior to October 1, 1983,
6203	will be approved as a service company upon complying with the
6204	filing requirements of this section and s. 626.898. The failure
6205	of any person to obtain such approval while acting as a service
6206	company shall subject such person to a fine of not less than
6207	$5,000 or more than $10,000 for each violation.
6208	Section 142. Subsections (3) and (10) of section 626.898,
6209	Florida Statutes, are amended to read:
6210	626.898 Requirements for retaining authorization as
6211	service company; recertification.--
6212	(3)(a) Each service company shall maintain at one or more
6213	locations within this state copies of all contracts with each
6214	self-insurer or multiple-employer welfare arrangement that it
6215	services and records relating thereto which are sufficient in
6216	type and quantity to verify the accuracy and completeness of all
6217	reports and documents submitted to the officedepartment
6218	pursuant to this part. In the event that the service company has
6219	its records distributed in multiple locations, it shall inform
6220	the officedepartmentas to the location of each type of record,
6221	as well as the location of specific records for the self-
6222	insurers or multiple-employer welfare arrangements it services.
6223	(b) These records shall be open to inspection by
6224	representatives of the officedepartmentduring regular business
6225	hours. All records shall be retained according to the schedule
6226	adopted by the commissiondepartmentfor similar documents. The
6227	location of these records shall be made known to the office
6228	departmentas necessary.
6229	(10) Each service company shall identify to the office
6230	departmentany ownership interest or affiliation of any kind
6231	with any insurance company responsible directly or through
6232	reinsurance for providing benefits to any plan for which it
6233	provides services.
6234	Section 143. Section 626.899, Florida Statutes, is amended
6235	to read:
6236	626.899 Withdrawal of authorization as service
6237	company.--The failure to comply with any provision of ss.
6238	626.895-626.899 or with any rule or any order of the commission
6239	or officedepartmentwithin the time prescribed shall be
6240	considered good cause for withdrawal of the certificate of
6241	approval. The officedepartmentshall by registered or
6242	certified mail give to the service company prior written notice
6243	of such withdrawal. The service company shall have 30 days from
6244	the date of mailing to request a hearing. The failure to
6245	request a hearing within the time prescribed shall result in the
6246	withdrawal becoming effective 45 days from the date of mailing
6247	of the original notice. In no event shall the withdrawal of the
6248	certificate of approval be effective prior to the date upon
6249	which a hearing, if requested, is scheduled. Copies of such
6250	notice of withdrawal of a certificate of approval shall be
6251	furnished by the officedepartmentto each self-funded program
6252	serviced.
6253	Section 144. Subsection (4) of section 626.901, Florida
6254	Statutes, is amended to read:
6255	626.901 Representing or aiding unauthorized insurer
6256	prohibited.--
6257	(4) This section does not apply to:
6258	(a) Matters authorized to be done by the officedepartment
6259	under the Unauthorized Insurers Process Law, ss. 626.904-
6260	626.912.
6261	(b) Surplus lines insurance when written pursuant to the
6262	Surplus Lines Law, ss. 626.913-626.937.
6263	(c) Transactions as to which a certificate of authority is
6264	not required of an insurer, as stated in s. 624.402.
6265	(d) Independently procured coverage written pursuant to s.
6266	626.938.
6267	Section 145. Section 626.906, Florida Statutes, is amended
6268	to read:
6269	626.906 Acts constituting Chief Financial Officer
6270	Insurance Commissioner and Treasureras process agent.--Any of
6271	the following acts in this state, effected by mail or otherwise,
6272	by an unauthorized foreign insurer, alien insurer, or person
6273	representing or aiding such an insurer is equivalent to and
6274	shall constitute an appointment by such insurer or person
6275	representing or aiding such insurer of the Chief Financial
6276	OfficerInsurance Commissioner and Treasurer, and his or her
6277	successor or successors in office,to be its true and lawful
6278	attorney, upon whom may be served all lawful process in any
6279	action, suit, or proceeding instituted by or on behalf of an
6280	insured or beneficiary, arising out of any such contract of
6281	insurance; and any such act shall be signification of the
6282	insurer's or person's agreement that such service of process is
6283	of the same legal force and validity as personal service of
6284	process in this state upon such insurer or person representing
6285	or aiding such insurer:
6286	(1) The issuance or delivery of contracts of insurance to
6287	residents of this state or to corporations authorized to do
6288	business therein;
6289	(2) The solicitation of applications for such contracts;
6290	(3) The collection of premiums, membership fees,
6291	assessments, or other considerations for such contracts; or
6292	(4) Any other transaction of insurance.
6293	Section 146. Subsection (1) of section 626.907, Florida
6294	Statutes, is amended to read:
6295	626.907 Service of process; judgment by default.--
6296	(1) Service of process upon an insurer or person
6297	representing or aiding such insurer pursuant to s. 626.906 shall
6298	be made by delivering to and leaving with the Chief Financial
6299	OfficerInsurance Commissioner and Treasureror some person in
6300	apparent charge of his or her office two copies thereof. The
6301	Chief Financial OfficerInsurance Commissioner and Treasurer
6302	shall forthwith mail by registered mail one of the copies of
6303	such process to the defendant at the defendant's last known
6304	principal place of business and shall keep a record of all
6305	process so served upon him or her. The service of process is
6306	sufficient, provided notice of such service and a copy of the
6307	process are sent within 10 days thereafter by registered mail by
6308	plaintiff or plaintiff's attorney to the defendant at the
6309	defendant's last known principal place of business, and the
6310	defendant's receipt, or receipt issued by the post office with
6311	which the letter is registered, showing the name of the sender
6312	of the letter and the name and address of the person to whom the
6313	letter is addressed, and the affidavit of the plaintiff or
6314	plaintiff's attorney showing a compliance herewith are filed
6315	with the clerk of the court in which the action is pending on or
6316	before the date the defendant is required to appear, or within
6317	such further time as the court may allow.
6318	Section 147. Section 626.909, Florida Statutes, is amended
6319	to read:
6320	626.909 Jurisdiction of office anddepartment; service of
6321	process on Secretary of State.--
6322	(1) The Legislature hereby declares that it is a subject
6323	of concern that the purpose of the Unauthorized Insurers Process
6324	Law as expressed in s. 626.905 may be denied by the possibility
6325	that the right of service of process provided for in that law
6326	may be restricted only to those actions, suits, or proceedings
6327	brought by insureds or beneficiaries. It therefore declares that
6328	it is the intent of s. 626.905 that it is the obligation and
6329	duty of the state to protect its residents and also proceed
6330	under this law through the office ordepartment in the courts of
6331	this state. It further declares that it is also the intent of
6332	the Legislature to subject unauthorized insurers and persons
6333	representing or aiding such insurers to the jurisdiction of the
6334	office ordepartment in proceedings, examinations, or hearings
6335	before it as provided for in this code.
6336	(2) In addition to the procedure for service of process on
6337	unauthorized insurers or persons representing or aiding such
6338	insurers contained in ss. 626.906 and 626.907, the office or
6339	department shall have the right to bring any action, suit, or
6340	proceeding in the name of the state or conduct any proceeding,
6341	examination, or hearing provided for in this code against any
6342	unauthorized insurer or person representing or aiding such
6343	insurer for violation of any lawful order of the office or
6344	department or any provision of this code, specifically including
6345	but not limited to the regulation of trade practices provided
6346	for in part IX of this chapter, if the insurer or person
6347	representing or aiding such insurer transacts insurance in this
6348	state as defined in ss. 624.10 and 626.906 and the insurer does
6349	not transact such business under a subsisting certificate of
6350	authority as required by s. 624.401. In the event the
6351	transaction of business is done by mail, the venue of the act is
6352	at the point where the matter transmitted by mail is delivered
6353	and takes effect.
6354	(3) In addition to the right of action, suit, or
6355	proceeding authorized by subsection (2), the office or
6356	department shall have the right to bring a civil action in the
6357	name of the state, as parens patriae on behalf of any insured,
6358	beneficiary of any insured, claimant or dependent, or any other
6359	person or class of persons injured as a result of the
6360	transaction of any insurance business as defined in s. 626.906
6361	by any unauthorized insurer, as defined in s. 624.09 who is also
6362	an ineligible insurer as set forth in ss. 626.917 and 626.918,
6363	or any person who represents or aids any unauthorized insurer,
6364	in violation of s. 626.901, to recover actual damages on behalf
6365	of individuals who were residents at the time the transaction
6366	occurred and the cost of such suit, including a reasonable
6367	attorney's fee. The court shall exclude from the amount of
6368	monetary relief awarded in such action any amount of monetary
6369	relief which duplicates amounts which have been awarded for the
6370	same injury.
6371	(4) Transaction of business in this state, as so defined,
6372	by any unauthorized insurer or person representing or aiding
6373	such insurer shall be deemed consent by the insurer or person
6374	representing or aiding such insurer to the jurisdiction of the
6375	office ordepartment in proceedings, examinations, and hearings
6376	before it as provided for in this code and shall constitute an
6377	irrevocable appointment by the insurer or person representing or
6378	aiding such insurer of the Secretary of State and his or her
6379	successor or successors in office as its true and lawful
6380	attorney upon whom may be served all lawful process in any
6381	action, suit, or proceeding in any court by the office or
6382	department or by the state and upon whom may be served all
6383	notices and orders of the office ordepartment arising out of
6384	any such transaction of business; and such transaction of
6385	business shall constitute the agreement of the insurer or person
6386	representing or aiding such insurer that any such process
6387	against it or any such notice or order which is so served shall
6388	be of the same legal force and validity as if served personally
6389	within this state on the insurer or person representing or
6390	aiding such insurer. Service of process shall be in accordance
6391	with and in the same manner as now provided for service of
6392	process upon nonresidents under the provision of s. 48.161, and
6393	service of process shall also be valid if made as provided in s.
6394	626.907(2).
6395	(5) No plaintiff shall be entitled to a judgment by
6396	default or a decree pro confesso under this section until the
6397	expiration of 30 days after date of the filing of the affidavit
6398	of compliance.
6399	(6) Nothing in this section shall limit or abridge the
6400	right to serve any process, notice, orders, or demand upon the
6401	insurer or person representing or aiding such insurer in any
6402	other manner now or hereafter permitted by law.
6403	(7) Nothing in this section shall apply as to surplus
6404	lines insurance when written pursuant to the Surplus Lines Law,
6405	ss. 626.913-626.937, or as to transactions as to which a
6406	certificate of authority is not required of the insurer, as
6407	stated in s. 624.402.
6408	Section 148. Section 626.910, Florida Statutes, is amended
6409	to read:
6410	626.910 Penalty for violation by unauthorized insurers and
6411	persons representing or aiding such insurers.--Any unauthorized
6412	insurer or person representing or aiding such insurer
6413	transacting insurance in this state and subject to service of
6414	process as referred to in s. 626.909 shall forfeit and pay to
6415	the state a civil penalty of not more than $1,000 for each
6416	nonwillful violation, or not more than $10,000 for each willful
6417	violation, of any lawful order of the office ordepartment or
6418	any provision of this code.
6419	Section 149. Section 626.912, Florida Statutes, is amended
6420	to read:
6421	626.912 Exemptions from ss. 626.904-626.911.--The
6422	provisions of ss. 626.904-626.911 do not apply to any action,
6423	suit, or proceeding against any unauthorized foreign insurer,
6424	alien insurer, or person representing or aiding such an insurer
6425	arising out of any contract of insurance:
6426	(1) Covering reinsurance, wet marine and transportation,
6427	commercial aircraft, or railway insurance risks;
6428	(2) Against legal liability arising out of the ownership,
6429	operation, or maintenance of any property having a permanent
6430	situs outside this state;
6431	(3) Against loss of or damage to any property having a
6432	permanent situs outside this state; or
6433	(4) Issued under and in accordance with the Surplus Lines
6434	Law, when such insurer or person representing or aiding such
6435	insurer enters a general appearance or when such contract of
6436	insurance contains a provision designating the Chief Financial
6437	OfficerInsurance Commissioner and Treasurer and his or her
6438	successor or successors inoffice or designating a Florida
6439	resident agent to be the true and lawful attorney of such
6440	unauthorized insurer or person representing or aiding such
6441	insurer upon whom may be served all lawful process in any
6442	action, suit, or proceeding instituted by or on behalf of an
6443	insured or person representing or aiding such insurer or
6444	beneficiary arising out of any such contract of insurance; and
6445	service of process effected on such Chief Financial Officer
6446	Insurance Commissioner and Treasurer, his or her successor or
6447	successors in office,or such resident agent shall be deemed to
6448	confer complete jurisdiction over such unauthorized insurer or
6449	person representing or aiding such insurer in such action.
6450	Section 150. Subsection (2) of section 626.914, Florida
6451	Statutes, is amended to read:
6452	626.914 Definitions.--As used in this Surplus Lines Law,
6453	the term:
6454	(2) "Eligible surplus lines insurer" means an unauthorized
6455	insurer which has been made eligible by the officedepartmentto
6456	issue insurance coverage under this Surplus Lines Law.
6457	Section 151. Subsections (1) and (2) of section 626.916,
6458	Florida Statutes, are amended to read:
6459	626.916 Eligibility for export.--
6460	(1) No insurance coverage shall be eligible for export
6461	unless it meets all of the following conditions:
6462	(a) The full amount of insurance required must not be
6463	procurable, after a diligent effort has been made by the
6464	producing agent to do so, from among the insurers authorized to
6465	transact and actually writing that kind and class of insurance
6466	in this state, and the amount of insurance exported shall be
6467	only the excess over the amount so procurable from authorized
6468	insurers. Surplus lines agents must verify that a diligent
6469	effort has been made by requiring a properly documented
6470	statement of diligent effort from the retail or producing agent.
6471	However, to be in compliance with the diligent effort
6472	requirement, the surplus lines agent's reliance must be
6473	reasonable under the particular circumstances surrounding the
6474	export of that particular risk. Reasonableness shall be assessed
6475	by taking into account factors which include, but are not
6476	limited to, a regularly conducted program of verification of the
6477	information provided by the retail or producing agent.
6478	Declinations must be documented on a risk-by-risk basis. If it
6479	is not possible to obtain the full amount of insurance required
6480	by layering the risk, it is permissible to export the full
6481	amount.
6482	(b) The premium rate at which the coverage is exported
6483	shall not be lower than that rate applicable, if any, in actual
6484	and current use by a majority of the authorized insurers for the
6485	same coverage on a similar risk.
6486	(c) The policy or contract form under which the insurance
6487	is exported shall not be more favorable to the insured as to the
6488	coverage or rate than under similar contracts on file and in
6489	actual current use in this state by the majority of authorized
6490	insurers actually writing similar coverages on similar risks;
6491	except that a coverage may be exported under a unique form of
6492	policy designed for use with respect to a particular subject of
6493	insurance if a copy of such form is filed with the office
6494	departmentby the surplus lines agent desiring to use the same
6495	and is subject to the disapproval of the officedepartment
6496	within 10 days of filing such form exclusive of Saturdays,
6497	Sundays, and legal holidays if it finds that the use of such
6498	special form is not reasonably necessary for the principal
6499	purposes of the coverage or that its use would be contrary to
6500	the purposes of this Surplus Lines Law with respect to the
6501	reasonable protection of authorized insurers from unwarranted
6502	competition by unauthorized insurers.
6503	(d) Except as to extended coverage in connection with fire
6504	insurance policies and except as to windstorm insurance, the
6505	policy or contract under which the insurance is exported shall
6506	not provide for deductible amounts, in determining the existence
6507	or extent of the insurer's liability, other than those available
6508	under similar policies or contracts in actual and current use by
6509	one or more authorized insurers.
6510	(2) The commissiondepartment may by rulerules and
6511	regulationsdeclare eligible for export generally, and
6512	notwithstanding the provisions of paragraphs (a), (b), (c), and
6513	(d) of subsection (1), any class or classes of insurance
6514	coverage or risk for which it finds, after a hearing, that there
6515	is no reasonable or adequate market among authorized insurers.
6516	Any such rules and regulationsshall continue in effect during
6517	the existence of the conditions upon which predicated, but
6518	subject to termination by the commissiondepartment.
6519	Section 152. Subsection (1) of section 626.917, Florida
6520	Statutes, is amended to read:
6521	626.917 Eligibility for export; wet marine and
6522	transportation, aviation risks.--
6523	(1) Insurance coverage of wet marine and transportation
6524	risks, as defined in this code in s. 624.607(2), or aviation
6525	risks, including airport and products liability incidental
6526	thereto and hangarkeeper's liability, may be exported under the
6527	following conditions:
6528	(a) The insurance must be placed only by or through a
6529	licensed Florida surplus lines agent; and
6530	(b) The insurer must be one made eligible by the office
6531	departmentspecifically for such coverages, based upon
6532	information furnished by the insurer and indicating that the
6533	insurer is well able to meet its financial obligations.
6534	Section 153. Section 626.918, Florida Statutes, is amended
6535	to read:
6536	626.918 Eligible surplus lines insurers.--
6537	(1) No surplus lines agent shall place any coverage with
6538	any unauthorized insurer which is not then an eligible surplus
6539	lines insurer, except as permitted under subsections (5) and
6540	(6).
6541	(2) No unauthorized insurer shall be or become an eligible
6542	surplus lines insurer unless made eligible by the office
6543	departmentin accordance with the following conditions:
6544	(a) Eligibility of the insurer must be requested in
6545	writing by the Florida Surplus Lines Service Office;
6546	(b) The insurer must be currently an authorized insurer in
6547	the state or country of its domicile as to the kind or kinds of
6548	insurance proposed to be so placed and must have been such an
6549	insurer for not less than the 3 years next preceding or must be
6550	the wholly owned subsidiary of such authorized insurer or must
6551	be the wholly owned subsidiary of an already eligible surplus
6552	lines insurer as to the kind or kinds of insurance proposed for
6553	a period of not less than the 3 years next preceding. However,
6554	the officedepartmentmay waive the 3-year requirement if the
6555	insurer provides a product or service not readily available to
6556	the consumers of this state or has operated successfully for a
6557	period of at least 1 year next preceding and has capital and
6558	surplus of not less than $25 million;
6559	(c) Before granting eligibility, the requesting surplus
6560	lines agent or the insurer shall furnish the officedepartment
6561	with a duly authenticated copy of its current annual financial
6562	statement in the English language and with all monetary values
6563	therein expressed in United States dollars, at an exchange rate
6564	(in the case of statements originally made in the currencies of
6565	other countries) then-current and shown in the statement, and
6566	with such additional information relative to the insurer as the
6567	officedepartmentmay request;
6568	(d)1. The insurer must have and maintain surplus as to
6569	policyholders of not less than $15 million; in addition, an
6570	alien insurer must also have and maintain in the United States a
6571	trust fund for the protection of all its policyholders in the
6572	United States under terms deemed by the officedepartmentto be
6573	reasonably adequate, in an amount not less than $5.4 million.
6574	Any such surplus as to policyholders or trust fund shall be
6575	represented by investments consisting of eligible investments
6576	for like funds of like domestic insurers under part II of
6577	chapter 625 provided, however, that in the case of an alien
6578	insurance company, any such surplus as to policyholders may be
6579	represented by investments permitted by the domestic regulator
6580	of such alien insurance company if such investments are
6581	substantially similar in terms of quality, liquidity, and
6582	security to eligible investments for like funds of like domestic
6583	insurers under part II of chapter 625;
6584	2. For those surplus lines insurers that were eligible on
6585	January 1, 1994, and that maintained their eligibility
6586	thereafter, the required surplus as to policyholders shall be:
6587	a. On December 31, 1994, and until December 30, 1995, $2.5
6588	million.
6589	b. On December 31, 1995, and until December 30, 1996, $3.5
6590	million.
6591	c. On December 31, 1996, and until December 30, 1997, $4.5
6592	million.
6593	d. On December 31, 1997, and until December 30, 1998, $5.5
6594	million.
6595	e. On December 31, 1998, and until December 30, 1999, $6.5
6596	million.
6597	f. On December 31, 1999, and until December 30, 2000, $8
6598	million.
6599	g. On December 31, 2000, and until December 30, 2001, $9.5
6600	million.
6601	h. On December 31, 2001, and until December 30, 2002, $11
6602	million.
6603	i. On December 31, 2002, and until December 30, 2003, $13
6604	million.
6605	j. On December 31, 2003, and thereafter, $15 million.
6606	3. The capital and surplus requirements as set forth in
6607	subparagraph 2. do not apply in the case of an insurance
6608	exchange created by the laws of individual states, where the
6609	exchange maintains capital and surplus pursuant to the
6610	requirements of that state, or maintains capital and surplus in
6611	an amount not less than $50 million in the aggregate. For an
6612	insurance exchange which maintains funds in the amount of at
6613	least $12 million for the protection of all insurance exchange
6614	policyholders, each individual syndicate shall maintain minimum
6615	capital and surplus in an amount not less than $3 million. If
6616	the insurance exchange does not maintain funds in the amount of
6617	at least $12 million for the protection of all insurance
6618	exchange policyholders, each individual syndicate shall meet the
6619	minimum capital and surplus requirements set forth in
6620	subparagraph 2.;
6621	4. A surplus lines insurer which is a member of an
6622	insurance holding company that includes a member which is a
6623	Florida domestic insurer as set forth in its holding company
6624	registration statement, as set forth in s. 628.801 and rules
6625	adopted thereunder, may elect to maintain surplus as to
6626	policyholders in an amount equal to the requirements of s.
6627	624.408, subject to the requirement that the surplus lines
6628	insurer shall at all times be in compliance with the
6629	requirements of chapter 625.
6630
6631	The election shall be submitted to the officedepartmentand
6632	shall be effective upon the office'sdepartment'sbeing
6633	satisfied that the requirements of subparagraph 4. have been
6634	met. The initial date of election shall be the date of office
6635	departmentapproval. The election approval application shall be
6636	on a form adopted by commissiondepartment rule. The office
6637	departmentmay approve an election form submitted pursuant to
6638	subparagraph 4. only if it was on file with the former
6639	Department of Insurancebefore February 28, 1998;
6640	(e) The insurer must be of good reputation as to the
6641	providing of service to its policyholders and the payment of
6642	losses and claims;
6643	(f) The insurer must be eligible, as for authority to
6644	transact insurance in this state, under s. 624.404(3); and
6645	(g) This subsection does not apply as to unauthorized
6646	insurers made eligible under s. 626.917 as to wet marine and
6647	aviation risks.
6648	(3) The officedepartmentshall from time to time publish
6649	a list of all currently eligible surplus lines insurers and
6650	shall mail a copy thereof to each licensed surplus lines agent
6651	at his or her office of record with the officedepartment.
6652	(4) This section shall not be deemed to cast upon the
6653	officedepartmentany duty or responsibility to determine the
6654	actual financial condition or claims practices of any
6655	unauthorized insurer; and the status of eligibility, if granted
6656	by the officedepartment, shall indicate only that the insurer
6657	appears to be sound financially and to have satisfactory claims
6658	practices and that the officedepartmenthas no credible
6659	evidence to the contrary.
6660	(5) When it appears that any particular insurance risk
6661	which is eligible for export, but on which insurance coverage,
6662	in whole or in part, is not procurable from the eligible surplus
6663	lines insurers, after a search of eligible surplus lines
6664	insurers, then the surplus lines agent may file a supplemental
6665	signed statement setting forth such facts and advising the
6666	officedepartmentthat such part of the risk as shall be
6667	unprocurable, as aforesaid, is being placed with named
6668	unauthorized insurers, in the amounts and percentages set forth
6669	in the statement. Such named unauthorized insurer shall,
6670	however, before accepting any risk in this state, deposit with
6671	the department cash or securities acceptable to the office and
6672	department of the market value of $50,000 for each individual
6673	risk, contract, or certificate, which deposit shall be held by
6674	the department for the benefit of Florida policyholders only;
6675	and the surplus lines agent shall procure from such unauthorized
6676	insurer and file with the officedepartmenta certified copy of
6677	its statement of condition as of the close of the last calendar
6678	year. If such statement reveals, including both capital and
6679	surplus, net assets of at least that amount required for
6680	licensure of a domestic insurer, then the surplus lines agent
6681	may proceed to consummate such contract of insurance. Whenever
6682	any insurance risk, or any part thereof, is placed with an
6683	unauthorized insurer, as provided herein, the policy, binder, or
6684	cover note shall contain a statement signed by the insured and
6685	the agent with the following notation: "The insured is aware
6686	that certain insurers participating in this risk have not been
6687	approved to transact business in Florida nor have they been
6688	declared eligible as surplus lines insurers by the Office of
6689	Insurance RegulationDepartment of Insuranceof Florida. The
6690	placing of such insurance by a duly licensed surplus lines agent
6691	in Florida shall not be construed as approval of such insurer by
6692	the Office of Insurance RegulationDepartment of Insuranceof
6693	Florida. Consequently, the insured is aware that the insured
6694	has severely limited the assistance available under the
6695	insurance laws of Florida. The insured is further aware that he
6696	or she may be charged a reasonable per policy fee, as provided
6697	in s. 626.916(4), Florida Statutes, for each policy certified
6698	for export." All other provisions of this code shall apply to
6699	such placement the same as if such risks were placed with an
6700	eligible surplus lines insurer.
6701	(6) When any particular insurance risk subject to
6702	subsection (5) is eligible for placement with an unauthorized
6703	insurer and not more than 12.5 percent of the risk is so
6704	subject, the officeDepartment of Insurancemay, at its
6705	discretion, permit the agent to obtain from the insured a signed
6706	statement as indicated in subsection (5). All other provisions
6707	of this code apply to such placement the same as if such risks
6708	were placed with an eligible surplus lines insurer.
6709	Section 154. Section 626.919, Florida Statutes, is amended
6710	to read:
6711	626.919 Withdrawal of eligibility; surplus lines
6712	insurer.--
6713	(1) If at any time the officedepartmenthas reason to
6714	believe that any unauthorized insurer then on the list of
6715	eligible surplus lines insurers is insolvent or in unsound
6716	financial condition, or does not make reasonable prompt payment
6717	of just losses and claims in this state, or that it is no longer
6718	eligible under the conditions therefor provided in s. 626.918,
6719	it shall withdraw the eligibility of the insurer to insure
6720	surplus lines risks in this state.
6721	(2) If the officedepartmentfinds that an insurer
6722	currently eligible as a surplus lines insurer has willfully
6723	violated the laws of this state or a rule of the commission
6724	department, it may, in its discretion, withdraw the eligibility
6725	of the insurer to insure surplus lines risks in this state.
6726	(3) The officedepartmentshall promptly mail notice of
6727	all such withdrawals of eligibility to each surplus lines agent
6728	at his or her address of record with the department.
6729	Section 155. Subsection (8) of section 626.921, Florida
6730	Statutes, is amended to read:
6731	626.921 Florida Surplus Lines Service Office.--
6732	(8)(a) Information furnished to the department under s.
6733	626.923 or contained in the records subject to examination by
6734	the department under s. 626.930 is confidential and exempt from
6735	the provisions of s. 119.07(1) and s. 24(a), Art. I of the State
6736	Constitution if the disclosure of the information would reveal
6737	information specific to a particular policy or policyholder.
6738	The exemption does not apply to any proceeding instituted by the
6739	department or officeagainst an agent or insurer.
6740	(b) Information furnished to the Florida Surplus Lines
6741	Service Office under the Surplus Lines Law is confidential and
6742	exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I
6743	of the State Constitution if the disclosure of the information
6744	would reveal information specific to a particular policy or
6745	policyholder. This exemption does not prevent the disclosure of
6746	any information by the Florida Surplus Lines Service Office to
6747	the department, but the exemption applies to records obtained by
6748	the department from the Florida Surplus Lines Service Office.
6749	The exemption does not apply to any proceeding instituted by the
6750	department or officeagainst an agent or insurer. This paragraph
6751	is subject to the Open Government Sunset Review Act of 1995 in
6752	accordance with s. 119.15, and shall stand repealed on October
6753	2, 2006, unless reviewed and saved from repeal through
6754	reenactment by the Legislature.
6755	Section 156. Subsection (5) of section 626.931, Florida
6756	Statutes, is amended to read:
6757	626.931 Agent affidavit and insurer reporting
6758	requirements.--
6759	(5) The department mayInsurance Commissioner shall have
6760	the authority towaive the filing requirements described in
6761	subsections(3) and (4).
6762	Section 157. Subsections (2) and (5) of section 626.932,
6763	Florida Statutes, are amended to read:
6764	626.932 Surplus lines tax.--
6765	(2)(a) The surplus lines agent shall make payable to the
6766	department of Insurancethe tax related to each calendar
6767	quarter's business as reported to the Florida Surplus Lines
6768	Service Office, and remit the tax to the Florida Surplus Lines
6769	Service Office at the same time as provided for the filing of
6770	the quarterly affidavit, under s. 626.931. The Florida Surplus
6771	Lines Service Office shall forward to the department the taxes
6772	and any interest collected pursuant to paragraph (b), within 10
6773	days of receipt.
6774	(b) The agent shall pay interest on the amount of any
6775	delinquent tax due, at the rate of 9 percent per year,
6776	compounded annually, beginning the day the amount becomes
6777	delinquent.
6778	(5) The department shall deposit 55 percent of all taxes
6779	collected under this section to the credit of the Insurance
6780	Commissioner'sRegulatory Trust Fund. Forty-five percent of all
6781	taxes collected under this section shall be deposited into the
6782	General Revenue Fund.
6783	Section 158. Section 626.936, Florida Statutes, is amended
6784	to read:
6785	626.936 Failure to file reports or pay tax or service fee;
6786	administrative penalty.--
6787	(1) Any licensed surplus lines agent who neglects to file
6788	a report or an affidavit in the form and within the time
6789	required or provided for in the Surplus Lines Law may be fined
6790	up to $50 per day for each day the neglect continues, beginning
6791	the day after the report or affidavit was due until the date the
6792	report or affidavit is received. All sums collected under this
6793	section shall be deposited into the Insurance Commissioner's
6794	Regulatory Trust Fund.
6795	(2) Any licensed surplus lines agent who neglects to pay
6796	the taxes or service fees as required under the Surplus Lines
6797	Law and within the time required may be fined up to $500 per day
6798	for each day the failure to pay continues, beginning the day
6799	after the tax or service fees were due. The agent shall pay
6800	interest on the amount of any delinquent tax due, at the rate of
6801	9 percent per year, compounded annually, beginning the day the
6802	amount becomes delinquent. The department shall deposit all
6803	sums collected under this section into the Insurance
6804	Commissioner'sRegulatory Trust Fund.
6805	Section 159. Section 626.9361, Florida Statutes, is
6806	amended to read:
6807	626.9361 Failure to file report; administrative
6808	penalty.--Any eligible surplus lines insurer who fails to file a
6809	report in the form and within the time required or provided for
6810	in the Surplus Lines Law may be fined up to $500 per day for
6811	each day such failure continues, beginning the day after the
6812	report was due, until the date the report is received. Failure
6813	to file a report may also result in withdrawal of eligibility as
6814	a surplus lines insurer in this state. All sums collected by the
6815	department under this section shall be deposited into the
6816	Insurance Commissioner'sRegulatory Trust Fund.
6817	Section 160. Subsections (2), (3), and (4) of section
6818	626.937, Florida Statutes, are amended to read:
6819	626.937 Actions against insurer; service of process.--
6820	(2) The unauthorized insurer accepting the risk or issuing
6821	the policy shall be deemed thereby to have authorized service of
6822	process against it in the manner and to the effect as provided
6823	in this section, and to have appointed the Chief Financial
6824	OfficerInsurance Commissioner and Treasureras its agent for
6825	service of process issuing upon any cause of action arising in
6826	this state under any such policy, contract, or insurance.
6827	(3) Each unauthorized insurer requesting eligibility
6828	pursuant to s. 626.918 shall file with the department its
6829	appointment of the Chief Financial OfficerInsurance
6830	Commissioner and Treasurer and his or her successors in office,
6831	on a form as furnished by the department, as its attorney to
6832	receive service of all legal process issued against it in any
6833	civil action or proceeding in this state, and agreeing that
6834	process so served shall be valid and binding upon the insurer.
6835	The appointment shall be irrevocable, shall bind the insurer and
6836	any successor in interest as to the assets or liabilities of the
6837	insurer, and shall remain in effect as long as there is
6838	outstanding in this state any obligation or liability of the
6839	insurer resulting from its insurance transactions therein.
6840	(4) At the time of such appointment of the Chief Financial
6841	OfficerInsurance Commissioner and Treasureras its process
6842	agent, the insurer shall file with the department designation of
6843	the name and address of the person to whom process against it
6844	served upon the Chief Financial OfficerInsurance Commissioner
6845	and Treasureris to be forwarded. The insurer may change the
6846	designation at any time by a new filing.
6847	Section 161. Subsections (3) and (7) of section 626.938,
6848	Florida Statutes, are amended to read:
6849	626.938 Report and tax of independently procured
6850	coverages.--
6851	(3) For the general support of the government of this
6852	state, there is levied upon the obligation, chose in action, or
6853	right represented by the premium charged for such insurance a
6854	tax at the rate of 5 percent of the gross amount of such premium
6855	and a 0.3 percent service fee pursuant to s. 626.9325. The
6856	insured shall withhold the amount of the tax and service fee
6857	from the amount of premium charged by and otherwise payable to
6858	the insurer for such insurance. Within 30 days after the
6859	insurance is procured, continued, or renewed, and simultaneously
6860	with the filing of the report provided for in subsection (1)
6861	with the Florida Surplus Lines Service Office, the insured shall
6862	make payable to the department of Insurancethe amount of the
6863	tax and make payable to the Florida Surplus Lines Service Office
6864	the amount of the service fee. The insured shall remit the tax
6865	and the service fee to the Florida Surplus Lines Service Office.
6866	The Florida Surplus Lines Service Office shall forward to the
6867	department the taxes, and any interest collected pursuant to
6868	subsection (5), within 10 days after receipt.
6869	(7) The department shall deposit 55 percent of all taxes
6870	and interest collected under this section to the credit of the
6871	Insurance Commissioner'sRegulatory Trust Fund. Forty-five
6872	percent of all taxes and interest collected under this section
6873	shall be deposited into the General Revenue Fund.
6874	Section 162. Section 626.9511, Florida Statutes, is
6875	amended to read:
6876	626.9511 Definitions.--When used in this part:
6877	(1) "Person" means any individual, corporation,
6878	association, partnership, reciprocal exchange, interinsurer,
6879	Lloyds insurer, fraternal benefit society, or business trust or
6880	any entity involved in the business of insurance.
6881	(2) "Department" means the Department of Insurance of this
6882	state.
6883	(2)(3)"Insurance policy" or "insurance contract" means a
6884	written contract of, or a written agreement for or effecting,
6885	insurance, or the certificate thereof, by whatever name called,
6886	and includes all clauses, riders, endorsements, and papers which
6887	are a part thereof.
6888	Section 163. Paragraphs (h), (o), (w), and (aa) of
6889	subsection (1) of section 626.9541, Florida Statutes, are
6890	amended to read:
6891	626.9541 Unfair methods of competition and unfair or
6892	deceptive acts or practices defined.--
6893	(1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
6894	ACTS.--The following are defined as unfair methods of
6895	competition and unfair or deceptive acts or practices:
6896	(h) Unlawful rebates.--
6897	1. Except as otherwise expressly provided by law, or in an
6898	applicable filing with the officedepartment, knowingly:
6899	a. Permitting, or offering to make, or making, any
6900	contract or agreement as to such contract other than as plainly
6901	expressed in the insurance contract issued thereon;
6902	b. Paying, allowing, or giving, or offering to pay, allow,
6903	or give, directly or indirectly, as inducement to such insurance
6904	contract, any unlawful rebate of premiums payable on the
6905	contract, any special favor or advantage in the dividends or
6906	other benefits thereon, or any valuable consideration or
6907	inducement whatever not specified in the contract;
6908	c. Giving, selling, or purchasing, or offering to give,
6909	sell, or purchase, as inducement to such insurance contract or
6910	in connection therewith, any stocks, bonds, or other securities
6911	of any insurance company or other corporation, association, or
6912	partnership, or any dividends or profits accrued thereon, or
6913	anything of value whatsoever not specified in the insurance
6914	contract.
6915	2. Nothing in paragraph (g) or subparagraph 1. of this
6916	paragraph shall be construed as including within the definition
6917	of discrimination or unlawful rebates:
6918	a. In the case of any contract of life insurance or life
6919	annuity, paying bonuses to all policyholders or otherwise
6920	abating their premiums in whole or in part out of surplus
6921	accumulated from nonparticipating insurance; provided that any
6922	such bonuses or abatement of premiums is fair and equitable to
6923	all policyholders and for the best interests of the company and
6924	its policyholders.
6925	b. In the case of life insurance policies issued on the
6926	industrial debit plan, making allowance to policyholders who
6927	have continuously for a specified period made premium payments
6928	directly to an office of the insurer in an amount which fairly
6929	represents the saving in collection expenses.
6930	c. Readjustment of the rate of premium for a group
6931	insurance policy based on the loss or expense thereunder, at the
6932	end of the first or any subsequent policy year of insurance
6933	thereunder, which may be made retroactive only for such policy
6934	year.
6935	d. Issuance of life insurance policies or annuity
6936	contracts at rates less than the usual rates of premiums for
6937	such policies or contracts, as group insurance or employee
6938	insurance as defined in this code.
6939	e. Issuing life or disability insurance policies on a
6940	salary savings, bank draft, preauthorized check, payroll
6941	deduction, or other similar plan at a reduced rate reasonably
6942	related to the savings made by the use of such plan.
6943	3.a. No title insurer, or any member, employee, attorney,
6944	agent, agency, or solicitor thereof, shall pay, allow, or give,
6945	or offer to pay, allow, or give, directly or indirectly, as
6946	inducement to title insurance, or after such insurance has been
6947	effected, any rebate or abatement of the agent's, agency's, or
6948	title insurer's share of the premium or any charge for related
6949	title services below the cost for providing such services, or
6950	provide any special favor or advantage, or any monetary
6951	consideration or inducement whatever. Nothing herein contained
6952	shall preclude an abatement in an attorney's fee charged for
6953	legal services.
6954	b. Nothing in this subparagraph shall be construed as
6955	prohibiting the payment of fees to attorneys at law duly
6956	licensed to practice law in the courts of this state, for
6957	professional services, or as prohibiting the payment of earned
6958	portions of the premium to duly appointed agents or agencies who
6959	actually perform services for the title insurer.
6960	c. No insured named in a policy, or any other person
6961	directly or indirectly connected with the transaction involving
6962	the issuance of such policy, including, but not limited to, any
6963	mortgage broker, real estate broker, builder, or attorney, any
6964	employee, agent, agency, or representative thereof, or any other
6965	person whatsoever, shall knowingly receive or accept, directly
6966	or indirectly, any rebate or abatement of said charge, or any
6967	monetary consideration or inducement, other than as set forth in
6968	sub-subparagraph b.
6969	(o) Illegal dealings in premiums; excess or reduced
6970	charges for insurance.--
6971	1. Knowingly collecting any sum as a premium or charge for
6972	insurance, which is not then provided, or is not in due course
6973	to be provided, subject to acceptance of the risk by the
6974	insurer, by an insurance policy issued by an insurer as
6975	permitted by this code.
6976	2. Knowingly collecting as a premium or charge for
6977	insurance any sum in excess of or less than the premium or
6978	charge applicable to such insurance, in accordance with the
6979	applicable classifications and rates as filed with and approved
6980	by the officedepartment, and as specified in the policy; or, in
6981	cases when classifications, premiums, or rates are not required
6982	by this code to be so filed and approved, premiums and charges
6983	in excess of or less than those specified in the policy and as
6984	fixed by the insurer. This provision shall not be deemed to
6985	prohibit the charging and collection, by surplus lines agents
6986	licensed under part VIII of this chapter, of the amount of
6987	applicable state and federal taxes, or fees as authorized by s.
6988	626.916(4), in addition to the premium required by the insurer
6989	or the charging and collection, by licensed agents, of the exact
6990	amount of any discount or other such fee charged by a credit
6991	card facility in connection with the use of a credit card, as
6992	authorized by subparagraph (q)3., in addition to the premium
6993	required by the insurer. This subparagraph shall not be
6994	construed to prohibit collection of a premium for a universal
6995	life or a variable or indeterminate value insurance policy made
6996	in accordance with the terms of the contract.
6997	3.a. Imposing or requesting an additional premium for a
6998	policy of motor vehicle liability, personal injury protection,
6999	medical payment, or collision insurance or any combination
7000	thereof or refusing to renew the policy solely because the
7001	insured was involved in a motor vehicle accident unless the
7002	insurer's file contains information from which the insurer in
7003	good faith determines that the insured was substantially at
7004	fault in the accident.
7005	b. An insurer which imposes and collects such a surcharge
7006	or which refuses to renew such policy shall, in conjunction with
7007	the notice of premium due or notice of nonrenewal, notify the
7008	named insured that he or she is entitled to reimbursement of
7009	such amount or renewal of the policy under the conditions listed
7010	below and will subsequently reimburse him or her or renew the
7011	policy, if the named insured demonstrates that the operator
7012	involved in the accident was:
7013	(I) Lawfully parked;
7014	(II) Reimbursed by, or on behalf of, a person responsible
7015	for the accident or has a judgment against such person;
7016	(III) Struck in the rear by another vehicle headed in the
7017	same direction and was not convicted of a moving traffic
7018	violation in connection with the accident;
7019	(IV) Hit by a "hit-and-run" driver, if the accident was
7020	reported to the proper authorities within 24 hours after
7021	discovering the accident;
7022	(V) Not convicted of a moving traffic violation in
7023	connection with the accident, but the operator of the other
7024	automobile involved in such accident was convicted of a moving
7025	traffic violation;
7026	(VI) Finally adjudicated not to be liable by a court of
7027	competent jurisdiction;
7028	(VII) In receipt of a traffic citation which was dismissed
7029	or nolle prossed; or
7030	(VIII) Not at fault as evidenced by a written statement
7031	from the insured establishing facts demonstrating lack of fault
7032	which are not rebutted by information in the insurer's file from
7033	which the insurer in good faith determines that the insured was
7034	substantially at fault.
7035	c. In addition to the other provisions of this
7036	subparagraph, an insurer may not fail to renew a policy if the
7037	insured has had only one accident in which he or she was at
7038	fault within the current 3-year period. However, an insurer may
7039	nonrenew a policy for reasons other than accidents in accordance
7040	with s. 627.728. This subparagraph does not prohibit nonrenewal
7041	of a policy under which the insured has had three or more
7042	accidents, regardless of fault, during the most recent 3-year
7043	period.
7044	4. Imposing or requesting an additional premium for, or
7045	refusing to renew, a policy for motor vehicle insurance solely
7046	because the insured committed a noncriminal traffic infraction
7047	as described in s. 318.14 unless the infraction is:
7048	a. A second infraction committed within an 18-month
7049	period, or a third or subsequent infraction committed within a
7050	36-month period.
7051	b. A violation of s. 316.183, when such violation is a
7052	result of exceeding the lawful speed limit by more than 15 miles
7053	per hour.
7054	5. Upon the request of the insured, the insurer and
7055	licensed agent shall supply to the insured the complete proof of
7056	fault or other criteria which justifies the additional charge or
7057	cancellation.
7058	6. No insurer shall impose or request an additional
7059	premium for motor vehicle insurance, cancel or refuse to issue a
7060	policy, or refuse to renew a policy because the insured or the
7061	applicant is a handicapped or physically disabled person, so
7062	long as such handicap or physical disability does not
7063	substantially impair such person's mechanically assisted driving
7064	ability.
7065	7. No insurer may cancel or otherwise terminate any
7066	insurance contract or coverage, or require execution of a
7067	consent to rate endorsement, during the stated policy term for
7068	the purpose of offering to issue, or issuing, a similar or
7069	identical contract or coverage to the same insured with the same
7070	exposure at a higher premium rate or continuing an existing
7071	contract or coverage with the same exposure at an increased
7072	premium.
7073	8. No insurer may issue a nonrenewal notice on any
7074	insurance contract or coverage, or require execution of a
7075	consent to rate endorsement, for the purpose of offering to
7076	issue, or issuing, a similar or identical contract or coverage
7077	to the same insured at a higher premium rate or continuing an
7078	existing contract or coverage at an increased premium without
7079	meeting any applicable notice requirements.
7080	9. No insurer shall, with respect to premiums charged for
7081	motor vehicle insurance, unfairly discriminate solely on the
7082	basis of age, sex, marital status, or scholastic achievement.
7083	10. Imposing or requesting an additional premium for motor
7084	vehicle comprehensive or uninsured motorist coverage solely
7085	because the insured was involved in a motor vehicle accident or
7086	was convicted of a moving traffic violation.
7087	11. No insurer shall cancel or issue a nonrenewal notice
7088	on any insurance policy or contract without complying with any
7089	applicable cancellation or nonrenewal provision required under
7090	the Florida Insurance Code.
7091	12. No insurer shall impose or request an additional
7092	premium, cancel a policy, or issue a nonrenewal notice on any
7093	insurance policy or contract because of any traffic infraction
7094	when adjudication has been withheld and no points have been
7095	assessed pursuant to s. 318.14(9) and (10). However, this
7096	subparagraph does not apply to traffic infractions involving
7097	accidents in which the insurer has incurred a loss due to the
7098	fault of the insured.
7099	(w) Soliciting or accepting new or renewal insurance risks
7100	by insolvent or impaired insurer prohibited; penalty.--
7101	1. Whether or not delinquency proceedings as to the
7102	insurer have been or are to be initiated, but while such
7103	insolvency or impairment exists, no director or officer of an
7104	insurer, except with the written permission of the office
7105	Department of Insurance, shall authorize or permit the insurer
7106	to solicit or accept new or renewal insurance risks in this
7107	state after such director or officer knew, or reasonably should
7108	have known, that the insurer was insolvent or impaired.
7109	"Impaired" includes impairment of capital or surplus, as defined
7110	in s. 631.011(12) and (13).
7111	2. Any such director or officer, upon conviction of a
7112	violation of this paragraph, is guilty of a felony of the third
7113	degree, punishable as provided in s. 775.082, s. 775.083, or s.
7114	775.084.
7115	(aa) Churning.--
7116	1. Churning is the practice whereby policy values in an
7117	existing life insurance policy or annuity contract, including,
7118	but not limited to, cash, loan values, or dividend values, and
7119	in any riders to that policy or contract, are utilized to
7120	purchase another insurance policy or annuity contract with that
7121	same insurer for the purpose of earning additional premiums,
7122	fees, commissions, or other compensation:
7123	a. Without an objectively reasonable basis for believing
7124	that the replacement or extraction will result in an actual and
7125	demonstrable benefit to the policyholder;
7126	b. In a fashion that is fraudulent, deceptive, or
7127	otherwise misleading or that involves a deceptive omission;
7128	c. Effective October 1, 1995,When the applicant is not
7129	informed that the policy values including cash values,
7130	dividends, and other assets of the existing policy or contract
7131	will be reduced, forfeited, or utilized in the purchase of the
7132	replacing or additional policy or contract, if this is the case;
7133	or
7134	d. Effective October 1, 1995,Without informing the
7135	applicant that the replacing or additional policy or contract
7136	will not be a paid-up policy or that additional premiums will be
7137	due, if this is the case.
7138
7139	Churning by an insurer or an agent is an unfair method of
7140	competition and an unfair or deceptive act or practice.
7141	2. Effective October 1, 1995,Each insurer shall comply
7142	with sub-subparagraphs 1.c. and 1.d. by disclosing to the
7143	applicant at the time of the offer on a form designed and
7144	adopted by rule by the commissiondepartmentif, how, and the
7145	extent to which the policy or contract values (including cash
7146	value, dividends, and other assets) of a previously issued
7147	policy or contract will be used to purchase a replacing or
7148	additional policy or contract with the same insurer. The form
7149	shall include disclosure of the premium, the death benefit of
7150	the proposed replacing or additional policy, and the date when
7151	the policy values of the existing policy or contract will be
7152	insufficient to pay the premiums of the replacing or additional
7153	policy or contract.
7154	3. Effective October 1, 1995,Each insurer shall adopt
7155	written procedures to reasonably avoid churning of policies or
7156	contracts that it has issued, and failure to adopt written
7157	procedures sufficient to reasonably avoid churning shall be an
7158	unfair method of competition and an unfair or deceptive act or
7159	practice.
7160	Section 164. Section 626.9545, Florida Statutes, is
7161	amended to read:
7162	626.9545 Improper charge identification incentive
7163	program.--No section or provision of the Florida Insurance Code
7164	shall be construed as prohibiting an insurer from establishing a
7165	financial incentive program for remunerating a policyholder or
7166	an insured person with a selected percentage or stated portion
7167	of any health care charge identified by the policyholder or the
7168	insured person as an error or overcharge if the health care
7169	charge is recovered by the insurer. The financial incentive
7170	program shall be written and shall be available for inspection
7171	by the officedepartment.
7172	Section 165. Subsection (5) of section 626.9551, Florida
7173	Statutes, is amended to read:
7174	626.9551 Favored agent or insurer; coercion of debtors.--
7175	(5) The department or officemay investigate the affairs
7176	of any person to whom this section applies to determine whether
7177	such person has violated this section. If a violation of this
7178	section is found to have been committed knowingly, the person in
7179	violation shall be subject to the same procedures and penalties
7180	as provided in ss. 626.9571, 626.9581, 626.9591, and 626.9601.
7181	Section 166. Section 626.9561, Florida Statutes, is
7182	amended to read:
7183	626.9561 Power of department and office.--The department
7184	and office shall each have power within its respective
7185	regulatory jurisdictionto examine and investigate the affairs
7186	of every person involved in the business of insurance in this
7187	state in order to determine whether such person has been or is
7188	engaged in any unfair method of competition or in any unfair or
7189	deceptive act or practice prohibited by s. 626.9521, and shall
7190	each have the powers and duties specified in ss. 626.9571-
7191	626.9601 in connection therewith.
7192	Section 167. Section 626.9571, Florida Statutes, is
7193	amended to read:
7194	626.9571 Defined practices; hearings, witnesses,
7195	appearances, production of books and service of process.--
7196	(1) Whenever the department or officehas reason to
7197	believe that any person has engaged, or is engaging, in this
7198	state in any unfair method of competition or any unfair or
7199	deceptive act or practice as defined in s. 626.9541 or s.
7200	626.9551 or is engaging in the business of insurance without
7201	being properly licensed as required by this code and that a
7202	proceeding by it in respect thereto would be to the interest of
7203	the public, it shall conduct or cause to have conducted a
7204	hearing in accordance with chapter 120.
7205	(2) The department or office, a duly empowered hearing
7206	officer, or an administrative law judge shall, during the
7207	conduct of such hearing, have those powers enumerated in s.
7208	120.569; however, the penalties for failure to comply with a
7209	subpoena or with an order directing discovery shall be limited
7210	to a fine not to exceed $1,000 per violation.
7211	(3) Statements of charges, notices, and orders under this
7212	act may be served by anyone duly authorized by the department or
7213	office, either in the manner provided by law for service of
7214	process in civil actions or by certifying and mailing a copy
7215	thereof to the person affected by such statement, notice, order,
7216	or other process at his or her or its residence or principal
7217	office or place of business. The verified return by the person
7218	so serving such statement, notice, order, or other process,
7219	setting forth the manner of the service, shall be proof of the
7220	same, and the return postcard receipt for such statement,
7221	notice, order, or other process, certified and mailed as
7222	aforesaid, shall be proof of service of the same.
7223	Section 168. Section 626.9581, Florida Statutes, is
7224	amended to read:
7225	626.9581 Cease and desist and penalty orders.--After the
7226	hearing provided in s. 626.9571, the department or officeshall
7227	enter a final order in accordance with s. 120.569. If it is
7228	determined that the person charged has engaged in an unfair or
7229	deceptive act or practice or the unlawful transaction of
7230	insurance, the department or officeshall also issue an order
7231	requiring the violator to cease and desist from engaging in such
7232	method of competition, act, or practice or the unlawful
7233	transaction of insurance. Further, if the act or practice is a
7234	violation of s. 626.9541 or s. 626.9551, the department or
7235	officemay, at its discretion, order any one or more of the
7236	following:
7237	(1) Suspension or revocation of the person's certificate
7238	of authority, license, or eligibility for any certificate of
7239	authority or license, if he or she knew, or reasonably should
7240	have known, he or she was in violation of this act.
7241	(2) Such other relief as may be provided in the insurance
7242	code.
7243	Section 169. Section 626.9591, Florida Statutes, is
7244	amended to read:
7245	626.9591 Appeals from the department or office.--Any
7246	person subject to an order of the department or officeunder s.
7247	626.9581 or s. 626.9601 may obtain a review of such order by
7248	filing an appeal therefrom in accordance with the provisions and
7249	procedures for appeal from the orders of the department or
7250	officein general under s. 120.68.
7251	Section 170. Section 626.9601, Florida Statutes, is
7252	amended to read:
7253	626.9601 Penalty for violation of cease and desist
7254	orders.--Any person who violates a cease and desist order of the
7255	department or officeunder s. 626.9581 while such order is in
7256	effect, after notice and hearing as provided in s. 626.9571,
7257	shall be subject, at the discretion of the department or office,
7258	to any one or more of the following:
7259	(1) A monetary penalty of not more than $50,000 as to all
7260	matters determined in such hearing.
7261	(2) Suspension or revocation of such person's certificate
7262	of authority, license, or eligibility to hold such certificate
7263	of authority or license.
7264	(3) Such other relief as may be provided in the insurance
7265	code.
7266	Section 171. Section 626.9611, Florida Statutes, is
7267	amended to read:
7268	626.9611 Rules.--The department or commissionmay, in
7269	accordance with chapter 120, adoptpromulgatereasonable rules
7270	as are necessary or proper to identify specific methods of
7271	competition or acts or practices which are prohibited by s.
7272	626.9541 or s. 626.9551, but the rules shall not enlarge upon or
7273	extend the provisions of ss. 626.9541 and 626.9551.
7274	Section 172. Section 626.9621, Florida Statutes, is
7275	amended to read:
7276	626.9621 Provisions of part additional to existing
7277	law.--The powers vested in the department, commission, and
7278	officeby this part shall be additional to any other powers to
7279	enforce any penalties, fines, or forfeitures authorized by law.
7280	Section 173. Section 626.9631, Florida Statutes, is
7281	amended to read:
7282	626.9631 Civil liability.--The provisions of this part are
7283	cumulative to rights under the general civil and common law, and
7284	no action of the department, commission, or officeshall
7285	abrogate such rights to damages or other relief in any court.
7286	Section 174. Subsection (1) of section 626.9641, Florida
7287	Statutes, is amended to read:
7288	626.9641 Policyholders, bill of rights.--
7289	(1) The principles expressed in the following statements
7290	shall serve as standards to be followed by the department,
7291	commission, and office in exercising theiritspowers and
7292	duties, in exercising administrative discretion, in dispensing
7293	administrative interpretations of the law, and in adopting
7294	promulgatingrules:
7295	(a) Policyholders shall have the right to competitive
7296	pricing practices and marketing methods that enable them to
7297	determine the best value among comparable policies.
7298	(b) Policyholders shall have the right to obtain
7299	comprehensive coverage.
7300	(c) Policyholders shall have the right to insurance
7301	advertising and other selling approaches that provide accurate
7302	and balanced information on the benefits and limitations of a
7303	policy.
7304	(d) Policyholders shall have a right to an insurance
7305	company that is financially stable.
7306	(e) Policyholders shall have the right to be serviced by a
7307	competent, honest insurance agent or broker.
7308	(f) Policyholders shall have the right to a readable
7309	policy.
7310	(g) Policyholders shall have the right to an insurance
7311	company that provides an economic delivery of coverage and that
7312	tries to prevent losses.
7313	(h) Policyholders shall have the right to a balanced and
7314	positive regulation by the department, commission, and office.
7315	Section 175. Section 626.9651, Florida Statutes, is
7316	amended to read:
7317	626.9651 Privacy.--The department and commission shall
7318	eachadopt rules consistent with other provisions of the Florida
7319	Insurance Code to govern the use of a consumer's nonpublic
7320	personal financial and health information. These rules must be
7321	based on, consistent with, and not more restrictive than the
7322	Privacy of Consumer Financial and Health Information Regulation,
7323	adopted September 26, 2000, by the National Association of
7324	Insurance Commissioners; however, the rules must permit the use
7325	and disclosure of nonpublic personal health information for
7326	scientific, medical, or public policy research, in accordance
7327	with federal law. In addition, these rules must be consistent
7328	with, and not more restrictive than, the standards contained in
7329	Title V of the Gramm-Leach-Bliley Act of 1999, Pub. L. No. 106-
7330	102. If the officedepartmentdetermines that a health insurer
7331	or health maintenance organization is in compliance with, or is
7332	actively undertaking compliance with, the consumer privacy
7333	protection rules adopted by the United States Department of
7334	Health and Human Services, in conformance with the Health
7335	Insurance Portability and Affordability Act, that health insurer
7336	or health maintenance organization is in compliance with this
7337	section.
7338	Section 176. Paragraph (e) of subsection (4) and
7339	subsections (5) and (9) of section 626.989, Florida Statutes,
7340	are amended to read:
7341	626.989 Investigation by department or Division of
7342	Insurance Fraud; compliance; immunity; confidential information;
7343	reports to division; division investigator's power of arrest.--
7344	(4)
7345	(e) The Chief Financial OfficerInsurance Commissionerand
7346	any employee or agent of the department, commission, office,or
7347	division, when acting without malice and in the absence of fraud
7348	or bad faith, is not subject to civil liability for libel,
7349	slander, or any other relevant tort, and no civil cause of
7350	action of any nature exists against such person by virtue of the
7351	execution of official activities or duties of the department,
7352	commission, or officeunder this section or by virtue of the
7353	publication of any report or bulletin related to the official
7354	activities or duties of the department,or division, commission,
7355	or officeunder this section.
7356	(5) The office's and thedepartment's papers, documents,
7357	reports, or evidence relative to the subject of an investigation
7358	under this section are confidential and exempt from the
7359	provisions of s. 119.07(1) until such investigation is completed
7360	or ceases to be active. For purposes of this subsection, an
7361	investigation is considered "active" while the investigation is
7362	being conducted by the office ordepartment with a reasonable,
7363	good faith belief that it could lead to the filing of
7364	administrative, civil, or criminal proceedings. An investigation
7365	does not cease to be active if the office ordepartment is
7366	proceeding with reasonable dispatch and has a good faith belief
7367	that action could be initiated by the office ordepartment or
7368	other administrative or law enforcement agency. After an
7369	investigation is completed or ceases to be active, portions of
7370	records relating to the investigation shall remain exempt from
7371	the provisions of s. 119.07(1) if disclosure would:
7372	(a) Jeopardize the integrity of another active
7373	investigation;
7374	(b) Impair the safety and soundness of an insurer;
7375	(c) Reveal personal financial information;
7376	(d) Reveal the identity of a confidential source;
7377	(e) Defame or cause unwarranted damage to the good name or
7378	reputation of an individual or jeopardize the safety of an
7379	individual; or
7380	(f) Reveal investigative techniques or procedures.
7381	Further, such papers, documents, reports, or evidence relative
7382	to the subject of an investigation under this section shall not
7383	be subject to discovery until the investigation is completed or
7384	ceases to be active. Office, department,or division
7385	investigators shall not be subject to subpoena in civil actions
7386	by any court of this state to testify concerning any matter of
7387	which they have knowledge pursuant to a pending insurance fraud
7388	investigation by the division.
7389	(9) In recognition of the complementary roles of
7390	investigating instances of workers' compensation fraud and
7391	enforcing compliance with the workers' compensation coverage
7392	requirements under chapter 440, the department of Insuranceis
7393	directed to prepare and submit a joint performance report to the
7394	President of the Senate and the Speaker of the House of
7395	Representatives by November 1, 2003, and then by November 1
7396	every 3 years thereafter, describing the results obtained in
7397	achieving compliance with the workers' compensation coverage
7398	requirements and reducing the incidence of workers' compensation
7399	fraud.
7400	Section 177. Subsection (1) of section 626.9892, Florida
7401	Statutes, is amended to read:
7402	626.9892 Anti-Fraud Reward Program; reporting of insurance
7403	fraud.--
7404	(1) The Anti-Fraud Reward Program is hereby established
7405	within the department, to be funded from the Insurance
7406	Commissioner'sRegulatory Trust Fund.
7407	Section 178. Paragraph (k) of subsection (5) of section
7408	626.99, Florida Statutes, is amended to read:
7409	626.99 Life insurance solicitation.--
7410	(5) GENERAL RULES RELATING TO SOLICITATION.--
7411	(k) If an appropriately licensed agent proposes to replace
7412	a life insurance policy or an in-force annuity with a registered
7413	securities product, preapplication notice requirements to the
7414	departmentshall not apply.
7415	Section 179. Section 626.9911, Florida Statutes, is
7416	amended to read:
7417	626.9911 Definitions.--As used in this act, the term:
7418	(1) "Department" means the Department of Insurance.
7419	(1)(2)"Independent third-party trustee or escrow agent"
7420	means an attorney, certified public accountant, financial
7421	institution, or other person providing escrow services under the
7422	authority of a regulatory body. The term does not include any
7423	person associated, affiliated, or under common control with a
7424	viatical settlement provider or viatical settlement broker.
7425	(2)(3)"Person" has the meaning specified in s. 1.01.
7426	(3)(4)"Viatical settlement broker" means a person who, on
7427	behalf of a viator and for a fee, commission, or other valuable
7428	consideration, offers or attempts to negotiate viatical
7429	settlement contracts between a viator resident in this state and
7430	one or more viatical settlement providers. Notwithstanding the
7431	manner in which the viatical settlement broker is compensated, a
7432	viatical settlement broker is deemed to represent only the
7433	viator and owes a fiduciary duty to the viator to act according
7434	to the viator's instructions and in the best interest of the
7435	viator. The term does not include an attorney, licensed
7436	Certified Public Accountant, or investment adviser lawfully
7437	registered with the department of Banking and Financeunder
7438	chapter 517, who is retained to represent the viator and whose
7439	compensation is paid directly by or at the direction and on
7440	behalf of the viator.
7441	(4)(5)"Viatical settlement contract" means a written
7442	agreement entered into between a viatical settlement provider,
7443	or its related provider trust, and a viator. The viatical
7444	settlement contract includes an agreement to transfer ownership
7445	or change the beneficiary designation of a life insurance policy
7446	at a later date, regardless of the date that compensation is
7447	paid to the viator. The agreement must establish the terms
7448	under which the viatical settlement provider will pay
7449	compensation or anything of value, which compensation or value
7450	is less than the expected death benefit of the insurance policy
7451	or certificate, in return for the viator's assignment, transfer,
7452	sale, devise, or bequest of the death benefit or ownership of
7453	all or a portion of the insurance policy or certificate of
7454	insurance to the viatical settlement provider. A viatical
7455	settlement contract also includes a contract for a loan or other
7456	financial transaction secured primarily by an individual or
7457	group life insurance policy, other than a loan by a life
7458	insurance company pursuant to the terms of the life insurance
7459	contract, or a loan secured by the cash value of a policy.
7460	(5)(6)"Viatical settlement provider" means a person who,
7461	in this state, from this state, or with a resident of this
7462	state, effectuates a viatical settlement contract. The term
7463	does not include:
7464	(a) Any bank, savings bank, savings and loan association,
7465	credit union, or other licensed lending institution that takes
7466	an assignment of a life insurance policy as collateral for a
7467	loan.;
7468	(b) A life and health insurer that has lawfully issued a
7469	life insurance policy that provides accelerated benefits to
7470	terminally ill policyholders or certificateholders.; or
7471	(c) Any natural person who enters into no more than one
7472	viatical settlement contract with a viator in 1 calendar year,
7473	unless such natural person has previously been licensed under
7474	this act or is currently licensed under this act.
7475	(d) A trust that meets the definition of a "related
7476	provider trust."
7477	(e) A viator in this state.
7478	(f) A viatical settlement purchaser.
7479	(g) A financing entity.
7480	(6)(7)"Viator" means the owner of a life insurance policy
7481	or a certificateholder under a group policy who enters or seeks
7482	to enter into a viatical settlement contract. This term does not
7483	include a viatical settlement purchaser or a viatical settlement
7484	provider or any person acquiring a policy or interest in a
7485	policy from a viatical settlement provider, nor does it include
7486	an independent third-party trustee or escrow agent.
7487	(7)(8)"Related provider trust" means a titling trust or
7488	other trust established by a licensed viatical settlement
7489	provider or financing entity for the sole purpose of holding the
7490	ownership or beneficial interest in purchased policies in
7491	connection with a financing transaction. The trust must have a
7492	written agreement with a licensed viatical settlement provider
7493	or financing entity under which the licensed viatical settlement
7494	provider or financing entity is responsible for insuring
7495	compliance with all statutory and regulatory requirements and
7496	under which the trust agrees to make all records and files
7497	relating to viatical settlement transactions available to the
7498	officedepartmentas if those records and files were maintained
7499	directly by the licensed viatical settlement provider. This term
7500	does not include an independent third-party trustee or escrow
7501	agent or a trust that does not enter into agreements with a
7502	viator. A related provider trust shall be subject to all
7503	provisions of this act that apply to the viatical settlement
7504	provider who established the related provider trust, except s.
7505	626.9912, which shall not be applicable. A viatical settlement
7506	provider may establish no more than one related provider trust,
7507	and the sole trustee of such related provider trust shall be the
7508	viatical settlement provider licensed under s. 626.9912. The
7509	name of the licensed viatical settlement provider shall be
7510	included within the name of the related provider trust.
7511	(8)(9)"Viatical settlement purchase agreement" means a
7512	contract or agreement, entered into by a viatical settlement
7513	purchaser, to which the viator is not a party, to purchase a
7514	life insurance policy or an interest in a life insurance policy,
7515	which is entered into for the purpose of deriving an economic
7516	benefit. The term also includes purchases made by viatical
7517	settlement purchasers from any person other than the provider
7518	who effectuated the viatical settlement contract.
7519	(9)(10)"Viatical settlement purchaser" means a person who
7520	gives a sum of money as consideration for a life insurance
7521	policy or an equitable or legal interest in the death benefits
7522	of a life insurance policy that has been or will be the subject
7523	of a viatical settlement contract, for the purpose of deriving
7524	an economic benefit, including purchases made from any person
7525	other than the provider who effectuated the viatical settlement
7526	contract or an entity affiliated with the provider. The term
7527	does not include a licensee under this part, an accredited
7528	investor as defined in Rule 501, Regulation D of the Securities
7529	Act Rules, or a qualified institutional buyer as defined by Rule
7530	144(a) of the Federal Securities Act, a special purpose entity,
7531	a financing entity, or a contingency insurer. The above
7532	references to Rule 501, Regulation D and Rule 144(a) of the
7533	Federal Securities Act are used strictly for defining purposes
7534	and shall not be interpreted in any other manner. Any person who
7535	claims to be an accredited investor shall sign an affidavit
7536	stating that he or she is an accredited investor, the basis of
7537	that claim, and that he or she understands that as an accredited
7538	investor he or she will not be entitled to certain protections
7539	of the Viatical Settlement Act. This affidavit must be kept with
7540	other documents required to be maintained by this act.
7541	(10)(11)"Viatical settlement sales agent" means a person
7542	other than a licensed viatical settlement provider who arranges
7543	the purchase through a viatical settlement purchase agreement of
7544	a life insurance policy or an interest in a life insurance
7545	policy.
7546	(11)(12)"Viaticated policy" means a life insurance
7547	policy, or a certificate under a group policy, which is the
7548	subject of a viatical settlement contract.
7549	(12)(13)"Related form" means any form, created by or on
7550	behalf of a licensee, which a viator or viatical settlement
7551	purchaser is required to sign or initial. The forms include, but
7552	are not limited to, a power of attorney, a release of medical
7553	information form, a suitability questionnaire, a disclosure
7554	document, or any addendum, schedule, or amendment to a viatical
7555	settlement contract or viatical settlement purchase agreement
7556	considered necessary by a provider to effectuate a viatical
7557	settlement transaction.
7558	(13)(14)"Special purpose entity" means an entity
7559	established by a licensed viatical settlement provider or by a
7560	financing entity, which may be a corporation, partnership,
7561	trust, limited liability company, or other similar entity formed
7562	solely to provide, either directly or indirectly, access to
7563	institutional capital markets to a viatical settlement provider
7564	or financing entity. A special purpose entity shall not enter
7565	into a viatical settlement contract or a viatical settlement
7566	purchase agreement.
7567	(14)(15)"Financing entity" means an underwriter,
7568	placement agent, lender, purchaser of securities, or purchaser
7569	of a policy or certificate from a viatical settlement provider,
7570	credit enhancer, or any entity that has direct ownership in a
7571	policy or certificate that is the subject of a viatical
7572	settlement contract, but whose principal activity related to the
7573	transaction is providing funds or credit enhancement to effect
7574	the viatical settlement or the purchase of one or more viatical
7575	policies and who has an agreement in writing with one or more
7576	licensed viatical settlement providers to finance the
7577	acquisition of viatical settlement contracts. The term does not
7578	include a nonaccredited investor, a viatical settlement
7579	purchaser, or other natural person. A financing entity may not
7580	enter into a viatical settlement contract.
7581	Section 180. Section 626.9912, Florida Statutes, is
7582	amended to read:
7583	626.9912 Viatical settlement provider license required;
7584	application for license.--
7585	(1) A person may not perform the functions of a viatical
7586	settlement provider as defined in this act or enter into or
7587	solicit a viatical settlement contract without first having
7588	obtained a license from the officedepartment.
7589	(2) Application for a viatical settlement provider license
7590	must be made to the officedepartmentby the applicant on a form
7591	prescribed by the commissiondepartment, under oath and signed
7592	by the applicant. The application must be accompanied by a fee
7593	of $500. If the applicant is a corporation, the application must
7594	be under oath and signed by the president and the secretary of
7595	the corporation.
7596	(3) In the application, the applicant must provide all of
7597	the following:
7598	(a) The applicant's full name, age, residence address, and
7599	business address, and all occupations engaged in by the
7600	applicant during the 5 years preceding the date of the
7601	application.
7602	(b) A copy of the applicant's basic organizational
7603	documents, if any, including the articles of incorporation,
7604	articles of association, partnership agreement, trust agreement,
7605	or other similar documents, together with all amendments to such
7606	documents.
7607	(c) Copies of all bylaws, rules, regulations, or similar
7608	documents regulating the conduct of the applicant's internal
7609	affairs.
7610	(d) A list showing the name, business and residence
7611	addresses, and official position of each individual who is
7612	responsible for conduct of the applicant's affairs, including,
7613	but not limited to, any member of the applicant's board of
7614	directors, board of trustees, executive committee, or other
7615	governing board or committee and any other person or entity
7616	owning or having the right to acquire 10 percent or more of the
7617	voting securities of the applicant.
7618	(e) With respect to each individual identified under
7619	paragraph (d):
7620	1. A sworn biographical statement on forms adopted by the
7621	commission and supplied by the officedepartment.
7622	2. A set of fingerprints on forms prescribed by the
7623	commissiondepartment, certified by a law enforcement officer,
7624	and accompanied by the fingerprinting fee specified in s.
7625	624.501.
7626	3. Authority for release of information relating to the
7627	investigation of the individual's background.
7628	(f) All applications, viatical settlement contract forms,
7629	viatical settlement purchase agreement forms, escrow forms, and
7630	other related forms proposed to be used by the applicant.
7631	(g) Such other information as the commission or office
7632	departmentdeems necessary to determine that the applicant and
7633	the individuals identified under paragraph (d) are competent and
7634	trustworthy and can lawfully and successfully act as a viatical
7635	settlement provider.
7636	(4) The officedepartmentmay not issue a license to an
7637	entity other than a natural person if it is not satisfied that
7638	all officers, directors, employees, stockholders, partners, and
7639	any other persons who exercise or have the ability to exercise
7640	effective control of the entity or who have the ability to
7641	influence the transaction of business by the entity meet the
7642	standards of this act and have not violated any provision of
7643	this act or rules of the commissiondepartmentrelated to the
7644	business of viatical settlement contracts or viatical settlement
7645	purchase agreements.
7646	(5) Upon the filing of a sworn application and the payment
7647	of the license fee, the officedepartmentshall investigate each
7648	applicant and may issue the applicant a license if the office
7649	departmentfinds that the applicant:
7650	(a) Has provided a detailed plan of operation.
7651	(b) Is competent and trustworthy and intends to act in
7652	good faith in the business authorized by the license applied
7653	for.
7654	(c) Has a good business reputation and has had experience,
7655	training, or education that qualifies the applicant to conduct
7656	the business authorized by the license applied for.
7657	(d) If the applicant is a corporation, is a corporation
7658	incorporated under the laws of this state, or is a foreign
7659	corporation authorized to transact business in this state.
7660	(e) Has designated the Chief Financial OfficerInsurance
7661	Commissioner and Treasureras its agent for service of process.
7662	(f) Has made the deposit required by s. 626.9913(3).
7663	Section 181. Subsections (2) and (3) of section 626.9913,
7664	Florida Statutes, are amended to read:
7665	626.9913 Viatical settlement provider license continuance;
7666	annual report; fees; deposit.--
7667	(2) Annually, on or before March 1, the viatical
7668	settlement provider licensee shall file a statement containing
7669	information the commissiondepartmentrequires and shall pay to
7670	the officedepartmenta license fee in the amount of $500. A
7671	viatical settlement provider shall include in all statements
7672	filed with the officedepartmentall information requested by
7673	the officedepartmentregarding a related provider trust
7674	established by the viatical settlement provider. The office
7675	departmentmay require more frequent reporting. Failure to
7676	timely file the annual statement or to timely pay the license
7677	fee is grounds for immediate suspension of the license.
7678	(3) A viatical settlement provider licensee must deposit
7679	and maintain deposited in trust with the department securities
7680	eligible for deposit under s. 625.52, having at all times a
7681	value of not less than $100,000. As an alternative to meeting
7682	the $100,000 deposit requirement, the provider may deposit and
7683	maintain deposited in trust with the department such securities
7684	in the amount of $25,000 and post with the officedepartmenta
7685	surety bond acceptable to the officedepartmentin the amount of
7686	$75,000.
7687	Section 182. Section 626.9914, Florida Statutes, is
7688	amended to read:
7689	626.9914 Suspension, revocation, or nonrenewal of viatical
7690	settlement provider license; grounds; administrative fine.--
7691	(1) The officedepartmentshall suspend, revoke, or refuse
7692	to renew the license of any viatical settlement provider if the
7693	officedepartmentfinds that the licensee:
7694	(a) Has made a misrepresentation in the application for
7695	the license;
7696	(b) Has engaged in fraudulent or dishonest practices, or
7697	otherwise has been shown to be untrustworthy or incompetent to
7698	act as a viatical settlement provider;
7699	(c) Demonstrates a pattern of unreasonable payments to
7700	viators;
7701	(d) Has been found guilty of, or has pleaded guilty or
7702	nolo contendere to, any felony, or a misdemeanor involving fraud
7703	or moral turpitude, regardless of whether a judgment of
7704	conviction has been entered by the court;
7705	(e) Has issued viatical settlement contracts that have not
7706	been approved pursuant to this act;
7707	(f) Has failed to honor contractual obligations related to
7708	the business of viatical settlement contracts;
7709	(g) Deals in bad faith with viators;
7710	(h) Has violated any provision of the insurance code or of
7711	this act;
7712	(i) Employs any person who materially influences the
7713	licensee's conduct and who fails to meet the requirements of
7714	this act; or
7715	(j) No longer meets the requirements for initial
7716	licensure.
7717	(2) The officedepartmentmay, in lieu of or in addition
7718	to any suspension or revocation, assess an administrative fine
7719	not to exceed $2,500 for each nonwillful violation or $10,000
7720	for each willful violation by a viatical settlement provider
7721	licensee. The officedepartmentmay also place a viatical
7722	settlement provider licensee on probation for a period not to
7723	exceed 2 years.
7724	(3) If an employee of a viatical settlement provider
7725	violates any provision of this act, the officedepartmentmay
7726	take disciplinary action against such employee as if the
7727	employee were licensed under this act, including suspending or
7728	otherwise prohibiting the employee from performing the functions
7729	of a viatical settlement provider or viatical settlement broker
7730	as defined in this act.
7731	(4) If a viatical settlement provider establishes a
7732	related provider trust as permitted by this act, the viatical
7733	settlement provider shall be liable and responsible for the
7734	performance of all obligations of the related provider trust
7735	under all viatical settlement contracts entered into by the
7736	related provider trust, and for the compliance of the related
7737	provider trust with all provisions of this act. Any violation of
7738	this act by the related provider trust shall be deemed a
7739	violation of this act by the viatical settlement provider as
7740	well as the related provider trust. If the related provider
7741	trust violates any provisions of this act, the officedepartment
7742	may exercise all remedies set forth in this act for such
7743	violations against the viatical settlement provider, as well as
7744	the related provider trust.
7745	Section 183. Subsections (1), (2), and (4) of section
7746	626.9915, Florida Statutes, are amended to read:
7747	626.9915 Effect of suspension or revocation of viatical
7748	settlement provider license; duration of suspension;
7749	reinstatement.--
7750	(1) When its license is suspended or revoked, the provider
7751	must proceed, immediately following the effective date of the
7752	suspension or revocation, to conclude the affairs it is
7753	transacting under its license. The provider may not solicit,
7754	negotiate, advertise, or effectuate new contracts. The office
7755	departmentretains jurisdiction over the provider until all
7756	contracts have been fulfilled or canceled or have expired. A
7757	provider whose license is suspended or revoked may continue to
7758	maintain and service viaticated policies subject to the approval
7759	of the officedepartment.
7760	(2) The suspension of the license of a viatical settlement
7761	provider licensee may be for such period, not to exceed 2 years,
7762	as determined by the officedepartment. The officedepartment
7763	may shorten, rescind, or modify the suspension.
7764	(4) If, upon expiration of the suspension order, the
7765	license has not otherwise been terminated, the officedepartment
7766	must reinstate the license only upon written request by the
7767	suspended licensee unless the officedepartmentfinds that the
7768	grounds giving rise to the suspension have not been removed or
7769	that the licensee is otherwise not in compliance with the
7770	requirements of this act. The officedepartmentshall give the
7771	licensee notice of its findings no later than 90 days after
7772	receipt of the request or upon expiration of the suspension
7773	order, whichever occurs later. If a license is not reinstated
7774	pursuant to the procedures set forth in this subsection, it
7775	expires at the end of the suspension or on the date it otherwise
7776	would have expired, whichever is sooner.
7777	Section 184. Subsections (7), (8), and (9) of section
7778	626.9916, Florida Statutes, are amended to read:
7779	626.9916 Viatical settlement broker license required;
7780	application for license.--
7781	(7) Upon the filing of a sworn application and the payment
7782	of the license fee and all other applicable fees under this act,
7783	the department shall investigate each applicant and may issue
7784	the applicant a license if the department finds that the
7785	applicant:
7786	(a) Is competent and trustworthy and intends to act in
7787	good faith in the business authorized by the license applied
7788	for.
7789	(b) Has a good business reputation and has had experience,
7790	training, or education that qualifies the applicant to conduct
7791	the business authorized by the license applied for.
7792	(c) Except with respect to applicants for nonresident
7793	licenses, is a bona fide resident of this state and actually
7794	resides in this state at least 180 days a year. If an applicant
7795	holds a similar license or an insurance agent's or broker's
7796	license in another state at the time of applying for a license
7797	under this section, the applicant may be found to meet the
7798	residency requirement of this paragraph only after he or she
7799	furnishes a letter of clearance satisfactory to the department
7800	or other proof that the applicant's resident licenses have been
7801	canceled or changed to nonresident status and that the applicant
7802	is in good standing with the licensing authority.
7803	(d) Is a corporation, a corporation incorporated under the
7804	laws of this state, or a foreign corporation authorized to
7805	transact business in this state.
7806	(e) Has designated the Chief Financial OfficerInsurance
7807	Commissioner and Treasureras its agent for service of process.
7808	(8) An applicant for a nonresident viatical settlement
7809	broker license must, in addition to designating the Chief
7810	Financial OfficerInsurance Commissioner and Treasureras agent
7811	for service of process as required by this section, also furnish
7812	the department with the name and address of a resident of this
7813	state upon whom notices or orders of the department or process
7814	affecting the applicant or licensee may be served. After
7815	issuance of the license, the licensee must also notify the
7816	department of change of the person to receive such notices,
7817	orders, or process; such change is not effective until
7818	acknowledged by the department.
7819	(9) Beginning July 1, 1997,The department may, by rule,
7820	specify experience, educational, or other training standards
7821	required for licensure under this section.
7822	Section 185. Section 626.9919, Florida Statutes, is
7823	amended to read:
7824	626.9919 Notice of change of licensee address or
7825	name.--Each viatical settlement provider licensee, viatical
7826	settlement broker licensee, and viatical settlement sales agent
7827	licensee must provide the office or department, as applicable,
7828	at least 30 days' advance notice of any change in the licensee's
7829	name, residence address, principal business address, or mailing
7830	address.
7831	Section 186. Section 626.9921, Florida Statutes, is
7832	amended to read:
7833	626.9921 Filing of forms; required procedures; approval.--
7834	(1) A viatical settlement contract form, viatical
7835	settlement purchase agreement form, escrow form, or related form
7836	may be used in this state only after the form has been filed
7837	with the officedepartmentand only after the form has been
7838	approved by the officedepartment.
7839	(2) The viatical settlement contract form, viatical
7840	settlement purchase agreement form, escrow form, or related form
7841	must be filed with the officedepartmentat least 60 days before
7842	its use. The form is considered approved on the 60th day after
7843	its date of filing unless it has been previously disapproved by
7844	the officedepartment. The officedepartmentmust disapprove a
7845	viatical settlement contract form, viatical settlement purchase
7846	agreement form, escrow form, or related form that is
7847	unreasonable, contrary to the public interest, discriminatory,
7848	or misleading or unfair to the viator or the purchaser.
7849	(3) If a viatical settlement provider elects to use a
7850	related provider trust in accordance with this act, the viatical
7851	settlement provider shall file notice of its intention to use a
7852	related provider trust with the officedepartment, including a
7853	copy of the trust agreement of the related provider trust. The
7854	organizational documents of the trust must be submitted to and
7855	approved by the officedepartmentbefore the transacting of
7856	business by the trust.
7857	(4) The commissiondepartmentmay adopt, by rule,
7858	standardized forms to be used by licensees, at the licensee's
7859	option in place of separately approved forms.
7860	Section 187. Section 626.9922, Florida Statutes, is
7861	amended to read:
7862	626.9922 Examination.--
7863	(1) The office ordepartment may examine the business and
7864	affairs of any of its respective licensees or applicants
7865	licensee or applicant for a license. The office ordepartment
7866	may order any suchlicensee or applicant to produce any records,
7867	books, files, advertising and solicitation materials, or other
7868	information and may take statements under oath to determine
7869	whether the licensee or applicant is in violation of the law or
7870	is acting contrary to the public interest. The expenses
7871	incurred in conducting any examination or investigation must be
7872	paid by the licensee or applicant. Examinations and
7873	investigations must be conducted as provided in chapter 624, and
7874	licensees are subject to all applicable provisions of the
7875	insurance code.
7876	(2) All accounts, books and records, documents, files,
7877	contracts, and other information relating to all transactions of
7878	viatical settlement contracts or viatical settlement purchase
7879	agreements must be maintained by the licensee for a period of at
7880	least 3 years after the death of the insured and must be
7881	available to the office ordepartment for inspection during
7882	reasonable business hours.
7883	(3) All such records or accurate copies of such records
7884	must be maintained at the licensee's home office. As used in
7885	this section, the term "home office" means the principal place
7886	of business and any other single storage facility, the street
7887	address of which shall be disclosed to the office ordepartment
7888	within 20 days after its initial use, or within 20 days of the
7889	effective date of this subsection.
7890	(4) The originals of records required to be maintained
7891	under this section must be made available to the office or
7892	department for examination at the office's ordepartment's
7893	request.
7894	Section 188. Subsection (2) of section 626.99235, Florida
7895	Statutes, is amended to read:
7896	626.99235 Disclosures to viatical settlement purchasers;
7897	misrepresentations.--
7898	(2) The viatical settlement provider and the viatical
7899	settlement sales agent, themselves or through another person,
7900	shall provide in writing the following disclosures to any
7901	viatical settlement purchaser or purchaser prospect:
7902	(a) That the return represented as being available under
7903	the viatical settlement purchase agreement is directly tied to
7904	the projected life span of one or more insureds.
7905	(b) If a return is represented, the disclosure shall
7906	indicate the projected life span of the insured or insureds
7907	whose life or lives are tied to the return.
7908	(c) If required by the terms of the viatical settlement
7909	purchase agreement, that the viatical settlement purchaser shall
7910	be responsible for the payment of insurance premiums on the life
7911	of the insured, late or surrender fees, or other costs related
7912	to the life insurance policy on the life of the insured or
7913	insureds which may reduce the return.
7914	(d) The amount of any trust fees, commissions, deductions,
7915	or other expenses, if any, to be charged to the viatical
7916	settlement purchaser.
7917	(e) The name and address of the person responsible for
7918	tracking the insured.
7919	(f) That group policies may contain limitations or caps in
7920	the conversion rights, that additional premiums may have to be
7921	paid if the policy is converted, and that the party responsible
7922	for the payment of such additional premiums shall be identified.
7923	(g) That the life expectancy and rate of return are only
7924	estimates and cannot be guaranteed.
7925	(h) That the purchase of a viatical settlement contract
7926	should not be considered a liquid purchase, since it is
7927	impossible to predict the exact timing of its maturity and the
7928	funds may not be available until the death of the insured.
7929	(i) The name and address of the person with the
7930	responsibility for paying the premium until the death of the
7931	insured.
7932
7933	The written disclosure required under this subsection shall be
7934	conspicuously displayed in any viatical settlement purchase
7935	agreement, and in any solicitation material furnished to the
7936	viatical settlement purchaser by such viatical settlement
7937	provider, related provider trust, or person, and shall be in
7938	contrasting color and in not less than 10-point type or no
7939	smaller than the largest type on the page if larger than 10-
7940	point type. The commission maydepartment is authorized toadopt
7941	by rule the disclosure form to be used. The disclosures need not
7942	be furnished in an invitation to inquire, the objective of which
7943	is to create a desire to inquire further about entering into a
7944	viatical settlement purchase agreement. The invitation to
7945	inquire may not quote rates of return, may not include material
7946	attendant to the execution of any specific viatical settlement
7947	purchase agreement, and may not relate to any specific viator.
7948	Section 189. Section 626.99245, Florida Statutes, is
7949	amended to read:
7950	626.99245 Conflict of regulation of viaticals.--
7951	(1) A viatical settlement provider who from this state
7952	enters into a viatical settlement purchase agreement with a
7953	purchaser who is a resident of another state that has enacted
7954	statutes or adopted regulations governing viatical settlement
7955	purchase agreements, shall be governed in the effectuation of
7956	that viatical settlement purchase agreement by the statutes and
7957	regulations of the purchaser's state of residence. If the state
7958	in which the purchaser is a resident has not enacted statutes or
7959	regulations governing viatical settlement purchase agreements,
7960	the provider shall give the purchaser notice that neither
7961	Florida nor his or her state regulates the transaction upon
7962	which he or she is entering. For transactions in these states,
7963	however, the viatical settlement provider is to maintain all
7964	records required as if the transactions were executed in
7965	Florida. However, the forms used in those states need not be
7966	approved by the officedepartment.
7967	(2) A viatical settlement provider who from this state
7968	enters into a viatical settlement contract with a viator who is
7969	a resident of another state that has enacted statutes or adopted
7970	regulations governing viatical settlement contracts shall be
7971	governed in the effectuation of that viatical settlement
7972	contract by the statutes and regulations of the viator's state
7973	of residence. If the state in which the viator is a resident has
7974	not enacted statutes or regulations governing viatical
7975	settlement agreements, the provider shall give the viator notice
7976	that neither Florida nor his or her state regulates the
7977	transaction upon which he or she is entering. For transactions
7978	in those states, however, the viatical settlement provider is to
7979	maintain all records required as if the transactions were
7980	executed in Florida. The forms used in those states need not be
7981	approved by the officedepartment.
7982	(3) This section does not affect the requirement of ss.
7983	626.9911(5)(6)and 626.9912(1) that a viatical settlement
7984	provider doing business from this state must obtain a viatical
7985	settlement license from the officedepartment. As used in this
7986	subsection, the term "doing business from this state" includes
7987	effectuating viatical settlement contracts and effectuating
7988	viatical settlement purchase agreements from offices in this
7989	state, regardless of the state of residence of the viator or the
7990	viatical settlement purchaser.
7991	Section 190. Section 626.9925, Florida Statutes, is
7992	amended to read:
7993	626.9925 Rules.--The commissiondepartmentmay adopt rules
7994	to administer this act, including rules establishing standards
7995	for evaluating advertising by licensees; rules providing for the
7996	collection of data, for disclosures to viators or purchasers,
7997	and for the reporting of life expectancies; and rules defining
7998	terms used in this act and prescribing recordkeeping
7999	requirements relating to executed viatical settlement contracts
8000	and viatical settlement purchase agreements.
8001	Section 191. Section 626.9926, Florida Statutes, is
8002	amended to read:
8003	626.9926 Rate regulation not authorized.--Nothing in this
8004	act shall be construed to authorize the office ordepartment to
8005	directly or indirectly regulate the amount paid as consideration
8006	for entry into a viatical settlement contract or viatical
8007	settlement purchase agreement.
8008	Section 192. Subsection (2) of section 626.9927, Florida
8009	Statutes, is amended to read:
8010	626.9927 Unfair trade practices; cease and desist;
8011	injunctions; civil remedy.--
8012	(2) In addition to the penalties and other enforcement
8013	provisions of this act, if any person violates this act or any
8014	rule implementing this act, the office or department, as
8015	appropriate,may seek an injunction in the circuit court of the
8016	county where the person resides or has a principal place of
8017	business and may apply for temporary and permanent orders that
8018	the office ordepartment determines necessary to restrain the
8019	person from committing the violation.
8020	Section 193. Section 626.99272, Florida Statutes, is
8021	amended to read:
8022	626.99272 Cease and desist orders and fines.--
8023	(1) The office or department as appropriatemay issue a
8024	cease and desist order upon a person that violates any provision
8025	of this part, any rule or order adopted by the commission,
8026	office, ordepartment, or any written agreement entered into
8027	with the office ordepartment.
8028	(2) When the office ordepartment finds that such an
8029	action presents an immediate danger to the public which requires
8030	an immediate final order, it may issue an emergency cease and
8031	desist order reciting with particularity the facts underlying
8032	such findings. The emergency cease and desist order is effective
8033	immediately upon service of a copy of the order on the
8034	respondent and remains effective for 90 days. If the office or
8035	department begins nonemergency cease and desist proceedings
8036	under subsection(1), the emergency cease and desist order
8037	remains effective, absent an order by an appellate court of
8038	competent jurisdiction pursuant to s. 120.68, until the
8039	conclusion of proceedings under ss. 120.569 and 120.57.
8040	(3) The office ordepartment may impose and collect an
8041	administrative fine not to exceed $10,000 for each nonwillful
8042	violation and $25,000 for each willful violation of any
8043	provision of this part.
8044	Section 194. Section 626.99285, Florida Statutes, is
8045	amended to read:
8046	626.99285 Applicability of insurance code.--In addition to
8047	other applicable provisions cited in the insurance code, the
8048	office or department, as appropriate,has the authority granted
8049	under ss. 624.310, 626.901, and 626.989 to regulate viatical
8050	settlement providers, viatical settlement brokers, viatical
8051	settlement sales agents, viatical settlement contracts, viatical
8052	settlement purchase agreements, and viatical settlement
8053	transactions.
8054	Section 195. Section 626.99295, Florida Statutes, is
8055	amended to read:
8056	626.99295 Grace period.--An unlicensed viatical settlement
8057	provider or viatical settlement broker that was legally
8058	transacting business in this state on June 30, 2000, may
8059	continue to transact such business, in the absence of any orders
8060	by the office, department, or the former Department of Insurance
8061	to the contrary, until the office or department, as applicable,
8062	approves or disapproves the viatical settlement provider's
8063	application for licensure if the viatical settlement provider or
8064	viatical settlement broker filedfiles with the former
8065	department an application for licensure no later than August 1,
8066	2000, and if the viatical settlement provider or viatical
8067	settlement broker complies with all other provisions of this
8068	act. Any form for which former department approval wasis
8069	required under this part must have beenbefiled by August 1,
8070	2000, and may continue to be used until disapproved by the
8071	office ordepartment.
8072	Section 196. Paragraphs (a), (b), and (c) of subsection
8073	(2) and paragraph (c) of subsection(3) of section 627.0628,
8074	Florida Statutes, are amended to read:
8075	627.0628 Florida Commission on Hurricane Loss Projection
8076	Methodology.--
8077	(2) COMMISSION CREATED.--
8078	(a) There is created the Florida Commission on Hurricane
8079	Loss Projection Methodology, which is assigned to the State
8080	Board of Administration. For the purposes of this section, the
8081	term "commission" means the Florida Commission on Hurricane Loss
8082	Projection Methodology.The commission shall be administratively
8083	housed within the State Board of Administration, but it shall
8084	independently exercise the powers and duties specified in this
8085	section.
8086	(b) The commission shall consist of the following 11
8087	members:
8088	1. The insurance consumer advocate.
8089	2. The senior employee of the State Board of
8090	Administration responsible for operationsChief Operating
8091	Officerof the Florida Hurricane Catastrophe Fund.
8092	3. The Executive Director of the Citizens Property
8093	Insurance CorporationResidential Property and Casualty Joint
8094	Underwriting Association.
8095	4. The Director of the Division of Emergency Management of
8096	the Department of Community Affairs.
8097	5. The actuary member of the Florida Hurricane Catastrophe
8098	Fund Advisory Council.
8099	6. Six members appointed by the Chief Financial Officer
8100	Insurance Commissioner, as follows:
8101	a. An employee of the officeDepartment of Insurancewho
8102	is an actuary responsible for property insurance rate filings.
8103	b. An actuary who is employed full time by a property and
8104	casualty insurer which was responsible for at least 1 percent of
8105	the aggregate statewide direct written premium for homeowner's
8106	insurance in the calendar year preceding the member's
8107	appointment to the commission.
8108	c. An expert in insurance finance who is a full time
8109	member of the faculty of the State University System and who has
8110	a background in actuarial science.
8111	d. An expert in statistics who is a full time member of
8112	the faculty of the State University System and who has a
8113	background in insurance.
8114	e. An expert in computer system design who is a full time
8115	member of the faculty of the State University System.
8116	f. An expert in meteorology who is a full time member of
8117	the faculty of the State University System and who specializes
8118	in hurricanes.
8119	(c) Members designated under subparagraphs (b)1.-5. shall
8120	serve on the commission as long as they maintain the respective
8121	offices designated in subparagraphs (b)1.-5. Members appointed
8122	by the Chief Financial OfficerInsurance Commissionerunder
8123	subparagraph (b)6. shall serve on the commission until the end
8124	of the term of office of the Chief Financial OfficerInsurance
8125	Commissioner who appointed them, unless earlier removed by the
8126	Chief Financial OfficerInsurance Commissionerfor cause.
8127	Vacancies on the commission shall be filled in the same manner
8128	as the original appointment.
8129	(3) ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--
8130	(c) With respect to a rate filing under s. 627.062, an
8131	insurer may employ actuarial methods, principles, standards,
8132	models, or output ranges found by the commission to be accurate
8133	or reliable to determine hurricane loss factors for use in a
8134	rate filing under s. 627.062, which findings and factors are
8135	admissible and relevant in consideration of a rate filing by the
8136	officedepartmentor in any arbitration or administrative or
8137	judicial review.
8138	Section 197. Paragraph (b) of subsection (2) and
8139	subsections (5), (6), and (9) of section 627.0629, Florida
8140	Statutes, are amended to read:
8141	627.0629 Residential property insurance; rate filings.--
8142	(2)
8143	(b) A rate filing for residential property insurance made
8144	more than 150 days after approval by the officedepartmentof a
8145	building code rating factor plan submitted by a statewide rating
8146	organization shall include positive and negative rate factors
8147	that reflect the manner in which building code enforcement in a
8148	particular jurisdiction addresses risk of wind damage. The rate
8149	filing shall include variations from standard rate factors on an
8150	individual basis based on inspection of a particular structure
8151	by a licensed home inspector. If an inspection is requested by
8152	the insured, the insurer may require the insured to pay the
8153	reasonable cost of the inspection. This paragraph applies to
8154	structures constructed or renovated after the implementation of
8155	this paragraph.
8156	(5) In order to provide an appropriate transition period,
8157	an insurer may, in its sole discretion, implement an approved
8158	rate filing for residential property insurance over a period of
8159	years. An insurer electing to phase in its rate filing must
8160	provide an informational notice to the officedepartmentsetting
8161	out its schedule for implementation of the phased-in rate
8162	filing.
8163	(6) An insurer may not write a residential property
8164	insurance policy without providing windstorm coverage or
8165	hurricane coverage as defined in s. 627.4025. This subsection
8166	does not apply with respect to risks located in an area eligible
8167	for coverage under the high-risk account of the Citizens
8168	Property Insurance Corporation pursuant to s. 627.351(6)Florida
8169	Windstorm Underwriting Association under s. 627.351(2).
8170	(9) EVALUATION OF RESIDENTIAL PROPERTY STRUCTURAL
8171	SOUNDNESS.--
8172	(a) It is the intent of the Legislature to provide a
8173	program whereby homeowners may obtain an evaluation of the wind
8174	resistance of their homes with respect to preventing damage from
8175	hurricanes, together with a recommendation of reasonable steps
8176	that may be taken to upgrade their homes to better withstand
8177	hurricane force winds.
8178	(b) To the extent that funds are provided for this purpose
8179	in the General Appropriations Act, the Legislature hereby
8180	authorizes the establishment of a program to be administered by
8181	the Citizens Property Insurance Corporation for homeowners
8182	insured in the high-risk accountFlorida Windstorm Underwriting
8183	Association.
8184	(c) The program shall provide grants to homeowners, for
8185	the purpose of providing homeowner applicants with funds to
8186	conduct an evaluation of the integrity of their homes with
8187	respect to withstanding hurricane force winds, recommendations
8188	to retrofit the homes to better withstand damage from such
8189	winds, and the estimated cost to make the recommended retrofits.
8190	(d) The Department of Community Affairs shall establish by
8191	rule standards to govern the quality of the evaluation, the
8192	quality of the recommendations for retrofitting, the eligibility
8193	of the persons conducting the evaluation, and the selection of
8194	applicants under the program. In establishing the rule, the
8195	Department of Community Affairsshall consult with the advisory
8196	committee to minimize the possibility of fraud or abuse in the
8197	evaluation and retrofitting process, and to ensure that funds
8198	spent by homeowners acting on the recommendations achieve
8199	positive results.
8200	(e) The Citizens Property Insurance CorporationFlorida
8201	Windstorm Underwriting Associationshall identify areas of this
8202	state with the greatest wind risk to residential properties and
8203	recommend annually to the Department of Community Affairs
8204	priority target areas for such evaluations and inclusion with
8205	the associated residential construction mitigation program.
8206	Section 198. Subsections (2) and (3) and paragraphs (a),
8207	(b), (c), (e), (f), and (g) of subsection (4) of section
8208	627.311, Florida Statutes, are amended to read:
8209	627.311 Joint underwriters and joint reinsurers.--
8210	(2) If the officedepartmentfinds that any activity or
8211	practice of any such group, association, or other organization
8212	is unfair or unreasonable or otherwise inconsistent with the
8213	provisions of this chapter, it may issue a written order
8214	specifying in what respects such activity or practice is unfair
8215	or unreasonable or otherwise inconsistent with the provisions of
8216	this chapter, and requiring the discontinuance of such activity
8217	or practice.
8218	(3) The officedepartmentmay, after consultation with
8219	insurers licensed to write automobile insurance in this state,
8220	approve a joint underwriting plan for purposes of equitable
8221	apportionment or sharing among insurers of automobile liability
8222	insurance and other motor vehicle insurance, as an alternate to
8223	the plan required in s. 627.351(1). All insurers authorized to
8224	write automobile insurance in this state shall subscribe to the
8225	plan and participate therein. The plan shall be subject to
8226	continuous review by the officedepartmentwhich may at any time
8227	disapprove the entire plan or any part thereof if it determines
8228	that conditions have changed since prior approval and that in
8229	view of the purposes of the plan changes are warranted. Any
8230	disapproval by the officedepartmentshall be subject to the
8231	provisions of chapter 120. If adopted, the plan and the
8232	association created under the plan:
8233	(a) Must be subject to all provisions of s. 627.351(1),
8234	except apportionment of applicants.
8235	(b) May provide for one or more designated insurers, able
8236	and willing to provide policy and claims service, to act on
8237	behalf of all other insurers to provide insurance for applicants
8238	who are in good faith entitled to, but unable to, procure
8239	insurance through the voluntary insurance market at standard
8240	rates.
8241	(c) Must provide that designated insurers will issue
8242	policies of insurance and provide policyholder and claims
8243	service on behalf of all insurers for the joint underwriting
8244	association.
8245	(d) Must provide for the equitable apportionment among
8246	insurers of losses and expenses incurred.
8247	(e) Must provide that the joint underwriting association
8248	will operate subject to the supervision and approval of a board
8249	of governors consisting of 11 individuals, including 1 who will
8250	be elected as chair. Five members of the board must be appointed
8251	by the Chief Financial OfficerInsurance Commissioner. Two of
8252	the Chief Financial Officer'scommissioner'sappointees must be
8253	chosen from the insurance industry. Any board member appointed
8254	by the Chief Financial OfficerInsurance Commissionermay be
8255	removed and replaced by her or him at any time without cause.
8256	Six members of the board must be appointed by the participating
8257	insurers, two of whom must be from the insurance agents'
8258	associations. All board members, including the chair, must be
8259	appointed to serve for 2-year terms beginning annually on a date
8260	designated by the plan.
8261	(f) Must provide that an agent appointed to a servicing
8262	carrier must be a licensed general lines agent of an insurer
8263	which is authorized to write automobile liability and physical
8264	damage insurance in the state and which is actively writing such
8265	coverage in the county in which the agent is located, or the
8266	immediately adjoining counties, or an agent who places a volume
8267	of other property and casualty insurance in an amount equal to
8268	the premium volume placed with the Florida Joint Underwriting
8269	Association. The officedepartmentmay, however, determine that
8270	an agent may be appointed to a servicing carrier if, after
8271	public hearing, the officedepartmentfinds that consumers in
8272	the agent's operating area would not have adequate and
8273	reasonable access to the purchase of automobile insurance if the
8274	agent were not appointed to a servicing carrier.
8275	(g) Must make available noncancelable coverage as provided
8276	in s. 627.7275(2).
8277	(h) Must provide for the furnishing of a list of insureds
8278	and their mailing addresses upon the request of a member of the
8279	association or an insurance agent licensed to place business
8280	with an association member. The list must indicate whether the
8281	insured is currently receiving a good driver discount from the
8282	association. The plan may charge a reasonable fee to cover the
8283	cost incurred in providing the list.
8284	(i) Must not provide a renewal credit or discount or any
8285	other inducement designed to retain a risk.
8286	(j) Must not provide any other good driver credit or
8287	discount that is not actuarially sound. In addition to other
8288	criteria that the plan may specify, to be eligible for a good
8289	driver credit, an insured must not have any criminal traffic
8290	violations within the most recent 36-month period preceding the
8291	date the discount is received.
8292	(k) Shall have no liability, and no cause of action of any
8293	nature shall arise against, any member insurer or its agents or
8294	employees, agents or employees of the association, members of
8295	the board of governors of the association, the Chief Financial
8296	Officer, or the officedepartmentor its representatives, for
8297	any action taken by them in the performance of their duties or
8298	responsibilities under this subsection. Such immunity does not
8299	apply to actions for or arising out of breach of any contract or
8300	agreement pertaining to insurance, or any willful tort.
8301	(l)1. Shall be subject to the public records requirements
8302	of chapter 119 and the public meeting requirements of s.
8303	286.011. However, the following records of the Florida
8304	Automobile Joint Underwriting Association are confidential and
8305	exempt from s. 119.07(1) and s. 24(a), Art. I of the State
8306	Constitution:
8307	a. Underwriting files, except that a policyholder or an
8308	applicant shall have access to his or her own underwriting
8309	files.
8310	b. Claims files, until termination of all litigation and
8311	settlement of all claims arising out of the same incident,
8312	although portions of the claims files may remain exempt, as
8313	otherwise provided by law. Confidential and exempt claims file
8314	records may be released to other governmental agencies upon
8315	written request and demonstration of need; such records held by
8316	the receiving agency remain confidential and exempt as provided
8317	by this paragraph.
8318	c. Records obtained or generated by an internal auditor
8319	pursuant to a routine audit, until the audit is completed or, if
8320	the audit is conducted as part of an investigation, until the
8321	investigation is closed or ceases to be active. An
8322	investigation is considered "active" while the investigation is
8323	being conducted with a reasonable, good faith belief that it
8324	could lead to the filing of administrative, civil, or criminal
8325	proceedings.
8326	d. Matters reasonably encompassed in privileged attorney-
8327	client communications.
8328	e. Proprietary information licensed to the association
8329	under contract when the contract provides for the
8330	confidentiality of such proprietary information.
8331	f. All information relating to the medical condition or
8332	medical status of an association employee which is not relevant
8333	to the employee's capacity to perform his or her duties, except
8334	as otherwise provided in this paragraph. Information which is
8335	exempt shall include, but is not limited to, information
8336	relating to workers' compensation, insurance benefits, and
8337	retirement or disability benefits.
8338	g. All records relative to an employee's participation in
8339	an employee assistance program designed to assist any employee
8340	who has a behavioral or medical disorder, substance abuse
8341	problem, or emotional difficulty which affects the employee's
8342	job performance, except as otherwise provided in s.
8343	112.0455(11).
8344	h. Information relating to negotiations for financing,
8345	reinsurance, depopulation, or contractual services, until the
8346	conclusion of the negotiations.
8347	i. Minutes of closed meetings regarding underwriting
8348	files, and minutes of closed meetings regarding an open claims
8349	file until termination of all litigation and settlement of all
8350	claims with regard to that claim, except that information
8351	otherwise confidential or exempt by law must be redacted.
8352
8353	When an authorized insurer is considering underwriting a risk
8354	insured by the association, relevant underwriting files and
8355	confidential claims files may be released to the insurer
8356	provided the insurer agrees in writing, notarized and under
8357	oath, to maintain the confidentiality of such files. When a
8358	file is transferred to an insurer, that file is no longer a
8359	public record because it is not held by an agency subject to the
8360	provisions of the public records law. The association may make
8361	the following information obtained from underwriting files and
8362	confidential claims files available to licensed general lines
8363	insurance agents: name, address, and telephone number of the
8364	automobile owner or insured; location of the risk; rating
8365	information; loss history; and policy type. The receiving
8366	licensed general lines insurance agent must retain the
8367	confidentiality of the information received.
8368	2. Portions of meetings of the Florida Automobile Joint
8369	Underwriting Association during which confidential underwriting
8370	files or confidential open claims files are discussed are exempt
8371	from the provisions of s. 286.011 and s. 24(b), Art. I of the
8372	State Constitution. All portions of association meetings which
8373	are closed to the public shall be recorded by a court reporter.
8374	The court reporter shall record the times of commencement and
8375	termination of the meeting, all discussion and proceedings, the
8376	names of all persons present at any time, and the names of all
8377	persons speaking. No portion of any closed meeting shall be off
8378	the record. Subject to the provisions of this paragraph and s.
8379	119.07(2)(a), the court reporter's notes of any closed meeting
8380	shall be retained by the association for a minimum of 5 years.
8381	A copy of the transcript, less any exempt matters, of any closed
8382	meeting during which claims are discussed shall become public as
8383	to individual claims after settlement of the claim.
8384
8385	This paragraph is subject to the Open Government Sunset Review
8386	Act of 1995 in accordance with s. 119.15, and shall stand
8387	repealed on October 2, 2003, unless reviewed and saved from
8388	repeal through reenactment by the Legislature.
8389	(4)(a) Effective upon this act becoming a law, The office
8390	departmentshall, after consultation with insurers, approve a
8391	joint underwriting plan of insurers which shall operate as a
8392	nonprofit entity. For the purposes of this subsection, the term
8393	"insurer" includes group self-insurance funds authorized by s.
8394	624.4621, commercial self-insurance funds authorized by s.
8395	624.462, assessable mutual insurers authorized under s.
8396	628.6011, and insurers licensed to write workers' compensation
8397	and employer's liability insurance in this state. The purpose of
8398	the plan is to provide workers' compensation and employer's
8399	liability insurance to applicants who are required by law to
8400	maintain workers' compensation and employer's liability
8401	insurance and who are in good faith entitled to but who are
8402	unable to purchase such insurance through the voluntary market.
8403	The joint underwriting plan shall issue policies beginning
8404	January 1, 1994.The plan must have actuarially sound rates that
8405	assure that the plan is self-supporting.
8406	(b) The operation of the plan is subject to the
8407	supervision of a 13-member board of governors. The board of
8408	governors shall be comprised of:
8409	1. Five of the 20 domestic insurers, as defined in s.
8410	624.06(1), having the largest voluntary direct premiums written
8411	in this state for workers' compensation and employer's liability
8412	insurance, which shall be elected by those 20 domestic insurers;
8413	2. Five of the 20 foreign insurers as defined in s.
8414	624.06(2) having the largest voluntary direct premiums written
8415	in this state for workers' compensation and employer's liability
8416	insurance, which shall be elected by those 20 foreign insurers;
8417	3. One person, who shall serve as the chair, appointed by
8418	the Chief Financial OfficerInsurance Commissioner;
8419	4. One person appointed by the largest property and
8420	casualty insurance agents' association in this state; and
8421	5. The consumer advocate appointed under s. 627.0613 or
8422	the consumer advocate's designee.
8423
8424	Each board member shall serve a 4-year term and may serve
8425	consecutive terms. No board member shall be an insurer which
8426	provides service to the plan or which has an affiliate which
8427	provides services to the plan or which is serviced by a service
8428	company or third-party administrator which provides services to
8429	the plan or which has an affiliate which provides services to
8430	the plan. The minutes, audits, and procedures of the board of
8431	governors are subject to chapter 119.
8432	(c) The operation of the plan shall be governed by a plan
8433	of operation that is prepared at the direction of the board of
8434	governors. The plan of operation may be changed at any time by
8435	the board of governors or upon request of the officedepartment.
8436	The plan of operation and all changes thereto are subject to the
8437	approval of the officedepartment. The plan of operation shall:
8438	1. Authorize the board to engage in the activities
8439	necessary to implement this subsection, including, but not
8440	limited to, borrowing money.
8441	2. Develop criteria for eligibility for coverage by the
8442	plan, including, but not limited to, documented rejection by at
8443	least two insurers which reasonably assures that insureds
8444	covered under the plan are unable to acquire coverage in the
8445	voluntary market. Any insured may voluntarily elect to accept
8446	coverage from an insurer for a premium equal to or greater than
8447	the plan premium if the insurer writing the coverage adheres to
8448	the provisions of s. 627.171.
8449	3. Require notice from the agent to the insured at the
8450	time of the application for coverage that the application is for
8451	coverage with the plan and that coverage may be available
8452	through an insurer, group self-insurers' fund, commercial self-
8453	insurance fund, or assessable mutual insurer through another
8454	agent at a lower cost.
8455	4. Establish programs to encourage insurers to provide
8456	coverage to applicants of the plan in the voluntary market and
8457	to insureds of the plan, including, but not limited to:
8458	a. Establishing procedures for an insurer to use in
8459	notifying the plan of the insurer's desire to provide coverage
8460	to applicants to the plan or existing insureds of the plan and
8461	in describing the types of risks in which the insurer is
8462	interested. The description of the desired risks must be on a
8463	form developed by the plan.
8464	b. Developing forms and procedures that provide an insurer
8465	with the information necessary to determine whether the insurer
8466	wants to write particular applicants to the plan or insureds of
8467	the plan.
8468	c. Developing procedures for notice to the plan and the
8469	applicant to the plan or insured of the plan that an insurer
8470	will insure the applicant or the insured of the plan, and notice
8471	of the cost of the coverage offered; and developing procedures
8472	for the selection of an insuring entity by the applicant or
8473	insured of the plan.
8474	d. Provide for a market-assistance plan to assist in the
8475	placement of employers. All applications for coverage in the
8476	plan received 45 days before the effective date for coverage
8477	shall be processed through the market-assistance plan. A market-
8478	assistance plan specifically designed to serve the needs of
8479	small good policyholders as defined by the board must be
8480	finalized by January 1, 1994.
8481	5. Provide for policy and claims services to the insureds
8482	of the plan of the nature and quality provided for insureds in
8483	the voluntary market.
8484	6. Provide for the review of applications for coverage
8485	with the plan for reasonableness and accuracy, using any
8486	available historic information regarding the insured.
8487	7. Provide for procedures for auditing insureds of the
8488	plan which are based on reasonable business judgment and are
8489	designed to maximize the likelihood that the plan will collect
8490	the appropriate premiums.
8491	8. Authorize the plan to terminate the coverage of and
8492	refuse future coverage for any insured that submits a fraudulent
8493	application to the plan or provides fraudulent or grossly
8494	erroneous records to the plan or to any service provider of the
8495	plan in conjunction with the activities of the plan.
8496	9. Establish service standards for agents who submit
8497	business to the plan.
8498	10. Establish criteria and procedures to prohibit any
8499	agent who does not adhere to the established service standards
8500	from placing business with the plan or receiving, directly or
8501	indirectly, any commissions for business placed with the plan.
8502	11. Provide for the establishment of reasonable safety
8503	programs for all insureds in the plan.
8504	12. Authorize the plan to terminate the coverage of and
8505	refuse future coverage to any insured who fails to pay premiums
8506	or surcharges when due; who, at the time of application, is
8507	delinquent in payments of workers' compensation or employer's
8508	liability insurance premiums or surcharges owed to an insurer,
8509	group self-insurers' fund, commercial self-insurance fund, or
8510	assessable mutual insurer licensed to write such coverage in
8511	this state; or who refuses to substantially comply with any
8512	safety programs recommended by the plan.
8513	13. Authorize the board of governors to provide the
8514	services required by the plan through staff employed by the
8515	plan, through reasonably compensated service providers who
8516	contract with the plan to provide services as specified by the
8517	board of governors, or through a combination of employees and
8518	service providers.
8519	14. Provide for service standards for service providers,
8520	methods of determining adherence to those service standards,
8521	incentives and disincentives for service, and procedures for
8522	terminating contracts for service providers that fail to adhere
8523	to service standards.
8524	15. Provide procedures for selecting service providers and
8525	standards for qualification as a service provider that
8526	reasonably assure that any service provider selected will
8527	continue to operate as an ongoing concern and is capable of
8528	providing the specified services in the manner required.
8529	16. Provide for reasonable accounting and data-reporting
8530	practices.
8531	17. Provide for annual review of costs associated with the
8532	administration and servicing of the policies issued by the plan
8533	to determine alternatives by which costs can be reduced.
8534	18. Authorize the acquisition of such excess insurance or
8535	reinsurance as is consistent with the purposes of the plan.
8536	19. Provide for an annual report to the officedepartment
8537	on a date specified by the officedepartmentand containing such
8538	information as the officedepartmentreasonably requires.
8539	20. Establish multiple rating plans for various
8540	classifications of risk which reflect risk of loss, hazard
8541	grade, actual losses, size of premium, and compliance with loss
8542	control. At least one of such plans must be a preferred-rating
8543	plan to accommodate small-premium policyholders with good
8544	experience as defined in sub-subparagraph 22.a.
8545	21. Establish agent commission schedules.
8546	22. Establish three subplans as follows:
8547	a. Subplan "A" must include those insureds whose annual
8548	premium does not exceed $2,500 and who have neither incurred any
8549	lost-time claims nor incurred medical-only claims exceeding 50
8550	percent of their premium for the immediate 2 years.
8551	b. Subplan "B" must include insureds that are employers
8552	identified by the board of governors as high-risk employers due
8553	solely to the nature of the operations being performed by those
8554	insureds and for whom no market exists in the voluntary market,
8555	and whose experience modifications are less than 1.00.
8556	c. Subplan "C" must include all other insureds within the
8557	plan.
8558	(e) The plan shall establish and use its rates and rating
8559	plans, and the plan may establish and use changes in rating
8560	plans at any time, but no more frequently than two times per any
8561	rating class for any calendar year. By December 1, 1993, and
8562	December 1 of each year thereafter, the board shall establish
8563	and use actuarially sound rates for use by the plan to assure
8564	that the plan is self-funding while those rates are in effect.
8565	Such rates and rating plans must be filed with the office
8566	departmentwithin 30 calendar days after their effective dates,
8567	and shall be considered a "use and file" filing. Any disapproval
8568	by the officedepartmentmust have an effective date that is at
8569	least 60 days from the date of disapproval of the rates and
8570	rating plan and must have prospective effect only. The plan may
8571	not be subject to any order by the officedepartmentto return
8572	to policyholders any portion of the rates disapproved by the
8573	officedepartment. The officedepartmentmay not disapprove any
8574	rates or rating plans unless it demonstrates that such rates and
8575	rating plans are excessive, inadequate, or unfairly
8576	discriminatory.
8577	(f) No later than June 1 of each year, the plan shall
8578	obtain an independent actuarial certification of the results of
8579	the operations of the plan for prior years, and shall furnish a
8580	copy of the certification to the officedepartment. If, after
8581	the effective date of the plan, the projected ultimate incurred
8582	losses and expenses and dividends for prior years exceed
8583	collected premiums, accrued net investment income, and prior
8584	assessments for prior years, the certification is subject to
8585	review and approval by the officedepartmentbefore it becomes
8586	final.
8587	(g) Whenever a deficit exists, the plan shall, within 90
8588	days, provide the officedepartmentwith a program to eliminate
8589	the deficit within a reasonable time. The deficit may be funded
8590	through increased premiums charged to insureds of the plan for
8591	subsequent years, through the use of policyholder surplus
8592	attributable to any year, and through assessments on insureds in
8593	the plan if the plan uses assessable policies.
8594	Section 199. Section 627.3111, Florida Statutes, is
8595	amended to read:
8596	627.3111 Public records exemption.--All bank account
8597	numbers and debit, charge, and credit card numbers, and all
8598	other personal financial and health information of a consumer
8599	held by the department or officeof Insurance or theirits
8600	service providers or agents, relating to a consumer's complaint
8601	or inquiry regarding a matter or activity regulated under the
8602	Florida Insurance Code, are confidential and exempt from s.
8603	119.07(1) and s. 24(a), Art. I of the State Constitution. For
8604	the purpose of this section, the term "consumer" includes but is
8605	not limited to a prospective purchaser, purchaser, or
8606	beneficiary of, or applicant for, any product or service
8607	regulated under the Florida Insurance Code, and a family member
8608	or dependent of a consumer, a subscriber under a group policy,
8609	or a policyholder. This information shall be redacted from
8610	records that contain nonexempt information prior to disclosure.
8611	This exemption applies to information made confidential and
8612	exempt by this section held by the department or officeof
8613	Insurance or theiritsservice providers or agents before, on,
8614	or after the effective date of this exemption. Such confidential
8615	and exempt information may be disclosed to another governmental
8616	entity, if disclosure is necessary for the receiving entity to
8617	perform its duties and responsibilities, and may be disclosed to
8618	the National Association of Insurance Commissioners. The
8619	receiving governmental entity and the association must maintain
8620	the confidential and exempt status of such information. The
8621	information made confidential and exempt by this section may be
8622	used in a criminal, civil, or administrative proceeding so long
8623	as the confidential and exempt status of such information is
8624	maintained. This exemption does not include the name and address
8625	of an inquirer or complainant to the department or officeor the
8626	name of an insurer or other regulated entity which is the
8627	subject of the inquiry or complaint. This section is subject to
8628	the Open Government Sunset Review Act of 1995 in accordance with
8629	s. 119.15 and shall stand repealed on October 2, 2007, unless
8630	reviewed and saved from repeal through reenactment by the
8631	Legislature.
8632	Section 200. Subsection (1), paragraphs (a) and (c) of
8633	subsection (3), paragraphs (a), (c), and (d) of subsection (4),
8634	and subsections (5) and (6) of section 627.351, Florida
8635	Statutes, are amended, and paragraph (f) is added to subsection
8636	(2) of that section to read:
8637	627.351 Insurance risk apportionment plans.--
8638	(1) MOTOR VEHICLE INSURANCE RISK
8639	APPORTIONMENT.--Agreements may be made among casualty and surety
8640	insurers with respect to the equitable apportionment among them
8641	of insurance which may be afforded applicants who are in good
8642	faith entitled to, but are unable to, procure such insurance
8643	through ordinary methods, and such insurers may agree among
8644	themselves on the use of reasonable rate modifications for such
8645	insurance. Such agreements and rate modifications shall be
8646	subject to the approval of the officedepartment. The office
8647	departmentshall, after consultation with the insurers licensed
8648	to write automobile liability insurance in this state, adopt a
8649	reasonable plan or plans for the equitable apportionment among
8650	such insurers of applicants for such insurance who are in good
8651	faith entitled to, but are unable to, procure such insurance
8652	through ordinary methods, and, when such plan has been adopted,
8653	all such insurers shall subscribe thereto and shall participate
8654	therein. Such plan or plans shall include rules for
8655	classification of risks and rates therefor. The plan or plans
8656	shall make available noncancelable coverage as provided in s.
8657	627.7275(2). Any insured placed with the plan shall be notified
8658	of the fact that insurance coverage is being afforded through
8659	the plan and not through the private market, and such
8660	notification shall be given in writing within 10 days of such
8661	placement. To assure that plan rates are made adequate to pay
8662	claims and expenses, insurers shall develop a means of obtaining
8663	loss and expense experience at least annually, and the plan
8664	shall file such experience, when available, with the office
8665	departmentin sufficient detail to make a determination of rate
8666	adequacy. Prior to the filing of such experience with the office
8667	department, the plan shall poll each member insurer as to the
8668	need for an actuary who is a member of the Casualty Actuarial
8669	Society and who is not affiliated with the plan's statistical
8670	agent to certify the plan's rate adequacy. If a majority of
8671	those insurers responding indicate a need for such
8672	certification, the plan shall include the certification as part
8673	of its experience filing. Such experience shall be filed with
8674	the officedepartmentnot more than 9 months following the end
8675	of the annual statistical period under review, together with a
8676	rate filing based on said experience. The officedepartment
8677	shall initiate proceedings to disapprove the rate and so notify
8678	the plan or shall finalize its review within 60 days of receipt
8679	of the filing. Notification to the plan by the officedepartment
8680	of its preliminary findings, which include a point of entry to
8681	the plan pursuant to chapter 120, shall toll the 60-day period
8682	during any such proceedings and subsequent judicial review. The
8683	rate shall be deemed approved if the officedepartmentdoes not
8684	issue notice to the plan of its preliminary findings within 60
8685	days of the filing. In addition to provisions for claims and
8686	expenses, the ratemaking formula shall include a factor for
8687	projected claims trending and 5 percent for contingencies. In no
8688	instance shall the formula include a renewal discount for plan
8689	insureds. However, the plan shall reunderwrite each insured on
8690	an annual basis, based upon all applicable rating factors
8691	approved by the officedepartment. Trend factors shall not be
8692	found to be inappropriate if not in excess of trend factors
8693	normally used in the development of residual market rates by the
8694	appropriate licensed rating organization. Each application for
8695	coverage in the plan shall include, in boldfaced 12-point type
8696	immediately preceding the applicant's signature, the following
8697	statement:
8698
8699	"THIS INSURANCE IS BEING AFFORDED THROUGH THE FLORIDA JOINT
8700	UNDERWRITING ASSOCIATION AND NOT THROUGH THE PRIVATE MARKET.
8701	PLEASE BE ADVISED THAT COVERAGE WITH A PRIVATE INSURER MAY BE
8702	AVAILABLE FROM ANOTHER AGENT AT A LOWER COST. AGENT AND COMPANY
8703	LISTINGS ARE AVAILABLE IN THE LOCAL YELLOW PAGES."
8704
8705	The plan shall annually report to the officedepartmentthe
8706	number and percentage of plan insureds who are not surcharged
8707	due to their driving record.
8708	(2) WINDSTORM INSURANCE RISK APPORTIONMENT.--
8709	(f) As used in this subsection, the term "department"
8710	means the former Department of Insurance.
8711	(3) POLITICAL SUBDIVISION; CASUALTY INSURANCE RISK
8712	APPORTIONMENT.--
8713	(a) The officedepartmentshall, after consultation with
8714	the casualty insurers licensed in this state, adopt a plan or
8715	plans for the equitable apportionment among them of casualty
8716	insurance coverage which may be afforded political subdivisions
8717	which are in good faith entitled to, but are unable to, procure
8718	such coverage through the voluntary market at standard rates or
8719	through a statutorily approved plan authorized by the office
8720	department. The officedepartmentmay adopt a joint underwriting
8721	plan which shall provide for one or more designated insurers
8722	able and willing to provide policyholder and claims service,
8723	including the issuance of insurance policies, to act on behalf
8724	of all other insurers required to participate in the joint
8725	underwriting plan. Any joint underwriting plan adopted shall
8726	provide for the equitable apportionment of any profits realized,
8727	or of losses and expenses incurred, among participating
8728	insurers. The plan shall include, but shall not be limited to:
8729	1. Rules for the classification of risks and rates which
8730	reflect the past loss experience and prospective loss experience
8731	in different geographic areas.
8732	2. A rating plan which reasonably reflects the prior
8733	claims experience of the insureds.
8734	3. Excess coverage by insurers if the officeInsurance
8735	Commissioner, in itshis or herdiscretion, requires such
8736	coverage by insurers participating in the joint underwriting
8737	plan.
8738	(c) Any deficit sustained under the plan shall first be
8739	recovered through a premium contingency assessment.
8740	Concurrently, the rates for insureds shall be adjusted for the
8741	next year so as to be actuarially sound in conformance with
8742	rules adopted byof the commissiondepartment.
8743	(4) MEDICAL MALPRACTICE RISK APPORTIONMENT.--
8744	(a) The officedepartmentshall, after consultation with
8745	insurers as set forth in paragraph (b), adopt a joint
8746	underwriting plan as set forth in paragraph (d).
8747	(c) The Joint Underwriting Association shall operate
8748	subject to the supervision and approval of a board of governors
8749	consisting of representatives of five of the insurers
8750	participating in the Joint Underwriting Association, an attorney
8751	to be named by The Florida Bar, a physician to be named by the
8752	Florida Medical Association, a dentist to be named by the
8753	Florida Dental Association, and a hospital representative to be
8754	named by the Florida Hospital Association. The Chief Financial
8755	Officer shall select the representatives of the five insurers.
8756	One insurer representative shall be selected from
8757	recommendations of the American Insurance Association. One
8758	insurer representative shall be selected from recommendations of
8759	the National Association of Independent Insurers. One insurer
8760	representative shall be selected from recommendations of the
8761	Alliance of American Insurers. Two insurer representatives shall
8762	be selected to represent insurers that are not affiliated with
8763	these associations.The board of governors shall choose, during
8764	the first meeting of the board after June 30 of each year, one
8765	of its members to serve as chair of the board and another member
8766	to serve as vice chair of the board. There shall be no
8767	liability on the part of, and no cause of action of any nature
8768	shall arise against, any member insurer, self-insurer, or its
8769	agents or employees, the Joint Underwriting Association or its
8770	agents or employees, members of the board of governors, or the
8771	officedepartmentor its representatives for any action taken by
8772	them in the performance of their powers and duties under this
8773	subsection.
8774	(d) The plan shall provide coverage for claims arising out
8775	of the rendering of, or failure to render, medical care or
8776	services and, in the case of health care facilities, coverage
8777	for bodily injury or property damage to the person or property
8778	of any patient arising out of the insured's activities, in
8779	appropriate policy forms for all health care providers as
8780	defined in paragraph (h). The plan shall include, but shall not
8781	be limited to:
8782	1. Classifications of risks and rates which reflect past
8783	and prospective loss and expense experience in different areas
8784	of practice and in different geographical areas. To assure that
8785	plan rates are adequate to pay claims and expenses, the Joint
8786	Underwriting Association shall develop a means of obtaining loss
8787	and expense experience; and the plan shall file such experience,
8788	when available, with the officedepartmentin sufficient detail
8789	to make a determination of rate adequacy. Within 60 days after a
8790	rate filing, the officedepartmentshall approve such rates or
8791	rate revisions as are fully supported by the filing. In addition
8792	to provisions for claims and expenses, the ratemaking formula
8793	may include a factor for projected claims trending and a margin
8794	for contingencies. The use of trend factors shall not be found
8795	to be inappropriate.
8796	2. A rating plan which reasonably recognizes the prior
8797	claims experience of insureds.
8798	3. Provisions as to rates for:
8799	a. Insureds who are retired or semiretired.
8800	b. The estates of deceased insureds.
8801	c. Part-time professionals.
8802	4. Protection in an amount not to exceed $250,000 per
8803	claim, $750,000 annual aggregate for health care providers other
8804	than hospitals and in an amount not to exceed $1.5 million per
8805	claim, $5 million annual aggregate for hospitals. Such coverage
8806	for health care providers other than hospitals shall be
8807	available as primary coverage and as excess coverage for the
8808	layer of coverage between the primary coverage and the total
8809	limits of $250,000 per claim, $750,000 annual aggregate. The
8810	plan shall also provide tail coverage in these amounts to
8811	insureds whose claims-made coverage with another insurer or
8812	trust has or will be terminated. Such tail coverage shall
8813	provide coverage for incidents that occurred during the claims-
8814	made policy period for which a claim is made after the policy
8815	period.
8816	5. A risk management program for insureds of the
8817	association. This program shall include, but not be limited to:
8818	investigation and analysis of frequency, severity, and causes of
8819	adverse or untoward medical injuries; development of measures to
8820	control these injuries; systematic reporting of medical
8821	incidents; investigation and analysis of patient complaints; and
8822	auditing of association members to assure implementation of this
8823	program. The plan may refuse to insure any insured who refuses
8824	or fails to comply with the risk management program implemented
8825	by the association. Prior to cancellation or refusal to renew
8826	an insured, the association shall provide the insured 60 days'
8827	notice of intent to cancel or nonrenew and shall further notify
8828	the insured of any action which must be taken to be in
8829	compliance with the risk management program.
8830	(5) PROPERTY AND CASUALTY INSURANCE RISK
8831	APPORTIONMENT.--The commissiondepartmentshall adopt by rule a
8832	joint underwriting plan to equitably apportion among insurers
8833	authorized in this state to write property insurance as defined
8834	in s. 624.604 or casualty insurance as defined in s. 624.605,
8835	the underwriting of one or more classes of property insurance or
8836	casualty insurance, except for the types of insurance that are
8837	included within property insurance or casualty insurance for
8838	which an equitable apportionment plan, assigned risk plan, or
8839	joint underwriting plan is authorized under s. 627.311 or
8840	subsection (1), subsection (2), subsection(3), subsection (4),
8841	or subsection (6) and except for risks eligible for flood
8842	insurance written through the federal flood insurance program to
8843	persons with risks eligible under subparagraph (a)1. and who are
8844	in good faith entitled to, but are unable to, obtain such
8845	property or casualty insurance coverage, including excess
8846	coverage, through the voluntary market. For purposes of this
8847	subsection, an adequate level of coverage means that coverage
8848	which is required by state law or by responsible or prudent
8849	business practices. The Joint Underwriting Association shall not
8850	be required to provide coverage for any type of risk for which
8851	there are no insurers providing similar coverage in this state.
8852	The officedepartmentmay designate one or more participating
8853	insurers who agree to provide policyholder and claims service,
8854	including the issuance of policies, on behalf of the
8855	participating insurers.
8856	(a) The plan shall provide:
8857	1. A means of establishing eligibility of a risk for
8858	obtaining insurance through the plan, which provides that:
8859	a. A risk shall be eligible for such property insurance or
8860	casualty insurance as is required by Florida law if the
8861	insurance is unavailable in the voluntary market, including the
8862	market assistance program and the surplus lines market.
8863	b. A commercial risk not eligible under sub-subparagraph
8864	a. shall be eligible for property or casualty insurance if:
8865	(I) The insurance is unavailable in the voluntary market,
8866	including the market assistance plan and the surplus lines
8867	market;
8868	(II) Failure to secure the insurance would substantially
8869	impair the ability of the entity to conduct its affairs; and
8870	(III) The risk is not determined by the Risk Underwriting
8871	Committee to be uninsurable.
8872	c. In the event the Federal Government terminates the
8873	Federal Crime Insurance Program established under 44 C.F.R. ss.
8874	80-83, Florida commercial and residential risks previously
8875	insured under the federal program shall be eligible under the
8876	plan.
8877	d.(I) In the event a risk is eligible under this paragraph
8878	and in the event the market assistance plan receives a minimum
8879	of 100 applications for coverage within a 3-month period, or 200
8880	applications for coverage within a 1-year period or less, for a
8881	given class of risk contained in the classification system
8882	defined in the plan of operation of the Joint Underwriting
8883	Association, and unless the market assistance plan provides a
8884	quotation for at least 80 percent of such applicants, such
8885	classification shall immediately be eligible for coverage in the
8886	Joint Underwriting Association.
8887	(II) Any market assistance plan application which is
8888	rejected because an individual risk is so hazardous as to be
8889	practically uninsurable, considering whether the likelihood of a
8890	loss for such a risk is substantially higher than for other
8891	risks of the same class due to individual risk characteristics,
8892	prior loss experience, unwillingness to cooperate with a prior
8893	insurer, physical characteristics and physical location shall
8894	not be included in the minimum percentage calculation provided
8895	above. In the event that there is any legal or administrative
8896	challenge to a determination by the officedepartmentthat the
8897	conditions of this subparagraph have been met for eligibility
8898	for coverage in the Joint Underwriting Association for a given
8899	classification, any eligible risk may obtain coverage during the
8900	pendency of any such challenge.
8901	e. In order to qualify as a quotation for the purpose of
8902	meeting the minimum percentage calculation in this subparagraph,
8903	the quoted premium must meet the following criteria:
8904	(I) In the case of an admitted carrier, the quoted premium
8905	must not exceed the premium available for a given classification
8906	currently in use by the Joint Underwriting Association or the
8907	premium developed by using the rates and rating plans on file
8908	with the officedepartmentby the quoting insurer, whichever is
8909	greater.
8910	(II) In the case of an authorized surplus lines insurer,
8911	the quoted premium must not exceed the premium available for a
8912	given classification currently in use by the Joint Underwriting
8913	Association by more than 25 percent, after consideration of any
8914	individual risk surcharge or credit.
8915	f. Any agent who falsely certifies the unavailability of
8916	coverage as provided by sub-subparagraphs a. and b., is subject
8917	to the penalties provided in s. 626.611.
8918	2. A means for the equitable apportionment of profits or
8919	losses and expenses among participating insurers.
8920	3. Rules for the classification of risks and rates which
8921	reflect the past and prospective loss experience.
8922	4. A rating plan which reasonably reflects the prior
8923	claims experience of the insureds. Such rating plan shall
8924	include at least two levels of rates for risks that have
8925	favorable loss experience and risks that have unfavorable loss
8926	experience, as established by the plan.
8927	5. Reasonable limits to available amounts of insurance.
8928	Such limits may not be less than the amounts of insurance
8929	required of eligible risks by Florida law.
8930	6. Risk management requirements for insurance where such
8931	requirements are reasonable and are expected to reduce losses.
8932	7. Deductibles as may be necessary to meet the needs of
8933	insureds.
8934	8. Policy forms which are consistent with the forms in use
8935	by the majority of the insurers providing coverage in the
8936	voluntary market for the coverage requested by the applicant.
8937	9. A means to remove risks from the plan once such risks
8938	no longer meet the eligibility requirements of this paragraph.
8939	For this purpose, the plan shall include the following
8940	requirements: At each 6-month interval after the activation of
8941	any class of insureds, the board of governors or its designated
8942	committee shall review the number of applications to the market
8943	assistance plan for that class. If, based on these latest
8944	numbers, at least 90 percent of such applications have been
8945	provided a quotation, the Joint Underwriting Association shall
8946	cease underwriting new applications for such class within 30
8947	days, and notification of this decision shall be sent to the
8948	officeInsurance Commissioner, the major agents' associations,
8949	and the board of directors of the market assistance plan. A
8950	quotation for the purpose of this subparagraph shall meet the
8951	same criteria for a quotation as provided in sub-subparagraph
8952	1.esub-subparagraph d. All policies which were previously
8953	written for that class shall continue in force until their
8954	normal expiration date, at which time, subject to the required
8955	timely notification of nonrenewal by the Joint Underwriting
8956	Association, the insured may then elect to reapply to the Joint
8957	Underwriting Association according to the requirements of
8958	eligibility. If, upon reapplication, those previously insured
8959	Joint Underwriting Association risks meet the eligibility
8960	requirements, the Joint Underwriting Association shall provide
8961	the coverage requested.
8962	10. A means for providing credits to insurers against any
8963	deficit assessment levied pursuant to paragraph (c), for risks
8964	voluntarily written through the market assistance plan by such
8965	insurers.
8966	11. That the Joint Underwriting Association shall operate
8967	subject to the supervision and approval of a board of governors
8968	consisting of 13 individuals appointed by the Chief Financial
8969	OfficerInsurance Commissioner, and shall have an executive or
8970	underwriting committee. At least four of the members shall be
8971	representatives of insurance trade associations as follows: one
8972	member from the American Insurance Association, one member from
8973	the Alliance of American Insurers, one member from the National
8974	Association of Independent Insurers, and one member from an
8975	unaffiliated insurer writing coverage on a national basis. Two
8976	representatives shall be from two of the statewide agents'
8977	associations. Each board member shall be appointed to serve for
8978	2-year terms beginning on a date designated by the plan and
8979	shall serve at the pleasure of the Chief Financial Officer
8980	commissioner. Members may be reappointed for subsequent terms.
8981	(b) Rates used by the Joint Underwriting Association shall
8982	be actuarially sound. To the extent applicable, the rate
8983	standards set forth in s. 627.062 shall be considered by the
8984	officedepartmentin establishing rates to be used by the joint
8985	underwriting plan. The initial rate level shall be determined
8986	using the rates, rules, rating plans, and classifications
8987	contained in the most current Insurance Services Office (ISO)
8988	filing with the officedepartmentor the filing of other
8989	licensed rating organizations with an additional increment of 25
8990	percent of premium. For any type of coverage or classification
8991	which lends itself to manual rating for which the Insurance
8992	Services Office or another licensed rating organization does not
8993	file or publish a rate, the Joint Underwriting Association shall
8994	file and use an initial rate based on the average current market
8995	rate. The initial rate level for the rate plan shall also be
8996	subject to an experience and schedule rating plan which may
8997	produce a maximum of 25 percent debits or credits. For any risk
8998	which does not lend itself to manual rating and for which no
8999	rate has been promulgated under the rate plan, the board shall
9000	develop and file with the officecommissioner, subject to its
9001	his or herapproval, appropriate criteria and factors for rating
9002	the individual risk. Such criteria and factors shall include,
9003	but not be limited to, loss rating plans, composite rating
9004	plans, and unique and unusual risk rating plans. The initial
9005	rates required under this paragraph shall be adjusted in
9006	conformity with future filings by the Insurance Services Office
9007	with the officedepartmentand shall remain in effect until such
9008	time as the Joint Underwriting Association has sufficient data
9009	as to independently justify an actuarially sound change in such
9010	rates.
9011	(c)1. In the event an underwriting deficit exists for any
9012	policy year the plan is in effect, any surplus which has accrued
9013	from previous years and is not projected within reasonable
9014	actuarial certainty to be needed for payment for claims in the
9015	year the surplus arose shall be used to offset the deficit to
9016	the extent available.
9017	2. As to any remaining deficit, the board of governors of
9018	the Joint Underwriting Association shall levy and collect an
9019	assessment in an amount sufficient to offset such deficit. Such
9020	assessment shall be levied against the insurers participating in
9021	the plan during the year giving rise to the assessment. Any
9022	assessments against insurers for the lines of property and
9023	casualty insurance issued to commercial risks shall be recovered
9024	from the participating insurers in the proportion that the net
9025	direct premium of each insurer for commercial risks written
9026	during the preceding calendar year bears to the aggregate net
9027	direct premium written for commercial risks by all members of
9028	the plan for the lines of insurance included in the plan. Any
9029	assessments against insurers for the lines of property and
9030	casualty insurance issued to personal risks eligible under sub-
9031	subparagraph (a)1.a. or sub-subparagraph (a)1.c. shall be
9032	recovered from the participating insurers in the proportion that
9033	the net direct premium of each insurer for personal risks
9034	written during the preceding calendar year bears to the
9035	aggregate net direct premium written for personal risks by all
9036	members of the plan for the lines of insurance included in the
9037	plan.
9038	3. The board shall take all reasonable and prudent steps
9039	necessary to collect the amount of assessment due from each
9040	participating insurer and policyholder, including, if prudent,
9041	filing suit to collect such assessment. If the board is unable
9042	to collect an assessment from any insurer, the uncollected
9043	assessments shall be levied as an additional assessment against
9044	the participating insurers and any participating insurer
9045	required to pay an additional assessment as a result of such
9046	failure to pay shall have a cause of action against such
9047	nonpaying insurer.
9048	4. Any funds or entitlements that the state may be
9049	eligible to receive by virtue of the Federal Government's
9050	termination of the Federal Crime Insurance Program referenced in
9051	sub-subparagraph (a)1.c. may be used under the plan to offset
9052	any subsequent underwriting deficits that may occur from risks
9053	previously insured with the Federal Crime Insurance Program.
9054	5. Assessments shall be included as an appropriate factor
9055	in the making of rates as provided in s. 627.3512.
9056	6.a. The Legislature finds that the potential for
9057	unlimited assessments under this paragraph may induce insurers
9058	to attempt to reduce their writings in the voluntary market, and
9059	that such actions would worsen the availability problems that
9060	the association was created to remedy. It is the intent of the
9061	Legislature that insurers remain fully responsible for covering
9062	any deficits of the association; however, it is also the intent
9063	of the Legislature to provide a means by which assessment
9064	liabilities may be amortized over a period of years.
9065	b. The total amount of deficit assessments under this
9066	paragraph with respect to any year may not exceed 10 percent of
9067	the statewide total gross written premium for all insurers for
9068	the coverages referred to in the introductory language of this
9069	subsection for the prior year, except that if the deficit with
9070	respect to any plan year exceeds such amount and bonds are
9071	issued under sub-subparagraph c. to defray the deficit, the
9072	total amount of assessments with respect to such deficit may not
9073	in any year exceed 10 percent of the deficit, or such lesser
9074	percentage as is sufficient to retire the bonds as determined by
9075	the board, and shall continue annually until the bonds are
9076	retired.
9077	c. The governing body of any unit of local government, any
9078	residents or businesses of which are insured by the association,
9079	may issue bonds as defined in s. 125.013 or s. 166.101 from time
9080	to time to fund an assistance program, in conjunction with the
9081	association, for the purpose of defraying deficits of the
9082	association. Revenue bonds may not be issued until validated
9083	pursuant to chapter 75, unless a state of emergency is declared
9084	by executive order or proclamation of the Governor pursuant to
9085	s. 252.36 making such findings as are necessary to determine
9086	that it is in the best interests of, and necessary for, the
9087	protection of the public health, safety, and general welfare of
9088	residents of this state and the protection and preservation of
9089	the economic stability of insurers operating in this state, and
9090	declaring it an essential public purpose to permit certain
9091	municipalities or counties to issue such bonds as will provide
9092	relief to claimants and policyholders of the joint underwriting
9093	association and insurers responsible for apportionment of
9094	association losses. The unit of local government shall enter
9095	into such contracts with the association as are necessary to
9096	carry out this paragraph. Any bonds issued under this sub-
9097	subparagraph shall be payable from and secured by moneys
9098	received by the association from assessments under this
9099	paragraph, and assigned and pledged to or on behalf of the unit
9100	of local government for the benefit of the holders of such
9101	bonds. The funds, credit, property, and taxing power of the
9102	state or of the unit of local government shall not be pledged
9103	for the payment of such bonds. If any of the bonds remain unsold
9104	60 days after issuance, the officedepartmentshall require all
9105	insurers subject to assessment to purchase the bonds, which
9106	shall be treated as admitted assets; each insurer shall be
9107	required to purchase that percentage of the unsold portion of
9108	the bond issue that equals the insurer's relative share of
9109	assessment liability under this subsection. An insurer shall not
9110	be required to purchase the bonds to the extent that the office
9111	departmentdetermines that the purchase would endanger or impair
9112	the solvency of the insurer.
9113	7. The plan shall provide for the deferment, in whole or
9114	in part, of the assessment of an insurer if the office
9115	departmentfinds that payment of the assessment would endanger
9116	or impair the solvency of the insurer. In the event an
9117	assessment against an insurer is deferred in whole or in part,
9118	the amount by which such assessment is deferred may be assessed
9119	against the other member insurers in a manner consistent with
9120	the basis for assessments set forth in subparagraph 2.
9121	(d) Upon adoption of the plan, all insurers authorized in
9122	this state to underwrite property or casualty insurance shall
9123	participate in the plan.
9124	(e) A Risk Underwriting Committee of the Joint
9125	Underwriting Association composed of three members experienced
9126	in evaluating insurance risks is created to review risks
9127	rejected by the voluntary market for which application is made
9128	for insurance through the joint underwriting plan. The committee
9129	shall consist of a representative of the market assistance plan
9130	created under s. 627.3515, a member selected by the insurers
9131	participating in the Joint Underwriting Association, and a
9132	member named by the Chief Financial OfficerInsurance
9133	Commissioner. The Risk Underwriting Committee shall appoint such
9134	advisory committees as are provided for in the plan and are
9135	necessary to conduct its functions. The salaries and expenses of
9136	the members of the Risk Underwriting Committee and its advisory
9137	committees shall be paid by the joint underwriting plan. The
9138	plan approved by the officedepartmentshall establish criteria
9139	and procedures for use by the Risk Underwriting Committee for
9140	determining whether an individual risk is so hazardous as to be
9141	uninsurable. In making this determination and in establishing
9142	the criteria and procedures, the following shall be considered:
9143	1. Whether the likelihood of a loss for the individual
9144	risk is substantially higher than for other risks of the same
9145	class; and
9146	2. Whether the uncertainty associated with the individual
9147	risk is such that an appropriate premium cannot be determined.
9148
9149	The acceptance or rejection of a risk by the underwriting
9150	committee shall be construed as the private placement of
9151	insurance, and the provisions of chapter 120 shall not apply.
9152	(f) There shall be no liability on the part of, and no
9153	cause of action of any nature shall arise against, any member
9154	insurer or its agents or employees, the Florida Property and
9155	Casualty Joint Underwriting Association or its agents or
9156	employees, members of the board of governors, the Chief
9157	Financial Officer, or the officedepartmentor its
9158	representatives for any action taken by them in the performance
9159	of their duties under this subsection. Such immunity does not
9160	apply to actions for breach of any contract or agreement
9161	pertaining to insurance, or any other willful tort.
9162	(6) CITIZENS PROPERTY INSURANCE CORPORATION.--
9163	(a)1. The Legislature finds that actual and threatened
9164	catastrophic losses to property in this state from hurricanes
9165	have caused insurers to be unwilling or unable to provide
9166	property insurance coverage to the extent sought and needed. It
9167	is in the public interest and a public purpose to assist in
9168	assuring that property in the state is insured so as to
9169	facilitate the remediation, reconstruction, and replacement of
9170	damaged or destroyed property in order to reduce or avoid the
9171	negative effects otherwise resulting to the public health,
9172	safety, and welfare; to the economy of the state; and to the
9173	revenues of the state and local governments needed to provide
9174	for the public welfare. It is necessary, therefore, to provide
9175	property insurance to applicants who are in good faith entitled
9176	to procure insurance through the voluntary market but are unable
9177	to do so. The Legislature intends by this subsection that
9178	property insurance be provided and that it continues, as long as
9179	necessary, through an entity organized to achieve efficiencies
9180	and economies, all toward the achievement of the foregoing
9181	public purposes. Because it is essential for the corporation to
9182	have the maximum financial resources to pay claims following a
9183	catastrophic hurricane, it is the intent of the Legislature that
9184	the income of the corporation be exempt from federal income
9185	taxation and that interest on the debt obligations issued by the
9186	corporation be exempt from federal income taxation.
9187	2. The Residential Property and Casualty Joint
9188	Underwriting Association originally created by this statute
9189	shall be known, as of July 1, 2002, as the Citizens Property
9190	Insurance Corporation. The corporation shall provide insurance
9191	for residential and commercial property, for applicants who are
9192	in good faith entitled, but are unable, to procure insurance
9193	through the voluntary market. The corporation shall operate
9194	pursuant to a plan of operation approved by order of the office
9195	department. The plan is subject to continuous review by the
9196	officedepartment. The officedepartmentmay, by order, withdraw
9197	approval of all or part of a plan if the officedepartment
9198	determines that conditions have changed since approval was
9199	granted and that the purposes of the plan require changes in the
9200	plan. For the purposes of this subsection, residential coverage
9201	includes both personal lines residential coverage, which
9202	consists of the type of coverage provided by homeowner's, mobile
9203	home owner's, dwelling, tenant's, condominium unit owner's, and
9204	similar policies, and commercial lines residential coverage,
9205	which consists of the type of coverage provided by condominium
9206	association, apartment building, and similar policies.
9207	(b)1. All insurers authorized to write one or more subject
9208	lines of business in this state are subject to assessment by the
9209	corporation and, for the purposes of this subsection, are
9210	referred to collectively as "assessable insurers." Insurers
9211	writing one or more subject lines of business in this state
9212	pursuant to part VIII of chapter 626 are not assessable
9213	insurers, but insureds who procure one or more subject lines of
9214	business in this state pursuant to part VIII of chapter 626 are
9215	subject to assessment by the corporation and are referred to
9216	collectively as "assessable insureds." An authorized insurer's
9217	assessment liability shall begin on the first day of the
9218	calendar year following the year in which the insurer was issued
9219	a certificate of authority to transact insurance for subject
9220	lines of business in this state and shall terminate 1 year after
9221	the end of the first calendar year during which the insurer no
9222	longer holds a certificate of authority to transact insurance
9223	for subject lines of business in this state.
9224	2.a. All revenues, assets, liabilities, losses, and
9225	expenses of the corporation shall be divided into three separate
9226	accounts as follows:
9227	(I) A personal lines account for personal residential
9228	policies issued by the corporation or issued by the Residential
9229	Property and Casualty Joint Underwriting Association and renewed
9230	by the corporation that provide comprehensive, multiperil
9231	coverage on risks that are not located in areas eligible for
9232	coverage in the Florida Windstorm Underwriting Association as
9233	those areas were defined on January 1, 2002 and for such
9234	policies that do not provide coverage for the peril of wind on
9235	risks that are located in such areas;
9236	(II) A commercial lines account for commercial residential
9237	policies issued by the corporation or issued by the Residential
9238	Property and Casualty Joint Underwriting Association and renewed
9239	by the corporation that provide coverage for basic property
9240	perils on risks that are not located in areas eligible for
9241	coverage in the Florida Windstorm Underwriting Association as
9242	those areas were defined on January 1, 2002, and for such
9243	policies that do not provide coverage for the peril of wind on
9244	risks that are located in such areas; and
9245	(III) A high-risk account for personal residential
9246	policies and commercial residential and commercial
9247	nonresidential property policies issued by the corporation or
9248	transferred to the corporation that provide coverage for the
9249	peril of wind on risks that are located in areas eligible for
9250	coverage in the Florida Windstorm Underwriting Association as
9251	those areas were defined on January 1, 2002. The high-risk
9252	account must also include quota share primary insurance under
9253	subparagraph (c)2. The area eligible for coverage under the
9254	high-risk account also includes the area within Port Canaveral,
9255	which is bordered on the south by the City of Cape Canaveral,
9256	bordered on the west by the Banana River, and bordered on the
9257	north by Federal Government property. The officedepartmentmay
9258	remove territory from the area eligible for wind-only and quota
9259	share coverage if, after a public hearing, the officedepartment
9260	finds that authorized insurers in the voluntary market are
9261	willing and able to write sufficient amounts of personal and
9262	commercial residential coverage for all perils in the territory,
9263	including coverage for the peril of wind, such that risks
9264	covered by wind-only policies in the removed territory could be
9265	issued a policy by the corporation in either the personal lines
9266	or commercial lines account without a significant increase in
9267	the corporation's probable maximum loss in such account. Removal
9268	of territory from the area eligible for wind-only or quota share
9269	coverage does not alter the assignment of wind coverage written
9270	in such areas to the high-risk account.
9271	b. The three separate accounts must be maintained as long
9272	as financing obligations entered into by the Florida Windstorm
9273	Underwriting Association or Residential Property and Casualty
9274	Joint Underwriting Association are outstanding, in accordance
9275	with the terms of the corresponding financing documents. When
9276	the financing obligations are no longer outstanding, in
9277	accordance with the terms of the corresponding financing
9278	documents, the corporation may use a single account for all
9279	revenues, assets, liabilities, losses, and expenses of the
9280	corporation.
9281	c. Creditors of the Residential Property and Casualty
9282	Joint Underwriting Association shall have a claim against, and
9283	recourse to, the accounts referred to in sub-sub-subparagraphs
9284	a.(I) and (II) and shall have no claim against, or recourse to,
9285	the account referred to in sub-sub-subparagraph a.(III).
9286	Creditors of the Florida Windstorm Underwriting Association
9287	shall have a claim against, and recourse to, the account
9288	referred to in sub-sub-subparagraph a.(III) and shall have no
9289	claim against, or recourse to, the accounts referred to in sub-
9290	sub-subparagraphs a.(I) and (II).
9291	d. Revenues, assets, liabilities, losses, and expenses not
9292	attributable to particular accounts shall be prorated among the
9293	accounts.
9294	e. The Legislature finds that the revenues of the
9295	corporation are revenues that are necessary to meet the
9296	requirements set forth in documents authorizing the issuance of
9297	bonds under this subsection.
9298	f. No part of the income of the corporation may inure to
9299	the benefit of any private person.
9300	3. With respect to a deficit in an account:
9301	a. When the deficit incurred in a particular calendar year
9302	is not greater than 10 percent of the aggregate statewide direct
9303	written premium for the subject lines of business for the prior
9304	calendar year, the entire deficit shall be recovered through
9305	regular assessments of assessable insurers under paragraph (g)
9306	and assessable insureds.
9307	b. When the deficit incurred in a particular calendar year
9308	exceeds 10 percent of the aggregate statewide direct written
9309	premium for the subject lines of business for the prior calendar
9310	year, the corporation shall levy regular assessments on
9311	assessable insurers under paragraph (g) and on assessable
9312	insureds in an amount equal to the greater of 10 percent of the
9313	deficit or 10 percent of the aggregate statewide direct written
9314	premium for the subject lines of business for the prior calendar
9315	year. Any remaining deficit shall be recovered through emergency
9316	assessments under sub-subparagraph d.
9317	c. Each assessable insurer's share of the amount being
9318	assessed under sub-subparagraph a. or sub-subparagraph b. shall
9319	be in the proportion that the assessable insurer's direct
9320	written premium for the subject lines of business for the year
9321	preceding the assessment bears to the aggregate statewide direct
9322	written premium for the subject lines of business for that year.
9323	The assessment percentage applicable to each assessable insured
9324	is the ratio of the amount being assessed under sub-subparagraph
9325	a. or sub-subparagraph b. to the aggregate statewide direct
9326	written premium for the subject lines of business for the prior
9327	year. Assessments levied by the corporation on assessable
9328	insurers under sub-subparagraphs a. and b. shall be paid as
9329	required by the corporation's plan of operation and paragraph
9330	(g). Assessments levied by the corporation on assessable
9331	insureds under sub-subparagraphs a. and b. shall be collected by
9332	the surplus lines agent at the time the surplus lines agent
9333	collects the surplus lines tax required by s. 626.932 and shall
9334	be paid to the Florida Surplus Lines Service Office at the time
9335	the surplus lines agent pays the surplus lines tax to the
9336	Florida Surplus Lines Service Office. Upon receipt of regular
9337	assessments from surplus lines agents, the Florida Surplus Lines
9338	Service Office shall transfer the assessments directly to the
9339	corporation as determined by the corporation.
9340	d. Upon a determination by the board of governors that a
9341	deficit in an account exceeds the amount that will be recovered
9342	through regular assessments under sub-subparagraph a. or sub-
9343	subparagraph b., the board shall levy, after verification by the
9344	officedepartment, emergency assessments, for as many years as
9345	necessary to cover the deficits, to be collected by assessable
9346	insurers and the corporation and collected from assessable
9347	insureds upon issuance or renewal of policies for subject lines
9348	of business, excluding National Flood Insurance policies. The
9349	amount of the emergency assessment collected in a particular
9350	year shall be a uniform percentage of that year's direct written
9351	premium for subject lines of business and all accounts of the
9352	corporation, excluding National Flood Insurance Program policy
9353	premiums, as annually determined by the board and verified by
9354	the officedepartment. The officedepartmentshall verify the
9355	arithmetic calculations involved in the board's determination
9356	within 30 days after receipt of the information on which the
9357	determination was based. Notwithstanding any other provision of
9358	law, the corporation and each assessable insurer that writes
9359	subject lines of business shall collect emergency assessments
9360	from its policyholders without such obligation being affected by
9361	any credit, limitation, exemption, or deferment. Emergency
9362	assessments levied by the corporation on assessable insureds
9363	shall be collected by the surplus lines agent at the time the
9364	surplus lines agent collects the surplus lines tax required by
9365	s. 626.932 and shall be paid to the Florida Surplus Lines
9366	Service Office at the time the surplus lines agent pays the
9367	surplus lines tax to the Florida Surplus Lines Service Office.
9368	The emergency assessments so collected shall be transferred
9369	directly to the corporation on a periodic basis as determined by
9370	the corporation and shall be held by the corporation solely in
9371	the applicable account. The aggregate amount of emergency
9372	assessments levied for an account under this sub-subparagraph in
9373	any calendar year may not exceed the greater of 10 percent of
9374	the amount needed to cover the original deficit, plus interest,
9375	fees, commissions, required reserves, and other costs associated
9376	with financing of the original deficit, or 10 percent of the
9377	aggregate statewide direct written premium for subject lines of
9378	business and for all accounts of the corporation for the prior
9379	year, plus interest, fees, commissions, required reserves, and
9380	other costs associated with financing the original deficit.
9381	e. The corporation may pledge the proceeds of assessments,
9382	projected recoveries from the Florida Hurricane Catastrophe
9383	Fund, other insurance and reinsurance recoverables, market
9384	equalization surcharges and other surcharges, and other funds
9385	available to the corporation as the source of revenue for and to
9386	secure bonds issued under paragraph (g), bonds or other
9387	indebtedness issued under subparagraph (c)3., or lines of credit
9388	or other financing mechanisms issued or created under this
9389	subsection, or to retire any other debt incurred as a result of
9390	deficits or events giving rise to deficits, or in any other way
9391	that the board determines will efficiently recover such
9392	deficits. The purpose of the lines of credit or other financing
9393	mechanisms is to provide additional resources to assist the
9394	corporation in covering claims and expenses attributable to a
9395	catastrophe. As used in this subsection, the term "assessments"
9396	includes regular assessments under sub-subparagraph a., sub-
9397	subparagraph b., or subparagraph (g)1. and emergency assessments
9398	under sub-subparagraph d. Emergency assessments collected under
9399	sub-subparagraph d. are not part of an insurer's rates, are not
9400	premium, and are not subject to premium tax, fees, or
9401	commissions; however, failure to pay the emergency assessment
9402	shall be treated as failure to pay premium. The emergency
9403	assessments under sub-subparagraph d. shall continue as long as
9404	any bonds issued or other indebtedness incurred with respect to
9405	a deficit for which the assessment was imposed remain
9406	outstanding, unless adequate provision has been made for the
9407	payment of such bonds or other indebtedness pursuant to the
9408	documents governing such bonds or other indebtedness.
9409	f. As used in this subsection, the term "subject lines of
9410	business" means insurance written by assessable insurers or
9411	procured by assessable insureds on real or personal property, as
9412	defined in s. 624.604, including insurance for fire, industrial
9413	fire, allied lines, farmowners multiperil, homeowners
9414	multiperil, commercial multiperil, and mobile homes, and
9415	including liability coverage on all such insurance, but
9416	excluding inland marine as defined in s. 624.607(3) and
9417	excluding vehicle insurance as defined in s. 624.605(1) other
9418	than insurance on mobile homes used as permanent dwellings.
9419	g. The Florida Surplus Lines Service Office shall
9420	determine annually the aggregate statewide written premium in
9421	subject lines of business procured by assessable insureds and
9422	shall report that information to the corporation in a form and
9423	at a time the corporation specifies to ensure that the
9424	corporation can meet the requirements of this subsection and the
9425	corporation's financing obligations.
9426	h. The Florida Surplus Lines Service Office shall verify
9427	the proper application by surplus lines agents of assessment
9428	percentages for regular assessments and emergency assessments
9429	levied under this subparagraph on assessable insureds and shall
9430	assist the corporation in ensuring the accurate, timely
9431	collection and payment of assessments by surplus lines agents as
9432	required by the corporation.
9433	(c) The plan of operation of the corporation:
9434	1. Must provide for adoption of residential property and
9435	casualty insurance policy forms and commercial residential and
9436	nonresidential property insurance forms, which forms must be
9437	approved by the officedepartmentprior to use. The corporation
9438	shall adopt the following policy forms:
9439	a. Standard personal lines policy forms that are
9440	comprehensive multiperil policies providing full coverage of a
9441	residential property equivalent to the coverage provided in the
9442	private insurance market under an HO-3, HO-4, or HO-6 policy.
9443	b. Basic personal lines policy forms that are policies
9444	similar to an HO-8 policy or a dwelling fire policy that provide
9445	coverage meeting the requirements of the secondary mortgage
9446	market, but which coverage is more limited than the coverage
9447	under a standard policy.
9448	c. Commercial lines residential policy forms that are
9449	generally similar to the basic perils of full coverage
9450	obtainable for commercial residential structures in the admitted
9451	voluntary market.
9452	d. Personal lines and commercial lines residential
9453	property insurance forms that cover the peril of wind only. The
9454	forms are applicable only to residential properties located in
9455	areas eligible for coverage under the high-risk account referred
9456	to in sub-subparagraph (b)2.a.
9457	e. Commercial lines nonresidential property insurance
9458	forms that cover the peril of wind only. The forms are
9459	applicable only to nonresidential properties located in areas
9460	eligible for coverage under the high-risk account referred to in
9461	sub-subparagraph (b)2.a.
9462	2.a. Must provide that the corporation adopt a program in
9463	which the corporation and authorized insurers enter into quota
9464	share primary insurance agreements for hurricane coverage, as
9465	defined in s. 627.4025(2)(a), for eligible risks, and adopt
9466	property insurance forms for eligible risks which cover the
9467	peril of wind only. As used in this subsection, the term:
9468	(I) "Quota share primary insurance" means an arrangement
9469	in which the primary hurricane coverage of an eligible risk is
9470	provided in specified percentages by the corporation and an
9471	authorized insurer. The corporation and authorized insurer are
9472	each solely responsible for a specified percentage of hurricane
9473	coverage of an eligible risk as set forth in a quota share
9474	primary insurance agreement between the corporation and an
9475	authorized insurer and the insurance contract. The
9476	responsibility of the corporation or authorized insurer to pay
9477	its specified percentage of hurricane losses of an eligible
9478	risk, as set forth in the quota share primary insurance
9479	agreement, may not be altered by the inability of the other
9480	party to the agreement to pay its specified percentage of
9481	hurricane losses. Eligible risks that are provided hurricane
9482	coverage through a quota share primary insurance arrangement
9483	must be provided policy forms that set forth the obligations of
9484	the corporation and authorized insurer under the arrangement,
9485	clearly specify the percentages of quota share primary insurance
9486	provided by the corporation and authorized insurer, and
9487	conspicuously and clearly state that neither the authorized
9488	insurer nor the corporation may be held responsible beyond its
9489	specified percentage of coverage of hurricane losses.
9490	(II) "Eligible risks" means personal lines residential and
9491	commercial lines residential risks that meet the underwriting
9492	criteria of the corporation and are located in areas that were
9493	eligible for coverage by the Florida Windstorm Underwriting
9494	Association on January 1, 2002.
9495	b. The corporation may enter into quota share primary
9496	insurance agreements with authorized insurers at corporation
9497	coverage levels of 90 percent and 50 percent.
9498	c. If the corporation determines that additional coverage
9499	levels are necessary to maximize participation in quota share
9500	primary insurance agreements by authorized insurers, the
9501	corporation may establish additional coverage levels. However,
9502	the corporation's quota share primary insurance coverage level
9503	may not exceed 90 percent.
9504	d. Any quota share primary insurance agreement entered
9505	into between an authorized insurer and the corporation must
9506	provide for a uniform specified percentage of coverage of
9507	hurricane losses, by county or territory as set forth by the
9508	corporation board, for all eligible risks of the authorized
9509	insurer covered under the quota share primary insurance
9510	agreement.
9511	e. Any quota share primary insurance agreement entered
9512	into between an authorized insurer and the corporation is
9513	subject to review and approval by the officedepartment.
9514	However, such agreement shall be authorized only as to insurance
9515	contracts entered into between an authorized insurer and an
9516	insured who is already insured by the corporation for wind
9517	coverage.
9518	f. For all eligible risks covered under quota share
9519	primary insurance agreements, the exposure and coverage levels
9520	for both the corporation and authorized insurers shall be
9521	reported by the corporation to the Florida Hurricane Catastrophe
9522	Fund. For all policies of eligible risks covered under quota
9523	share primary insurance agreements, the corporation and the
9524	authorized insurer shall maintain complete and accurate records
9525	for the purpose of exposure and loss reimbursement audits as
9526	required by Florida Hurricane Catastrophe Fund rules. The
9527	corporation and the authorized insurer shall each maintain
9528	duplicate copies of policy declaration pages and supporting
9529	claims documents.
9530	g. The corporation board shall establish in its plan of
9531	operation standards for quota share agreements which ensure that
9532	there is no discriminatory application among insurers as to the
9533	terms of quota share agreements, pricing of quota share
9534	agreements, incentive provisions if any, and consideration paid
9535	for servicing policies or adjusting claims.
9536	h. The quota share primary insurance agreement between the
9537	corporation and an authorized insurer must set forth the
9538	specific terms under which coverage is provided, including, but
9539	not limited to, the sale and servicing of policies issued under
9540	the agreement by the insurance agent of the authorized insurer
9541	producing the business, the reporting of information concerning
9542	eligible risks, the payment of premium to the corporation, and
9543	arrangements for the adjustment and payment of hurricane claims
9544	incurred on eligible risks by the claims adjuster and personnel
9545	of the authorized insurer. Entering into a quota sharing
9546	insurance agreement between the corporation and an authorized
9547	insurer shall be voluntary and at the discretion of the
9548	authorized insurer.
9549	3. May provide that the corporation may employ or
9550	otherwise contract with individuals or other entities to provide
9551	administrative or professional services that may be appropriate
9552	to effectuate the plan. The corporation shall have the power to
9553	borrow funds, by issuing bonds or by incurring other
9554	indebtedness, and shall have other powers reasonably necessary
9555	to effectuate the requirements of this subsection. The
9556	corporation may, but is not required to, seek judicial
9557	validation of its bonds or other indebtedness under chapter 75.
9558	The corporation may issue bonds or incur other indebtedness, or
9559	have bonds issued on its behalf by a unit of local government
9560	pursuant to subparagraph(g)2., in the absence of a hurricane or
9561	other weather-related event, upon a determination by the
9562	corporation, subject to approval by the officedepartment, that
9563	such action would enable it to efficiently meet the financial
9564	obligations of the corporation and that such financings are
9565	reasonably necessary to effectuate the requirements of this
9566	subsection. The corporation is authorized to take all actions
9567	needed to facilitate tax-free status for any such bonds or
9568	indebtedness, including formation of trusts or other affiliated
9569	entities. The corporation shall have the authority to pledge
9570	assessments, projected recoveries from the Florida Hurricane
9571	Catastrophe Fund, other reinsurance recoverables, market
9572	equalization and other surcharges, and other funds available to
9573	the corporation as security for bonds or other indebtedness. In
9574	recognition of s. 10, Art. I of the State Constitution,
9575	prohibiting the impairment of obligations of contracts, it is
9576	the intent of the Legislature that no action be taken whose
9577	purpose is to impair any bond indenture or financing agreement
9578	or any revenue source committed by contract to such bond or
9579	other indebtedness.
9580	4.a.Must require that the corporation operate subject to
9581	the supervision and approval of a board of governors consisting
9582	of 7 individuals who are residents of this state, from different
9583	geographical areas of this state, appointed by the Chief
9584	Financial OfficerTreasurer. The Chief Financial Officer
9585	Treasurershall designate one of the appointees as chair. All
9586	board members serve at the pleasure of the Chief Financial
9587	OfficerTreasurer. All board members, including the chair, must
9588	be appointed to serve for 3-year terms beginning annually on a
9589	date designated by the plan. Any board vacancy shall be filled
9590	for the unexpired term by the Chief Financial OfficerTreasurer.
9591	The Chief Financial OfficerTreasurershall appoint a technical
9592	advisory group to provide information and advice to the board of
9593	governors in connection with the board's duties under this
9594	subsection. The executive director and senior managers of the
9595	corporation shall be engaged by the Chief Financial Officer
9596	Treasurer and serve at the pleasure of the Chief Financial
9597	OfficerTreasurer. The executive director is responsible for
9598	employing other staff as the corporation may require, subject to
9599	review and concurrence by the Office of the Chief Financial
9600	OfficerTreasurer.
9601	b. To ensure the effective and efficient implementation of
9602	this subsection, the Treasurer shall appoint the board of
9603	governors by July 1, 2002. The board of governors shall work in
9604	conjunction with the Residential Property Insurance Market
9605	Coordinating Council to address appropriate organizational,
9606	operational, and financial matters relating to the corporation.
9607	In addition, after consultation with the Residential Property
9608	Insurance Market Coordinating Council, the bond trustees and
9609	rating agencies, the Treasurer may postpone for a period not to
9610	exceed 180 days after the effective date, the implementation of
9611	the corporation or the implementation of one or more of the
9612	provisions relating to transfer of Florida Windstorm
9613	Underwriting Association policies, obligations, rights, assets,
9614	and liabilities into the high-risk accounts and such other
9615	provisions that may be affected thereby if the Treasurer
9616	determines that postponement is necessary:
9617	(I) Due to emergency conditions;
9618	(II) To ensure the effective and efficient implementation
9619	of the corporation's operations; or
9620	(III) To maintain existing financing arrangements without
9621	a material adverse effect on the creditors of the Residential
9622	Property and Casualty Joint Underwriting Association or the
9623	Florida Windstorm Underwriting Association.
9624	5. Must provide a procedure for determining the
9625	eligibility of a risk for coverage, as follows:
9626	a. Subject to the provisions of s. 627.3517, with respect
9627	to personal lines residential risks, if the risk is offered
9628	coverage from an authorized insurer at the insurer's approved
9629	rate under either a standard policy including wind coverage or,
9630	if consistent with the insurer's underwriting rules as filed
9631	with the officedepartment, a basic policy including wind
9632	coverage, the risk is not eligible for any policy issued by the
9633	corporationassociation. If the risk is not able to obtain any
9634	such offer, the risk is eligible for either a standard policy
9635	including wind coverage or a basic policy including wind
9636	coverage issued by the corporationassociation; however, if the
9637	risk could not be insured under a standard policy including wind
9638	coverage regardless of market conditions, the risk shall be
9639	eligible for a basic policy including wind coverage unless
9640	rejected under subparagraph 8. The corporationassociationshall
9641	determine the type of policy to be provided on the basis of
9642	objective standards specified in the underwriting manual and
9643	based on generally accepted underwriting practices.
9644	(I) If the risk accepts an offer of coverage through the
9645	market assistance plan or an offer of coverage through a
9646	mechanism established by the corporationassociationbefore a
9647	policy is issued to the risk by the corporationassociationor
9648	during the first 30 days of coverage by the corporation
9649	association, and the producing agent who submitted the
9650	application to the plan or to the corporationassociationis not
9651	currently appointed by the insurer, the insurer shall:
9652	(A) Pay to the producing agent of record of the policy,
9653	for the first year, an amount that is the greater of the
9654	insurer's usual and customary commission for the type of policy
9655	written or a fee equal to the usual and customary commission of
9656	the corporationassociation; or
9657	(B) Offer to allow the producing agent of record of the
9658	policy to continue servicing the policy for a period of not less
9659	than 1 year and offer to pay the agent the greater of the
9660	insurer's or the corporation'sassociation'susual and customary
9661	commission for the type of policy written.
9662
9663	If the producing agent is unwilling or unable to accept
9664	appointment, the new insurer shall pay the agent in accordance
9665	with sub-sub-sub-subparagraph (A).
9666	(II) When the corporationassociationenters into a
9667	contractual agreement for a take-out plan, the producing agent
9668	of record of the corporationassociationpolicy is entitled to
9669	retain any unearned commission on the policy, and the insurer
9670	shall:
9671	(A) Pay to the producing agent of record of the
9672	corporationassociationpolicy, for the first year, an amount
9673	that is the greater of the insurer's usual and customary
9674	commission for the type of policy written or a fee equal to the
9675	usual and customary commission of the corporationassociation;
9676	or
9677	(B) Offer to allow the producing agent of record of the
9678	corporationassociationpolicy to continue servicing the policy
9679	for a period of not less than 1 year and offer to pay the agent
9680	the greater of the insurer's or the corporation'sassociation's
9681	usual and customary commission for the type of policy written.
9682
9683	If the producing agent is unwilling or unable to accept
9684	appointment, the new insurer shall pay the agent in accordance
9685	with sub-sub-sub-subparagraph (A).
9686	b. With respect to commercial lines residential risks, if
9687	the risk is offered coverage under a policy including wind
9688	coverage from an authorized insurer at its approved rate, the
9689	risk is not eligible for any policy issued by the corporation
9690	association. If the risk is not able to obtain any such offer,
9691	the risk is eligible for a policy including wind coverage issued
9692	by the corporationassociation.
9693	(I) If the risk accepts an offer of coverage through the
9694	market assistance plan or an offer of coverage through a
9695	mechanism established by the corporationassociationbefore a
9696	policy is issued to the risk by the corporationassociationor
9697	during the first 30 days of coverage by the corporation
9698	association, and the producing agent who submitted the
9699	application to the plan or the corporationassociationis not
9700	currently appointed by the insurer, the insurer shall:
9701	(A) Pay to the producing agent of record of the policy,
9702	for the first year, an amount that is the greater of the
9703	insurer's usual and customary commission for the type of policy
9704	written or a fee equal to the usual and customary commission of
9705	the corporationassociation; or
9706	(B) Offer to allow the producing agent of record of the
9707	policy to continue servicing the policy for a period of not less
9708	than 1 year and offer to pay the agent the greater of the
9709	insurer's or the corporation'sassociation'susual and customary
9710	commission for the type of policy written.
9711
9712	If the producing agent is unwilling or unable to accept
9713	appointment, the new insurer shall pay the agent in accordance
9714	with sub-sub-sub-subparagraph (A).
9715	(II) When the corporationassociationenters into a
9716	contractual agreement for a take-out plan, the producing agent
9717	of record of the corporationassociationpolicy is entitled to
9718	retain any unearned commission on the policy, and the insurer
9719	shall:
9720	(A) Pay to the producing agent of record of the
9721	corporationassociationpolicy, for the first year, an amount
9722	that is the greater of the insurer's usual and customary
9723	commission for the type of policy written or a fee equal to the
9724	usual and customary commission of the corporationassociation;
9725	or
9726	(B) Offer to allow the producing agent of record of the
9727	corporationassociationpolicy to continue servicing the policy
9728	for a period of not less than 1 year and offer to pay the agent
9729	the greater of the insurer's or the corporation'sassociation's
9730	usual and customary commission for the type of policy written.
9731
9732	If the producing agent is unwilling or unable to accept
9733	appointment, the new insurer shall pay the agent in accordance
9734	with sub-sub-sub-subparagraph (A).
9735	c. This subparagraph does not require the association to
9736	provide wind coverage or hurricane coverage in any area in which
9737	such coverage is available through the Florida Windstorm
9738	Underwriting Association.
9739	6. Must include rules for classifications of risks and
9740	rates therefor.
9741	7. Must provide that if premium and investment income for
9742	an account attributable to a particular calendar year are in
9743	excess of projected losses and expenses for the account
9744	attributable to that year, such excess shall be held in surplus
9745	in the account. Such surplus shall be available to defray
9746	deficits in that account as to future years and shall be used
9747	for that purpose prior to assessing assessable insurers and
9748	assessable insureds as to any calendar year.
9749	8. Must provide objective criteria and procedures to be
9750	uniformly applied for all applicants in determining whether an
9751	individual risk is so hazardous as to be uninsurable. In making
9752	this determination and in establishing the criteria and
9753	procedures, the following shall be considered:
9754	a. Whether the likelihood of a loss for the individual
9755	risk is substantially higher than for other risks of the same
9756	class; and
9757	b. Whether the uncertainty associated with the individual
9758	risk is such that an appropriate premium cannot be determined.
9759
9760	The acceptance or rejection of a risk by the corporation shall
9761	be construed as the private placement of insurance, and the
9762	provisions of chapter 120 shall not apply.
9763	9. Must provide that the corporation shall make its best
9764	efforts to procure catastrophe reinsurance at reasonable rates,
9765	as determined by the board of governors.
9766	10. Must provide that in the event of regular deficit
9767	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
9768	(b)3.b., in the personal lines account, the commercial lines
9769	residential account, or the high-risk account, the corporation
9770	shall levy upon corporation policyholders in its next rate
9771	filing, or by a separate rate filing solely for this purpose, a
9772	market equalization surcharge arising from a regular assessment
9773	in such account in a percentage equal to the total amount of
9774	such regular assessments divided by the aggregate statewide
9775	direct written premium for subject lines of business for the
9776	prior calendar year. Market equalization surcharges under this
9777	subparagraph are not considered premium and are not subject to
9778	commissions, fees, or premium taxes; however, failure to pay a
9779	market equalization surcharge shall be treated as failure to pay
9780	premium.
9781	11. The policies issued by the corporation must provide
9782	that, if the corporation or the market assistance plan obtains
9783	an offer from an authorized insurer to cover the risk at its
9784	approved rates, the risk is no longer eligible for renewal
9785	through the corporation.
9786	12. Corporation policies and applications must include a
9787	notice that the corporation policy could, under this section, be
9788	replaced with a policy issued by an authorized insurer that does
9789	not provide coverage identical to the coverage provided by the
9790	corporation. The notice shall also specify that acceptance of
9791	corporation coverage creates a conclusive presumption that the
9792	applicant or policyholder is aware of this potential.
9793	13. May establish, subject to approval by the office
9794	department, different eligibility requirements and operational
9795	procedures for any line or type of coverage for any specified
9796	county or area if the board determines that such changes to the
9797	eligibility requirements and operational procedures are
9798	justified due to the voluntary market being sufficiently stable
9799	and competitive in such area or for such line or type of
9800	coverage and that consumers who, in good faith, are unable to
9801	obtain insurance through the voluntary market through ordinary
9802	methods would continue to have access to coverage from the
9803	corporation. When coverage is sought in connection with a real
9804	property transfer, such requirements and procedures shall not
9805	provide for an effective date of coverage later than the date of
9806	the closing of the transfer as established by the transferor,
9807	the transferee, and, if applicable, the lender.
9808	14. Must provide that, with respect to the high-risk
9809	account, any assessable insurer with a surplus as to
9810	policyholders of $25 million or less writing 25 percent or more
9811	of its total countrywide property insurance premiums in this
9812	state may petition the officedepartment, within the first 90
9813	days of each calendar year, to qualify as a limited
9814	apportionment company. In no event shall a limited apportionment
9815	company be required to participate in the portion of any
9816	assessment, within the high-risk account, pursuant to sub-
9817	subparagraph (b)3.a. or sub-subparagraph (b)3.b. in the
9818	aggregate which exceeds $50 million after payment of available
9819	high-risk account funds in any calendar year. However, a limited
9820	apportionment company shall collect from its policyholders any
9821	emergency assessment imposed under sub-subparagraph (b)3.d. The
9822	plan shall provide that, if the officedepartmentdetermines
9823	that any regular assessment will result in an impairment of the
9824	surplus of a limited apportionment company, the office
9825	departmentmay direct that all or part of such assessment be
9826	deferred as provided in subparagraph (g)4. However, there shall
9827	be no limitation or deferment of an emergency assessment to be
9828	collected from policyholders under sub-subparagraph(b)3.d.
9829	15. Must provide that the corporation appoint as its
9830	licensed agents only those agents who also hold an appointment
9831	as defined in s. 626.104 with an insurer who at the time of the
9832	agent's initial appointment by the corporation is authorized to
9833	write and is actually writing personal lines residential
9834	property coverage, commercial residential property coverage, or
9835	commercial nonresidential property coverage within the state.
9836	(d)1. It is the intent of the Legislature that the rates
9837	for coverage provided by the corporation be actuarially sound
9838	and not competitive with approved rates charged in the admitted
9839	voluntary market, so that the corporation functions as a
9840	residual market mechanism to provide insurance only when the
9841	insurance cannot be procured in the voluntary market. Rates
9842	shall include an appropriate catastrophe loading factor that
9843	reflects the actual catastrophic exposure of the corporation.
9844	2. For each county, the average rates of the corporation
9845	for each line of business for personal lines residential
9846	policies excluding rates for wind-only policies shall be no
9847	lower than the average rates charged by the insurer that had the
9848	highest average rate in that county among the 20 insurers with
9849	the greatest total direct written premium in the state for that
9850	line of business in the preceding year, except that with respect
9851	to mobile home coverages, the average rates of the corporation
9852	shall be no lower than the average rates charged by the insurer
9853	that had the highest average rate in that county among the 5
9854	insurers with the greatest total written premium for mobile home
9855	owner's policies in the state in the preceding year.
9856	3. Rates for personal lines residential wind-only policies
9857	must be actuarially sound and not competitive with approved
9858	rates charged by authorized insurers. However, for personal
9859	lines residential wind-only policies issued or renewed between
9860	July 1, 2002, and June 30, 2003, the maximum premium increase
9861	must be no greater than 10 percent of the Florida Windstorm
9862	Underwriting Association premium for that policy in effect on
9863	June 30, 2002, as adjusted for coverage changes and seasonal
9864	occupancy surcharges. The personal lines residential wind-only
9865	rates for the corporation effective July 1, 2003, must be based
9866	on a rate filing by the corporation which establishes rates
9867	which are actuarially sound and not competitive with approved
9868	rates charged by authorized insurers. Corporation rate manuals
9869	shall include a rate surcharge for seasonal occupancy. To
9870	ensure that personal lines residential wind-only rates effective
9871	on or after July 1, 2003, are not competitive with approved
9872	rates charged by authorized insurers, the officedepartment, by
9873	March 1 of each year, shall provide the corporation, for each
9874	county in which there are geographical areas in which personal
9875	lines residential wind-only policies may be issued, the average
9876	rates charged by the insurer that had the highest average rate
9877	in that county for wind coverage in that insurer's rating
9878	territories which most closely approximate the geographical area
9879	in that county in which personal lines residential wind-only
9880	policies may be written by the corporation. The average rates
9881	provided must be from an insurer among the 20 insurers with the
9882	greatest total direct written premium in the state for personal
9883	lines residential property insurance for the preceding year.
9884	With respect to mobile homes, the five insurers with the
9885	greatest total written premium for that line of business in the
9886	preceding year shall be used. The corporation shall certify to
9887	the officedepartmentthat its average personal lines
9888	residential wind-only rates are no lower in each county than the
9889	average rates provided by the officedepartment. The commission
9890	maydepartment is authorized toadopt rules to establish
9891	reporting requirements to obtain the necessary wind-only rate
9892	information from insurers to implement this provision.
9893	4. Rates for commercial lines coverage shall not be
9894	subject to the requirements of subparagraph 2., but shall be
9895	subject to all other requirements of this paragraph and s.
9896	627.062.
9897	5. Nothing in this paragraph shall require or allow the
9898	corporation to adopt a rate that is inadequate under s. 627.062.
9899	6. The corporation shall make a rate filing at least once
9900	a year, but no more often than quarterly.
9901	7. In addition to the rates otherwise determined pursuant
9902	to this paragraph, the corporation shall impose and collect an
9903	amount equal to the premium tax provided for in s. 624.509 to
9904	augment the financial resources of the corporation.
9905	(e) If coverage in an account is deactivated pursuant to
9906	paragraph (f), coverage through the corporation shall be
9907	reactivated by order of the officedepartmentonly under one of
9908	the following circumstances:
9909	1. If the market assistance plan receives a minimum of 100
9910	applications for coverage within a 3-month period, or 200
9911	applications for coverage within a 1-year period or less for
9912	residential coverage, unless the market assistance plan provides
9913	a quotation from admitted carriers at their filed rates for at
9914	least 90 percent of such applicants. Any market assistance plan
9915	application that is rejected because an individual risk is so
9916	hazardous as to be uninsurable using the criteria specified in
9917	subparagraph (c)8. shall not be included in the minimum
9918	percentage calculation provided herein. In the event that there
9919	is a legal or administrative challenge to a determination by the
9920	officedepartmentthat the conditions of this subparagraph have
9921	been met for eligibility for coverage in the corporation, any
9922	eligible risk may obtain coverage during the pendency of such
9923	challenge.
9924	2. In response to a state of emergency declared by the
9925	Governor under s. 252.36, the officedepartmentmay activate
9926	coverage by order for the period of the emergency upon a finding
9927	by the officedepartmentthat the emergency significantly
9928	affects the availability of residential property insurance.
9929	(f)1. The corporation shall file with the office
9930	departmentquarterly statements of financial condition, an
9931	annual statement of financial condition, and audited financial
9932	statements in the manner prescribed by law. In addition, the
9933	corporation shall report to the officedepartmentmonthly on the
9934	types, premium, exposure, and distribution by county of its
9935	policies in force, and shall submit other reports as the office
9936	departmentrequires to carry out its oversight of the
9937	corporation.
9938	2. The activities of the corporation shall be reviewed at
9939	least annually by the officedepartmentto determine whether
9940	coverage shall be deactivated in an account on the basis that
9941	the conditions giving rise to its activation no longer exist.
9942	(g)1. The corporation shall certify to the office
9943	departmentits needs for annual assessments as to a particular
9944	calendar year, and for any interim assessments that it deems to
9945	be necessary to sustain operations as to a particular year
9946	pending the receipt of annual assessments. Upon verification,
9947	the officedepartmentshall approve such certification, and the
9948	corporation shall levy such annual or interim assessments. Such
9949	assessments shall be prorated as provided in paragraph (b). The
9950	corporation shall take all reasonable and prudent steps
9951	necessary to collect the amount of assessment due from each
9952	assessable insurer, including, if prudent, filing suit to
9953	collect such assessment. If the corporation is unable to collect
9954	an assessment from any assessable insurer, the uncollected
9955	assessments shall be levied as an additional assessment against
9956	the assessable insurers and any assessable insurer required to
9957	pay an additional assessment as a result of such failure to pay
9958	shall have a cause of action against such nonpaying assessable
9959	insurer. Assessments shall be included as an appropriate factor
9960	in the making of rates. The failure of a surplus lines agent to
9961	collect and remit any regular or emergency assessment levied by
9962	the corporation is considered to be a violation of s. 626.936
9963	and subjects the surplus lines agent to the penalties provided
9964	in that section.
9965	2. The governing body of any unit of local government, any
9966	residents of which are insured by the corporation, may issue
9967	bonds as defined in s. 125.013 or s. 166.101 from time to time
9968	to fund an assistance program, in conjunction with the
9969	corporation, for the purpose of defraying deficits of the
9970	corporation. In order to avoid needless and indiscriminate
9971	proliferation, duplication, and fragmentation of such assistance
9972	programs, any unit of local government, any residents of which
9973	are insured by the corporation, may provide for the payment of
9974	losses, regardless of whether or not the losses occurred within
9975	or outside of the territorial jurisdiction of the local
9976	government. Revenue bonds under this subparagraph may not be
9977	issued until validated pursuant to chapter 75, unless a state of
9978	emergency is declared by executive order or proclamation of the
9979	Governor pursuant to s. 252.36 making such findings as are
9980	necessary to determine that it is in the best interests of, and
9981	necessary for, the protection of the public health, safety, and
9982	general welfare of residents of this state and declaring it an
9983	essential public purpose to permit certain municipalities or
9984	counties to issue such bonds as will permit relief to claimants
9985	and policyholders of the corporation. Any such unit of local
9986	government may enter into such contracts with the corporation
9987	and with any other entity created pursuant to this subsection as
9988	are necessary to carry out this paragraph. Any bonds issued
9989	under this subparagraph shall be payable from and secured by
9990	moneys received by the corporation from emergency assessments
9991	under sub-subparagraph (b)3.d., and assigned and pledged to or
9992	on behalf of the unit of local government for the benefit of the
9993	holders of such bonds. The funds, credit, property, and taxing
9994	power of the state or of the unit of local government shall not
9995	be pledged for the payment of such bonds. If any of the bonds
9996	remain unsold 60 days after issuance, the officedepartment
9997	shall require all insurers subject to assessment to purchase the
9998	bonds, which shall be treated as admitted assets; each insurer
9999	shall be required to purchase that percentage of the unsold
10000	portion of the bond issue that equals the insurer's relative
10001	share of assessment liability under this subsection. An insurer
10002	shall not be required to purchase the bonds to the extent that
10003	the officedepartmentdetermines that the purchase would
10004	endanger or impair the solvency of the insurer.
10005	3.a. The corporation shall adopt one or more programs
10006	subject to approval by the officedepartmentfor the reduction
10007	of both new and renewal writings in the corporation. The
10008	corporation may consider any prudent and not unfairly
10009	discriminatory approach to reducing corporation writings, and
10010	may adopt a credit against assessment liability or other
10011	liability that provides an incentive for insurers to take risks
10012	out of the corporation and to keep risks out of the corporation
10013	by maintaining or increasing voluntary writings in counties or
10014	areas in which corporation risks are highly concentrated and a
10015	program to provide a formula under which an insurer voluntarily
10016	taking risks out of the corporation by maintaining or increasing
10017	voluntary writings will be relieved wholly or partially from
10018	assessments under sub-subparagraphs (b)3.a. and b. When the
10019	corporation enters into a contractual agreement for a take-out
10020	plan, the producing agent of record of the corporation policy is
10021	entitled to retain any unearned commission on such policy, and
10022	the insurer shall either:
10023	(I) Pay to the producing agent of record of the policy,
10024	for the first year, an amount which is the greater of the
10025	insurer's usual and customary commission for the type of policy
10026	written or a policy fee equal to the usual and customary
10027	commission of the corporation; or
10028	(II) Offer to allow the producing agent of record of the
10029	policy to continue servicing the policy for a period of not less
10030	than 1 year and offer to pay the agent the insurer's usual and
10031	customary commission for the type of policy written. If the
10032	producing agent is unwilling or unable to accept appointment by
10033	the new insurer, the new insurer shall pay the agent in
10034	accordance with sub-sub-subparagraph (I).
10035	b. Any credit or exemption from regular assessments
10036	adopted under this subparagraph shall last no longer than the 3
10037	years following the cancellation or expiration of the policy by
10038	the corporation. With the approval of the officedepartment, the
10039	board may extend such credits for an additional year if the
10040	insurer guarantees an additional year of renewability for all
10041	policies removed from the corporation, or for 2 additional years
10042	if the insurer guarantees 2 additional years of renewability for
10043	all policies so removed.
10044	c. There shall be no credit, limitation, exemption, or
10045	deferment from emergency assessments to be collected from
10046	policyholders pursuant to sub-subparagraph (b)3.d.
10047	4. The plan shall provide for the deferment, in whole or
10048	in part, of the assessment of an assessable insurer, other than
10049	an emergency assessment collected from policyholders pursuant to
10050	sub-subparagraph (b)3.d., if the officedepartmentfinds that
10051	payment of the assessment would endanger or impair the solvency
10052	of the insurer. In the event an assessment against an assessable
10053	insurer is deferred in whole or in part, the amount by which
10054	such assessment is deferred may be assessed against the other
10055	assessable insurers in a manner consistent with the basis for
10056	assessments set forth in paragraph (b).
10057	(h) Nothing in this subsection shall be construed to
10058	preclude the issuance of residential property insurance coverage
10059	pursuant to part VIII of chapter 626.
10060	(i) There shall be no liability on the part of, and no
10061	cause of action of any nature shall arise against, any
10062	assessable insurer or its agents or employees, the corporation
10063	or its agents or employees, members of the board of governors or
10064	their respective designees at a board meeting, corporation
10065	committee members, or the officedepartmentor its
10066	representatives, for any action taken by them in the performance
10067	of their duties or responsibilities under this subsection. Such
10068	immunity does not apply to:
10069	1. Any of the foregoing persons or entities for any
10070	willful tort;
10071	2. The corporation or its producing agents for breach of
10072	any contract or agreement pertaining to insurance coverage;
10073	3. The corporation with respect to issuance or payment of
10074	debt; or
10075	4. Any assessable insurer with respect to any action to
10076	enforce an assessable insurer's obligations to the corporation
10077	under this subsection.
10078	(j) For the purposes of s. 199.183(1), the corporation
10079	shall be considered a political subdivision of the state and
10080	shall be exempt from the corporate income tax. The premiums,
10081	assessments, investment income, and other revenue of the
10082	corporation are funds received for providing property insurance
10083	coverage as required by this subsection, paying claims for
10084	Florida citizens insured by the corporation, securing and
10085	repaying debt obligations issued by the corporation, and
10086	conducting all other activities of the corporation, and shall
10087	not be considered taxes, fees, licenses, or charges for services
10088	imposed by the Legislature on individuals, businesses, or
10089	agencies outside state government. Bonds and other debt
10090	obligations issued by or on behalf of the corporation are not to
10091	be considered "state bonds" within the meaning of s.
10092	215.58(8)(10). The corporation is not subject to the procurement
10093	provisions of chapter 287, and policies and decisions of the
10094	corporation relating to incurring debt, levying of assessments
10095	and the sale, issuance, continuation, terms and claims under
10096	corporation policies, and all services relating thereto, are not
10097	subject to the provisions of chapter 120. The corporation is not
10098	required to obtain or to hold a certificate of authority issued
10099	by the officedepartment, nor is it required to participate as a
10100	member insurer of the Florida Insurance Guaranty Association.
10101	However, the corporation is required to pay, in the same manner
10102	as an authorized insurer, assessments pledged by the Florida
10103	Insurance Guaranty Association to secure bonds issued or other
10104	indebtedness incurred to pay covered claims arising from insurer
10105	insolvencies caused by, or proximately related to, hurricane
10106	losses. It is the intent of the Legislature that the tax
10107	exemptions provided in this paragraph will augment the financial
10108	resources of the corporation to better enable the corporation to
10109	fulfill its public purposes. Any bonds issued by the
10110	corporation, their transfer, and the income therefrom, including
10111	any profit made on the sale thereof, shall at all times be free
10112	from taxation of every kind by the state and any political
10113	subdivision or local unit or other instrumentality thereof;
10114	however, this exemption does not apply to any tax imposed by
10115	chapter 220chapter 200on interest, income, or profits on debt
10116	obligations owned by corporations other than the corporation.
10117	(k) Upon a determination by the officedepartmentthat the
10118	conditions giving rise to the establishment and activation of
10119	the corporation no longer exist, the corporation is dissolved.
10120	Upon dissolution, the assets of the corporationassociation
10121	shall be applied first to pay all debts, liabilities, and
10122	obligations of the corporation, including the establishment of
10123	reasonable reserves for any contingent liabilities or
10124	obligations, and all remaining assets of the corporation shall
10125	become property of the state and be deposited in the Florida
10126	Hurricane Catastrophe Fund. However, no dissolution shall take
10127	effect as long as the corporation has bonds or other financial
10128	obligations outstanding unless adequate provision has been made
10129	for the payment of the bonds or other financial obligations
10130	pursuant to the documents authorizing the issuance of the bonds
10131	or other financial obligations.
10132	(l)1. Effective July 1, 2002, policies of the Residential
10133	Property and Casualty Joint Underwriting Association shall
10134	become policies of the corporation. All obligations, rights,
10135	assets and liabilities of the Residential Property and Casualty
10136	Joint Underwriting Association, including bonds, note and debt
10137	obligations, and the financing documents pertaining to them
10138	become those of the corporation as of July 1, 2002. The
10139	corporation is not required to issue endorsements or
10140	certificates of assumption to insureds during the remaining term
10141	of in-force transferred policies.
10142	2. Effective July 1, 2002, policies of the Florida
10143	Windstorm Underwriting Association are transferred to the
10144	corporation and shall become policies of the corporation. All
10145	obligations, rights, assets, and liabilities of the Florida
10146	Windstorm Underwriting Association, including bonds, note, and
10147	debt obligations, and the financing documents pertaining to them
10148	are transferred to and assumed by the corporation on July 1,
10149	2002. The corporation is not required to issue endorsement or
10150	certificates of assumption to insureds during the remaining term
10151	of in-force transferred policies.
10152	3. The Florida Windstorm Underwriting Association and the
10153	Residential Property and Casualty Joint Underwriting Association
10154	shall take all actions as may be proper to further evidence the
10155	transfers and shall provide the documents and instruments of
10156	further assurance as may reasonably be requested by the
10157	corporation for that purpose. The corporation shall execute
10158	assumptions and instruments as the trustees or other parties to
10159	the financing documents of the Florida Windstorm Underwriting
10160	Association or the Residential Property and Casualty Joint
10161	Underwriting Association may reasonably request to further
10162	evidence the transfers and assumptions, which transfers and
10163	assumptions, however, are effective on the date provided under
10164	this paragraph whether or not, and regardless of the date on
10165	which, the assumptions or instruments are executed by the
10166	corporation. Subject to the relevant financing documents
10167	pertaining to their outstanding bonds, notes, indebtedness, or
10168	other financing obligations, the moneys, investments,
10169	receivables, choses in action, and other intangibles of the
10170	Florida Windstorm Underwriting Association shall be credited to
10171	the high-risk account of the corporation, and those of the
10172	personal lines residential coverage account and the commercial
10173	lines residential coverage account of the Residential Property
10174	and Casualty Joint Underwriting Association shall be credited to
10175	the personal lines account and the commercial lines account,
10176	respectively, of the corporation.
10177	4. Effective July 1, 2002, a new applicant for property
10178	insurance coverage who would otherwise have been eligible for
10179	coverage in the Florida Windstorm Underwriting Association is
10180	eligible for coverage from the corporation as provided in this
10181	subsection.
10182	5. The transfer of all policies, obligations, rights,
10183	assets, and liabilities from the Florida Windstorm Underwriting
10184	Association to the corporation and the renaming of the
10185	Residential Property and Casualty Joint Underwriting Association
10186	as the corporation shall in no way affect the coverage with
10187	respect to covered policies as defined in s. 215.555(2)(c)
10188	provided to these entities by the Florida Hurricane Catastrophe
10189	Fund. The coverage provided by the Florida Hurricane Catastrophe
10190	Fund to the Florida Windstorm Underwriting Association based on
10191	its exposures as of June 30, 2002, and each June 30 thereafter
10192	shall be redesignated as coverage for the high-risk account of
10193	the corporation. Notwithstanding any other provision of law, the
10194	coverage provided by the Florida Hurricane Catastrophe Fund to
10195	the Residential Property and Casualty Joint Underwriting
10196	Association based on its exposures as of June 30, 2002, and each
10197	June 30 thereafter shall be transferred to the personal lines
10198	account and the commercial lines account of the corporation.
10199	Notwithstanding any other provision of law, the high-risk
10200	account shall be treated, for all Florida Hurricane Catastrophe
10201	Fund purposes, as if it were a separate participating insurer
10202	with its own exposures, reimbursement premium, and loss
10203	reimbursement. Likewise, the personal lines and commercial lines
10204	accounts shall be viewed together, for all Florida Hurricane
10205	Catastrophe Fund purposes, as if the two accounts were one and
10206	represent a single, separate participating insurer with its own
10207	exposures, reimbursement premium, and loss reimbursement. The
10208	coverage provided by the Florida Hurricane Catastrophe Fund to
10209	the corporation shall constitute and operate as a full transfer
10210	of coverage from the Florida Windstorm Underwriting Association
10211	and Residential Property and Casualty Joint Underwriting to the
10212	corporation.
10213	(m) Notwithstanding any other provision of law:
10214	1. The pledge or sale of, the lien upon, and the security
10215	interest in any rights, revenues, or other assets of the
10216	corporation created or purported to be created pursuant to any
10217	financing documents to secure any bonds or other indebtedness of
10218	the corporation shall be and remain valid and enforceable,
10219	notwithstanding the commencement of and during the continuation
10220	of, and after, any rehabilitation, insolvency, liquidation,
10221	bankruptcy, receivership, conservatorship, reorganization, or
10222	similar proceeding against the corporation under the laws of
10223	this state.
10224	2. No such proceeding shall relieve the corporation of its
10225	obligation, or otherwise affect its ability to perform its
10226	obligation, to continue to collect, or levy and collect,
10227	assessments, market equalization or other surcharges under
10228	subparagraph (c)10., or any other rights, revenues, or other
10229	assets of the corporation pledged pursuant to any financing
10230	documents.
10231	3. Each such pledge or sale of, lien upon, and security
10232	interest in, including the priority of such pledge, lien, or
10233	security interest, any such assessments, market equalization or
10234	other surcharges, or other rights, revenues, or other assets
10235	which are collected, or levied and collected, after the
10236	commencement of and during the pendency of, or after, any such
10237	proceeding shall continue unaffected by such proceeding. As
10238	used in this subsection, the term "financing documents" means
10239	any agreement or agreements, instrument or instruments, or other
10240	document or documents now existing or hereafter created
10241	evidencing any bonds or other indebtedness of the corporation or
10242	pursuant to which any such bonds or other indebtedness has been
10243	or may be issued and pursuant to which any rights, revenues, or
10244	other assets of the corporation are pledged or sold to secure
10245	the repayment of such bonds or indebtedness, together with the
10246	payment of interest on such bonds or such indebtedness, or the
10247	payment of any other obligation or financial product, as defined
10248	in the plan of operation of the corporation related to such
10249	bonds or indebtedness.
10250	4. Any such pledge or sale of assessments, revenues,
10251	contract rights, or other rights or assets of the corporation
10252	shall constitute a lien and security interest, or sale, as the
10253	case may be, that is immediately effective and attaches to such
10254	assessments, revenues, or contract rights or other rights or
10255	assets, whether or not imposed or collected at the time the
10256	pledge or sale is made. Any such pledge or sale is effective,
10257	valid, binding, and enforceable against the corporation or other
10258	entity making such pledge or sale, and valid and binding against
10259	and superior to any competing claims or obligations owed to any
10260	other person or entity, including policyholders in this state,
10261	asserting rights in any such assessments, revenues, or contract
10262	rights or other rights or assets to the extent set forth in and
10263	in accordance with the terms of the pledge or sale contained in
10264	the applicable financing documents, whether or not any such
10265	person or entity has notice of such pledge or sale and without
10266	the need for any physical delivery, recordation, filing, or
10267	other action.
10268	(n)1. The following records of the corporation are
10269	confidential and exempt from the provisions of s. 119.07(1) and
10270	s. 24(a), Art. I of the State Constitution:
10271	a. Underwriting files, except that a policyholder or an
10272	applicant shall have access to his or her own underwriting
10273	files.
10274	b. Claims files, until termination of all litigation and
10275	settlement of all claims arising out of the same incident,
10276	although portions of the claims files may remain exempt, as
10277	otherwise provided by law. Confidential and exempt claims file
10278	records may be released to other governmental agencies upon
10279	written request and demonstration of need; such records held by
10280	the receiving agency remain confidential and exempt as provided
10281	for herein.
10282	c. Records obtained or generated by an internal auditor
10283	pursuant to a routine audit, until the audit is completed, or if
10284	the audit is conducted as part of an investigation, until the
10285	investigation is closed or ceases to be active. An
10286	investigation is considered "active" while the investigation is
10287	being conducted with a reasonable, good faith belief that it
10288	could lead to the filing of administrative, civil, or criminal
10289	proceedings.
10290	d. Matters reasonably encompassed in privileged attorney-
10291	client communications.
10292	e. Proprietary information licensed to the corporation
10293	under contract and the contract provides for the confidentiality
10294	of such proprietary information.
10295	f. All information relating to the medical condition or
10296	medical status of a corporation employee which is not relevant
10297	to the employee's capacity to perform his or her duties, except
10298	as otherwise provided in this paragraph. Information which is
10299	exempt shall include, but is not limited to, information
10300	relating to workers' compensation, insurance benefits, and
10301	retirement or disability benefits.
10302	g. Upon an employee's entrance into the employee
10303	assistance program, a program to assist any employee who has a
10304	behavioral or medical disorder, substance abuse problem, or
10305	emotional difficulty which affects the employee's job
10306	performance, all records relative to that participation shall be
10307	confidential and exempt from the provisions of s. 119.07(1) and
10308	s. 24(a), Art. I of the State Constitution, except as otherwise
10309	provided in s. 112.0455(11).
10310	h. Information relating to negotiations for financing,
10311	reinsurance, depopulation, or contractual services, until the
10312	conclusion of the negotiations.
10313	i. Minutes of closed meetings regarding underwriting
10314	files, and minutes of closed meetings regarding an open claims
10315	file until termination of all litigation and settlement of all
10316	claims with regard to that claim, except that information
10317	otherwise confidential or exempt by law will be redacted.
10318
10319	When an authorized insurer is considering underwriting a risk
10320	insured by the corporation, relevant underwriting files and
10321	confidential claims files may be released to the insurer
10322	provided the insurer agrees in writing, notarized and under
10323	oath, to maintain the confidentiality of such files. When a
10324	file is transferred to an insurer that file is no longer a
10325	public record because it is not held by an agency subject to the
10326	provisions of the public records law. Underwriting files and
10327	confidential claims files may also be released to staff of and
10328	the board of governors of the market assistance plan established
10329	pursuant to s. 627.3515, who must retain the confidentiality of
10330	such files, except such files may be released to authorized
10331	insurers that are considering assuming the risks to which the
10332	files apply, provided the insurer agrees in writing, notarized
10333	and under oath, to maintain the confidentiality of such files.
10334	Finally, the corporation or the board or staff of the market
10335	assistance plan may make the following information obtained from
10336	underwriting files and confidential claims files available to
10337	licensed general lines insurance agents: name, address, and
10338	telephone number of the residential property owner or insured;
10339	location of the risk; rating information; loss history; and
10340	policy type. The receiving licensed general lines insurance
10341	agent must retain the confidentiality of the information
10342	received.
10343	2. Portions of meetings of the corporation are exempt from
10344	the provisions of s. 286.011 and s. 24(b), Art. I of the State
10345	Constitution wherein confidential underwriting files or
10346	confidential open claims files are discussed. All portions of
10347	corporation meetings which are closed to the public shall be
10348	recorded by a court reporter. The court reporter shall record
10349	the times of commencement and termination of the meeting, all
10350	discussion and proceedings, the names of all persons present at
10351	any time, and the names of all persons speaking. No portion of
10352	any closed meeting shall be off the record. Subject to the
10353	provisions hereof and s. 119.07(2)(a), the court reporter's
10354	notes of any closed meeting shall be retained by the corporation
10355	for a minimum of 5 years. A copy of the transcript, less any
10356	exempt matters, of any closed meeting wherein claims are
10357	discussed shall become public as to individual claims after
10358	settlement of the claim.
10359	(o) It is the intent of the Legislature that the
10360	amendments to this subsection enacted in 2002 should, over time,
10361	reduce the probable maximum windstorm losses in the residual
10362	markets and should reduce the potential assessments to be levied
10363	on property insurers and policyholders statewide. In
10364	furtherance of this intent:
10365	1. The board shall, on or before February 1 of each year,
10366	provide a report to the President of the Senate and the Speaker
10367	of the House of Representatives showing the reduction or
10368	increase in the 100-year probable maximum loss attributable to
10369	wind-only coverages and the quota share program under this
10370	subsection combined, as compared to the benchmark 100-year
10371	probable maximum loss of the Florida Windstorm Underwriting
10372	Association. For purposes of this paragraph, the benchmark 100-
10373	year probable maximum loss of the Florida Windstorm Underwriting
10374	Association shall be the calculation dated February 2001 and
10375	based on November 30, 2000, exposures. In order to ensure
10376	comparability of data, the board shall use the same methods for
10377	calculating its probable maximum loss as were used to calculate
10378	the benchmark probable maximum loss.
10379	2. Beginning February 1, 2007, if the report under
10380	subparagraph 1. for any year indicates that the 100-year
10381	probable maximum loss attributable to wind-only coverages and
10382	the quota share program combined does not reflect a reduction of
10383	at least 25 percent from the benchmark, the board shall reduce
10384	the boundaries of the high-risk area eligible for wind-only
10385	coverages under this subsection in a manner calculated to reduce
10386	such probable maximum loss to an amount at least 25 percent
10387	below the benchmark.
10388	3. Beginning February 1, 2012, if the report under
10389	subparagraph 1. for any year indicates that the 100-year
10390	probable maximum loss attributable to wind-only coverages and
10391	the quota share program combined does not reflect a reduction of
10392	at least 50 percent from the benchmark, the boundaries of the
10393	high-risk area eligible for wind-only coverages under this
10394	subsection shall be reduced by the elimination of any area that
10395	is not seaward of a line 1,000 feet inland from the Intracoastal
10396	Waterway.
10397	(p) In enacting the provisions of this section, the
10398	Legislature recognizes that both the Florida Windstorm
10399	Underwriting Association and the Residential Property and
10400	Casualty Joint Underwriting Association have entered into
10401	financing arrangements that obligate each entity to service its
10402	debts and maintain the capacity to repay funds secured under
10403	these financing arrangements. It is the intent of the
10404	Legislature that nothing in this section be construed to
10405	compromise, diminish, or interfere with the rights of creditors
10406	under such financing arrangements. It is further the intent of
10407	the Legislature to preserve the obligations of the Florida
10408	Windstorm Underwriting Association and Residential Property and
10409	Casualty Joint Underwriting Association with regard to
10410	outstanding financing arrangements, with such obligations
10411	passing entirely and unchanged to the corporation and,
10412	specifically, to the applicable account of the corporation. So
10413	long as any bonds, notes, indebtedness, or other financing
10414	obligations of the Florida Windstorm Underwriting Association or
10415	the Residential Property and Casualty Joint Underwriting
10416	Association are outstanding, under the terms of the financing
10417	documents pertaining to them, the governing board of the
10418	corporation shall have and shall exercise the authority to levy,
10419	charge, collect, and receive all premiums, assessments,
10420	surcharges, charges, revenues, and receipts that the
10421	associations had authority to levy, charge, collect, or receive
10422	under the provisions of subsection (2) and this subsection,
10423	respectively, as they existed on January 1, 2002, to provide
10424	moneys, without exercise of the authority provided by this
10425	subsection, in at least the amounts, and by the times, as would
10426	be provided under those former provisions of subsection (2) or
10427	this subsection, respectively, so that the value, amount, and
10428	collectability of any assets, revenues, or revenue source
10429	pledged or committed to, or any lien thereon securing such
10430	outstanding bonds, notes, indebtedness, or other financing
10431	obligations will not be diminished, impaired, or adversely
10432	affected by the amendments made by this act and to permit
10433	compliance with all provisions of financing documents pertaining
10434	to such bonds, notes, indebtedness, or other financing
10435	obligations, or the security or credit enhancement for them, and
10436	any reference in this subsection to bonds, notes, indebtedness,
10437	financing obligations, or similar obligations, of the
10438	corporation shall include like instruments or contracts of the
10439	Florida Windstorm Underwriting Association and the Residential
10440	Property and Casualty Joint Underwriting Association to the
10441	extent not inconsistent with the provisions of the financing
10442	documents pertaining to them.
10443	(q) Effective January 7, 2003, any reference in this
10444	subsection to the Treasurer shall be deemed to be a reference to
10445	the Chief Financial Officer and any reference to the Department
10446	of Insurance shall be deemed to be a reference to the Department
10447	of Insurance and Financial Services or other successor to the
10448	Department of Insurance specified by law.
10449	(q)(r)The corporation shall not require the securing of
10450	flood insurance as a condition of coverage if the insured or
10451	applicant executes a form approved by the officedepartment
10452	affirming that flood insurance is not provided by the
10453	corporation and that if flood insurance is not secured by the
10454	applicant or insured in addition to coverage by the corporation,
10455	the risk will not be covered for flood damage. A corporation
10456	policyholder electing not to secure flood insurance and
10457	executing a form as provided herein making a claim for water
10458	damage against the corporation shall have the burden of proving
10459	the damage was not caused by flooding. Notwithstanding other
10460	provisions of this subsection, the corporation may deny coverage
10461	to an applicant or insured who refuses to execute the form
10462	described herein.
10463	Section 201. Section 627.3511, Florida Statutes, is
10464	amended to read:
10465	627.3511 Depopulation of Citizens Property Insurance
10466	CorporationResidential Property and Casualty Joint Underwriting
10467	Association.--
10468	(1) LEGISLATIVE INTENT.--The Legislature finds that the
10469	public policy of this state requires the maintenance of a
10470	residual market for residential property insurance. It is the
10471	intent of the Legislature to provide a variety of financial
10472	incentives to encourage the replacement of the highest possible
10473	number of Citizens Property Insurance CorporationResidential
10474	Property and Casualty Joint Underwriting Associationpolicies
10475	with policies written by admitted insurers at approved rates.
10476	(2) TAKE-OUT BONUS.--The Citizens Property Insurance
10477	CorporationResidential Property and Casualty Joint Underwriting
10478	Associationshall pay the sum of up to $100 to an insurer for
10479	each risk that the insurer removes from the corporation
10480	association, either by issuance of a policy upon expiration or
10481	cancellation of the corporationassociationpolicy or by
10482	assumption of the corporation'sassociation'sobligations with
10483	respect to an in-force policy. Such payment is subject to
10484	approval of the corporationassociationboard. In order to
10485	qualify for the bonus under this subsection, the take-out plan
10486	must include a minimum of 25,000 policies. Within 30 days after
10487	approval by the board, the officedepartmentmay reject the
10488	insurer's take-out plan and disqualify the insurer from the
10489	bonus, based on the following criteria:
10490	(a) The capacity of the insurer to absorb the policies
10491	proposed to be taken out of the corporationassociationand the
10492	concentration of risks of those policies.
10493	(b) Whether the geographic and risk characteristics of
10494	policies in the proposed take-out plan serve to reduce the
10495	exposure of the corporationassociationsufficiently to justify
10496	the bonus.
10497	(c) Whether coverage for risks to be taken out otherwise
10498	exists in the admitted voluntary market.
10499	(d) The degree to which the take-out bonus is promoting
10500	new capital being allocated by the insurer to Florida
10501	residential property coverage.
10502	(3) EXEMPTION FROM DEFICIT ASSESSMENTS.--
10503	(a) The calculation of an insurer's assessment liability
10504	under s. 627.351(6)(b)3.a. or b. shall, for an insurer that in
10505	any calendar year removes 50,000 or more risks from the Citizens
10506	Property Insurance CorporationResidential Property and Casualty
10507	Joint Underwriting Association, either by issuance of a policy
10508	upon expiration or cancellation of the corporationassociation
10509	policy or by assumption of the corporation'sassociation's
10510	obligations with respect to in-force policies, exclude such
10511	removed policies for the succeeding 3 years, as follows:
10512	1. In the first year following removal of the risks, the
10513	risks are excluded from the calculation to the extent of 100
10514	percent.
10515	2. In the second year following removal of the risks, the
10516	risks are excluded from the calculation to the extent of 75
10517	percent.
10518	3. In the third year following removal of the risks, the
10519	risks are excluded from the calculation to the extent of 50
10520	percent.
10521
10522	If the removal of risks is accomplished through assumption of
10523	obligations with respect to in-force policies, the corporation
10524	associationshall pay to the assuming insurer all unearned
10525	premium with respect to such policies less any policy
10526	acquisition costs agreed to by the corporationassociationand
10527	assuming insurer. The term "policy acquisition costs" is defined
10528	as costs of issuance of the policy by the corporation
10529	associationwhich includes agent commissions, servicing company
10530	fees, and premium tax. This paragraph does not apply to an
10531	insurer that, at any time within 5 years before removing the
10532	risks, had a market share in excess of 0.1 percent of the
10533	statewide aggregate gross direct written premium for any line of
10534	property insurance, or to an affiliate of such an insurer. This
10535	paragraph does not apply unless either at least 40 percent of
10536	the risks removed from the corporationassociationare located
10537	in Dade, Broward, and Palm Beach Counties, or at least 30
10538	percent of the risks removed from the corporationassociation
10539	are located in such counties and an additional 50 percent of the
10540	risks removed from the corporationassociationare located in
10541	other coastal counties.
10542	(b) An insurer that first wrote personal lines residential
10543	property coverage in this state on or after July 1, 1994, is
10544	exempt from regular deficit assessments imposed pursuant to s.
10545	627.351(6)(b)3.a. and b., but not emergency assessments
10546	collected from policyholders pursuant to s. 627.351(6)(b)3.d.,
10547	of the Citizens Property Insurance CorporationResidential
10548	Property and Casualty Joint Underwriting Associationuntil the
10549	earlier of the following:
10550	1. The end of the calendar year in which it first wrote
10551	0.5 percent or more of the statewide aggregate direct written
10552	premium for any line of residential property coverage; or
10553	2. December 31, 1997, or December 31 of the third year in
10554	which it wrote such coverage in this state, whichever is later.
10555	(c) Other than an insurer that is exempt under paragraph
10556	(b), an insurer that in any calendar year increases its total
10557	structure exposure subject to wind coverage by 25 percent or
10558	more over its exposure for the preceding calendar year is, with
10559	respect to that year, exempt from deficit assessments imposed
10560	pursuant to s. 627.351(6)(b)3.a. and b., but not emergency
10561	assessments collected from policyholders pursuant to s.
10562	627.351(6)(b)3.d., of the Citizens Property Insurance
10563	CorporationResidential Property and Casualty Joint Underwriting
10564	Associationattributable to such increase in exposure.
10565	(d) Any exemption or credit from regular assessments
10566	authorized by this section shall last no longer than 3 years
10567	following the cancellation or expiration of the policy by the
10568	corporationassociation. With the approval of the office
10569	department, the board may extend such credits for an additional
10570	year if the insurer guarantees an additional year of
10571	renewability for all policies removed from the corporation
10572	association, or for 2 additional years if the insurer guarantees
10573	2 additional years of renewability for all policies so removed.
10574	(4) AGENT BONUS.--When the corporationResidential
10575	Property and Casualty Joint Underwriting Associationenters into
10576	a contractual agreement for a take-out plan that provides a
10577	bonus to the insurer, the producing agent of record of the
10578	corporationassociationpolicy is entitled to retain any
10579	unearned commission on such policy, and the insurer shall
10580	either:
10581	(a) Pay to the producing agent of record of the
10582	association policy, for the first year, an amount that is the
10583	greater of the insurer's usual and customary commission for the
10584	type of policy written or a fee equal to the usual and customary
10585	commission of the corporationassociation; or
10586	(b) Offer to allow the producing agent of record of the
10587	corporationassociationpolicy to continue servicing the policy
10588	for a period of not less than 1 year and offer to pay the agent
10589	the greater of the insurer's or the corporation'sassociation's
10590	usual and customary commission for the type of policy written.
10591
10592	If the producing agent is unwilling or unable to accept
10593	appointment, the new insurer shall pay the agent in accordance
10594	with paragraph (a). The requirement of this subsection that the
10595	producing agent of record is entitled to retain the unearned
10596	commission on an association policy does not apply to a policy
10597	for which coverage has been provided in the association for 30
10598	days or less or for which a cancellation notice has been issued
10599	pursuant to s. 627.351(6)(c)11. during the first 30 days of
10600	coverage.
10601	(5) APPLICABILITY.--
10602	(a) The take-out bonus provided by subsection (2) and the
10603	exemption from assessment provided by paragraph (3)(a) apply
10604	only if the corporationassociationpolicy is replaced by either
10605	a standard policy including wind coverage or, if consistent with
10606	the insurer's underwriting rules as filed with the office
10607	department, a basic policy including wind coverage; however,
10608	with respect to risks located in areas where coverage through
10609	the high-risk account of the corporationFlorida Windstorm
10610	Underwriting Associationis available, the replacement policy
10611	need not provide wind coverage. The insurer must renew the
10612	replacement policy at approved rates on substantially similar
10613	terms for two additional 1-year terms, unless canceled by the
10614	insurer for a lawful reason other than reduction of hurricane
10615	exposure. If an insurer assumes the corporation'sassociation's
10616	obligations for a policy, it must issue a replacement policy for
10617	a 1-year term upon expiration of the corporationassociation
10618	policy and must renew the replacement policy at approved rates
10619	on substantially similar terms for two additional 1-year terms,
10620	unless canceled by the insurer for a lawful reason other than
10621	reduction of hurricane exposure. For each replacement policy
10622	canceled or nonrenewed by the insurer for any reason during the
10623	3-year coverage period required by this paragraph, the insurer
10624	must remove from the corporationassociationone additional
10625	policy covering a risk similar to the risk covered by the
10626	canceled or nonrenewed policy. In addition to these
10627	requirements, the corporationassociationmust place the bonus
10628	moneys in escrow for a period of 3 years; such moneys may be
10629	released from escrow only to pay claims. A take-out bonus
10630	provided by subsection (2) or subsection (6) shall not be
10631	considered premium income for purposes of taxes and assessments
10632	under the Florida Insurance Code and shall remain the property
10633	of the corporationResidential Property and Casualty Joint
10634	Underwriting Association, subject to the prior security interest
10635	of the insurer under the escrow agreement until it is released
10636	from escrow, and after it is released from escrow it shall be
10637	considered an asset of the insurer and credited to the insurer's
10638	capital and surplus.
10639	(b) It is the intent of the Legislature that an insurer
10640	eligible for the exemption under paragraph (3)(a) establish a
10641	preference in appointment of agents for those agents who lose a
10642	substantial amount of business as a result of risks being
10643	removed from the corporationassociation.
10644	(6) COMMERCIAL RESIDENTIAL TAKE-OUT PLANS.--
10645	(a) The corporationResidential Property and Casualty
10646	Joint Underwriting Associationshall pay a bonus to an insurer
10647	for each commercial residential policy that the insurer removes
10648	from the corporationassociationpursuant to an approved take-
10649	out plan, either by issuance of a new policy upon expiration of
10650	the corporationassociation policy or by assumption of the
10651	corporation'sassociation'sobligations with respect to an in-
10652	force policy. The corporationassociationboard shall determine
10653	the amount of the bonus based on such factors as the coverage
10654	provided, relative hurricane risk, the length of time that the
10655	property has been covered by the corporationassociation, and
10656	the criteria specified in paragraphs (b) and (c). The amount of
10657	the bonus with respect to a particular policy may not exceed 25
10658	percent of the corporation'sassociation's1-year premium for
10659	the policy. Such payment is subject to approval of the
10660	corporationassociationboard. In order to qualify for the bonus
10661	under this subsection, the take-out plan must include policies
10662	reflecting at least $100 million in structure exposure.
10663	(b) In order for a plan to qualify for approval:
10664	1. At least 40 percent of the policies removed from the
10665	corporationassociationunder the plan must be located in Dade,
10666	Broward, and Palm Beach Counties, or at least 30 percent of the
10667	policies removed from the corporationassociationunder the plan
10668	must be located in such counties and an additional 50 percent of
10669	the policies removed from the corporationassociationmust be
10670	located in other coastal counties.
10671	2. The insurer must renew the replacement policy at
10672	approved rates on substantially similar terms for two additional
10673	1-year terms, unless canceled or nonrenewed by the insurer for a
10674	lawful reason other than reduction of hurricane exposure. If an
10675	insurer assumes the corporation'sassociation'sobligations for
10676	a policy, it must issue a replacement policy for a 1-year term
10677	upon expiration of the corporationassociationpolicy and must
10678	renew the replacement policy at approved rates on substantially
10679	similar terms for two additional 1-year terms, unless canceled
10680	by the insurer for a lawful reason other than reduction of
10681	hurricane exposure. For each replacement policy canceled or
10682	nonrenewed by the insurer for any reason during the 3-year
10683	coverage period required by this subparagraph, the insurer must
10684	remove from the corporationassociationone additional policy
10685	covering a risk similar to the risk covered by the canceled or
10686	nonrenewed policy.
10687	(c) A take-out plan is deemed approved unless the office
10688	department, within 120 days after the board votes to recommend
10689	the plan, disapproves the plan based on:
10690	1. The capacity of the insurer to absorb the policies
10691	proposed to be taken out of the corporationassociationand the
10692	concentration of risks of those policies.
10693	2. Whether the geographic and risk characteristics of
10694	policies in the proposed take-out plan serve to reduce the
10695	exposure of the corporationassociationsufficiently to justify
10696	the bonus.
10697	3. Whether coverage for risks to be taken out otherwise
10698	exists in the admitted voluntary market.
10699	4. The degree to which the take-out bonus is promoting new
10700	capital being allocated by the insurer to residential property
10701	coverage in this state.
10702	(d) The calculation of an insurer's regular assessment
10703	liability under s. 627.351(b)3.a. and b., but not emergency
10704	assessments collected from policyholders pursuant to s.
10705	627.351(6)(b)3.d., shall, with respect to commercial residential
10706	policies removed from the corporationassociationunder an
10707	approved take-out plan, exclude such removed policies for the
10708	succeeding 3 years, as follows:
10709	1. In the first year following removal of the policies,
10710	the policies are excluded from the calculation to the extent of
10711	100 percent.
10712	2. In the second year following removal of the policies,
10713	the policies are excluded from the calculation to the extent of
10714	75 percent.
10715	3. In the third year following removal of the policies,
10716	the policies are excluded from the calculation to the extent of
10717	50 percent.
10718	(e) An insurer that first wrote commercial residential
10719	property coverage in this state on or after June 1, 1996, is
10720	exempt from regular assessments under s. 627.351(6)(b)3.a. and
10721	b., but not emergency assessments collected from policyholders
10722	pursuant to s. 627.351(6)(b)3.d., with respect to commercial
10723	residential policies until the earlier of:
10724	1. The end of the calendar year in which such insurer
10725	first wrote 0.5 percent or more of the statewide aggregate
10726	direct written premium for commercial residential property
10727	coverage; or
10728	2. December 31 of the third year in which such insurer
10729	wrote commercial residential property coverage in this state.
10730	(f) An insurer that is not otherwise exempt from regular
10731	assessments under s. 627.351(6)(b)3.a. and b. with respect to
10732	commercial residential policies is, for any calendar year in
10733	which such insurer increased its total commercial residential
10734	hurricane exposure by 25 percent or more over its exposure for
10735	the preceding calendar year, exempt from regular assessments
10736	under s. 627.351(6)(b)3.a. and b., but not emergency assessments
10737	collected from policyholders pursuant to s. 627.351(6)(b)3.d.,
10738	attributable to such increased exposure.
10739	(7) A minority business, which is at least 51 percent
10740	owned by minority persons as described in s. 288.703(3),
10741	desiring to operate or become licensed as a property and
10742	casualty insurer may exempt up to $50 of the escrow requirements
10743	of the take-out bonus, as described in this section. Such
10744	minority business, which has applied for a certificate of
10745	authority to engage in business as a property and casualty
10746	insurer, may simultaneously file the business' proposed take-out
10747	plan, as described in this section, with the corporationto the
10748	Residential Property and Casualty Joint Underwriting
10749	Association.
10750	Section 202. Section 627.3513, Florida Statutes, is
10751	amended to read:
10752	627.3513 Standards for sale of bonds by Citizens Property
10753	Insurance Corporationunderwriting associations.--
10754	(1)(a) The purpose of this section is to provide standards
10755	for the sale of bonds pursuant to s. 627.351(2) and (6).
10756	(b) The term "corporation," as used in this section, means
10757	the Citizens Property Insurance Corporation."Association" or
10758	"associations," for purposes of this section, means the Florida
10759	Windstorm Underwriting Association and the Residential Property
10760	and Casualty Joint Underwriting Association as established
10761	pursuant to s. 627.351(2) and (6), and any corporation or other
10762	entity established pursuant to those subsections.
10763	(2) The plan of operation of the corporationeach
10764	associationshall provide for the selection of financial
10765	services providers and underwriters. Such provisions shall
10766	include the method for publicizing or otherwise providing
10767	reasonable notice to potential financial services providers,
10768	underwriters, and other interested parties, which may include
10769	expedited procedures and methods for emergency situations. The
10770	corporationassociationsshall not engage the services of any
10771	person or firm as a securities broker or bond underwriter that
10772	is not eligible to be engaged by the state under the provisions
10773	of s. 215.684. The corporationassociationsshall make all
10774	selections of financial service providers and managing
10775	underwriters at a noticed public meeting.
10776	(3) The plan of operation of the corporationeach
10777	associationshall provide for any managing underwriter or
10778	financial adviser to provide to the corporationassociationa
10779	disclosure statement containing at least the following
10780	information:
10781	(a) An itemized list setting forth the nature and
10782	estimated amounts of expenses to be incurred by the managing
10783	underwriter in connection with the issuance of such bonds.
10784	Notwithstanding the foregoing, any such list may include an item
10785	for miscellaneous expenses, provided such item includes only
10786	minor items of expense which cannot be easily categorized
10787	elsewhere in the statement.
10788	(b) The names, addresses, and estimated amounts of
10789	compensation of any finders connected with the issuance of the
10790	bonds.
10791	(c) The amount of underwriting spread expected to be
10792	realized and the amount of fees and expenses expected to be paid
10793	to the financial adviser.
10794	(d) Any management fee charged by the managing
10795	underwriter.
10796	(e) Any other fee, bonus, or compensation estimated to be
10797	paid by the managing underwriter in connection with the bond
10798	issue to any person not regularly employed or retained by it.
10799	(f) The name and address of each financial adviser or
10800	managing underwriter, if any, connected with the bond issue.
10801	(g) Any other disclosure which the corporationassociation
10802	may require.
10803	(4)(a) No underwriter, commercial bank, investment banker,
10804	or financial consultant or adviser shall pay any finder any
10805	bonus, fee, or gratuity in connection with the sale of bonds
10806	issued by the corporationassociationunless full disclosure is
10807	made in writing to the corporationassociationprior to or
10808	concurrently with the submission of a purchase proposal for
10809	bonds by the underwriter, commercial bank, investment banker, or
10810	financial consultant or adviser, providing the name and address
10811	of any finder and the amount of bonus, fee, or gratuity paid to
10812	such finder. A violation of this subsection shall not affect the
10813	validity of the bond issue.
10814	(b) As used in this subsection, the term "finder" means a
10815	person who is neither regularly employed by, nor a partner or
10816	officer of, an underwriter, bank, banker, or financial
10817	consultant or adviser and who enters into an understanding with
10818	either the issuer or the managing underwriter, or both, for any
10819	paid or promised compensation or valuable consideration,
10820	directly or indirectly, expressed or implied, to act solely as
10821	an intermediary between such issuer and managing underwriter for
10822	the purpose of influencing any transaction in the purpose of
10823	such bonds.
10824	(5) This section is not intended to restrict or prohibit
10825	the employment of professional services relating to bonds issued
10826	under s. 627.351(6)s. 627.351(2) or (6)or the issuance of
10827	bonds by the corporationassociations.
10828	(6) The failure of the corporationassociationto comply
10829	with one or more provisions of this section shall not affect the
10830	validity of the bond issue; however, the failure of the
10831	corporationeither associationto comply in good faith both with
10832	this section and with the plan as amended shall be a violation
10833	of its plan of operation and a violation of the insurance code.
10834	Section 203. Section 627.3515, Florida Statutes, is
10835	amended to read:
10836	627.3515 Market assistance plan; property and casualty
10837	risks.--
10838	(1) The officedepartmentshall adopt a market assistance
10839	plan to assist in the placement of risks of applicants who are
10840	unable to procure property insurance as defined in s. 624.604 or
10841	casualty insurance as defined in s. 624.605(1)(b), (e), (f),
10842	(g), or (h) from authorized insurers when such insurance is
10843	otherwise generally available from insurers authorized to
10844	transact and actually writing that kind and class of insurance
10845	in this state. Through such measures as are found appropriate by
10846	the board of governors, the market assistance plan shall take
10847	affirmative steps to assist in the removal from the Citizens
10848	Property Insurance CorporationResidential Property and Casualty
10849	Joint Underwriting Associationany risk that can be placed in
10850	the voluntary market. All property and casualty insurers
10851	licensed in this state shall participate in the plan.
10852	(2)(a) Each person serving as a member of the board of
10853	governors of the Citizens Property Insurance Corporation
10854	Residential Property and Casualty Joint Underwriting Association
10855	shall also serve as a member of the board of governors of the
10856	market assistance plan.
10857	(b) The plan shall be funded through payments from the
10858	Citizens Property Insurance CorporationResidential Property and
10859	Casualty Joint Underwriting Associationand annual assessments
10860	of residential property insurers in the amount of $450.
10861	(c) The plan is not required to assist in the placement of
10862	any workers' compensation, employer's liability, malpractice, or
10863	motor vehicle insurance coverage.
10864	Section 204. Subsections (2), (4), and (6), paragraphs (c)
10865	and (h) of subsection (7), and subsection (8) of section
10866	627.357, Florida Statutes, are amended to read:
10867	627.357 Medical malpractice self-insurance.--
10868	(2) A group or association of health care providers
10869	composed of any number of members, is authorized to self-insure
10870	against claims arising out of the rendering of, or failure to
10871	render, medical care or services, or against claims for injury
10872	or death to the insured's patients arising out of the insured's
10873	activities, upon obtaining approval from the officedepartment
10874	and upon complying with the following conditions:
10875	(a) Establishment of a Medical Malpractice Risk Management
10876	Trust Fund to provide coverage against professional medical
10877	malpractice liability.
10878	(b) Employment of professional consultants for loss
10879	prevention and claims management coordination under a risk
10880	management program.
10881	(4) The fund is subject to regulation and investigation by
10882	the officedepartment. The fund is subject to rules of the
10883	commissiondepartmentand to part IX of chapter 626, relating to
10884	trade practices and frauds.
10885	(6) The commissiondepartmentshall adopt rules to
10886	implement this section, including rules that ensure that a trust
10887	fund maintains a sufficient reserve to cover contingent
10888	liabilities under subsection (7) in the event of its
10889	dissolution.
10890	(7)
10891	(c) The trust fund may from time to time assess members of
10892	the fund liable therefor under the terms of their policies and
10893	pursuant to this section. The officedepartmentmay assess the
10894	members in the event of liquidation of the fund.
10895	(h) If the trust fund fails to make an assessment as
10896	required by paragraph(g), the officedepartmentshall order the
10897	fund to do so. If the deficiency is not sufficiently made up
10898	within 60 days after the date of the order, the fund is deemed
10899	insolvent and grounds exist to proceed against the fund as
10900	provided for in part I of chapter 631.
10901	(8) The expense factors associated with rates used by a
10902	fund shall be filed with the officedepartmentat least 30 days
10903	prior to use and may not be used until approved by the office
10904	department. The officedepartmentshall disapprove the rates
10905	unless the filed expense factors associated therewith are
10906	justified and reasonable for the benefits and services provided.
10907	Section 205. Paragraph (a) of subsection (3) of section
10908	627.4236, Florida Statutes, is amended to read:
10909	627.4236 Coverage for bone marrow transplant procedures.--
10910	(3)(a) The Agency for Health Care Administration shall
10911	adopt rules specifying the bone marrow transplant procedures
10912	that are accepted within the appropriate oncological specialty
10913	and are not experimental for purposes of this section. The rules
10914	must be based upon recommendations of an advisory panel
10915	appointed by the secretary of the agency, composed of:
10916	1. One adult oncologist, selected from a list of three
10917	names recommended by the Florida Medical Association;
10918	2. One pediatric oncologist, selected from a list of three
10919	names recommended by the Florida Pediatric Society;
10920	3. One representative of the J. Hillis Miller Health
10921	Center at the University of Florida;
10922	4. One representative of the H. Lee Moffitt Cancer Center
10923	and Research Institute, Inc.;
10924	5. One consumer representative, selected from a list of
10925	three names recommended by the Chief Financial OfficerInsurance
10926	Commissioner;
10927	6. One representative of the Health Insurance Association
10928	of America;
10929	7. Two representatives of health insurers, one of whom
10930	represents the insurer with the largest Florida health insurance
10931	premium volume and one of whom represents the insurer with the
10932	second largest Florida health insurance premium volume; and
10933	8. One representative of the insurer with the largest
10934	Florida small group health insurance premium volume.
10935	Section 206. Paragraphs (a) and (e) of subsection (2),
10936	subsection (3), paragraphs (e), (j), and (k) of subsection (4),
10937	and subsection (6) of section 627.6488, Florida Statutes, are
10938	amended to read:
10939	627.6488 Florida Comprehensive Health Association.--
10940	(2)(a) The association shall operate subject to the
10941	supervision and approval of a three-member board of directors.
10942	The board of directors shall be appointed by the Chief Financial
10943	OfficerInsurance Commissioneras follows:
10944	1. The chair of the board shall be the Chief Financial
10945	OfficerInsurance Commissioneror his or her designee.
10946	2. One representative of policyholders who is not
10947	associated with the medical profession, a hospital, or an
10948	insurer.
10949	3. One representative of insurers.
10950
10951	The administrator or his or her affiliate shall not be a member
10952	of the board. Any board member appointed by the Chief Financial
10953	Officercommissionermay be removed and replaced by him or her
10954	at any time without cause.
10955	(e) There shall be no liability on the part of, and no
10956	cause of action of any nature shall arise against, any member
10957	insurer, or its agents or employees, agents or employees of the
10958	association, members of the board of directors of the
10959	association, or the Chief Financial Officer'sdepartmental
10960	representatives for any act or omission taken by them in the
10961	performance of their powers and duties under this act, unless
10962	such act or omission by such person is in intentional disregard
10963	of the rights of the claimant.
10964	(3) The association shall adopt a plan pursuant to this
10965	act and submit its articles, bylaws, and operating rules to the
10966	officedepartmentfor approval. If the association fails to
10967	adopt such plan and suitable articles, bylaws, and operating
10968	rules within 180 days after the appointment of the board, the
10969	commissiondepartmentshall adopt rules to effectuate the
10970	provisions of this act; and such rules shall remain in effect
10971	until superseded by a plan and articles, bylaws, and operating
10972	rules submitted by the association and approved by the office
10973	department.
10974	(4) The association shall:
10975	(e) Require that all policy forms issued by the
10976	association conform to standard forms developed by the
10977	association. The forms shall be approved by the office
10978	department.
10979	(j) Make a report to the Governor, the officeInsurance
10980	Commissioner, the President of the Senate, the Speaker of the
10981	House of Representatives, and the Minority Leaders of the Senate
10982	and House of Representatives, not later than 45 days after the
10983	close of each calendar quarter, which includes, for the prior
10984	quarter, current data and estimates of net written and earned
10985	premiums, the expenses of administration, and the paid and
10986	incurred losses. The report shall identify any statutorily
10987	mandated program that has not been fully implemented by the
10988	board.
10989	(k) To facilitate preparation of assessments and for other
10990	purposes, the board shall direct preparation of annual audited
10991	financial statements for each calendar year as soon as feasible
10992	following the conclusion of that calendar year, and shall,
10993	within 30 days after rendition of such statements, file with the
10994	officedepartmentthe annual report containing such information
10995	as required by the officedepartmentto be filed on March 1 of
10996	each year.
10997	(6) The officedepartmentshall examine and investigate
10998	the association in the manner provided in part II of chapter
10999	624.
11000	Section 207. Paragraph (a) of subsection (3), paragraphs
11001	(c), (d), (e), and (i) of subsection (5), paragraphs (a) and (b)
11002	of subsection (6), paragraphs (b), (c), and (d) of subsection
11003	(8), paragraphs (a) and (b) of subsection (9), subsection (10),
11004	paragraphs (b), (c), (d), (e), (g), (h), (j), and (m) of
11005	subsection (11), subsection (12), paragraph (i) of subsection
11006	(13), paragraph(a) of subsection (15), and subsection (16) of
11007	section 627.6699, Florida Statutes, are amended to read:
11008	627.6699 Employee Health Care Access Act.--
11009	(3) DEFINITIONS.--As used in this section, the term:
11010	(a) "Actuarial certification" means a written statement,
11011	by a member of the American Academy of Actuaries or another
11012	person acceptable to the officedepartment, that a small
11013	employer carrier is in compliance with subsection (6), based
11014	upon the person's examination, including a review of the
11015	appropriate records and of the actuarial assumptions and methods
11016	used by the carrier in establishing premium rates for applicable
11017	health benefit plans.
11018	(5) AVAILABILITY OF COVERAGE.--
11019	(c) Every small employer carrier must, as a condition of
11020	transacting business in this state:
11021	1. Beginning July 1, 2000,Offer and issue all small
11022	employer health benefit plans on a guaranteed-issue basis to
11023	every eligible small employer, with 2 to 50 eligible employees,
11024	that elects to be covered under such plan, agrees to make the
11025	required premium payments, and satisfies the other provisions of
11026	the plan. A rider for additional or increased benefits may be
11027	medically underwritten and may only be added to the standard
11028	health benefit plan. The increased rate charged for the
11029	additional or increased benefit must be rated in accordance with
11030	this section.
11031	2. Beginning July 1, 2000, and until July 31, 2001, offer
11032	and issue basic and standard small employer health benefit plans
11033	on a guaranteed-issue basis to every eligible small employer
11034	which is eligible for guaranteed renewal, has less than two
11035	eligible employees, is not formed primarily for the purpose of
11036	buying health insurance, elects to be covered under such plan,
11037	agrees to make the required premium payments, and satisfies the
11038	other provisions of the plan. A rider for additional or
11039	increased benefits may be medically underwritten and may be
11040	added only to the standard benefit plan. The increased rate
11041	charged for the additional or increased benefit must be rated in
11042	accordance with this section. For purposes of this subparagraph,
11043	a person, his or her spouse, and his or her dependent children
11044	shall constitute a single eligible employee if that person and
11045	spouse are employed by the same small employer and either one
11046	has a normal work week of less than 25 hours.
11047	2.3. Beginning August 1, 2001,Offer and issue basic and
11048	standard small employer health benefit plans on a guaranteed-
11049	issue basis, during a 31-day open enrollment period of August 1
11050	through August 31 of each year, to every eligible small
11051	employer, with fewer than two eligible employees, which small
11052	employer is not formed primarily for the purpose of buying
11053	health insurance and which elects to be covered under such plan,
11054	agrees to make the required premium payments, and satisfies the
11055	other provisions of the plan. Coverage provided under this
11056	subparagraph shall begin on October 1 of the same year as the
11057	date of enrollment, unless the small employer carrier and the
11058	small employer agree to a different date. A rider for additional
11059	or increased benefits may be medically underwritten and may only
11060	be added to the standard health benefit plan. The increased
11061	rate charged for the additional or increased benefit must be
11062	rated in accordance with this section. For purposes of this
11063	subparagraph, a person, his or her spouse, and his or her
11064	dependent children constitute a single eligible employee if that
11065	person and spouse are employed by the same small employer and
11066	either that person or his or her spouse has a normal work week
11067	of less than 25 hours.
11068	3.4.This paragraph does not limit a carrier's ability to
11069	offer other health benefit plans to small employers if the
11070	standard and basic health benefit plans are offered and
11071	rejected.
11072	(d) A small employer carrier must file with the office
11073	department, in a format and manner prescribed by the committee,
11074	a standard health care plan and a basic health care plan to be
11075	used by the carrier.
11076	(e) The officedepartmentat any time may, after providing
11077	notice and an opportunity for a hearing, disapprove the
11078	continued use by the small employer carrier of the standard or
11079	basic health benefit plan on the grounds that such plan does not
11080	meet the requirements of this section.
11081	(i)1. A small employer carrier need not offer coverage or
11082	accept applications pursuant to paragraph (a):
11083	a. To a small employer if the small employer is not
11084	physically located in an established geographic service area of
11085	the small employer carrier, provided such geographic service
11086	area shall not be less than a county;
11087	b. To an employee if the employee does not work or reside
11088	within an established geographic service area of the small
11089	employer carrier; or
11090	c. To a small employer group within an area in which the
11091	small employer carrier reasonably anticipates, and demonstrates
11092	to the satisfaction of the officedepartment, that it cannot,
11093	within its network of providers, deliver service adequately to
11094	the members of such groups because of obligations to existing
11095	group contract holders and enrollees.
11096	2. A small employer carrier that cannot offer coverage
11097	pursuant to sub-subparagraph 1.c. may not offer coverage in the
11098	applicable area to new cases of employer groups having more than
11099	50 eligible employees or small employer groups until the later
11100	of 180 days following each such refusal or the date on which the
11101	carrier notifies the officedepartmentthat it has regained its
11102	ability to deliver services to small employer groups.
11103	3.a. A small employer carrier may deny health insurance
11104	coverage in the small-group market if the carrier has
11105	demonstrated to the officedepartmentthat:
11106	(I) It does not have the financial reserves necessary to
11107	underwrite additional coverage; and
11108	(II) It is applying this sub-subparagraph uniformly to all
11109	employers in the small-group market in this state consistent
11110	with this section and without regard to the claims experience of
11111	those employers and their employees and their dependents or any
11112	health-status-related factor that relates to such employees and
11113	dependents.
11114	b. A small employer carrier, upon denying health insurance
11115	coverage in connection with health benefit plans in accordance
11116	with sub-subparagraph a., may not offer coverage in connection
11117	with group health benefit plans in the small-group market in
11118	this state for a period of 180 days after the date such coverage
11119	is denied or until the insurer has demonstrated to the office
11120	departmentthat the insurer has sufficient financial reserves to
11121	underwrite additional coverage, whichever is later. The office
11122	departmentmay provide for the application of this sub-
11123	subparagraph on a service-area-specific basis.
11124	4. Beginning in 1994, The commissiondepartmentshall, by
11125	rule, require each small employer carrier to report, on or
11126	before March 1 of each year, its gross annual premiums for all
11127	health benefit plans issued to small employers during the
11128	previous calendar year, and also to report its gross annual
11129	premiums for new, but not renewal, standard and basic health
11130	benefit plans subject to this section issued during the previous
11131	calendar year. No later than May 1 of each year, the office
11132	departmentshall calculate each carrier's percentage of all
11133	small employer group health premiums for the previous calendar
11134	year and shall calculate the aggregate gross annual premiums for
11135	new, but not renewal, standard and basic health benefit plans
11136	for the previous calendar year.
11137	(6) RESTRICTIONS RELATING TO PREMIUM RATES.--
11138	(a) The commissiondepartmentmay, by rule, establish
11139	regulations to administer this section and to assure that rating
11140	practices used by small employer carriers are consistent with
11141	the purpose of this section, including assuring that differences
11142	in rates charged for health benefit plans by small employer
11143	carriers are reasonable and reflect objective differences in
11144	plan design, not including differences due to the nature of the
11145	groups assumed to select particular health benefit plans.
11146	(b) For all small employer health benefit plans that are
11147	subject to this section and are issued by small employer
11148	carriers on or after January 1, 1994, premium rates for health
11149	benefit plans subject to this section are subject to the
11150	following:
11151	1. Small employer carriers must use a modified community
11152	rating methodology in which the premium for each small employer
11153	must be determined solely on the basis of the eligible
11154	employee's and eligible dependent's gender, age, family
11155	composition, tobacco use, or geographic area as determined under
11156	paragraph (5)(j) and in which the premium may be adjusted as
11157	permitted by this paragraph.
11158	2. Rating factors related to age, gender, family
11159	composition, tobacco use, or geographic location may be
11160	developed by each carrier to reflect the carrier's experience.
11161	The factors used by carriers are subject to officedepartment
11162	review and approval.
11163	3. Small employer carriers may not modify the rate for a
11164	small employer for 12 months from the initial issue date or
11165	renewal date, unless the composition of the group changes or
11166	benefits are changed. However, a small employer carrier may
11167	modify the rate one time prior to 12 months after the initial
11168	issue date for a small employer who enrolls under a previously
11169	issued group policy that has a common anniversary date for all
11170	employers covered under the policy if:
11171	a. The carrier discloses to the employer in a clear and
11172	conspicuous manner the date of the first renewal and the fact
11173	that the premium may increase on or after that date.
11174	b. The insurer demonstrates to the officedepartmentthat
11175	efficiencies in administration are achieved and reflected in the
11176	rates charged to small employers covered under the policy.
11177	4. A carrier may issue a group health insurance policy to
11178	a small employer health alliance or other group association with
11179	rates that reflect a premium credit for expense savings
11180	attributable to administrative activities being performed by the
11181	alliance or group association if such expense savings are
11182	specifically documented in the insurer's rate filing and are
11183	approved by the officedepartment. Any such credit may not be
11184	based on different morbidity assumptions or on any other factor
11185	related to the health status or claims experience of any person
11186	covered under the policy. Nothing in this subparagraph exempts
11187	an alliance or group association from licensure for any
11188	activities that require licensure under the insurance code. A
11189	carrier issuing a group health insurance policy to a small
11190	employer health alliance or other group association shall allow
11191	any properly licensed and appointed agent of that carrier to
11192	market and sell the small employer health alliance or other
11193	group association policy. Such agent shall be paid the usual and
11194	customary commission paid to any agent selling the policy.
11195	5. Any adjustments in rates for claims experience, health
11196	status, or duration of coverage may not be charged to individual
11197	employees or dependents. For a small employer's policy, such
11198	adjustments may not result in a rate for the small employer
11199	which deviates more than 15 percent from the carrier's approved
11200	rate. Any such adjustment must be applied uniformly to the rates
11201	charged for all employees and dependents of the small employer.
11202	A small employer carrier may make an adjustment to a small
11203	employer's renewal premium, not to exceed 10 percent annually,
11204	due to the claims experience, health status, or duration of
11205	coverage of the employees or dependents of the small employer.
11206	Semiannually, small group carriers shall report information on
11207	forms adopted by rule by the commissiondepartment, to enable
11208	the officedepartmentto monitor the relationship of aggregate
11209	adjusted premiums actually charged policyholders by each carrier
11210	to the premiums that would have been charged by application of
11211	the carrier's approved modified community rates. If the
11212	aggregate resulting from the application of such adjustment
11213	exceeds the premium that would have been charged by application
11214	of the approved modified community rate by 5 percent for the
11215	current reporting period, the carrier shall limit the
11216	application of such adjustments only to minus adjustments
11217	beginning not more than 60 days after the report is sent to the
11218	officedepartment. For any subsequent reporting period, if the
11219	total aggregate adjusted premium actually charged does not
11220	exceed the premium that would have been charged by application
11221	of the approved modified community rate by 5 percent, the
11222	carrier may apply both plus and minus adjustments. A small
11223	employer carrier may provide a credit to a small employer's
11224	premium based on administrative and acquisition expense
11225	differences resulting from the size of the group. Group size
11226	administrative and acquisition expense factors may be developed
11227	by each carrier to reflect the carrier's experience and are
11228	subject to officedepartmentreview and approval.
11229	6. A small employer carrier rating methodology may include
11230	separate rating categories for one dependent child, for two
11231	dependent children, and for three or more dependent children for
11232	family coverage of employees having a spouse and dependent
11233	children or employees having dependent children only. A small
11234	employer carrier may have fewer, but not greater, numbers of
11235	categories for dependent children than those specified in this
11236	subparagraph.
11237	7. Small employer carriers may not use a composite rating
11238	methodology to rate a small employer with fewer than 10
11239	employees. For the purposes of this subparagraph, a "composite
11240	rating methodology" means a rating methodology that averages the
11241	impact of the rating factors for age and gender in the premiums
11242	charged to all of the employees of a small employer.
11243	8.a. A carrier may separate the experience of small
11244	employer groups with less than 2 eligible employees from the
11245	experience of small employer groups with 2-50 eligible employees
11246	for purposes of determining an alternative modified community
11247	rating.
11248	b. If a carrier separates the experience of small employer
11249	groups as provided in sub-subparagraph a., the rate to be
11250	charged to small employer groups of less than 2 eligible
11251	employees may not exceed 150 percent of the rate determined for
11252	small employer groups of 2-50 eligible employees. However, the
11253	carrier may charge excess losses of the experience pool
11254	consisting of small employer groups with less than 2 eligible
11255	employees to the experience pool consisting of small employer
11256	groups with 2-50 eligible employees so that all losses are
11257	allocated and the 150-percent rate limit on the experience pool
11258	consisting of small employer groups with less than 2 eligible
11259	employees is maintained. Notwithstanding s. 627.411(1), the rate
11260	to be charged to a small employer group of fewer than 2 eligible
11261	employees, insured as of July 1, 2002, may be up to 125 percent
11262	of the rate determined for small employer groups of 2-50
11263	eligible employees for the first annual renewal and 150 percent
11264	for subsequent annual renewals.
11265	(8) MAINTENANCE OF RECORDS.--
11266	(b) Each small employer carrier must file with the office
11267	departmenton or before March 15 of each year an actuarial
11268	certification that the carrier is in compliance with this
11269	section and that the rating methods of the carrier are
11270	actuarially sound. The certification must be in a form and
11271	manner and contain the information prescribed by the commission
11272	department. The carrier must retain a copy of the certification
11273	at its principal place of business.
11274	(c) A small employer carrier must make the information and
11275	documentation described in paragraph (a) available to the office
11276	departmentupon request. The information constitutes
11277	proprietary and trade secret information and may not be
11278	disclosed by the officedepartment to persons outside the office
11279	department, except as agreed to by the carrier or as ordered by
11280	a court of competent jurisdiction.
11281	(d) Each small employer carrier must file with the office
11282	department quarterly an enrollment report as directed by the
11283	officedepartment. Such report shall not constitute proprietary
11284	or trade secret information.
11285	(9) SMALL EMPLOYER CARRIER'S ELECTION TO BECOME A RISK-
11286	ASSUMING CARRIER OR A REINSURING CARRIER.--
11287	(a) A small employer carrier must elect to become either a
11288	risk-assuming carrier or a reinsuring carrier. Each small
11289	employer carrier must make an initial election, binding through
11290	January 1, 1994. The carrier's initial election must be made no
11291	later than October 31, 1992. By October 31, 1993, all small
11292	employer carriers must file a final election, which is binding
11293	for 2 years, from January 1, 1994, through December 31, 1995,
11294	after which an election shall be binding for a period of 5
11295	years. Any carrier that is not a small employer carrier on
11296	October 31, 1992, and intends to become a small employer carrier
11297	after October 31, 1992, must file its designation when it files
11298	the forms and rates it intends to use for small employer group
11299	health insurance; such designation shall be binding for 2 years
11300	after the date of approval of the forms and rates, and any
11301	subsequent designation is binding for 5 years. The office
11302	departmentmay permit a carrier to modify its election at any
11303	time for good cause shown, after a hearing.
11304	(b) The commissiondepartmentshall establish an
11305	application process for small employer carriers seeking to
11306	change their status under this subsection.
11307	(10) ELECTION PROCESS TO BECOME A RISK-ASSUMING CARRIER.--
11308	(a)1. A small employer carrier may become a risk-assuming
11309	carrier by filing with the officedepartmenta designation of
11310	election under subsection (9) in a format and manner prescribed
11311	by the commissiondepartment. The officedepartmentshall
11312	approve the election of a small employer carrier to become a
11313	risk-assuming carrier if the officedepartmentfinds that the
11314	carrier is capable of assuming that status pursuant to the
11315	criteria set forth in paragraph (b).
11316	2. The officedepartmentmust approve or disapprove any
11317	designation as a risk-assuming carrier within 60 days after
11318	filing.
11319	(b) In determining whether to approve an application by a
11320	small employer carrier to become a risk-assuming carrier, the
11321	officedepartmentshall consider:
11322	1. The carrier's financial ability to support the
11323	assumption of the risk of small employer groups.
11324	2. The carrier's history of rating and underwriting small
11325	employer groups.
11326	3. The carrier's commitment to market fairly to all small
11327	employers in the state or its service area, as applicable.
11328	4. The carrier's ability to assume and manage the risk of
11329	enrolling small employer groups without the protection of the
11330	reinsurance program provided in subsection (11).
11331	(c) A small employer carrier that becomes a risk-assuming
11332	carrier pursuant to this subsection is not subject to the
11333	assessment provisions of subsection(11).
11334	(d) The officedepartmentshall provide public notice of a
11335	small employer carrier's designation of election under
11336	subsection(9) to become a risk-assuming carrier and shall
11337	provide at least a 21-day period for public comment prior to
11338	making a decision on the election. The officedepartmentshall
11339	hold a hearing on the election at the request of the carrier.
11340	(e) The officedepartmentmay rescind the approval granted
11341	to a risk-assuming carrier under this subsection if the office
11342	departmentfinds that the carrier no longer meets the criteria
11343	of paragraph (b).
11344	(11) SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.--
11345	(b)1. The program shall operate subject to the supervision
11346	and control of the board.
11347	2. Effective upon this act becoming a law, the board shall
11348	consist of the Chief Financial Officercommissioneror his or
11349	her designee, who shall serve as the chairperson, and 13
11350	additional members who are representatives of carriers and
11351	insurance agents and are appointed by the Chief Financial
11352	Officercommissionerand serve as follows:
11353	a. The Chief Financial Officercommissionershall include
11354	representatives of small employer carriers subject to assessment
11355	under this subsection. If two or more carriers elect to be
11356	risk-assuming carriers, the membership must include at least two
11357	representatives of risk-assuming carriers; if one carrier is
11358	risk-assuming, one member must be a representative of such
11359	carrier. At least one member must be a carrier who is subject
11360	to the assessments, but is not a small employer carrier.
11361	Subject to such restrictions, at least five members shall be
11362	selected from individuals recommended by small employer carriers
11363	pursuant to procedures provided by rule of the commission
11364	department. Three members shall be selected from a list of
11365	health insurance carriers that issue individual health insurance
11366	policies. At least two of the three members selected must be
11367	reinsuring carriers. Two members shall be selected from a list
11368	of insurance agents who are actively engaged in the sale of
11369	health insurance.
11370	b. A member appointed under this subparagraph shall serve
11371	a term of 4 years and shall continue in office until the
11372	member's successor takes office, except that, in order to
11373	provide for staggered terms, the Chief Financial Officer
11374	commissionershall designate two of the initial appointees under
11375	this subparagraph to serve terms of 2 years and shall designate
11376	three of the initial appointees under this subparagraph to serve
11377	terms of 3 years.
11378	3. The Chief Financial Officercommissionermay remove a
11379	member for cause.
11380	4. Vacancies on the board shall be filled in the same
11381	manner as the original appointment for the unexpired portion of
11382	the term.
11383	5. The Chief Financial Officercommissionermay require an
11384	entity that recommends persons for appointment to submit
11385	additional lists of recommended appointees.
11386	(c)1. No later than August 15, 1992,The board shall
11387	submit to the officedepartmenta plan of operation to assure
11388	the fair, reasonable, and equitable administration of the
11389	program. The board may at any time submit to the office
11390	departmentany amendments to the plan that the board finds to be
11391	necessary or suitable.
11392	2. No later than September 15, 1992, The officedepartment
11393	shall, after notice and hearing, approve the plan of operation
11394	if it determines that the plan submitted by the board is
11395	suitable to assure the fair, reasonable, and equitable
11396	administration of the program and provides for the sharing of
11397	program gains and losses equitably and proportionately in
11398	accordance with paragraph (j).
11399	3. The plan of operation, or any amendment thereto,
11400	becomes effective upon written approval of the office
11401	department.
11402	(d) The plan of operation must, among other things:
11403	1. Establish procedures for handling and accounting for
11404	program assets and moneys and for an annual fiscal reporting to
11405	the officedepartment.
11406	2. Establish procedures for selecting an administering
11407	carrier and set forth the powers and duties of the administering
11408	carrier.
11409	3. Establish procedures for reinsuring risks.
11410	4. Establish procedures for collecting assessments from
11411	participating carriers to provide for claims reinsured by the
11412	program and for administrative expenses, other than amounts
11413	payable to the administrative carrier, incurred or estimated to
11414	be incurred during the period for which the assessment is made.
11415	5. Provide for any additional matters at the discretion of
11416	the board.
11417	(e) The board shall recommend to the officedepartment
11418	market conduct requirements and other requirements for carriers
11419	and agents, including requirements relating to:
11420	1. Registration by each carrier with the officedepartment
11421	of its intention to be a small employer carrier under this
11422	section;
11423	2. Publication by the officedepartmentof a list of all
11424	small employer carriers, including a requirement applicable to
11425	agents and carriers that a health benefit plan may not be sold
11426	by a carrier that is not identified as a small employer carrier;
11427	3. The availability of a broadly publicized, toll-free
11428	telephone number for access by small employers to information
11429	concerning this section;
11430	4. Periodic reports by carriers and agents concerning
11431	health benefit plans issued; and
11432	5. Methods concerning periodic demonstration by small
11433	employer carriers and agents that they are marketing or issuing
11434	health benefit plans to small employers.
11435	(g) A reinsuring carrier may reinsure with the program
11436	coverage of an eligible employee of a small employer, or any
11437	dependent of such an employee, subject to each of the following
11438	provisions:
11439	1. With respect to a standard and basic health care plan,
11440	the program must reinsure the level of coverage provided; and,
11441	with respect to any other plan, the program must reinsure the
11442	coverage up to, but not exceeding, the level of coverage
11443	provided under the standard and basic health care plan.
11444	2. Except in the case of a late enrollee, a reinsuring
11445	carrier may reinsure an eligible employee or dependent within 60
11446	days after the commencement of the coverage of the small
11447	employer. A newly employed eligible employee or dependent of a
11448	small employer may be reinsured within 60 days after the
11449	commencement of his or her coverage.
11450	3. A small employer carrier may reinsure an entire
11451	employer group within 60 days after the commencement of the
11452	group's coverage under the plan. The carrier may choose to
11453	reinsure newly eligible employees and dependents of the
11454	reinsured group pursuant to subparagraph 1.
11455	4. The program may not reimburse a participating carrier
11456	with respect to the claims of a reinsured employee or dependent
11457	until the carrier has paid incurred claims of at least $5,000 in
11458	a calendar year for benefits covered by the program. In
11459	addition, the reinsuring carrier shall be responsible for 10
11460	percent of the next $50,000 and 5 percent of the next $100,000
11461	of incurred claims during a calendar year and the program shall
11462	reinsure the remainder.
11463	5. The board annually shall adjust the initial level of
11464	claims and the maximum limit to be retained by the carrier to
11465	reflect increases in costs and utilization within the standard
11466	market for health benefit plans within the state. The adjustment
11467	shall not be less than the annual change in the medical
11468	component of the "Consumer Price Index for All Urban Consumers"
11469	of the Bureau of Labor Statistics of the Department of Labor,
11470	unless the board proposes and the officedepartmentapproves a
11471	lower adjustment factor.
11472	6. A small employer carrier may terminate reinsurance for
11473	all reinsured employees or dependents on any plan anniversary.
11474	7. The premium rate charged for reinsurance by the program
11475	to a health maintenance organization that is approved by the
11476	Secretary of Health and Human Services as a federally qualified
11477	health maintenance organization pursuant to 42 U.S.C. s.
11478	300e(c)(2)(A) and that, as such, is subject to requirements that
11479	limit the amount of risk that may be ceded to the program, which
11480	requirements are more restrictive than subparagraph 4., shall be
11481	reduced by an amount equal to that portion of the risk, if any,
11482	which exceeds the amount set forth in subparagraph 4. which may
11483	not be ceded to the program.
11484	8. The board may consider adjustments to the premium rates
11485	charged for reinsurance by the program for carriers that use
11486	effective cost containment measures, including high-cost case
11487	management, as defined by the board.
11488	9. A reinsuring carrier shall apply its case-management
11489	and claims-handling techniques, including, but not limited to,
11490	utilization review, individual case management, preferred
11491	provider provisions, other managed care provisions or methods of
11492	operation, consistently with both reinsured business and
11493	nonreinsured business.
11494	(h)1. The board, as part of the plan of operation, shall
11495	establish a methodology for determining premium rates to be
11496	charged by the program for reinsuring small employers and
11497	individuals pursuant to this section. The methodology shall
11498	include a system for classification of small employers that
11499	reflects the types of case characteristics commonly used by
11500	small employer carriers in the state. The methodology shall
11501	provide for the development of basic reinsurance premium rates,
11502	which shall be multiplied by the factors set for them in this
11503	paragraph to determine the premium rates for the program. The
11504	basic reinsurance premium rates shall be established by the
11505	board, subject to the approval of the officedepartment, and
11506	shall be set at levels which reasonably approximate gross
11507	premiums charged to small employers by small employer carriers
11508	for health benefit plans with benefits similar to the standard
11509	and basic health benefit plan. The premium rates set by the
11510	board may vary by geographical area, as determined under this
11511	section, to reflect differences in cost. The multiplying
11512	factors must be established as follows:
11513	a. The entire group may be reinsured for a rate that is
11514	1.5 times the rate established by the board.
11515	b. An eligible employee or dependent may be reinsured for
11516	a rate that is 5 times the rate established by the board.
11517	2. The board periodically shall review the methodology
11518	established, including the system of classification and any
11519	rating factors, to assure that it reasonably reflects the claims
11520	experience of the program. The board may propose changes to the
11521	rates which shall be subject to the approval of the office
11522	department.
11523	(j)1. Before March 1 of each calendar year, the board
11524	shall determine and report to the officedepartmentthe program
11525	net loss for the previous year, including administrative
11526	expenses for that year, and the incurred losses for the year,
11527	taking into account investment income and other appropriate
11528	gains and losses.
11529	2. Any net loss for the year shall be recouped by
11530	assessment of the carriers, as follows:
11531	a. The operating losses of the program shall be assessed
11532	in the following order subject to the specified limitations.
11533	The first tier of assessments shall be made against reinsuring
11534	carriers in an amount which shall not exceed 5 percent of each
11535	reinsuring carrier's premiums from health benefit plans covering
11536	small employers. If such assessments have been collected and
11537	additional moneys are needed, the board shall make a second tier
11538	of assessments in an amount which shall not exceed 0.5 percent
11539	of each carrier's health benefit plan premiums. Except as
11540	provided in paragraph (n), risk-assuming carriers are exempt
11541	from all assessments authorized pursuant to this section. The
11542	amount paid by a reinsuring carrier for the first tier of
11543	assessments shall be credited against any additional assessments
11544	made.
11545	b. The board shall equitably assess carriers for operating
11546	losses of the plan based on market share. The board shall
11547	annually assess each carrier a portion of the operating losses
11548	of the plan. The first tier of assessments shall be determined
11549	by multiplying the operating losses by a fraction, the numerator
11550	of which equals the reinsuring carrier's earned premium
11551	pertaining to direct writings of small employer health benefit
11552	plans in the state during the calendar year for which the
11553	assessment is levied, and the denominator of which equals the
11554	total of all such premiums earned by reinsuring carriers in the
11555	state during that calendar year. The second tier of assessments
11556	shall be based on the premiums that all carriers, except risk-
11557	assuming carriers, earned on all health benefit plans written in
11558	this state. The board may levy interim assessments against
11559	carriers to ensure the financial ability of the plan to cover
11560	claims expenses and administrative expenses paid or estimated to
11561	be paid in the operation of the plan for the calendar year prior
11562	to the association's anticipated receipt of annual assessments
11563	for that calendar year. Any interim assessment is due and
11564	payable within 30 days after receipt by a carrier of the interim
11565	assessment notice. Interim assessment payments shall be credited
11566	against the carrier's annual assessment. Health benefit plan
11567	premiums and benefits paid by a carrier that are less than an
11568	amount determined by the board to justify the cost of collection
11569	may not be considered for purposes of determining assessments.
11570	c. Subject to the approval of the officedepartment, the
11571	board shall make an adjustment to the assessment formula for
11572	reinsuring carriers that are approved as federally qualified
11573	health maintenance organizations by the Secretary of Health and
11574	Human Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the
11575	extent, if any, that restrictions are placed on them that are
11576	not imposed on other small employer carriers.
11577	3. Before March 1 of each year, the board shall determine
11578	and file with the officedepartmentan estimate of the
11579	assessments needed to fund the losses incurred by the program in
11580	the previous calendar year.
11581	4. If the board determines that the assessments needed to
11582	fund the losses incurred by the program in the previous calendar
11583	year will exceed the amount specified in subparagraph 2., the
11584	board shall evaluate the operation of the program and report its
11585	findings, including any recommendations for changes to the plan
11586	of operation, to the officedepartmentwithin 90 days following
11587	the end of the calendar year in which the losses were incurred.
11588	The evaluation shall include an estimate of future assessments,
11589	the administrative costs of the program, the appropriateness of
11590	the premiums charged and the level of carrier retention under
11591	the program, and the costs of coverage for small employers. If
11592	the board fails to file a report with the officedepartment
11593	within 90 days following the end of the applicable calendar
11594	year, the officedepartmentmay evaluate the operations of the
11595	program and implement such amendments to the plan of operation
11596	the officedepartmentdeems necessary to reduce future losses
11597	and assessments.
11598	5. If assessments exceed the amount of the actual losses
11599	and administrative expenses of the program, the excess shall be
11600	held as interest and used by the board to offset future losses
11601	or to reduce program premiums. As used in this paragraph, the
11602	term "future losses" includes reserves for incurred but not
11603	reported claims.
11604	6. Each carrier's proportion of the assessment shall be
11605	determined annually by the board, based on annual statements and
11606	other reports considered necessary by the board and filed by the
11607	carriers with the board.
11608	7. Provision shall be made in the plan of operation for
11609	the imposition of an interest penalty for late payment of an
11610	assessment.
11611	8. A carrier may seek, from the officecommissioner, a
11612	deferment, in whole or in part, from any assessment made by the
11613	board. The officedepartmentmay defer, in whole or in part,
11614	the assessment of a carrier if, in the opinion of the office
11615	department, the payment of the assessment would place the
11616	carrier in a financially impaired condition. If an assessment
11617	against a carrier is deferred, in whole or in part, the amount
11618	by which the assessment is deferred may be assessed against the
11619	other carriers in a manner consistent with the basis for
11620	assessment set forth in this section. The carrier receiving such
11621	deferment remains liable to the program for the amount deferred
11622	and is prohibited from reinsuring any individuals or groups in
11623	the program if it fails to pay assessments.
11624	(m) The board shall monitor compliance with this section,
11625	including the market conduct of small employer carriers, and
11626	shall report to the officedepartmentany unfair trade practices
11627	and misleading or unfair conduct by a small employer carrier
11628	that has been reported to the board by agents, consumers, or any
11629	other person. The officedepartmentshall investigate all
11630	reports and, upon a finding of noncompliance with this section
11631	or of unfair or misleading practices, shall take action against
11632	the small employer carrier as permitted under the insurance code
11633	or chapter 641. The board is not given investigatory or
11634	regulatory powers, but must forward all reports of cases or
11635	abuse or misrepresentation to the officedepartment.
11636	(12) STANDARD, BASIC, AND LIMITED HEALTH BENEFIT PLANS.--
11637	(a)1. By May 15, 1993, The Chief Financial Officer
11638	commissionershall appoint a health benefit plan committee
11639	composed of four representatives of carriers which shall include
11640	at least two representatives of HMOs, at least one of which is a
11641	staff model HMO, two representatives of agents, four
11642	representatives of small employers, and one employee of a small
11643	employer. The carrier members shall be selected from a list of
11644	individuals recommended by the board. The Chief Financial
11645	Officercommissionermay require the board to submit additional
11646	recommendations of individuals for appointment.
11647	2. The plans shall comply with all of the requirements of
11648	this subsection.
11649	3. The plans must be filed with and approved by the office
11650	departmentprior to issuance or delivery by any small employer
11651	carrier.
11652	4. After approval of the revised health benefit plans, if
11653	the officedepartmentdetermines that modifications to a plan
11654	might be appropriate, the Chief Financial Officercommissioner
11655	shall appoint a new health benefit plan committee in the manner
11656	provided in subparagraph 1. to submit recommended modifications
11657	to the officedepartmentfor approval.
11658	(b)1. Each small employer carrier issuing new health
11659	benefit plans shall offer to any small employer, upon request, a
11660	standard health benefit plan and a basic health benefit plan
11661	that meets the criteria set forth in this section.
11662	2. For purposes of this subsection, the terms "standard
11663	health benefit plan" and "basic health benefit plan" mean
11664	policies or contracts that a small employer carrier offers to
11665	eligible small employers that contain:
11666	a. An exclusion for services that are not medically
11667	necessary or that are not covered preventive health services;
11668	and
11669	b. A procedure for preauthorization by the small employer
11670	carrier, or its designees.
11671	3. A small employer carrier may include the following
11672	managed care provisions in the policy or contract to control
11673	costs:
11674	a. A preferred provider arrangement or exclusive provider
11675	organization or any combination thereof, in which a small
11676	employer carrier enters into a written agreement with the
11677	provider to provide services at specified levels of
11678	reimbursement or to provide reimbursement to specified
11679	providers. Any such written agreement between a provider and a
11680	small employer carrier must contain a provision under which the
11681	parties agree that the insured individual or covered member has
11682	no obligation to make payment for any medical service rendered
11683	by the provider which is determined not to be medically
11684	necessary. A carrier may use preferred provider arrangements or
11685	exclusive provider arrangements to the same extent as allowed in
11686	group products that are not issued to small employers.
11687	b. A procedure for utilization review by the small
11688	employer carrier or its designees.
11689
11690	This subparagraph does not prohibit a small employer carrier
11691	from including in its policy or contract additional managed care
11692	and cost containment provisions, subject to the approval of the
11693	officedepartment, which have potential for controlling costs in
11694	a manner that does not result in inequitable treatment of
11695	insureds or subscribers. The carrier may use such provisions to
11696	the same extent as authorized for group products that are not
11697	issued to small employers.
11698	4. The standard health benefit plan shall include:
11699	a. Coverage for inpatient hospitalization;
11700	b. Coverage for outpatient services;
11701	c. Coverage for newborn children pursuant to s. 627.6575;
11702	d. Coverage for child care supervision services pursuant
11703	to s. 627.6579;
11704	e. Coverage for adopted children upon placement in the
11705	residence pursuant to s. 627.6578;
11706	f. Coverage for mammograms pursuant to s. 627.6613;
11707	g. Coverage for handicapped children pursuant to s.
11708	627.6615;
11709	h. Emergency or urgent care out of the geographic service
11710	area; and
11711	i. Coverage for services provided by a hospice licensed
11712	under s. 400.602 in cases where such coverage would be the most
11713	appropriate and the most cost-effective method for treating a
11714	covered illness.
11715	5. The standard health benefit plan and the basic health
11716	benefit plan may include a schedule of benefit limitations for
11717	specified services and procedures. If the committee develops
11718	such a schedule of benefits limitation for the standard health
11719	benefit plan or the basic health benefit plan, a small employer
11720	carrier offering the plan must offer the employer an option for
11721	increasing the benefit schedule amounts by 4 percent annually.
11722	6. The basic health benefit plan shall include all of the
11723	benefits specified in subparagraph 4.; however, the basic health
11724	benefit plan shall place additional restrictions on the benefits
11725	and utilization and may also impose additional cost containment
11726	measures.
11727	7. Sections 627.419(2), (3), and (4), 627.6574, 627.6612,
11728	627.66121, 627.66122, 627.6616, 627.6618, 627.668, and 627.66911
11729	apply to the standard health benefit plan and to the basic
11730	health benefit plan. However, notwithstanding said provisions,
11731	the plans may specify limits on the number of authorized
11732	treatments, if such limits are reasonable and do not
11733	discriminate against any type of provider.
11734	8. Each small employer carrier that provides for inpatient
11735	and outpatient services by allopathic hospitals may provide as
11736	an option of the insured similar inpatient and outpatient
11737	services by hospitals accredited by the American Osteopathic
11738	Association when such services are available and the osteopathic
11739	hospital agrees to provide the service.
11740	(c) If a small employer rejects, in writing, the standard
11741	health benefit plan and the basic health benefit plan, the small
11742	employer carrier may offer the small employer a limited benefit
11743	policy or contract.
11744	(d)1. Upon offering coverage under a standard health
11745	benefit plan, a basic health benefit plan, or a limited benefit
11746	policy or contract for any small employer, the small employer
11747	carrier shall provide such employer group with a written
11748	statement that contains, at a minimum:
11749	a. An explanation of those mandated benefits and providers
11750	that are not covered by the policy or contract;
11751	b. An explanation of the managed care and cost control
11752	features of the policy or contract, along with all appropriate
11753	mailing addresses and telephone numbers to be used by insureds
11754	in seeking information or authorization; and
11755	c. An explanation of the primary and preventive care
11756	features of the policy or contract.
11757
11758	Such disclosure statement must be presented in a clear and
11759	understandable form and format and must be separate from the
11760	policy or certificate or evidence of coverage provided to the
11761	employer group.
11762	2. Before a small employer carrier issues a standard
11763	health benefit plan, a basic health benefit plan, or a limited
11764	benefit policy or contract, it must obtain from the prospective
11765	policyholder a signed written statement in which the prospective
11766	policyholder:
11767	a. Certifies as to eligibility for coverage under the
11768	standard health benefit plan, basic health benefit plan, or
11769	limited benefit policy or contract;
11770	b. Acknowledges the limited nature of the coverage and an
11771	understanding of the managed care and cost control features of
11772	the policy or contract;
11773	c. Acknowledges that if misrepresentations are made
11774	regarding eligibility for coverage under a standard health
11775	benefit plan, a basic health benefit plan, or a limited benefit
11776	policy or contract, the person making such misrepresentations
11777	forfeits coverage provided by the policy or contract; and
11778	d. If a limited plan is requested, acknowledges that the
11779	prospective policyholder had been offered, at the time of
11780	application for the insurance policy or contract, the
11781	opportunity to purchase any health benefit plan offered by the
11782	carrier and that the prospective policyholder had rejected that
11783	coverage.
11784
11785	A copy of such written statement shall be provided to the
11786	prospective policyholder no later than at the time of delivery
11787	of the policy or contract, and the original of such written
11788	statement shall be retained in the files of the small employer
11789	carrier for the period of time that the policy or contract
11790	remains in effect or for 5 years, whichever period is longer.
11791	3. Any material statement made by an applicant for
11792	coverage under a health benefit plan which falsely certifies as
11793	to the applicant's eligibility for coverage serves as the basis
11794	for terminating coverage under the policy or contract.
11795	4. Each marketing communication that is intended to be
11796	used in the marketing of a health benefit plan in this state
11797	must be submitted for review by the officedepartmentprior to
11798	use and must contain the disclosures stated in this subsection.
11799	(e) A small employer carrier may not use any policy,
11800	contract, form, or rate under this section, including
11801	applications, enrollment forms, policies, contracts,
11802	certificates, evidences of coverage, riders, amendments,
11803	endorsements, and disclosure forms, until the insurer has filed
11804	it with the officedepartment and the officedepartmenthas
11805	approved it under ss. 627.410 and 627.411 and this section.
11806	(13) STANDARDS TO ASSURE FAIR MARKETING.--
11807	(i) The commissiondepartmentmay establish regulations
11808	setting forth additional standards to provide for the fair
11809	marketing and broad availability of health benefit plans to
11810	small employers in this state.
11811	(15) APPLICABILITY OF OTHER STATE LAWS.--
11812	(a) Except as expressly provided in this section, a law
11813	requiring coverage for a specific health care service or
11814	benefit, or a law requiring reimbursement, utilization, or
11815	consideration of a specific category of licensed health care
11816	practitioner, does not apply to a standard or basic health
11817	benefit plan policy or contract or a limited benefit policy or
11818	contract offered or delivered to a small employer unless that
11819	law is made expressly applicable to such policies or contracts.
11820	A law restricting or limiting deductibles, coinsurance,
11821	copayments, or annual or lifetime maximum payments does not
11822	apply to any health plan policy, including a standard or basic
11823	health benefit plan policy or contract, offered or delivered to
11824	a small employer unless such law is made expressly applicable to
11825	such policy or contract. However, every small employer carrier
11826	must offer to eligible small employers the standard benefit plan
11827	and the basic benefit plan, as required by subsection (5), as
11828	such plans have been approved by the officedepartmentpursuant
11829	to subsection (12).
11830	(16) RULEMAKING AUTHORITY.--The commissiondepartmentmay
11831	adopt rules to administer this section, including rules
11832	governing compliance by small employer carriers and small
11833	employers.
11834	Section 208. Section 627.7015, Florida Statutes, is
11835	amended to read:
11836	627.7015 Alternative procedure for resolution of disputed
11837	property insurance claims.--
11838	(1) PURPOSE AND SCOPE.--This section sets forth a
11839	nonadversarial alternative dispute resolution procedure for a
11840	mediated claim resolution conference prompted by the need for
11841	effective, fair, and timely handling of property insurance
11842	claims. There is a particular need for an informal,
11843	nonthreatening forum for helping parties who elect this
11844	procedure to resolve their claims disputes because most
11845	homeowner's insurance policies obligate insureds to participate
11846	in a potentially expensive and time-consuming adversarial
11847	appraisal process prior to litigation. The procedure set forth
11848	in this section is designed to bring the parties together for a
11849	mediated claims settlement conference without any of the
11850	trappings or drawbacks of an adversarial process. Before
11851	resorting to these procedures, insureds and insurers are
11852	encouraged to resolve claims as quickly and fairly as possible.
11853	This section is available with respect to claims under personal
11854	lines policies for all claimants and insurers prior to
11855	commencing the appraisal process, or commencing litigation. If
11856	requested by the insured, participation by legal counsel shall
11857	be permitted. Mediation under this section is also available to
11858	litigants referred to the department by a county court or
11859	circuit court. This section does not apply to commercial
11860	coverages, to private passenger motor vehicle insurance
11861	coverages, or to disputes relating to liability coverages in
11862	policies of property insurance.
11863	(2) At the time a first-party claim within the scope of
11864	this section is filed, the insurer shall notify all first-party
11865	claimants of their right to participate in the mediation program
11866	under this section. The department shall prepare a consumer
11867	information pamphlet for distribution to persons participating
11868	in mediation under this section.
11869	(3) The costs of mediation shall be reasonable, and the
11870	insurer shall bear all of the cost of conducting mediation
11871	conferences, except as otherwise provided in this section. If an
11872	insured fails to appear at the conference, the conference shall
11873	be rescheduled upon the insured's payment of the costs of a
11874	rescheduled conference. If the insurer fails to appear at the
11875	conference, the insurer shall pay the insured's actual cash
11876	expenses incurred in attending the conference if the insurer's
11877	failure to attend was not due to a good cause acceptable to the
11878	department. An insurer will be deemed to have failed to appear
11879	if the insurer's representative lacks authority to settle the
11880	full value of the claim. The insurer shall incur an additional
11881	fee for a rescheduled conference necessitated by the insurer's
11882	failure to appear at a scheduled conference. The fees assessed
11883	by the administrator shall include a charge necessary to defray
11884	the expenses of the department related to its duties under this
11885	section and shall be deposited in the Insurance Commissioner's
11886	Regulatory Trust Fund.
11887	(4) The department shall adopt by rule a property
11888	insurance mediation program to be administered by the department
11889	or its designee. The department may also adopt special rules
11890	which are applicable in cases of an emergency within the state.
11891	The rules shall be modeled after practices and procedures set
11892	forth in mediation rules of procedure adopted by the Supreme
11893	Court. The rules shall provide for:
11894	(a) Reasonable requirement for processing and scheduling
11895	of requests for mediation.
11896	(b) Qualifications of mediators as provided in s. 627.745
11897	and in the Florida Rules of Certified and Court Appointed
11898	Mediators, and for such other individuals as are qualified by
11899	education, training, or experience as the department determines
11900	to be appropriate.
11901	(c) Provisions governing who may attend mediation
11902	conferences.
11903	(d) Selection of mediators.
11904	(e) Criteria for the conduct of mediation conferences.
11905	(f) Right to legal counsel.
11906	(5) All statements made and documents produced at a
11907	mediation conference shall be deemed to be settlement
11908	negotiations in anticipation of litigation within the scope of
11909	s. 90.408. All parties to the mediation must negotiate in good
11910	faith and must have the authority to immediately settle the
11911	claim. Mediators are deemed to be agents of the department and
11912	shall have the immunity from suit provided in s. 44.107.
11913	(6) Mediation is nonbinding; however, if a written
11914	settlement is reached, the insured has 3 business days within
11915	which the insured may rescind the settlement unless the insured
11916	has cashed or deposited any check or draft disbursed to the
11917	insured for the disputed matters as a result of the conference.
11918	If a settlement agreement is reached and is not rescinded, it
11919	shall be binding and act as a release of all specific claims
11920	that were presented in that mediation conference.
11921	(7) If the insurer requests the mediation, and the
11922	mediation results are rejected by either party, the insured
11923	shall not be required to submit to or participate in any
11924	contractual loss appraisal process of the property loss damage
11925	as a precondition to legal action for breach of contract against
11926	the insurer for its failure to pay the policyholder's claims
11927	covered by the policy.
11928	(8) The department may designate an entity or person to
11929	serve as administrator to carry out any of the provisions of
11930	this section and may take this action by means of a written
11931	contract or agreement.
11932	Section 209. Section 628.4615, Florida Statutes, is
11933	amended to read:
11934	628.4615 Specialty insurers; acquisition of controlling
11935	stock, ownership interest, assets, or control; merger or
11936	consolidation.--
11937	(1) For the purposes of this section, the term "specialty
11938	insurer" means any person holding a license or certificate of
11939	authority as:
11940	(a) A motor vehicle service agreement company authorized
11941	to issue motor vehicle service agreements as those terms are
11942	defined in s. 634.011(7)(8) and(8)(9);
11943	(b) A home warranty association authorized to issue "home
11944	warranties" as those terms are defined in s. 634.301(3)(4) and
11945	(4)(5);
11946	(c) A service warranty association authorized to issue
11947	"service warranties" as those terms are defined in s.
11948	634.401(13)(14) and (14)(15);
11949	(d) A prepaid limited health service organization
11950	authorized to issue prepaid limited health service contracts, as
11951	those terms are defined in chapter 636An optometric service
11952	plan corporation authorized to issue optometric service plan
11953	contracts as those terms are defined in s. 637.001(2) and (3);
11954	(e) A pharmaceutical service plan corporation authorized
11955	to issue pharmaceutical service plan contracts as those terms
11956	are defined in s. 637.1701(2) and (3);
11957	(f) A dental service plan corporation licensed to issue
11958	contracts for dental services pursuant to a dental service plan
11959	as that term is defined in s. 637.401(1);
11960	(g) An ambulance service association authorized to issue
11961	ambulance service contracts as those terms are defined in s.
11962	638.021(1) and (2);
11963	(e)(h)An authorized health maintenance organization
11964	operating pursuant to s. 641.21;
11965	(f)(i)An authorized prepaid health clinic operating
11966	pursuant to s. 641.405;
11967	(g)(j)A legal expense insurance corporation authorized to
11968	engage in a legal expense insurance business pursuant to s.
11969	642.021;
11970	(h)(k)A provider which is licensed to operate a facility
11971	which undertakes to provide continuing care as those terms are
11972	defined in s. 651.011(2), (4), (5), and (6), and (7);
11973	(i)(l)A multiple-employer welfare arrangement operating
11974	pursuant to ss. 624.436-624.446;
11975	(j)(m)A premium finance company authorized to finance
11976	insurance premiums pursuant to s. 627.828; or
11977	(k)(n)A corporation authorized to accept donor annuity
11978	agreements pursuant to s. 627.481.
11979	(2) No person shall, individually or in conjunction with
11980	any affiliated person of such person, directly or indirectly,
11981	conclude a tender offer or exchange offer for, enter into any
11982	agreement to exchange securities for, or otherwise finally
11983	acquire, 10 percent or more of the outstanding voting securities
11984	of a specialty insurer which is a stock corporation or of a
11985	controlling company of a specialty insurer which is a stock
11986	corporation; or conclude an acquisition of, or otherwise finally
11987	acquire, 10 percent or more of the ownership interest of a
11988	specialty insurer which is not a stock corporation or of a
11989	controlling company of a specialty insurer which is not a stock
11990	corporation, unless:
11991	(a) The person or affiliated person has filed with the
11992	officedepartmentand sent by registered mail to the principal
11993	office of the specialty insurer and controlling company an
11994	application, signed under oath and prepared on forms prescribed
11995	by the commissiondepartment, that contains the information
11996	specified in subsection(4) no later than 5 days after any form
11997	of tender offer or exchange offer is proposed, or no later than
11998	5 days after the acquisition of the securities or ownership
11999	interest if no tender offer or exchange offer is involved.
12000	(b) The officedepartmenthas approved the tender offer or
12001	exchange offer, or acquisition if no tender offer or exchange
12002	offer is involved.
12003	(3) This section does not apply to any acquisition of
12004	voting securities or ownership interest of a specialty insurer
12005	or of a controlling company by any person who, on July 9, 1986,
12006	is the owner of a majority of such voting securities or
12007	ownership interest or who, on or after July 9, 1986, becomes the
12008	owner of a majority of such voting securities or ownership
12009	interest with the approval of the officedepartmentpursuant to
12010	this section.
12011	(4) The application to be filed with the officedepartment
12012	and furnished to the specialty insurer and controlling company
12013	shall contain the following information and any additional
12014	information as the office deemsdepartment may deemnecessary to
12015	determine the character, experience, ability, and other
12016	qualifications of the person or affiliated person of such person
12017	for the protection of the insureds of the insurer and of the
12018	public:
12019	(a)1. The identity of, and the background information
12020	specified in subsection (5) on, each natural person by whom, or
12021	on whose behalf, the acquisition is to be made; and,
12022	2. If the acquisition is to be made by, or on behalf of, a
12023	person other than a natural person and as to any person who
12024	controls, either directly or indirectly, such other person, the
12025	identity of, and the background information specified in
12026	subsection (5) on:
12027	a. Each director, officer, or trustee, if a corporation,
12028	or
12029	b. Each partner, owner, manager, or joint venturer, or
12030	other person performing duties similar to those of persons in
12031	the aforementioned positions, if not a corporation,
12032
12033	for the person.
12034	(b) The source and amount of the funds or other
12035	consideration used, or to be used, in making the acquisition.
12036	(c) Any plans or proposals which such persons may have
12037	made to liquidate the specialty insurer, to sell any of its
12038	assets or merge or consolidate it with any person, or to make
12039	any other major change in its business or corporate structure or
12040	management; and any plans or proposals which such persons may
12041	have made to liquidate any controlling company of the specialty
12042	insurer, to sell any of its assets or merge or consolidate it
12043	with any person, or to make any other major change in its
12044	business or corporate structure or management.
12045	(d) The nature and the extent of the controlling interest
12046	which the person or affiliated person of such person proposes to
12047	acquire, the terms of the proposed acquisition, and the manner
12048	in which the controlling interest is to be acquired of a
12049	specialty insurer or controlling company which is not a stock
12050	corporation.
12051	(e) The number of shares or other securities which the
12052	person or affiliated person of such person proposes to acquire,
12053	the terms of the proposed acquisition, and the manner in which
12054	the securities are to be acquired.
12055	(f) Information as to any contract, arrangement, or
12056	understanding with any party with respect to any of the
12057	securities of the specialty insurer or controlling company,
12058	including, but not limited to, information relating to the
12059	transfer of any of the securities, option arrangements, puts or
12060	calls, or the giving or withholding of proxies, which
12061	information names the party with whom the contract, arrangement,
12062	or understanding has been entered into and gives the details
12063	thereof.
12064	(5)(a) The information as to the background and identity
12065	of each natural person, which information is required to be
12066	furnished pursuant to paragraph(4)(a), shall include:
12067	1. The natural person's occupations, positions of
12068	employment, and offices held during the past 10 years.
12069	2. The principal business and address of any business,
12070	corporation, or organization in which each such office of the
12071	natural person was held, or in which each such occupation or
12072	position of employment was carried on.
12073	3. Whether the natural person was, at any time during such
12074	10-year period, convicted of any crime other than a traffic
12075	violation.
12076	4. Whether the natural person has been, during such 10-
12077	year period, the subject of any proceeding for the revocation of
12078	any license and, if so, the nature of the proceeding and the
12079	disposition of the proceeding.
12080	5. Whether, during the 10-year period, the natural person
12081	has been the subject of any proceeding under the federal
12082	Bankruptcy Act; or whether, during the 10-year period, any
12083	person or other business or organization in which the natural
12084	person was a director, officer, trustee, partner, owner,
12085	manager, or other official has been subject to any such
12086	proceeding, either during the time in which the natural person
12087	was a director, officer, or trustee, if a corporation, or a
12088	partner, owner, manager, joint venturer, or other official, if
12089	not a corporation, or within 12 months thereafter.
12090	6. Whether, during the 10-year period, the natural person
12091	has been enjoined, either temporarily or permanently, by a court
12092	of competent jurisdiction from violating any federal or state
12093	law regulating the business of insurance, securities, or
12094	banking, or from carrying out any particular practice or
12095	practices in the course of the business of insurance,
12096	securities, or banking, together with details as to any such
12097	event.
12098	7. Fingerprints of each person referred to in subsection
12099	(4).
12100	(b) Any person filing the statement required by this
12101	section shall give all required information that is within the
12102	knowledge of:
12103	1. The directors, officers, or trustees, if a corporation,
12104	or
12105	2. The partners, owners, managers, or joint venturers, or
12106	others performing functions similar to those of a director,
12107	officer, or trustee, if not a corporation,
12108
12109	of the person making the filing and of any person controlling
12110	either directly or indirectly such person. If any material
12111	change occurs in the facts set forth in the application filed
12112	with the officedepartmentpursuant to this section, an
12113	amendment setting forth such changes shall be filed immediately
12114	with the officedepartment, and a copy of the amendment shall be
12115	sent by registered mail to the principal office of the specialty
12116	insurer and to the principal office of the controlling company.
12117	(6)(a) The acquisition application shall be reviewed in
12118	accordance with chapter 120. The officedepartmentmay on its
12119	own initiate, or, if requested to do so in writing by a
12120	substantially affected person, shall conduct, a proceeding to
12121	consider the appropriateness of the proposed filing. Time
12122	periods for purposes of chapter 120 shall be tolled during the
12123	pendency of the proceeding. Any written request for a proceeding
12124	must be filed with the officedepartmentwithin 10 days of the
12125	date notice of the filing is given. During the pendency of the
12126	proceeding or review period by the officedepartment, any person
12127	or affiliated person complying with the filing requirements of
12128	this section may proceed and take all steps necessary to
12129	conclude the acquisition so long as the acquisition becoming
12130	final is conditioned upon obtaining officedepartmental
12131	approval. The officedepartmentshall, however, at any time it
12132	finds an immediate danger to the public health, safety, and
12133	welfare of the insureds exists, immediately order, pursuant to
12134	s. 120.569(2)(n), the proposed acquisition disapproved and any
12135	further steps to conclude the acquisition ceased.
12136	(b) During the pendency of the office'sdepartment's
12137	review of any acquisition subject to the provisions of this
12138	section, the acquiring person shall not make any material change
12139	in the operation of the specialty insurer or controlling company
12140	unless the officedepartmenthas specifically approved the
12141	change nor shall the acquiring person make any material change
12142	in the management of the specialty insurer unless advance
12143	written notice of the change in management is furnished to the
12144	officedepartment. A material change in the operation of the
12145	specialty insurer is a transaction which disposes of or
12146	obligates 5 percent or more of the capital and surplus of the
12147	specialty insurer. A material change in the management of the
12148	specialty insurer is any change in management involving officers
12149	or directors of the specialty insurer or any person of the
12150	specialty insurer or controlling company having authority to
12151	dispose of or obligate 5 percent or more of the specialty
12152	insurer's capital or surplus. The officedepartmentshall
12153	approve a material change in operations if it finds the
12154	applicable provisions of subsection (8) have been met. The
12155	officedepartmentmay disapprove a material change in management
12156	if it finds that the applicable provisions of subsection (8)
12157	have not been met and in such case the specialty insurer shall
12158	promptly change management as acceptable to the office
12159	department.
12160	(c) If a request for a proceeding is filed, the proceeding
12161	shall be conducted within 60 days after the date the written
12162	request for a proceeding is received by the officedepartment. A
12163	recommended order shall be issued within 20 days of the date of
12164	the close of the proceedings. A final order shall be issued
12165	within 20 days of the date of the recommended order or, if
12166	exceptions to the recommended order are filed, within 20 days of
12167	the date the exceptions are filed.
12168	(7) The officedepartmentmay disapprove any acquisition
12169	subject to the provisions of this section by any person or any
12170	affiliated person of such person who:
12171	(a) Willfully violates this section;
12172	(b) In violation of an order of the officedepartment
12173	issued pursuant to subsection (11), fails to divest himself or
12174	herself of any stock or ownership interest obtained in violation
12175	of this section or fails to divest himself or herself of any
12176	direct or indirect control of such stock or ownership interest,
12177	within 25 days after such order; or
12178	(c) In violation of an order issued by the office
12179	departmentpursuant to subsection (11), acquires an additional
12180	stock or ownership interest in a specialty insurer or
12181	controlling company or direct or indirect control of such stock
12182	or ownership interest, without complying with this section.
12183	(8) The person or persons filing the application required
12184	by subsection(2) shall have the burden of proof. The office
12185	departmentshall approve any such acquisition if it finds, on
12186	the basis of the record made during any proceeding or on the
12187	basis of the filed application if no proceeding is conducted,
12188	that:
12189	(a) Upon completion of the acquisition, the specialty
12190	insurer will be able to satisfy the requirements for the
12191	issuance of a license or certificate to write the line of
12192	insurance for which it is presently licensed or certificated.
12193	(b) The financial condition of the acquiring person or
12194	persons will not jeopardize the financial stability of the
12195	specialty insurer or prejudice the interests of its insureds or
12196	the public.
12197	(c) Any plan or proposal which the acquiring person has,
12198	or acquiring persons have, made:
12199	1. To liquidate the specialty insurer, sell its assets, or
12200	merge or consolidate it with any person, or to make any other
12201	major change in its business or corporate structure or
12202	management, or
12203	2. To liquidate any controlling company, sell its assets,
12204	or merge or consolidate it with any person, or to make any major
12205	change in its business or corporate structure or management
12206	which would have an effect upon the specialty insurer,
12207
12208	is fair and free of prejudice to the insureds of the specialty
12209	insurer or to the public.
12210	(d) The competence, experience, and integrity of those
12211	persons who will control directly or indirectly the operation of
12212	the specialty insurer indicate that the acquisition is in the
12213	best interest of the insureds of the insurer and in the public
12214	interest.
12215	(e) The natural persons for whom background information is
12216	required to be furnished pursuant to this section have such
12217	backgrounds as to indicate that it is in the best interests of
12218	the insureds of the specialty insurer and in the public interest
12219	to permit such persons to exercise control over the specialty
12220	insurer.
12221	(f) The directors and officers, if such specialty insurer
12222	or controlling company is a stock corporation, or the trustees,
12223	partners, owners, managers, or joint venturers or other persons
12224	performing duties similar to those of persons in the
12225	aforementioned positions, if such specialty insurer or
12226	controlling company is not a stock corporation, to be employed
12227	after the acquisition have sufficient insurance experience and
12228	ability to assure reasonable promise of successful operation.
12229	(g) The management of the specialty insurer after the
12230	acquisition will be competent and trustworthy, and will possess
12231	sufficient managerial experience so as to make the proposed
12232	operation of the specialty insurer not hazardous to the
12233	insurance-buying public.
12234	(h) The management of the specialty insurer after the
12235	acquisition shall not include any person who has directly or
12236	indirectly through ownership, control, reinsurance transactions,
12237	or other insurance or business relations unlawfully manipulated
12238	the assets, accounts, finances, or books of any insurer or
12239	otherwise acted in bad faith with respect thereto.
12240	(i) The acquisition is not likely to be hazardous or
12241	prejudicial to the insureds of the insurer or to the public.
12242	(j) The effect of the acquisition would not substantially
12243	lessen competition in the line of insurance for which the
12244	specialty insurer is licensed or certified in this state or
12245	would not tend to create a monopoly therein.
12246	(9) No vote by the stockholder of record, or by any other
12247	person, of any security acquired in contravention of the
12248	provisions of this section is valid. Any acquisition contrary
12249	to the provisions of this section is void. Upon the petition of
12250	the specialty insurer or the controlling company, the circuit
12251	court for the county in which the principal office of the
12252	specialty insurer is located may, without limiting the
12253	generality of its authority, order the issuance or entry of an
12254	injunction or other order to enforce the provisions of this
12255	section. There shall be a private right of action in favor of
12256	the specialty insurer or controlling company to enforce the
12257	provisions of this section. No demand upon the office
12258	departmentthat it perform its functions shall be required as a
12259	prerequisite to any suit by the specialty insurer or controlling
12260	company against any other person, and in no case shall the
12261	officedepartmentbe deemed a necessary party to any action by
12262	the specialty insurer or controlling company to enforce the
12263	provisions of this section. Any person who makes or proposes an
12264	acquisition requiring the filing of an application pursuant to
12265	this section, or who files such an application, shall be deemed
12266	to have thereby designated the Chief Financial OfficerInsurance
12267	Commissioner and Treasurer, or his or her assistant or deputy or
12268	another person in charge of his or her office, as such person's
12269	agent for service of process under this section and shall
12270	thereby be deemed to have submitted himself or herself to the
12271	administrative jurisdiction of the officedepartmentand to the
12272	jurisdiction of the circuit court.
12273	(10) Any approval by the officedepartmentunder this
12274	section does not constitute a recommendation by the office
12275	departmentof the tender offer or exchange offer, or
12276	acquisition, if no tender offer or exchange offer is involved.
12277	It is unlawful for a person to represent that the office's
12278	department'sapproval constitutes a recommendation. A person who
12279	violates the provisions of this subsection commits a felony of
12280	the third degree, punishable as provided in s. 775.082, s.
12281	775.083, or s. 775.084. The statute-of-limitations period for
12282	the prosecution of an offense committed under this subsection is
12283	5 years.
12284	(11) If the officedepartmentdetermines that any person
12285	or any affiliated person of such person has acquired 10 percent
12286	or more of the outstanding voting securities of a specialty
12287	insurer or controlling company which is a stock corporation, or
12288	10 percent or more of the ownership interest of a specialty
12289	insurer or controlling company which is not a stock corporation,
12290	without complying with the provisions of this section, the
12291	officedepartmentmay order that the person and any affiliated
12292	person of such person cease acquisition of the specialty insurer
12293	or controlling company and, if appropriate, divest itself of any
12294	stock or ownership interest acquired in violation of this
12295	section.
12296	(12)(a) The officedepartmentshall, if necessary to
12297	protect the public interest, suspend or revoke the certificate
12298	of authority of any specialty insurer or controlling company
12299	acquired in violation of this section.
12300	(b) If any specialty insurer is subject to suspension or
12301	revocation pursuant to paragraph (a), the specialty insurer
12302	shall be deemed to be in such condition, or to be using or to
12303	have been subject to such methods or practices in the conduct of
12304	its business, as to render its further transaction of insurance
12305	presently or prospectively hazardous to its insureds, creditors,
12306	or stockholders or to the public.
12307	(13)(a) For the purpose of this section, the term
12308	"acquisition" includes:
12309	1. A tender offer or exchange offer for securities,
12310	assets, or other ownership interest;
12311	2. An agreement to exchange securities for other
12312	securities, assets, or other ownership interest;
12313	3. A merger of a person or affiliated person into a
12314	specialty insurer or a merger of any person with a specialty
12315	insurer;
12316	4. A consolidation; or
12317	5. Any other form of change of control
12318
12319	whereby any person or affiliated person acquires or attempts to
12320	acquire, directly or indirectly, 10 percent or more of the
12321	ownership interest or assets of a specialty insurer or of a
12322	controlling company. However, in the case of a health
12323	maintenance organization organized as a for-profit corporation,
12324	the provisions of s. 628.451 shall govern with respect to any
12325	merger or consolidation, and, in the case of a health
12326	maintenance organization organized as a not-for-profit
12327	corporation, the provisions of s. 628.471 shall govern with
12328	respect to any merger or consolidation.
12329	(b) For the purpose of this section, the term "affiliated
12330	person" of another person includes:
12331	1. The spouse of such other natural person;
12332	2. The parents of such other natural person and their
12333	lineal descendants and the parents of such other natural
12334	person's spouse and their lineal descendants;
12335	3. Any person who directly or indirectly owns or controls,
12336	or holds with power to vote, 10 percent or more of the
12337	outstanding voting securities of such other person;
12338	4. Any person who directly or indirectly owns 10 percent
12339	or more of the outstanding voting securities which are directly
12340	or indirectly owned or controlled, or held with power to vote,
12341	by such other person;
12342	5. Any person or group of persons who directly or
12343	indirectly control, are controlled by, or are under common
12344	control with such other person;
12345	6. Any director, officer, trustee, partner, owner,
12346	manager, joint venturer, or employee, or other person performing
12347	duties similar to those of persons in the aforementioned
12348	positions, of such other person;
12349	7. If such other person is an investment company, any
12350	investment adviser of such company or any member of an advisory
12351	board of such company;
12352	8. If such other person is an unincorporated investment
12353	company not having a board of directors, the depositor of such
12354	company; or
12355	9. Any person who has entered into an agreement, written
12356	or unwritten, to act in concert with such other person in
12357	acquiring, or limiting the disposition of, securities of a
12358	specialty insurer or controlling company which is a stock
12359	corporation or in acquiring, or limiting the disposition of, an
12360	ownership interest of a specialty insurer or controlling company
12361	which is not a stock corporation.
12362	(c) For the purposes of this section, the term
12363	"controlling company" means any corporation, trust, or
12364	association owning, directly or indirectly, 25 percent or more
12365	of the voting securities of one or more specialty insurance
12366	companies which are stock corporations, or 25 percent or more of
12367	the ownership interest of one or more specialty insurance
12368	companies which are not stock corporations.
12369	(d) For the purpose of this section, the term "natural
12370	person" means an individual.
12371	(e) For the purpose of this section, the term "person"
12372	includes a natural person, corporation, association, trust,
12373	general partnership, limited partnership, joint venture, firm,
12374	proprietorship, or any other entity which may hold a license or
12375	certificate as a specialty insurer.
12376	(14) The commission maydepartment is authorized toadopt,
12377	amend, or repeal rules that are necessary to implement the
12378	provisions of this section, pursuant to chapter 120.
12379	Section 210. Section 628.917, Florida Statutes, is amended
12380	to read:
12381	628.917 Insolvency and liquidation.--In the event that a
12382	captive insurer is insolvent as defined in chapter 631, the
12383	officedepartmentshall liquidate the captive insurer pursuant
12384	to the provisions of part I of chapter 631; except that the
12385	officedepartmentshall make no attempt to rehabilitate such
12386	insurer.
12387	Section 211. Subsection (5) is added to section 631.021,
12388	Florida Statutes, to read:
12389	631.021 Jurisdiction of delinquency proceeding; venue;
12390	change of venue; exclusiveness of remedy; appeal.--
12391	(5) No service of process against the department in its
12392	capacity as receiver shall be effective unless served upon a
12393	person designated by the receiver and filed with the circuit
12394	court having jurisdiction over the delinquency proceeding. The
12395	designated person shall refuse to accept service if acceptance
12396	would violate a stay against legal proceedings involving an
12397	insurer that is the subject of delinquency proceedings or would
12398	violate any orders of the circuit court governing a delinquency
12399	proceeding. The person denied service may petition the circuit
12400	court having jurisdiction over the delinquency proceeding for
12401	relief from the receiver’s refusal to accept service. This
12402	subsection shall be strictly construed and any purported service
12403	on the receiver or the department that is not in accordance with
12404	this subsection shall be null and void.
12405	Section 212. Section 631.025, Florida Statutes, is amended
12406	to read:
12407	631.025 Persons subject to this part.--Delinquency
12408	proceedings authorized by this part may be initiated against any
12409	insurer, as defined in s. 631.011(15), if the statutory grounds
12410	are present as to that insurer, and the court may exercise
12411	jurisdiction over any person required to cooperate with the
12412	department and officepursuant to s. 631.391 and over all
12413	persons made subject to the court's jurisdiction by other
12414	provisions of law. Such persons include, but are not limited to:
12415	(1) A person transacting, or that has transacted,
12416	insurance business in or from this state and against whom claims
12417	arising from that business may exist now or in the future.
12418	(2) A person purporting to transact an insurance business
12419	in this state and any person who acts as an insurer, transacts
12420	insurance, or otherwise engages in insurance activities in or
12421	from this state, with or without a certificate of authority or
12422	proper authority from the department or office, against whom
12423	claims arising from that business may exist now or in the
12424	future.
12425	(3) An insurer with policyholders resident in this state.
12426	(4) All other persons organized or in the process of
12427	organizing with the intent to transact an insurance business in
12428	this state.
12429	Section 213. Section 631.031, Florida Statutes, is amended
12430	to read:
12431	631.031 Initiation andcommencement of delinquency
12432	proceeding.—
12433	(1) Upon a determination by the office that one or more
12434	grounds for the initiation of delinquency proceedings exist
12435	pursuant to this chapter and that delinquency proceedings must
12436	be initiated, the director of the Office of Insurance Regulation
12437	shall notify the department of such determination and shall
12438	provide the department with all necessary documentation and
12439	evidence. The department shall immediately initiate such
12440	delinquency proceedings.
12441	(2)The department may commence any such proceeding by
12442	application to the court for an order directing the insurer to
12443	show cause why the department should not have the relief prayed
12444	for. On the return of such order to show cause, and after a full
12445	hearing, the court shall either deny the application or grant
12446	the application, together with such other relief as the nature
12447	of the case and the interests of the policyholders, creditors,
12448	stockholders, members, subscribers, or public may require. The
12449	officedepartmentmay also commence any such proceeding by
12450	application to the court by petition for the entry of a consent
12451	order of conservation, rehabilitation, or liquidation.
12452	Section 214. Section 631.051, Florida Statutes, is amended
12453	to read:
12454	631.051 Grounds for rehabilitation; domestic
12455	insurers.--The department may petition for an order directing it
12456	to rehabilitate a domestic insurer or an alien insurer domiciled
12457	in this state on any one or more of the following grounds, that
12458	the insurer:
12459	(1) Is impaired or insolvent;
12460	(2) Has failed to comply with an order of the office
12461	departmentto make good an impairment of capital or surplus or
12462	both;
12463	(3) Is found by the officedepartmentto be in such
12464	condition or is using or has been subject to such methods or
12465	practices in the conduct of its business, as to render its
12466	further transaction of insurance presently or prospectively
12467	hazardous to its policyholders, creditors, stockholders, or the
12468	public;
12469	(4) Has failed, or its parent corporation, subsidiary, or
12470	affiliated person controlled by either the insurer or the parent
12471	corporation has failed, to submit its books, documents,
12472	accounts, records, and affairs pertaining to the insurer to the
12473	reasonable inspection or examination of the officedepartmentor
12474	its authorized representative; or any individual exercising any
12475	executive authority in the affairs of the insurer, or parent
12476	corporation, or subsidiary, or affiliated person has refused to
12477	be examined under oath by the officedepartmentor its
12478	authorized representative, whether within this state or
12479	otherwise, concerning the pertinent affairs of the insurer, or
12480	parent corporation or subsidiary or affiliated person; or if
12481	examined under oath refuses to divulge pertinent information
12482	reasonably known to her or him; or officers, directors, agents,
12483	employees, or other representatives of the insurer or parent
12484	corporation, subsidiary, or affiliated person have failed to
12485	comply promptly with the reasonable requests of the office
12486	departmentor its authorized representative for the purposes of,
12487	and during the conduct of, any such examination;
12488	(5) Has concealed or removed records or assets or
12489	otherwise violated s. 628.271 or s. 628.281;
12490	(6) Through its board of directors or governing body is
12491	deadlocked in the management of the insurer's affairs and that
12492	the members of a mutual, reciprocal, or any other type of
12493	organization or stockholders are unable to break the deadlock
12494	and that irreparable injury to the insurer, its creditors, its
12495	policyholders, its members or subscribers, or the public is
12496	threatened by reason thereof;
12497	(7) Has transferred or attempted to transfer substantially
12498	its entire property or business, or has entered into any
12499	transaction the effect of which is to merge substantially its
12500	entire property or business into that of any other insurer or
12501	entity without having first obtained the written approval of the
12502	officedepartmentunder the provisions of s. 628.451, s.
12503	628.461, or s. 628.4615, as the case may be;
12504	(8) Has willfully violated its charter or certificate of
12505	incorporation or any law of this state;
12506	(9) Is in such a position that control of it, whether by
12507	stock ownership or otherwise, and whether direct or indirect, is
12508	in one or more persons found by the officedepartmentafter
12509	notice and hearing to be dishonest or untrustworthy; or that the
12510	insurer has failed, upon order of the officedepartmentand
12511	expiration of such reasonable time for such removal as the
12512	officedepartmentshall specify in the order, to remove any
12513	person who in fact has executive authority, directly or
12514	indirectly, in the insurer, whether as an officer, director,
12515	manager, agent, employee, or otherwise, and if such person has
12516	been found by the officedepartmentafter notice and hearing, to
12517	be incompetent, dishonest, untrustworthy, or so lacking in
12518	insurance company managerial experience as to be hazardous to
12519	the insurance-buying public;
12520	(10) Has been or is the subject of an application for the
12521	appointment of a receiver, trustee, custodian, or sequestrator
12522	of the insurer or its property otherwise than pursuant to the
12523	provisions of this code, but only if such an appointment has
12524	been made or is imminent;
12525	(11) Has consented to such an order through a majority of
12526	its directors, stockholders, members, or subscribers;
12527	(12) Has failed to pay a final judgment rendered against
12528	it in this state upon any insurance contract issued or assumed
12529	by it, within 60 days after the judgment became final, within 60
12530	days after the time for taking an appeal has expired, or within
12531	30 days after dismissal of an appeal before final determination,
12532	whichever date is the later;
12533	(13) Has been the victim of embezzlement, wrongful
12534	sequestration, conversion, diversion, or encumbering of its
12535	assets; forgery or fraud affecting it; or other illegal conduct
12536	in, by, or with respect to it, which if established would
12537	threaten its solvency; or that the officedepartmenthas
12538	reasonable cause to so believe any of the foregoing has occurred
12539	or may occur;
12540	(14) Is engaging in a systematic practice of reaching
12541	settlements with and obtaining releases from policyholders or
12542	third-party claimants and then unreasonably delaying payment of,
12543	or failing to pay, the agreed-upon settlements; or
12544	(15) Within the previous 12 months has systematically
12545	attempted to compromise with creditors on the ground that it is
12546	financially unable to pay its claims in full.
12547	Section 215. Section 631.081, Florida Statutes, is amended
12548	to read:
12549	631.081 Grounds for conservation; alien insurers.--The
12550	department may apply to the court for an order appointing it as
12551	receiver or ancillary receiver, and directing it to conserve the
12552	assets within this state, of any alien insurer upon any of the
12553	following grounds:
12554	(1) Upon any of the grounds specified in s. 631.051 or s.
12555	631.061;
12556	(2) Upon the ground that the insurer has failed to comply,
12557	within the time designated by the officedepartment, with an
12558	order made by it to make good an impairment of its trusteed
12559	funds; or
12560	(3) Upon the ground that the property of the insurer has
12561	been sequestrated in its domiciliary sovereignty or elsewhere.
12562	Section 216. Subsection (1) of section 631.152, Florida
12563	Statutes, is amended to read:
12564	631.152 Conduct of delinquency proceeding; foreign
12565	insurers.--
12566	(1) Whenever under this chapter an ancillary receiver is
12567	to be appointed in a delinquency proceeding for an insurer not
12568	domiciled in this state, the court shall appoint the department
12569	as ancillary receiver. The department shall file a petition
12570	requesting the appointment on the grounds set forth in s.
12571	631.091:
12572	(a) If it finds that there are sufficient assets of the
12573	insurer located in this state to justify the appointment of an
12574	ancillary receiver, or
12575	(b) If 10 or more persons resident in this state having
12576	claims against such insurer file a petition with the department
12577	or officerequesting the appointment of such ancillary receiver.
12578	Section 217. Section 631.221, Florida Statutes, is amended
12579	to read:
12580	631.221 Deposit of moneys collected.--The moneys collected
12581	by the department in a proceeding under this chapter shall be
12582	deposited in a qualified public depository as defined in s.
12583	280.02, which depository with regards to such funds shall
12584	conform to and be bound by all the provisions of chapter 280, or
12585	invested with the Chief Financial OfficerState Treasurer
12586	pursuant to chapter 18. For the purpose of accounting for the
12587	assets and transactions of the estate, the receiver shall use
12588	such accounting books, records, and systems as the court directs
12589	after it hears and considers the recommendations of the
12590	receiver.
12591	Section 218. Section 631.231, Florida Statutes, is amended
12592	to read:
12593	631.231 Exemption from fees.--The department or office
12594	shall not be required to pay any fee to any public officer in
12595	this state for filing, recording, issuing a transcript or
12596	certificate, or authenticating any paper or instrument
12597	pertaining to the exercise by the department or officeof any of
12598	the powers or duties conferred upon it under this chapter,
12599	whether or not such paper or instrument be executed by the
12600	department or office or theiritsemployees or attorneys of
12601	record and whether or not it is connected with the commencement
12602	of any action or proceeding by or against the department or
12603	office, or with the subsequent conduct of such action or
12604	proceeding.
12605	Section 219. Section 631.361, Florida Statutes, is amended
12606	to read:
12607	631.361 Seizure under court order.--
12608	(1) Upon filing by the officedepartmentin the circuit
12609	court in and for Leon County of its verified petition alleging
12610	any ground for a formal delinquency proceeding against an
12611	insurer under this chapter, alleging that the interests of the
12612	insurer's policyholders, claimants, or creditors or the public
12613	will be endangered or jeopardized by delay, and setting forth
12614	the order deemed necessary by the officedepartment, the court
12615	may, ex parte and without notice or hearing, issue forthwith the
12616	requested order. The requested order may:
12617	(a) Direct the department to take possession and control
12618	of all or part of the property, books, documents, accounts, and
12619	other records of the insurer and the premises occupied by it for
12620	transaction of its business and premium funds and other property
12621	of the insurer held by an affiliate; and
12622	(b) Until further order of court, enjoin the insurer and
12623	any affiliate and their officers, directors, managers, agents,
12624	and employees from removal, concealment, or other disposition of
12625	the insurer's property, books, records, or accounts and from
12626	transaction of the insurer's business except with the
12627	department's written consent.
12628	(2) The court's order shall be for such duration specified
12629	in the order as the court deems necessary to enable the office
12630	anddepartment to ascertain the insurer's condition. Upon motion
12631	of any party or affected person, or upon its own motion, the
12632	court may hold such hearings as it deems desirable, after such
12633	notice as it deems appropriate, and may extend, shorten, or
12634	modify the terms of the order. The court shall vacate the
12635	seizure order if the officedepartmentfails to commence a
12636	formal proceeding under this chapter after having had a
12637	reasonable opportunity to do so, and a seizure order is
12638	automatically vacated by issuance of the court's order pursuant
12639	to a formal delinquency proceeding under this chapter.
12640	(3) Entry of a seizure order under this section shall not
12641	constitute an anticipatory breach of any contract of the
12642	insurer.
12643	Section 220. Section 631.371, Florida Statutes, is amended
12644	to read:
12645	631.371 Seizure under order of the officedepartment.--
12646	(1) Upon the office'sdepartmentfiling a verified
12647	petition with any circuit judge of the proper judicial circuit
12648	as required by s. 631.021(2), which states that it believes that
12649	the interest of policyholders, the insurer, claimants,
12650	creditors, or the public will be endangered or jeopardized and
12651	that prima facie grounds exist for rehabilitation, liquidation,
12652	or conservation of an insurer under s. 631.051, s. 631.061, or
12653	s. 631.131, the officedepartmentmay request a seizure order
12654	and shall be entitled to an ex parte hearing forthwith and an
12655	appropriate seizure order from the judge or court in the
12656	interest of protecting the public and such insurer and its
12657	policyholders, claimants, or creditors. After a diligent effort
12658	is made to be heard by the judges of the circuit and such judges
12659	or the court fails or refuses to hear such petition for any
12660	reason, the officedepartmentshall then file a duplicate
12661	original of said petition and exhibits, if any, in the Circuit
12662	Court of Leon County along with an affidavit which shall state
12663	that a diligent effort was made to obtain such initial hearing
12664	in the judicial circuit where such hearing was sought and that
12665	the request to be heard was refused or that a hearing was not
12666	granted and the reasons therefor, if known. Upon compliance with
12667	the above and if said affidavit further states that the office
12668	departmentbelieves that irreparable harm will result to the
12669	public and the insurer and its policyholders, creditors, or
12670	claimants as a result of further delay, it may thereafter issue
12671	a seizure order on any ground that would justify court seizure
12672	under s. 631.361. Such seizure order may contain any or all the
12673	provisions of s. 631.361(1). The officedepartmentshall retain
12674	possession and control until the order is vacated or is replaced
12675	by an order of court pursuant to subsection (2) or subsection
12676	(3) or pursuant to a formal delinquency proceeding under this
12677	chapter.
12678	(2) The officedepartmentmay, at any time after seizure
12679	under its order, report its actions to the proper court; and, in
12680	the event that the insurer, for any reason, fails to avail
12681	itself of the judicial review provided for by law, then the
12682	officedepartmentshall forthwith report its actions to the
12683	proper court. The officedepartmentmay request the court to
12684	substitute its order for the office'sdepartment'sor it may
12685	seek any other order which it deems appropriate.
12686	(3) Every law enforcement officer of this state authorized
12687	by law shall assist the officedepartmentin making and
12688	enforcing any such seizure, and every such officer shall furnish
12689	it with such deputies, patrolmen, patrolwomen, or officers as
12690	are necessary to assist it in execution of its order.
12691	(4) Entry of a seizure order under this section shall not
12692	constitute an anticipatory breach of any contract of the
12693	insurer.
12694	Section 221. Section 631.391, Florida Statutes, is amended
12695	to read:
12696	631.391 Cooperation of officers and employees.--
12697	(1) Any officer, director, manager, trustee, agent,
12698	adjuster, employee, or independent contractor of any insurer or
12699	affiliate and any other person who possesses any executive
12700	authority over, or who exercises any control over, any segment
12701	of the affairs of the insurer or affiliate shall fully cooperate
12702	with the department and officein any proceeding under this
12703	chapter or any investigation preliminary or incidental to the
12704	proceeding. An order of rehabilitation or liquidation which
12705	results in the discharge or suspension of any of the persons
12706	listed above does not operate to release such person from the
12707	duty to cooperate with the department and officeas set out
12708	herein. To "cooperate" includes, but is not limited to, the
12709	following:
12710	(a) To reply promptly in writing to any inquiry from the
12711	department or officerequesting such a reply;
12712	(b) Promptly to make available and deliver to the
12713	department or officeany books, accounts, documents, other
12714	records, information, data processing software, or property of
12715	or pertaining to the insurer and in her or his possession,
12716	custody, or control; or
12717	(c) Promptly to provide access to all data processing
12718	records in hard copy and in electronic form and to data
12719	processing facilities and services.
12720	(2) No person shall obstruct or interfere with the
12721	department or officein the conduct of any delinquency
12722	proceeding or any investigation preliminary or incidental
12723	thereto.
12724	(3) This section does not prohibit any person from seeking
12725	legal relief from a court when aggrieved by the petition for
12726	liquidation or other delinquency proceeding or by other orders.
12727	(4) Any person referred to in subsection (1) who fails to
12728	cooperate with the department or office, or any other person who
12729	obstructs or interferes with the department or office, in the
12730	conduct of any delinquency proceeding or any investigation
12731	preliminary or incidental thereto, is guilty of a misdemeanor of
12732	the first degree, punishable as provided in s. 775.082 or by
12733	fine of not more than $10,000.
12734	(5) Refusal by any person referred to in subsection (1) to
12735	provide records upon the request of the department or officeis
12736	grounds for revocation of any insurance-related license,
12737	including, but not limited to, agent and third-party
12738	administrator licenses.
12739	Section 222. Section 631.392, Florida Statutes, is amended
12740	to read:
12741	631.392 Immunity.--There shall be no liability on the part
12742	of, and no cause of action of any nature shall arise against,
12743	the Chief Financial Officer,Insurance Commissioner orthe
12744	department, the office, or any of theiritsemployees or agents
12745	for any action taken by them in the performance of their powers
12746	and duties under this chapter.
12747	Section 223. Section 631.398, Florida Statutes, is amended
12748	to read:
12749	631.398 Prevention of insolvencies.--To aid in the
12750	detection and prevention of insurer insolvencies or impairments:
12751	(1) Any member insurer; agent, employee, or member of the
12752	board of directors; or representative of any insurance guaranty
12753	association may make reports and recommendations to the
12754	department or officeupon any matter germane to the solvency,
12755	liquidation, rehabilitation, or conservation of any member
12756	insurer or germane to the solvency of any company seeking to do
12757	an insurance business in this state. Such reports and
12758	recommendations are confidential and exempt from the provisions
12759	of s. 119.07(1) until the termination of a delinquency
12760	proceeding.
12761	(2) The officedepartmentshall:
12762	(a) Report to the board of directors of the appropriate
12763	insurance guaranty association when it has reasonable cause to
12764	believe from any examination, whether completed or in process,
12765	of any member insurer that such insurer may be an impaired or
12766	insolvent insurer.
12767	(b) Seek the advice and recommendations of the board of
12768	directors of the appropriate insurance guaranty association
12769	concerning any matter affecting the duties and responsibilities
12770	of the officedepartmentin relation to the financial condition
12771	of member companies and companies seeking admission to transact
12772	insurance business in this state.
12773	(3) The office and department jointlyshall, no later than
12774	the conclusion of any domestic insurer insolvency proceeding,
12775	prepare a summary report containing such information as is in
12776	theiritspossession relating to the history and causes of such
12777	insolvency, including a statement of the business practices of
12778	such insurer which led to such insolvency.
12779	Section 224. Section 631.54, Florida Statutes, is amended
12780	to read:
12781	631.54 Definitions.--As used in this part:
12782	(1) "Account" means any one of the three accounts created
12783	by s. 631.55.
12784	(2) "Association" means the Florida Insurance Guaranty
12785	Association, Incorporated.
12786	(3) "Covered claim" means an unpaid claim, including one
12787	of unearned premiums, which arises out of, and is within the
12788	coverage, and not in excess of, the applicable limits of an
12789	insurance policy to which this part applies, issued by an
12790	insurer, if such insurer becomes an insolvent insurer after
12791	October 1, 1970, and the claimant or insured is a resident of
12792	this state at the time of the insured event or the property from
12793	which the claim arises is permanently located in this state.
12794	"Covered claim" shall not include any amount due any reinsurer,
12795	insurer, insurance pool, or underwriting association, as
12796	subrogation, contribution, indemnification, or otherwise. Member
12797	insurers shall have no right of subrogation against the insured
12798	of any insolvent member.
12799	(4) "Department" means the Department of Insurance.
12800	(4)(5)"Expenses in handling claims" means allocated and
12801	unallocated expenses, including, but not limited to, general
12802	administrative expenses and those expenses which relate to the
12803	investigation, adjustment, defense, or settlement of specific
12804	claims under, or arising out of, a specific policy.
12805	(5)(6)"Insolvent insurer" means a member insurer
12806	authorized to transact insurance in this state, either at the
12807	time the policy was issued or when the insured event occurred,
12808	and against which an order of liquidation with a finding of
12809	insolvency has been entered by a court of competent jurisdiction
12810	if such order has become final by the exhaustion of appellate
12811	review.
12812	(6)(7)"Member insurer" means any person who writes any
12813	kind of insurance to which this part applies under s. 631.52,
12814	including the exchange of reciprocal or interinsurance
12815	contracts, and is licensed to transact insurance in this state.
12816	(7)(8)"Net direct written premiums" means direct gross
12817	premiums written in this state on insurance policies to which
12818	this part applies, less return premiums thereon and dividends
12819	paid or credited to policyholders on such direct business. "Net
12820	direct written premiums" does not include premiums on contracts
12821	between insurers or reinsurers.
12822	(8)(9)"Person" means individuals, children, firms,
12823	associations, joint ventures, partnerships, estates, trusts,
12824	business trusts, syndicates, fiduciaries, corporations, and all
12825	other groups or combinations.
12826	Section 225. Subsection (1) of section 631.55, Florida
12827	Statutes, is amended to read:
12828	631.55 Creation of the association.--
12829	(1) There is created a nonprofit corporation to be known
12830	as the "Florida Insurance Guaranty Association, Incorporated."
12831	All insurers defined as member insurers in s. 631.54(6)(7)shall
12832	be members of the association as a condition of their authority
12833	to transact insurance in this state, and, further, as a
12834	condition of such authority, an insurer shall agree to reimburse
12835	the association for all claim payments the association makes on
12836	said insurer's behalf if such insurer is subsequently
12837	rehabilitated. The association shall perform its functions under
12838	a plan of operation established and approved under s. 631.58 and
12839	shall exercise its powers through a board of directors
12840	established under s. 631.56. The corporation shall have all
12841	those powers granted or permitted nonprofit corporations, as
12842	provided in chapter 617.
12843	Section 226. Subsection (1) of section 631.56, Florida
12844	Statutes, is amended to read:
12845	631.56 Board of directors.--
12846	(1) The board of directors of the association shall
12847	consist of not less than five or more than nine persons serving
12848	terms as established in the plan of operation. The department
12849	shall approve and appoint to the board persons recommended by
12850	the member insurers. In the event the department finds that any
12851	recommended person does not meet the qualifications for service
12852	on the board, the department shall request the member insurers
12853	to recommend another person. Each member shall serve for a 4-
12854	year term and may be reappointed. Vacancies on the board shall
12855	be filled for the remaining period of the term in the same
12856	manner as initial appointments. If no members are selected by
12857	November 30, 1970, the department may appoint the initial
12858	members of the board of directors.
12859	Section 227. Paragraph (a) of subsection (1) and
12860	subsection (3) of section 631.57, Florida Statutes, are amended
12861	to read:
12862	631.57 Powers and duties of the association.--
12863	(1) The association shall:
12864	(a)1. Be obligated to the extent of the covered claims
12865	existing:
12866	a. Prior to adjudication of insolvency and arising within
12867	30 days after the determination of insolvency;
12868	b. Before the policy expiration date if less than 30 days
12869	after the determination; or
12870	c. Before the insured replaces the policy or causes its
12871	cancellation, if she or he does so within 30 days of the
12872	determination.
12873	2. The obligation under subparagraph 1. shall include only
12874	that amount of each covered claim which is in excess of $100 and
12875	is less than $300,000, except with respect to policies covering
12876	condominium associations or homeowners' associations, which
12877	associations have a responsibility to provide insurance coverage
12878	on residential units within the association, the obligation
12879	shall include that amount of each covered property insurance
12880	claim which is less than $100,000 multiplied by the number of
12881	condominium units or other residential units; however, as to
12882	homeowners' associations, this subparagraph applies only to
12883	claims for damage or loss to residential units and structures
12884	attached to residential units.
12885	3. In no event shall the association be obligated to a
12886	policyholder or claimant in an amount in excess of the
12887	obligation of the insolvent insurer under the policy from which
12888	the claim arises.
12889
12890	The foregoing notwithstanding, the association shall have no
12891	obligation to pay covered claims to be paid from the proceeds of
12892	bonds issued under s. 166.111(2). However, the association shall
12893	cause assessments to be made under paragraph (3)(e) for such
12894	covered claims, and such assessments shall be assigned and
12895	pledged under paragraph (3)(e) to or on behalf of the issuer of
12896	such bonds for the benefit of the holders of such bonds. The
12897	association shall administer any such covered claims and present
12898	valid covered claims for payment in accordance with the
12899	provisions of the assistance program in connection with which
12900	such bonds have been issued.
12901	(3)(a) To the extent necessary to secure the funds for the
12902	respective accounts for the payment of covered claims and also
12903	to pay the reasonable costs to administer the same, the office
12904	department, upon certification of the board of directors, shall
12905	levy assessments in the proportion that each insurer's net
12906	direct written premiums in this state in the classes protected
12907	by the account bears to the total of said net direct written
12908	premiums received in this state by all such insurers for the
12909	preceding calendar year for the kinds of insurance included
12910	within such account. Assessments shall be remitted to and
12911	administered by the board of directors in the manner specified
12912	by the approved plan. Each insurer so assessed shall have at
12913	least 30 days' written notice as to the date the assessment is
12914	due and payable. Every assessment shall be made as a uniform
12915	percentage applicable to the net direct written premiums of each
12916	insurer in the kinds of insurance included within the account in
12917	which the assessment is made. The assessments levied against
12918	any insurer shall not exceed in any one year more than 2 percent
12919	of that insurer's net direct written premiums in this state for
12920	the kinds of insurance included within such account during the
12921	calendar year next preceding the date of such assessments.
12922	(b) If sufficient funds from such assessments, together
12923	with funds previously raised, are not available in any one year
12924	in the respective account to make all the payments or
12925	reimbursements then owing to insurers, the funds available shall
12926	be prorated and the unpaid portion shall be paid as soon
12927	thereafter as funds become available.
12928	(c) Assessments shall be included as an appropriate factor
12929	in the making of rates.
12930	(d) No state funds of any kind shall be allocated or paid
12931	to said association or any of its accounts.
12932	(e)1.a. In addition to assessments otherwise authorized in
12933	paragraph (a), as a temporary measure related to insolvencies
12934	caused by Hurricane Andrew, and to the extent necessary to
12935	secure the funds for the account specified in s. 631.55(2)(c),
12936	or to retire indebtedness, including, without limitation, the
12937	principal, redemption premium, if any, and interest on, and
12938	related costs of issuance of, bonds issued under s. 166.111(2),
12939	and the funding of any reserves and other payments required
12940	under the bond resolution or trust indenture pursuant to which
12941	such bonds have been issued, the department, upon certification
12942	of the board of directors, shall levy assessments upon insurers
12943	holding a certificate of authority as follows:
12944	(I) Except as provided in sub-sub-subparagraph (II), the
12945	assessments payable under this paragraph by any insurer shall
12946	not exceed in any 1 year more than 2 percent of that insurer's
12947	direct written premiums, net of refunds, in this state during
12948	the preceding calendar year for the kinds of insurance within
12949	the account specified in s. 631.55(2)(c).
12950	(II) If the amount levied under sub-sub-subparagraph (I)
12951	is less than 2 percent of the insurer's direct written premiums,
12952	net of refunds, in this state during calendar year 1991 for the
12953	kinds of insurance within the account specified in s.
12954	631.55(2)(c), in addition to and separate from such assessment,
12955	the assessment shall also include the difference between the
12956	amount calculated based on calendar year 1991 and the amount
12957	determined under sub-sub-subparagraph (I). If this sub-sub-
12958	subparagraph is held invalid, the invalidity shall not affect
12959	other provisions of this section, and to this end the provisions
12960	of this section are declared severable.
12961	(III) In addition to any other insurers subject to this
12962	subparagraph, this subparagraph also applies to any insurer that
12963	held a certificate of authority on August 24, 1992. If this
12964	sub-sub-subparagraph is held invalid, the invalidity shall not
12965	affect other provisions of this section, and to this end the
12966	provisions of this section are declared severable.
12967	b. Any assessments authorized under this paragraph shall
12968	be levied by the department upon insurers referred to in sub-
12969	subparagraph a., upon certification as to the need therefor by
12970	the board of directors, in 1992 and in each year that bonds
12971	issued under s. 166.111(2) are outstanding, in such amounts up
12972	to such 2 percent limit as required in order to provide for the
12973	full and timely payment of the principal of, redemption premium,
12974	if any, and interest on, and related costs of, issuance of bonds
12975	issued under s. 166.111(2). The assessments provided for in
12976	this paragraph are hereby assigned and pledged to a municipality
12977	issuing bonds under s. 166.111(2)(b), for the benefit of the
12978	holders of such bonds, in order to enable such municipality to
12979	provide for the payment of the principal of, redemption premium,
12980	if any, and interest on such bonds, the cost of issuance of such
12981	bonds, and the funding of any reserves and other payments
12982	required under the bond resolution or trust indenture pursuant
12983	to which such bonds have been issued, without the necessity of
12984	any further action by the association, the department, or any
12985	other party. To the extent that bonds are issued under s.
12986	166.111(2), the proceeds of assessments levied under this
12987	paragraph shall be remitted directly to and administered by the
12988	trustee appointed for such bonds.
12989	c. Assessments under this paragraph shall be payable in 12
12990	monthly installments with the first installment being due and
12991	payable at the end of the month after an assessment is levied,
12992	and subsequent installments being due not later than the end of
12993	each succeeding month.
12994	d. The association shall issue a monthly report on the
12995	status of the use of the bond proceeds as related to
12996	insolvencies caused by Hurricane Andrew. The report must contain
12997	the number of claims paid and the amount of claims paid. The
12998	association shall also include an analysis of the revenue
12999	generated from the additional assessment levied under this
13000	subsection. The report must be sent to the Legislature and the
13001	Insurance Commissioner monthly.
13002	2. In order to assure that insurers paying assessments
13003	levied under this paragraph continue to charge rates that are
13004	neither inadequate nor excessive, within 90 days after being
13005	notified of such assessments, each insurer that is to be
13006	assessed pursuant to this paragraph shall make a rate filing for
13007	coverage included within the account specified in s.
13008	631.55(2)(c) and for which rates are required to be filed under
13009	s. 627.062. If the filing reflects a rate change that, as a
13010	percentage, is equal to the difference between the rate of such
13011	assessment and the rate of the previous year's assessment under
13012	this paragraph, the filing shall consist of a certification so
13013	stating and shall be deemed approved when made, subject to the
13014	department's continuing authority to require actuarial
13015	justification as to the adequacy of any rate at any time. Any
13016	rate change of a different percentage shall be subject to the
13017	standards and procedures of s. 627.062.
13018	Section 228. Section 631.59, Florida Statutes, is amended
13019	to read:
13020	631.59 Duties and powers of department and officeof
13021	Insurance.--
13022	(1) The department shall:
13023	(a)notify the association of the existence of an
13024	insolvent insurer not later than 3 days after it receives notice
13025	of the determination of the insolvency; and
13026	(b) Upon request of the board of directors, provide the
13027	association with a statement of the net direct written premiums
13028	of each member insurer.
13029	(2) The department may:
13030	(a)require that the association notify the insureds of
13031	the insolvent insurer and any other interested parties of the
13032	determination of insolvency and of their rights under this part.
13033	Such notification shall be by mail at their last known
13034	addresses, when available, but if sufficient information for
13035	notification by mail is not available, notice by publication in
13036	a newspaper of general circulation shall be sufficient.
13037	(3) The office shall, upon request of the board of
13038	directors, provide the association with a statement of the net
13039	direct written premiums of each member insurer.
13040	(4)(b)The office may:
13041	(a)Suspend or revoke the certificate of authority to
13042	transact insurance in this state of any member insurer which
13043	fails to pay an assessment when due or fails to comply with the
13044	plan of operation. As an alternative, the officedepartmentmay
13045	levy a fine on any member insurer which fails to pay an
13046	assessment when due. Such fine may not exceed 5 percent of the
13047	unpaid assessment per month, except that no fine shall be less
13048	than $100 per month.
13049	(b)(c)Revoke the designation of any servicing facility if
13050	it finds claims are being handled unsatisfactorily.
13051	Section 229. Section 631.62, Florida Statutes, is amended
13052	to read:
13053	631.62 Prevention of insolvencies.--To aid in the
13054	detection and prevention of insurer insolvencies:
13055	(1) It shall be the duty of the board of directors, upon
13056	majority vote, to notify the officedepartmentof any
13057	information indicating any member insurer may be insolvent or in
13058	a financial condition hazardous to the policyholders or the
13059	public.
13060	(2) The board of directors may, upon majority vote,
13061	request that the officedepartmentorder an examination of any
13062	member insurer which the board in good faith believes may be in
13063	a financial condition hazardous to the policyholders or the
13064	public. Within 30 days of the receipt of such request, the
13065	officedepartmentshall begin such examination. The examination
13066	may be conducted as a National Association of Insurance
13067	Commissioners examination or may be conducted by such persons as
13068	the officedepartmentdesignates. The cost of such examination
13069	shall be paid by the association and the examination report
13070	shall be treated as are other examination reports pursuant to s.
13071	624.319. In no event shall such examination report be released
13072	to the board of directors prior to its release to the public.
13073	The officedepartmentshall notify the board of directors when
13074	the examination is completed. The request for an examination
13075	shall be kept on file by the officedepartment; such request is
13076	confidential and exempt from the provisions of s. 119.07(1)
13077	until the examination report is released to the public.
13078	(3) The board of directors may, upon majority vote, make
13079	reports and recommendations to the department or officeupon any
13080	matter germane to the solvency, liquidation, rehabilitation, or
13081	conservation of any member insurer. Such reports and
13082	recommendations are confidential and exempt from the provisions
13083	of s. 119.07(1) until the termination of a delinquency
13084	proceeding.
13085	(4) The board of directors may, upon majority vote, make
13086	recommendations to the officedepartmentfor the detection and
13087	prevention of insurer insolvencies.
13088	Section 230. Section 631.66, Florida Statutes, is amended
13089	to read:
13090	631.66 Immunity.--There shall be no liability on the part
13091	of, and no cause of action of any nature shall arise against,
13092	any member insurer, the association or its agents or employees,
13093	the board of directors, the Chief Financial Officer,or the
13094	department or office or theiritsrepresentatives for any action
13095	taken by them in the performance of their powers and duties
13096	under this part. Such immunity shall extend to the participation
13097	in any organization of one or more other state associations of
13098	similar purposes and to any such organization and its agents or
13099	employees.
13100	Section 231. Section 631.714, Florida Statutes, is amended
13101	to read:
13102	631.714 Definitions.--As used in this part, the term:
13103	(1) "Account" means any of the three accounts created in
13104	s. 631.715.
13105	(2) "Association" means the Florida Life and Health
13106	Insurance Guaranty Association created in s. 631.715.
13107	(3) "Contractual obligation" means any obligation under
13108	covered policies.
13109	(4) "Covered policy" means any policy or contract set out
13110	in s. 631.713 and reduced to written, printed, or other tangible
13111	form.
13112	(5) "Department" means the Department of Insurance.
13113	(5)(6)"Impaired insurer" means a member insurer deemed by
13114	the department to be potentially unable to fulfill its
13115	contractual obligations and not an insolvent insurer.
13116	(6)(7)"Insolvent insurer" means a member insurer
13117	authorized to transact insurance in this state, either at the
13118	time the policy was issued or when the insured event occurred,
13119	and against which an order of liquidation with a finding of
13120	insolvency has been entered by a court of competent
13121	jurisdiction, if such order has become final by the exhaustion
13122	of appellate review.
13123	(7)(8)"Member insurer" means any person licensed to
13124	transact in this state any kind of insurance as set out in s.
13125	631.713.
13126	(8)(9)"Premium" means any direct gross insurance premium
13127	and any annuity consideration written on covered policies, less
13128	return premium and consideration thereon and dividends paid or
13129	credited to policyholders on such direct business. "Premium"
13130	does not include premium and consideration on contracts between
13131	insurers and reinsurers.
13132	(9)(10)"Person" means any individual, corporation,
13133	partnership, association, or voluntary organization.
13134	(10)(11)"Resident" means any person who resides in this
13135	state at the time a member insurer is determined to be an
13136	impaired or insolvent insurer and to whom contractual
13137	obligations are owed by such impaired or insolvent member
13138	insurer.
13139	Section 232. Subsections (2) and (3) of section 631.72,
13140	Florida Statutes, are amended to read:
13141	631.72 Premium or income tax credits for assessments
13142	paid.--
13143	(2) If a member insurer ceases doing business in this
13144	state and surrenders to the officedepartmentits certificate of
13145	authority to transact insurance in this state, all uncredited
13146	assessments may be credited as provided in this section against
13147	either its premium or corporate income tax liabilities imposed
13148	pursuant to ss. 624.509 and 220.11 for the year it ceases doing
13149	business.
13150	(3) Any sums acquired by refund pursuant to s. 631.718(6)
13151	from the association which have theretofore been written off by
13152	contributing insurers and offset against premium or corporate
13153	income taxes as provided in subsection(1) and which are not
13154	needed for purposes of this part shall be paid by the insurer to
13155	the Department of Revenue for deposit with the Chief Financial
13156	OfficerTreasurerto the credit of the General Revenue Fund.
13157	Section 233. Section 631.722, Florida Statutes, is amended
13158	to read:
13159	631.722 Powers and duties of department and office.--
13160	(1) The officedepartmentshall:
13161	(a) Upon request of the board of directors, provide the
13162	association with a statement of the premiums in each of the
13163	appropriate states for each member insurer.
13164	(b) When an impairment is declared and the amount of the
13165	impairment is determined, serve a demand upon the impaired
13166	insurer to make good the impairment within a reasonable time.
13167	Notice to the impaired insurer shall constitute notice to its
13168	shareholders, if any. The failure of the insurer to promptly
13169	comply with such demand shall not excuse the association from
13170	the performance of its powers and duties under this part.
13171	(2)(c)The department shall,in any liquidation or
13172	rehabilitation proceeding involving a domestic insurer, be
13173	appointed as the liquidator or rehabilitator. If a foreign or
13174	alien member insurer is subject to a liquidation proceeding in
13175	its domiciliary jurisdiction or state of entry, the department
13176	shall be appointed conservator.
13177	(3)(2) The officedepartmentmay suspend or revoke, after
13178	notice and hearing, the certificate of authority to transact
13179	insurance in this state of any member insurer that fails to pay
13180	an assessment when due or fails to comply with the approved plan
13181	of operation of the association. As an alternative, the office
13182	departmentmay levy a forfeiture on any member insurer that
13183	fails to pay an assessment when due. Such forfeiture shall not
13184	exceed 5 percent of the unpaid assessment per month, but no
13185	forfeiture shall be less than $100 per month.
13186	(4)(3)Any action of the board of directors or of the
13187	association may be appealed to the officedepartmentby any
13188	member insurer if such appeal is taken within 30 days of the
13189	action being appealed. If a member company is appealing an
13190	assessment, the amount assessed shall be paid to the association
13191	and available to meet association obligations during the
13192	pendency of the appeal. If the appeal on the assessment is
13193	upheld, the amount paid in error or excess shall be returned to
13194	the member company. Any final action or order of the office
13195	departmentshall be subject to judicial review in a court of
13196	competent jurisdiction.
13197	(5)(4)The liquidator, rehabilitator, or conservator of
13198	any impaired insurer may notify all interested persons of the
13199	effect of this part.
13200	Section 234. Section 631.723, Florida Statutes, is amended
13201	to read:
13202	631.723 Prevention of insolvencies.--To aid in the
13203	detection and prevention of insurer insolvencies or impairments:
13204	(1) The board of directors may, upon majority vote, make
13205	reports and recommendations to the department or officeupon any
13206	matter germane to the solvency, liquidation, rehabilitation, or
13207	conservation of any member insurer or germane to the solvency of
13208	any company seeking to do an insurance business in this state.
13209	Such reports and recommendations are confidential and exempt
13210	from the provisions of s. 119.07(1) until the termination of a
13211	delinquency proceeding.
13212	(2) It is the duty of the board of directors, upon a
13213	majority vote, to notify the officedepartmentof any
13214	information indicating that any member insurer may be an
13215	impaired or insolvent insurer.
13216	(3) The board of directors may, upon majority vote,
13217	request that the officedepartmentorder an examination of any
13218	member insurer which the board in good faith believes may be an
13219	impaired or insolvent insurer. Within 30 days of the receipt of
13220	such a request, the officedepartmentshall begin such an
13221	examination. The examination may be conducted as a National
13222	Association of Insurance Commissioners examination or may be
13223	conducted by such persons as the officeInsurance Commissioner
13224	designates. The cost of such examination shall be paid by the
13225	association, and the examination report shall be treated in a
13226	manner similar to other examination reports pursuant to s.
13227	624.319. In no event may such examination report be released to
13228	the board of directors before its release to the public, but
13229	this does not preclude the officedepartmentfrom complying with
13230	s. 631.398(2). The officedepartmentshall notify the board of
13231	directors when the examination is completed. The request for an
13232	examination shall be kept on file by the officedepartment; such
13233	request is confidential and exempt from the provisions of s.
13234	119.07(1) until the examination report is released to the
13235	public.
13236	(4) The board of directors may, upon majority vote, make
13237	recommendations to the officedepartmentfor the detection and
13238	prevention of insurer insolvencies.
13239	Section 235. Section 631.727, Florida Statutes, is amended
13240	to read:
13241	631.727 Immunity.--There shall be no liability on the part
13242	of, and no cause of action of any nature shall arise against,
13243	any member insurer or its agents or employees, the association
13244	or its agents or employees, members of the board of directors,
13245	the Chief Financial Officer, or the department or office or
13246	theiritsrepresentatives for any action taken by them in the
13247	performance of their powers and duties under this part. Such
13248	immunity shall extend to the participation in any organization
13249	of one or more other state associations of similar purposes and
13250	to any such organization and its agents or employees.
13251	Section 236. Section 631.813, Florida Statutes, is amended
13252	to read:
13253	631.813 Application of part.--This part shall apply to HMO
13254	contractual obligations to residents of Florida by HMOs
13255	possessing a valid certificate of authority issued by the
13256	Florida Department of Insuranceas provided by part I of chapter
13257	641. The provisions of this part shall not apply to persons
13258	participating in medical assistance programs under the Medicaid
13259	program.
13260	Section 237. Section 631.814, Florida Statutes, is amended
13261	to read:
13262	631.814 Definitions.--As used in this part, the term:
13263	(1) "Plan" means the Florida Health Maintenance
13264	Organization Consumer Assistance Plan created by this part.
13265	(2) "Board" means the board of directors of the plan.
13266	(3) "Contractual obligations" means any obligation under
13267	covered health care policies.
13268	(4) "Covered policy" means any policy or contract issued
13269	by an HMO for health care services.
13270	(5) "Date of insolvency" means the effective date of an
13271	order of liquidation entered by a court of competent
13272	jurisdiction.
13273	(6) "Department" means the Florida Department of
13274	Insurance.
13275	(6)(7)"Health care services" means comprehensive health
13276	care services as defined in s. 641.19.
13277	(7)(8)"HMO" means a health maintenance organization
13278	possessing a valid certificate of authority issued by the
13279	department pursuant to part I of chapter 641.
13280	(8)(9)"Insolvent HMO" means an HMO against which an order
13281	of rehabilitation or liquidation has been entered by a court of
13282	competent jurisdiction, with the department appointed as
13283	receiver, even if such order has not become final by the
13284	exhaustion of appellate reviews.
13285	(9)(10)"Person" means any individual, corporation,
13286	partnership, association, or voluntary organization.
13287	(10)(11)"Subscriber" means any resident of this state who
13288	is enrolled for benefits provided by an HMO and who makes
13289	premium payments or for whom premium payments are made.
13290	Section 238. Section 631.821, Florida Statutes, is amended
13291	to read:
13292	631.821 Powers and duties of the department and office.--
13293	(1) The officedepartmentmay suspend or revoke, after
13294	notice and hearing, the certificate of authority of a member HMO
13295	that fails to pay an assessment when due, fails to comply with
13296	the approved plan of operation of the plan, or fails either to
13297	timely comply with or to timely appeal pursuant to subsection
13298	(2) its appointment under s. 631.818(2).
13299	(2) Any action of the board of directors of the plan may
13300	be appealed to the department by any member HMO if such appeal
13301	is taken within 21 days of the action being appealed; however,
13302	the HMO must comply with such action pending exhaustion of
13303	appeal under s. 631.818(2). Any appeal shall be promptly
13304	determined by the department, and final action or order of the
13305	department shall be subject to judicial review in a court of
13306	competent jurisdiction.
13307	(3) The department may:
13308	(a)require that the plan notify the subscriber of the
13309	insolvent HMO and any other interested parties of the
13310	determination of insolvency and of their rights under this part.
13311	Such notification shall be by mail at their last known
13312	addresses, when available, but if sufficient information for
13313	notification by mail is not available, notice by publication in
13314	a newspaper of general circulation shall be sufficient.
13315	(4)(b)The office mayrevoke the designation of any
13316	servicing facility or administrator if it finds claims are being
13317	handled unsatisfactorily.
13318	Section 239. Section 631.823, Florida Statutes, is amended
13319	to read:
13320	631.823 Examination of the plan; annual report.--The plan
13321	shall be subject to examination and regulation by the office
13322	department. The board of directors shall submit to the
13323	department and office, not later than May 1 of each year, a
13324	financial report for the preceding calendar year in a form
13325	approved by the commissiondepartmentand a report of its
13326	activities during the preceding calendar year.
13327	Section 240. Section 631.825, Florida Statutes, is amended
13328	to read:
13329	631.825 Immunity.--There shall be no liability on the part
13330	of, and no cause of action of any nature shall arise against,
13331	any member HMO or its agents or employees, the plan or its
13332	agents or employees, members of the board of directors, the
13333	Chief Financial Officer, or the department or office or their
13334	itsrepresentatives for any action taken by them in the
13335	performance of their powers and duties under this part.
13336	Section 241. Section 631.904, Florida Statutes, is amended
13337	to read:
13338	631.904 Definitions.--As used in this part, the term:
13339	(1) "Corporation" means the Florida Workers' Compensation
13340	Insurance Guaranty Association, Incorporated.
13341	(2) "Covered claim" means an unpaid claim, including a
13342	claim for return of unearned premiums, which arises out of, is
13343	within the coverage of, and is not in excess of the applicable
13344	limits of, an insurance policy to which this part applies, which
13345	policy was issued by an insurer and which claim is made on
13346	behalf of a claimant or insured who was a resident of this state
13347	at the time of the injury. The term "covered claim" does not
13348	include any amount sought as a return of premium under any
13349	retrospective rating plan; any amount due any reinsurer,
13350	insurer, insurance pool, or underwriting association, as
13351	subrogation recoveries or otherwise; or any return of premium
13352	resulting from a policy that was not in force on the date of the
13353	final order of liquidation. Member insurers have no right of
13354	subrogation against the insured of any insolvent insurer. This
13355	provision shall be applied retroactively to cover claims of an
13356	insolvent self-insurance fund resulting from accidents or losses
13357	incurred prior to January 1, 1994, regardless of the date the
13358	Department of Insurance filed a petition in circuit court was
13359	filedalleging insolvency and the date the court entered an
13360	order appointing a receiver.
13361	(3) "Department" means the Department of Insurance.
13362	(3)(4)"Insolvency" means that condition in which all of
13363	the assets of the insurer, if made immediately available, would
13364	not be sufficient to discharge all of its liabilities or that
13365	condition in which the insurer is unable to pay its debts as
13366	they become due in the usual course of business. When the
13367	context of any provision of this part so indicates, insolvency
13368	also includes impairment of surplus or impairment of capital.
13369	(4)(5)"Insolvent insurer" means an insurer that was
13370	authorized to transact insurance in this state, either at the
13371	time the policy was issued or when the insured event occurred,
13372	and against which an order of liquidation with a finding of
13373	insolvency has been entered by a court of competent jurisdiction
13374	if such order has become final by the exhaustion of appellate
13375	review.
13376	(5)(6)"Insurer" means an insurance carrier or self-
13377	insurance fund authorized to insure under chapter 440. For
13378	purposes of this act, "insurer" does not include a qualified
13379	local government self-insurance fund, as defined in s. 624.4622,
13380	or an individual self-insurer as defined in s. 440.385.
13381	(6)(7)"Self-insurance fund" means a group self-insurance
13382	fund authorized under s. 624.4621, a commercial self-insurance
13383	fund writing workers' compensation insurance authorized under s.
13384	624.462, or an assessable mutual insurer authorized under s.
13385	628.6011. For purposes of this act, "self-insurance fund" does
13386	not include a qualified local government self-insurance fund, as
13387	defined in s. 624.4622, or an individual self-insurer as defined
13388	in s. 440.385.
13389	Section 242. Subsection (1) of section 631.911, Florida
13390	Statutes, is amended to read:
13391	631.911 Creation of the Florida Workers' Compensation
13392	Insurance Guaranty Association, Incorporated; merger; effect of
13393	merger.--
13394	(1)(a) The Florida Self-Insurance Fund Guaranty
13395	Association established in former part V of chapter 631 and the
13396	workers' compensation insurance account, which includes excess
13397	workers' compensation insurance, established in former s.
13398	631.55(2)(a) shall be merged, effective October 1, 1997, or as
13399	provided in paragraph (b),in accordance with the plan of
13400	operation adopted by the interim board of directors. The
13401	successor nonprofit corporation shall be known as the "Florida
13402	Workers' Compensation Insurance Guaranty Association,
13403	Incorporated."
13404	(b) The merger may be effected prior to October 1, 1997,
13405	if:
13406	1. The interim board of directors of the Workers'
13407	Compensation Insurance Guaranty Association provides the
13408	Department of Insurance with written notice of its intent to
13409	effectuate the merger as of a date certain and its functional
13410	readiness to initiate operations, such notice setting forth the
13411	plan or summary thereof for effecting the merger; and,
13412	2. The department, upon review of the plan or summary
13413	thereof, determines the Workers' Compensation Insurance Guaranty
13414	Association is functionally ready to initiate operations and so
13415	certifies to the interim board of directors.
13416	(c) Prior to the effective date of the merger, the Florida
13417	Self-Insurance Fund Guaranty Association shall be the entity
13418	responsible for the claims of insolvent self-insurance funds
13419	resulting from accidents or losses incurred prior to January 1,
13420	1994, regardless of the date the Department of Insurance filed a
13421	petition in circuit court alleging insolvency and the date the
13422	court entered an order appointing a receiver.
13423	(b)(d)Upon the effective date of the merger:
13424	1. The Florida Self-Insurance Fund Guaranty Association
13425	and the workers' compensation insurance account within the
13426	Florida Insurance Guaranty Association cease to exist and are
13427	succeeded by the Florida Workers' Compensation Insurance
13428	Guaranty Association.
13429	2. Title to all assets of any description, all real estate
13430	and other property, or any interest therein, owned by each party
13431	to the merger is vested in the successor corporation without
13432	reversion or impairment.
13433	3. The successor corporation shall be responsible and
13434	liable for all the liabilities and obligations of each party to
13435	the merger.
13436	4. Any claim existing or action or proceeding pending by
13437	or against any party to the merger may be continued as if the
13438	merger did not occur or the successor corporation may be
13439	substituted in the proceeding for the corporation or account
13440	which ceased existence.
13441	5. Neither the rights of creditors nor any liens upon the
13442	property of any party to the merger shall be impaired by such
13443	merger.
13444	6. Outstanding assessments levied by the Florida Self-
13445	Insurance Guaranty Association or the Florida Insurance Guaranty
13446	Association on behalf of the workers' compensation insurance
13447	account remain in full force and effect and shall be paid when
13448	due.
13449	Section 243. Subsections (1) and (3) of section 631.912,
13450	Florida Statutes, are amended to read:
13451	631.912 Board of directors.--
13452	(1) The board of directors of the corporation shall
13453	consist of 11 persons, 1 of whom is the insurance consumer
13454	advocate appointed under s. 627.0613 or designee and 1 of whom
13455	is designated by the Chief Financial OfficerInsurance
13456	Commissioner. The department shall appoint to the board 6
13457	persons selected by private carriers from among the 20 workers'
13458	compensation insurers with the largest amount of net direct
13459	written premium as determined by the department, and 3 persons
13460	selected by the self-insurance funds. At least two of the
13461	private carriers shall be foreign carriers authorized to do
13462	business in this state. The board shall elect a chairperson from
13463	among its members. The Chief Financial Officercommissionermay
13464	remove any board member for cause. Each board member shall
13465	serve for a 4-year term and may be reappointed, except that four
13466	members of the initial board shall have 2-year terms so as to
13467	stagger the periods of service. A vacancy on the board shall be
13468	filled for the remaining period of the term in the same manner
13469	by which the original appointment was made.
13470	(3) Effective upon this act becoming a law, the persons on
13471	the board of directors created pursuant to s. 627.311(4)(a) who
13472	evidence a willingness to serve in writing, shall serve as an
13473	interim board of directors of the corporation until the initial
13474	board of directors has been appointed for the corporation in
13475	accordance with the provisions of subsection (1). The interim
13476	board of directors shall serve for a period not to exceed 6
13477	months. The initial meeting shall be called by the commissioner
13478	within 30 days after this act becomes a law. The interim board
13479	of directors shall establish a process for the selection of
13480	persons to serve on the board of the Florida Workers'
13481	Compensation Insurance Guaranty Association in accordance with
13482	the terms of subsection (1). The board of directors shall adopt
13483	an interim plan of operation to effect the merger in s. 631.911
13484	and avoid any interruption of benefit payments to injured
13485	workers. When necessary and upon approval of the chairs of
13486	their respective board of directors, the Florida Self-Insurance
13487	Fund Guaranty Association and the Florida Insurance Guaranty
13488	Association shall provide staff support to the interim board of
13489	directors. The board shall submit the interim plan to the
13490	commissioner, who shall approve or disapprove the plan within 30
13491	days after receipt.
13492	Section 244. Section 631.917, Florida Statutes, is amended
13493	to read:
13494	631.917 Prevention of insolvencies.--To aid in the
13495	detection and prevention of insolvencies or impairments:
13496	(1)(a) The board may make reasonable and lawful
13497	investigation into the practices of any third-party
13498	administrator or service company for a self-insurance fund
13499	declared insolvent by the court.
13500	(b) If the results of an investigation reasonably lead to
13501	a finding that certain actions taken or not taken by those
13502	handling, processing, or preparing covered claims for payment or
13503	other benefit pursuant to any workers' compensation insurance
13504	policy contributed to the insolvency of an insurer, such
13505	information may, in the discretion of the board, be provided to
13506	the department or officein an expedited manner.
13507	(2) The board of directors may make reports and
13508	recommendations to the department or officeupon any matter
13509	germane to the solvency, liquidation, rehabilitation, or
13510	conservation of any member insurer or germane to the solvency of
13511	any insurer seeking to do insurance business in this state.
13512	(3) The board of directors, in its discretion, may notify
13513	the officedepartmentof any information indicating that any
13514	member insurer may be an impaired or insolvent insurer.
13515	(4) The board of directors, in its discretion, may request
13516	that the officedepartmentorder an examination of any member
13517	insurer which the board in good faith believes may be an
13518	impaired or insolvent insurer. Within 30 days after receipt of
13519	such a request, the officedepartmentshall begin such an
13520	examination. The examination may be conducted as a National
13521	Association of Insurance Commissioners examination or may be
13522	conducted by such persons as the officeInsurance Commissioner
13523	designates. The cost of such examination shall be paid by the
13524	corporation, and the examination report shall be treated in a
13525	manner similar to other examination reports pursuant to s.
13526	624.319. In no event may such examination report be released to
13527	the board of directors before its release to the public, but
13528	this requirement does not preclude the officedepartmentfrom
13529	complying with s. 631.398(2). The officedepartmentshall
13530	notify the board of directors when the examination is completed.
13531	The request for an examination shall be kept on file by the
13532	officedepartment.
13533	(5) The board is authorized to assist and aid the
13534	department or office, in any manner consistent with existing
13535	laws and this chapter, in the department's or office's
13536	investigation or referral for prosecution of those whose action
13537	or inaction may have contributed to the impairment or insolvency
13538	of the insurer.
13539	(6) The board may make recommendations to the office
13540	departmentfor the detection and prevention of insurer
13541	insolvencies.
13542	Section 245. Section 631.918, Florida Statutes, is amended
13543	to read:
13544	631.918 Immunity.--There is no liability on the part of,
13545	and a cause of action may not arise against, the corporation,
13546	its agents or employees, or members of its board of directors,
13547	the Chief Financial Officer, or the department or office or
13548	theiritsagents or employees, for any action taken by them in
13549	the performance of their powers and duties under this section,
13550	unless such action is found to be a violation of antitrust laws,
13551	was in bad faith, or was undertaken with malicious purpose or in
13552	a manner exhibiting wanton and willful disregard of human
13553	rights, safety, or property.
13554	Section 246. Section 631.931, Florida Statutes, is amended
13555	to read:
13556	631.931 Reports and recommendations by board; public
13557	records exemption.--Reports and recommendations made by the
13558	Board of Directors of the Florida Workers' Compensation
13559	Insurance Guaranty Association to the Department of Insurance
13560	under s. 631.917 upon any matter germane to the solvency,
13561	liquidation, rehabilitation, or conservation of any member
13562	insurer are confidential and exempt from the provisions of s.
13563	119.07(1) and s. 24(a), Art. I of the State Constitution until
13564	the termination of a delinquency proceeding.
13565	Section 247. Subsection (4) of section 634.3284, Florida
13566	Statutes, is amended to read:
13567	634.3284 Civil remedy.--
13568	(4) This section shall not be construed to authorize a
13569	class action suit against a home warranty association or a civil
13570	action against the department or office or their, its employees,
13571	or the Chief Financial OfficerInsurance Commissioner.
13572	Section 248. Subsection (2) of section 634.430, Florida
13573	Statutes, is amended to read:
13574	634.430 Dissolution or liquidation.--
13575	(2) The department and officeshall be notified of the
13576	commencement of voluntary dissolution proceedings of a
13577	manufacturer licensed under this part. As to the warranty
13578	operations of a manufacturer in this state, the department shall
13579	supervise the voluntary dissolution and shall require protection
13580	of the interests of the department, office,and consumers who
13581	have been issued service warranties by the manufacturer by the
13582	continuation of deposits or bonds as required by this part until
13583	that time as all warranties issued by the manufacturer are no
13584	longer in effect or all outstanding warranties have been
13585	assigned to another association approved by the department and
13586	office. The notification as provided herein shall be made by the
13587	manufacturer within 30 days of the commencement of any legal
13588	action for dissolution.
13589	Section 249. Subsection (4) of section 634.433, Florida
13590	Statutes, is amended to read:
13591	634.433 Civil remedy.--
13592	(4) This section shall not be construed to authorize a
13593	class action suit against a service warranty association or a
13594	civil action against the department, the office, theirits
13595	employees, or the Chief Financial OfficerInsurance
13596	Commissioner.
13597	Section 250. Section 636.067, Florida Statutes, is amended
13598	to read:
13599	636.067 Rules.--The commission maydepartment has
13600	authority toadopt rules pursuant to ss. 120.536(1) and 120.54
13601	to implement the provisions of this act. A violation of any
13602	such rule subjects the violator to the provisions of s. 636.048.
13603	Section 251. Section 641.183, Florida Statutes, is amended
13604	to read:
13605	641.183 Statutory accounting procedures; transition
13606	provisions.--All health maintenance organizations, authorized to
13607	do business under this chapter on January 1, 2001, shall elect a
13608	transition method for compliance with statutory accounting
13609	principles as follows:
13610	(1) Report assets acquired prior to June 30, 2001, in
13611	accordance with s. 641.35, Florida Statutes (2000), through
13612	December 31, 2005. Assets acquired on or after June 30, 2001,
13613	shall be accounted for in accordance with the National
13614	Association of Insurance Commissioners Accounting Practices and
13615	Procedures Manual as of 2002effective January 1, 2001. A health
13616	maintenance organization electing to report assets pursuant to
13617	this subsection shall maintain complete and detailed records
13618	reflecting such accounting treatment; or
13619	(2) Report all assets in accordance with the NAIC
13620	Accounting Practices and Procedures Manual as of 2002effective
13621	January 1, 2001.
13622	Section 252. Section 641.185, Florida Statutes, is amended
13623	to read:
13624	641.185 Health maintenance organization subscriber
13625	protections.--
13626	(1) With respect to the provisions of this part and part
13627	III, the principles expressed in the following statements shall
13628	serve as standards to be followed by the commission, the office,
13629	the department,of Insuranceand the Agency for Health Care
13630	Administration in exercising their powers and duties, in
13631	exercising administrative discretion, in administrative
13632	interpretations of the law, in enforcing its provisions, and in
13633	adopting rules:
13634	(a) A health maintenance organization shall ensure that
13635	the health care services provided to its subscribers shall be
13636	rendered under reasonable standards of quality of care which are
13637	at a minimum consistent with the prevailing standards of medical
13638	practice in the community pursuant to ss. 641.495(1) and 641.51.
13639	(b) A health maintenance organization subscriber should
13640	receive quality health care from a broad panel of providers,
13641	including referrals, preventive care pursuant to s. 641.402(1),
13642	emergency screening and services pursuant to ss. 641.31(12) and
13643	641.513, and second opinions pursuant to s. 641.51.
13644	(c) A health maintenance organization subscriber should
13645	receive assurance that the health maintenance organization has
13646	been independently accredited by a national review organization
13647	pursuant to s. 641.512, and is financially secure as determined
13648	by the state pursuant to ss. 641.221, 641.225, and 641.228.
13649	(d) A health maintenance organization subscriber should
13650	receive continuity of health care, even after the provider is no
13651	longer with the health maintenance organization pursuant to s.
13652	641.51(8).
13653	(e) A health maintenance organization subscriber should
13654	receive timely, concise information regarding the health
13655	maintenance organization's reimbursement to providers and
13656	services pursuant to ss. 641.31 and 641.31015 and should receive
13657	prompt payment from the organization pursuant to s. 641.3155.
13658	(f) A health maintenance organization subscriber should
13659	receive the flexibility to transfer to another Florida health
13660	maintenance organization, regardless of health status, pursuant
13661	to ss. 641.228, 641.3104, 641.3107, 641.3111, 641.3921, and
13662	641.3922.
13663	(g) A health maintenance organization subscriber should be
13664	eligible for coverage without discrimination against individual
13665	participants and beneficiaries of group plans based on health
13666	status pursuant to s. 641.31073.
13667	(h) A health maintenance organization that issues a group
13668	health contract must: provide coverage for preexisting
13669	conditions pursuant to s. 641.31071; guarantee renewability of
13670	coverage pursuant to s. 641.31074; provide notice of
13671	cancellation pursuant to s. 641.3108; provide extension of
13672	benefits pursuant to s. 641.3111; provide for conversion on
13673	termination of eligibility pursuant to s. 641.3921; and provide
13674	for conversion contracts and conditions pursuant to s. 641.3922.
13675	(i) A health maintenance organization subscriber should
13676	receive timely and, if necessary, urgent grievances and appeals
13677	within the health maintenance organization pursuant to ss.
13678	641.228, 641.31(5), 641.47, and 641.511.
13679	(j) A health maintenance organization should receive
13680	timely and, if necessary, urgent review by an independent state
13681	external review organization for unresolved grievances and
13682	appeals pursuant to s. 408.7056.
13683	(k) A health maintenance organization subscriber shall be
13684	given written notice at least 30 days in advance of a rate
13685	change pursuant to s. 641.31(3)(b). In the case of a group
13686	member, there may be a contractual agreement with the health
13687	maintenance organization to have the employer provide the
13688	required notice to the individual members of the group pursuant
13689	to s. 641.31(3)(b).
13690	(l) A health maintenance organization subscriber shall be
13691	given a copy of the applicable health maintenance contract,
13692	certificate, or member handbook specifying: all the provisions,
13693	disclosure, and limitations required pursuant to s. 641.31(1)
13694	and (4); the covered services, including those services, medical
13695	conditions, and provider types specified in ss. 641.31,
13696	641.31094, 641.31095, 641.31096, 641.51(11), and 641.513; and
13697	where and in what manner services may be obtained pursuant to s.
13698	641.31(4).
13699	(2) This section shall not be construed as creating a
13700	civil cause of action by any subscriber or provider against any
13701	health maintenance organization.
13702	Section 253. Section 641.19, Florida Statutes, is amended
13703	to read:
13704	641.19 Definitions.--As used in this part, the term:
13705	(1) "Affiliate" means any entity thatwhichexercises
13706	control over or is controlled by the health maintenance
13707	organization, directly or indirectly, through:
13708	(a) Equity ownership of voting securities;
13709	(b) Common managerial control; or
13710	(c) Collusive participation by the management of the
13711	health maintenance organization and affiliate in the management
13712	of the health maintenance organization or the affiliate.
13713	(2) "Agency" means the Agency for Health Care
13714	Administration.
13715	(3) "Capitation" means the fixed amount paid by an HMO to
13716	a health care provider under contract with the health
13717	maintenance organization in exchange for the rendering of
13718	covered medical services.
13719	(4) "Comprehensive health care services" means services,
13720	medical equipment, and supplies furnished by a provider, which
13721	may include, but which are not limited to, medical, surgical,
13722	and dental care; psychological, optometric, optic, chiropractic,
13723	podiatric, nursing, physical therapy, and pharmaceutical
13724	services; health education, preventive medical, rehabilitative,
13725	and home health services; inpatient and outpatient hospital
13726	services; extended care; nursing home care; convalescent
13727	institutional care; technical and professional clinical
13728	pathology laboratory services; laboratory and ambulance
13729	services; appliances, drugs, medicines, and supplies; and any
13730	other care, service, or treatment of disease, or correction of
13731	defects for human beings.
13732	(5) "Copayment" means a specific dollar amount, except as
13733	otherwise provided for by statute, that the subscriber must pay
13734	upon receipt of covered health care services. Copayments may
13735	not be established in an amount that will prevent a person from
13736	receiving a covered service or benefit as specified in the
13737	subscriber contract approved by the officedepartment.
13738	(6) "Department" means the Department of Insurance.
13739	(6)(7)"Emergency medical condition" means:
13740	(a) A medical condition manifesting itself by acute
13741	symptoms of sufficient severity, which may include severe pain
13742	or other acute symptoms, such that the absence of immediate
13743	medical attention could reasonably be expected to result in any
13744	of the following:
13745	1. Serious jeopardy to the health of a patient, including
13746	a pregnant woman or a fetus.
13747	2. Serious impairment to bodily functions.
13748	3. Serious dysfunction of any bodily organ or part.
13749	(b) With respect to a pregnant woman:
13750	1. That there is inadequate time to effect safe transfer
13751	to another hospital prior to delivery;
13752	2. That a transfer may pose a threat to the health and
13753	safety of the patient or fetus; or
13754	3. That there is evidence of the onset and persistence of
13755	uterine contractions or rupture of the membranes.
13756	(7)(8)"Emergency services and care" means medical
13757	screening, examination, and evaluation by a physician, or, to
13758	the extent permitted by applicable law, by other appropriate
13759	personnel under the supervision of a physician, to determine if
13760	an emergency medical condition exists and, if it does, the care,
13761	treatment, or surgery for a covered service by a physician
13762	necessary to relieve or eliminate the emergency medical
13763	condition, within the service capability of a hospital.
13764	(8)(9)"Entity" means any legal entity with continuing
13765	existence, including, but not limited to, a corporation,
13766	association, trust, or partnership.
13767	(9)(10)"Geographic area" means the county or counties, or
13768	any portion of a county or counties, within which the health
13769	maintenance organization provides or arranges for comprehensive
13770	health care services to be available to its subscribers.
13771	(10)(11) "Guaranteeing organization" is an organization
13772	thatwhich is domiciled in the United States; thatwhichhas
13773	authorized service of process against it; and thatwhichhas
13774	appointed the Chief Financial OfficerInsurance Commissioner and
13775	Treasureras its agent for service of process issuing upon any
13776	cause of action arising in this state, based upon any guarantee
13777	entered into under this part.
13778	(11)(12)"Health maintenance contract" means any contract
13779	entered into by a health maintenance organization with a
13780	subscriber or group of subscribers to provide comprehensive
13781	health care services in exchange for a prepaid per capita or
13782	prepaid aggregate fixed sum.
13783	(12)(13)"Health maintenance organization" means any
13784	organization authorized under this part which:
13785	(a) Provides emergency care, inpatient hospital services,
13786	physician care including care provided by physicians licensed
13787	under chapters 458, 459, 460, and 461, ambulatory diagnostic
13788	treatment, and preventive health care services;
13789	(b) Provides, either directly or through arrangements with
13790	other persons, health care services to persons enrolled with
13791	such organization, on a prepaid per capita or prepaid aggregate
13792	fixed-sum basis;
13793	(c) Provides, either directly or through arrangements with
13794	other persons, comprehensive health care services which
13795	subscribers are entitled to receive pursuant to a contract;
13796	(d) Provides physician services, by physicians licensed
13797	under chapters 458, 459, 460, and 461, directly through
13798	physicians who are either employees or partners of such
13799	organization or under arrangements with a physician or any group
13800	of physicians; and
13801	(e) If offering services through a managed care system,
13802	then the managed care system must be a system in which a primary
13803	physician licensed under chapter 458 or chapter 459 and chapters
13804	460 and 461 is designated for each subscriber upon request of a
13805	subscriber requesting service by a physician licensed under any
13806	of those chapters, and is responsible for coordinating the
13807	health care of the subscriber of the respectively requested
13808	service and for referring the subscriber to other providers of
13809	the same discipline when necessary. Each female subscriber may
13810	select as her primary physician an obstetrician/gynecologist who
13811	has agreed to serve as a primary physician and is in the health
13812	maintenance organization's provider network.
13813	(13)(14)"Insolvent" or "insolvency" means that all the
13814	statutory assets of the health maintenance organization, if made
13815	immediately available, would not be sufficient to discharge all
13816	of its liabilities or that the health maintenance organization
13817	is unable to pay its debts as they become due in the usual
13818	course of business. In the event that all the assets of the
13819	health maintenance organization, if made immediately available,
13820	would not be sufficient to discharge all of its liabilities, but
13821	the organization has a written guarantee of the type and subject
13822	to the same provisions as outlined in s. 641.225, the
13823	organization shall not be considered insolvent unless it is
13824	unable to pay its debts as they become due in the usual course
13825	of business.
13826	(14)(15)"Provider" means any physician, hospital, or
13827	other institution, organization, or person that furnishes health
13828	care services and is licensed or otherwise authorized to
13829	practice in the state.
13830	(15)(16)"Reporting period" means the annual calendar year
13831	accounting period or any part thereof.
13832	(16)(17)"Statutory accounting principles" means
13833	accounting principles as defined in the National Association of
13834	Insurance Commissioners Accounting Practices and Procedures
13835	Manual as of 2002effective January 1, 2001.
13836	(17((18)"Subscriber" means an entity or individual who
13837	has contracted, or on whose behalf a contract has been entered
13838	into, with a health maintenance organization for health care
13839	services or other persons who also receive health care services
13840	as a result of the contract.
13841	(18)(19)"Surplus" means total statutory assets in excess
13842	of total liabilities, except that assets pledged to secure debts
13843	not reflected on the books of the health maintenance
13844	organization shall not be included in surplus. Surplus includes
13845	capital stock, capital in excess of par, other contributed
13846	capital, retained earnings, and surplus notes.
13847	(19)(20)"Uncovered expenditures" means the cost of health
13848	care services that are covered by a health maintenance
13849	organization, for which a subscriber would also be liable in the
13850	event of the insolvency of the organization.
13851	(20)(21)"Health care risk contract" means a contract
13852	under which an individual or entity receives consideration or
13853	other compensation in an amount greater than 1 percent of the
13854	health maintenance organization's annual gross written premium
13855	in exchange for providing to the health maintenance organization
13856	a provider network or other services, which may include
13857	administrative services. The 1-percent threshold shall be
13858	calculated on a contract-by-contract basis for each such
13859	individual or entity and not in the aggregate for all health
13860	care risk contracts.
13861	Section 254. Section 641.2017, Florida Statutes, is
13862	amended to read:
13863	641.2017 Insurance business not authorized.--Nothing in
13864	the Florida Insurance Code or this part shall be deemed to
13865	authorize any health maintenance organization to transact any
13866	insurance business other than that of health maintenance
13867	organization type insurance or otherwise to engage in any other
13868	type of insurance unless it is authorized under a certificate of
13869	authority issued by the officedepartmentunder the provisions
13870	of the Florida Insurance Code. However, a health maintenance
13871	organization may by contract:
13872	(1) Enter into arrangements whereby the expected cost of
13873	health care services provided directly or through arrangements
13874	with other persons by the health maintenance organization is
13875	self-funded by the person contracting with the health
13876	maintenance organization, but the health maintenance
13877	organization assumes the risks that costs will exceed that
13878	amount on a prepaid per capita or prepaid aggregate fixed-sum
13879	basis; or
13880	(2) Enter into arrangements whereby the cost of health
13881	care services provided directly or through arrangements with
13882	other persons by the health maintenance organization is self-
13883	funded by the person contracting with the health maintenance
13884	organization.
13885	Section 255. Subsections (1) and (2) of section 641.2018,
13886	Florida Statutes, are amended to read:
13887	641.2018 Limited coverage for home health care
13888	authorized.--
13889	(1) Notwithstanding other provisions of this chapter, a
13890	health maintenance organization may issue a contract that limits
13891	coverage to home health care services only. The organization and
13892	the contract shall be subject to all of the requirements of this
13893	part that do not require or otherwise apply to specific benefits
13894	other than home care services. To this extent, all of the
13895	requirements of this part apply to any organization or contract
13896	that limits coverage to home care services, except the
13897	requirements for providing comprehensive health care services as
13898	provided in ss. 641.19(4), (11), and (12), and (13),and
13899	641.31(1), except ss. 641.31(9), (12), (17), (18), (19), (20),
13900	(21), and (24) and 641.31095.
13901	(2) Notwithstanding the other provisions of this chapter,
13902	a health maintenance organization may apply for and obtain a
13903	certificate of authority from the officedepartmentpursuant to
13904	this part and a health care provider certificate pursuant to
13905	part III, which certificate limits the authority of the
13906	organization to the issuance of contracts that limit coverage to
13907	home health care services pursuant to subsection (1). In
13908	addition to all applicable requirements of this part, as
13909	specified in subsection (1), all of the requirements of part III
13910	apply to an organization applying for such a limited
13911	certificate, except to the extent that such requirements
13912	directly conflict with the limited nature of the coverage
13913	provided.
13914	Section 256. Subsections (1) and (2) of section 641.21,
13915	Florida Statutes, are amended to read:
13916	641.21 Application for certificate.--
13917	(1) Before any entity may operate a health maintenance
13918	organization, it shall obtain a certificate of authority from
13919	the officedepartment. The officedepartmentshall accept and
13920	shall begin its review of an application for a certificate of
13921	authority anytime after an organization has filed an application
13922	for a health care provider certificate pursuant to part III of
13923	this chapter. However, the office maydepartment shallnot
13924	issue a certificate of authority to any applicant which does not
13925	possess a valid health care provider certificate issued by the
13926	agency. Each application for a certificate shall be on such form
13927	as the commissiondepartmentshall prescribe, shall be verified
13928	by the oath of two officers of the corporation and properly
13929	notarized, and shall be accompanied by the following:
13930	(a) A copy of the articles of incorporation and all
13931	amendments thereto;
13932	(b) A copy of the bylaws, rules and regulations, or
13933	similar form of document, if any, regulating the conduct of the
13934	affairs of the applicant;
13935	(c) A list of the names, addresses, and official
13936	capacities with the organization of the persons who are to be
13937	responsible for the conduct of the affairs of the health
13938	maintenance organization, including all officers, directors, and
13939	owners of in excess of 5 percent of the common stock of the
13940	corporation. Such persons shall fully disclose to the office
13941	departmentand the directors of the health maintenance
13942	organization the extent and nature of any contracts or
13943	arrangements between them and the health maintenance
13944	organization, including any possible conflicts of interest;
13945	(d) A complete biographical statement on forms prescribed
13946	by the commissiondepartment, and an independent investigation
13947	report and fingerprints obtained pursuant to chapter 624, of all
13948	of the individuals referred to in paragraph (c);
13949	(e) A statement generally describing the health
13950	maintenance organization, its operations, and its grievance
13951	procedures;
13952	(f) Forms of all health maintenance contracts,
13953	certificates, and member handbooks the applicant proposes to
13954	offer the subscribers, showing the benefits to which they are
13955	entitled, together with a table of the rates charged, or
13956	proposed to be charged, for each form of such contract. A
13957	certified actuary shall:
13958	1. Certify that the rates are neither inadequate nor
13959	excessive nor unfairly discriminatory;
13960	2. Certify that the rates are appropriate for the classes
13961	of risks for which they have been computed; and
13962	3. File an adequate description of the rating methodology
13963	showing that such methodology follows consistent and equitable
13964	actuarial principles;
13965	(g) A statement describing with reasonable certainty the
13966	geographic area or areas to be served by the health maintenance
13967	organization;
13968	(h) As to any applicant whose business plan indicates that
13969	it will receive Medicaid funds, a list of all contracts and
13970	agreements and any information relative to any payment or
13971	agreement to pay, directly or indirectly, a consultant fee, a
13972	broker fee, a commission, or other fee or charge related in any
13973	way to the application for a certificate of authority or the
13974	issuance of a certificate of authority, including, but not
13975	limited to, the name of the person or entity paying the fee; the
13976	name of the person or entity receiving the fee; the date of
13977	payment; and a brief description of the work performed. The
13978	contract, agreement, and related information shall, if
13979	requested, be provided to the officedepartment.
13980	(i) An audited financial statement prepared on the basis
13981	of statutory accounting principles and certified by an
13982	independent certified public accountant, except that surplus
13983	notes acceptable to the officedepartmentand meeting the
13984	requirements of this act shall be included in the calculation of
13985	surplus; and
13986	(j) Such additional reasonable data, financial statements,
13987	and other pertinent information as the commissioner or office
13988	requiresdepartment may requirewith respect to the
13989	determination that the applicant can provide the services to be
13990	offered.
13991	(2) After submission of the application for a certificate
13992	of authority, the entity may engage in initial group marketing
13993	activities solely with respect to employers, representatives of
13994	labor unions, professional associations, and trade associations,
13995	so long as it does not enter into, issue, deliver, or otherwise
13996	effectuate health maintenance contracts, effectuate or bind
13997	coverage or benefits, provide health care services, or collect
13998	premiums or charges until it has been issued a certificate of
13999	authority by the officedepartment. Any such activities, oral
14000	or written, shall include a statement that the entity does not
14001	possess a valid certificate of authority and cannot enter into
14002	health maintenance contracts until such time as it has been
14003	issued a certificate of authority by the officedepartment.
14004	Section 257. Section 641.215, Florida Statutes, is amended
14005	to read:
14006	641.215 Conditions precedent to issuance or maintenance of
14007	certificate of authority; effect of bankruptcy proceedings.--
14008	(1) As a condition precedent to the issuance or
14009	maintenance of a certificate of authority, a health maintenance
14010	organization insurer must file or have on file with the office
14011	department:
14012	(a) An acknowledgment that a delinquency proceeding
14013	pursuant to part I of chapter 631,or supervision by the
14014	department pursuant to ss. 624.80-624.87,constitutes the sole
14015	and exclusive method for the liquidation, rehabilitation,
14016	reorganization, or conservation of a health maintenance
14017	organization.
14018	(b) A waiver of any right to file or be subject to a
14019	bankruptcy proceeding.
14020	(2) The commencement of a bankruptcy proceeding either by
14021	or against a health maintenance organization shall, by operation
14022	of law:
14023	(a) Terminate the health maintenance organization's
14024	certificate of authority.
14025	(b) Vest in the officedepartmentfor the use and benefit
14026	of the subscribers of the health maintenance organization the
14027	title to any deposits of the insurer held by the department.
14028
14029	If the proceeding is initiated by a party other than the health
14030	maintenance organization, the operation of subsection (2) shall
14031	be stayed for a period of 60 days following the date of
14032	commencement of the proceeding.
14033	Section 258. Section 641.22, Florida Statutes, is amended
14034	to read:
14035	641.22 Issuance of certificate of authority.--The office
14036	departmentshall issue a certificate of authority to any entity
14037	filing a completed application in conformity with s. 641.21,
14038	upon payment of the prescribed fees and upon the office's
14039	department'sbeing satisfied that:
14040	(1) As a condition precedent to the issuance of any
14041	certificate, the entity has obtained a health care provider
14042	certificate from the Agency for Health Care Administration
14043	pursuant to part III of this chapter.
14044	(2) The health maintenance organization is actuarially
14045	sound.
14046	(3) The entity has met the applicable requirements
14047	specified in s. 641.225.
14048	(4) The procedures for offering comprehensive health care
14049	services and offering and terminating contracts to subscribers
14050	will not unfairly discriminate on the basis of age, sex, race,
14051	health, or economic status. However, this section does not
14052	prohibit reasonable underwriting classifications for the
14053	purposes of establishing contract rates, nor does it prohibit
14054	experience rating.
14055	(5) The entity furnishes evidence of adequate insurance
14056	coverage or an adequate plan for self-insurance to respond to
14057	claims for injuries arising out of the furnishing of
14058	comprehensive health care.
14059	(6) The ownership, control, and management of the entity
14060	is competent and trustworthy and possesses managerial experience
14061	that would make the proposed health maintenance organization
14062	operation beneficial to the subscribers. The officedepartment
14063	shall not grant or continue authority to transact the business
14064	of a health maintenance organization in this state at any time
14065	during which the officedepartmenthas good reason to believe
14066	that:
14067	(a) The ownership, control, or management of the
14068	organization includes any person:
14069	1. Who is incompetent or untrustworthy;
14070	2. Who is so lacking in health maintenance organization
14071	expertise as to make the operation of the health maintenance
14072	organization hazardous to potential and existing subscribers;
14073	3. Who is so lacking in health maintenance organization
14074	experience, ability, and standing as to jeopardize the
14075	reasonable promise of successful operation;
14076	4. Who is affiliated, directly or indirectly, through
14077	ownership, control, reinsurance transactions, or other business
14078	relations, with any person whose business operations are or have
14079	been marked by business practices or conduct that is to the
14080	detriment of the public, stockholders, investors, or creditors;
14081	or
14082	5. Whose business operations are or have been marked by
14083	business practices or conduct that is to the detriment of the
14084	public, stockholders, investors, or creditors;
14085	(b) Any person, including any stock subscriber,
14086	stockholder, or incorporator, who exercises or has the ability
14087	to exercise effective control of the organization, or who
14088	influences or has the ability to influence the transaction of
14089	the business of the health maintenance organization, does not
14090	possess the financial standing and business experience for the
14091	successful operation of the health maintenance organization;
14092	(c) Any person, including any stock subscriber,
14093	stockholder, or incorporator, who exercises or has the ability
14094	to exercise effective control of the organization, or who
14095	influences or has the ability to influence the transaction of
14096	the business of the health maintenance organization, has been
14097	found guilty of, or has pled guilty or no contest to, any felony
14098	or crime punishable by imprisonment of 1 year or more under the
14099	laws of the United States or any state thereof or under the laws
14100	of any other country, which involves moral turpitude, without
14101	regard to whether a judgment or conviction has been entered by
14102	the court having jurisdiction in such case. However, in the case
14103	of a health maintenance organization operating under a
14104	subsisting certificate of authority, the health maintenance
14105	organization shall remove any such person immediately upon
14106	discovery of the conditions set forth in this paragraph when
14107	applicable to such person or under the order of the office
14108	department, and the failure to so act by the organization is
14109	grounds for revocation or suspension of the health maintenance
14110	organization's certificate of authority; or
14111	(d) Any person, including any stock subscriber,
14112	stockholder, or incorporator, who exercises or has the ability
14113	to exercise effective control of the organization, or who
14114	influences or has the ability to influence the transaction of
14115	the business of the health maintenance organization, is now or
14116	was in the past affiliated, directly or indirectly, through
14117	ownership interest of 10 percent or more, control, or
14118	reinsurance transactions, with any business, corporation, or
14119	other entity that has been found guilty of or has pleaded guilty
14120	or nolo contendere to any felony or crime punishable by
14121	imprisonment for 1 year or more under the laws of the United
14122	States, any state, or any other country, regardless of
14123	adjudication. In the case of a health maintenance organization
14124	operating under a subsisting certificate of authority, the
14125	health maintenance organization shall immediately remove such
14126	person or immediately notify the officedepartmentof such
14127	person upon discovery of the conditions set forth in this
14128	paragraph, either when applicable to such person or upon order
14129	of the officedepartment. The failure to remove such person,
14130	provide such notice, or comply with such order constitutes
14131	grounds for suspension or revocation of the health maintenance
14132	organization's certificate of authority.
14133	(7) The entity has a blanket fidelity bond in the amount
14134	of $100,000, issued by a licensed insurance carrier in this
14135	state, that will reimburse the entity in the event that anyone
14136	handling the funds of the entity either misappropriates or
14137	absconds with the funds. All employees handling the funds shall
14138	be covered by the blanket fidelity bond. An agent licensed
14139	under the provisions of the Florida Insurance Code may either
14140	directly or indirectly represent the health maintenance
14141	organization in the solicitation, negotiation, effectuation,
14142	procurement, receipt, delivery, or forwarding of any health
14143	maintenance organization subscriber's contract or collect or
14144	forward any consideration paid by the subscriber to the health
14145	maintenance organization; and the licensed agent shall not be
14146	required to post the bond required by this subsection.
14147	(8) The entity has filed with the officedepartment, and
14148	obtained approval from the officedepartmentof, all reinsurance
14149	contracts as provided in s. 641.285.
14150	(9) The health maintenance organization has a grievance
14151	procedure that will facilitate the resolution of subscriber
14152	grievances and that includes both formal and informal steps
14153	available within the organization.
14154	Section 259. Subsections (2) and (4), and paragraphs (b)
14155	and (d) of subsection (6) of section 641.225, Florida Statutes,
14156	are amended to read:
14157	641.225 Surplus requirements.--
14158	(2) The officedepartmentshall not issue a certificate of
14159	authority, except as provided in subsection (3), unless the
14160	health maintenance organization has a minimum surplus in an
14161	amount which is the greater of:
14162	(a) Ten percent of their total liabilities based on their
14163	startup projection as set forth in this part;
14164	(b) Two percent of their total projected premiums based on
14165	their startup projection as set forth in this part; or
14166	(c) $1,500,000, plus all startup losses, excluding
14167	profits, projected to be incurred on their startup projection
14168	until the projection reflects statutory net profits for 12
14169	consecutive months.
14170	(4) The commissiondepartmentmay adopt rules to set
14171	uniform standards and criteria for the early warning that the
14172	continued operation of any health maintenance organization might
14173	be hazardous to its subscribers, creditors, or the general
14174	public, and to set standards for evaluating the financial
14175	condition of any health maintenance organization.
14176	(6) In lieu of having any minimum surplus, the health
14177	maintenance organization may provide a written guarantee to
14178	assure payment of covered subscriber claims and all other
14179	liabilities of the health maintenance organization, provided
14180	that the written guarantee is made by a guaranteeing
14181	organization which:
14182	(b) Submits a guarantee that is approved by the office
14183	departmentas meeting the requirements of this part, provided
14184	that the written guarantee contains a provision which requires
14185	that the guarantee be irrevocable unless the guaranteeing
14186	organization can demonstrate to the officedepartmentthat the
14187	cancellation of the guarantee will not result in the insolvency
14188	of the health maintenance organization and the officedepartment
14189	approves cancellation of the guarantee.
14190	(d) Submits annually, within 3 months after the end of its
14191	fiscal year, an audited financial statement certified by an
14192	independent certified public accountant, prepared in accordance
14193	with generally accepted accounting principles. The office
14194	departmentmay, as it deems necessary, require quarterly
14195	financial statements from the guaranteeing organization.
14196	Section 260. Subsection (1) of section 641.227, Florida
14197	Statutes, is amended to read:
14198	641.227 Rehabilitation Administrative Expense Fund.--
14199	(1) The officedepartmentshall not issue or permit to
14200	exist a certificate of authority to operate a health maintenance
14201	organization in this state unless the organization has deposited
14202	with the department $10,000 in cash for use in the
14203	Rehabilitation Administrative Expense Fund as established in
14204	subsection (2).
14205	Section 261. Subsections (1) and (3) of section 641.228,
14206	Florida Statutes, are amended to read:
14207	641.228 Florida Health Maintenance Organization Consumer
14208	Assistance Plan.--
14209	(1) The officedepartmentshall not issue a certificate to
14210	any health maintenance organization after July 1, 1989, until
14211	the applicant health maintenance organization has paid in full
14212	its special assessment as set forth in s. 631.819(2)(a).
14213	(3) The officedepartmentmay suspend or revoke the
14214	certificate of authority of any health maintenance organization
14215	which does not timely pay its assessment to the Florida Health
14216	Maintenance Organization Consumer Assistance Plan.
14217	Section 262. Section 641.23, Florida Statutes, is amended
14218	to read:
14219	641.23 Revocation or cancellation of certificate of
14220	authority; suspension of enrollment of new subscribers; terms of
14221	suspension.--
14222	(1) The maintenance of a valid and current health care
14223	provider certificate issued pursuant to part III of this chapter
14224	is a condition of the maintenance of a valid and current
14225	certificate of authority issued by the officedepartmentto
14226	operate a health maintenance organization. Denial or revocation
14227	of a health care provider certificate shall be deemed to be an
14228	automatic and immediate cancellation of a health maintenance
14229	organization's certificate of authority. At the discretion of
14230	the officeDepartment of Insurance, nonrenewal of a health care
14231	provider certificate may be deemed to be an automatic and
14232	immediate cancellation of a health maintenance organization's
14233	certificate of authority if the Agency for Health Care
14234	Administration notifies the officeDepartment of Insurance, in
14235	writing, that the health care provider certificate will not be
14236	renewed.
14237	(2) The officedepartmentmay suspend the authority of a
14238	health maintenance organization to enroll new subscribers or
14239	revoke any certificate issued to a health maintenance
14240	organization, or order compliance within 30 days, if it finds
14241	that any of the following conditions exists:
14242	(a) The organization is not operating in compliance with
14243	this part;
14244	(b) The plan is no longer actuarially sound or the
14245	organization does not have the minimum surplus as required by
14246	this part;
14247	(c) The existing contract rates are excessive, inadequate,
14248	or unfairly discriminatory;
14249	(d) The organization has advertised, merchandised, or
14250	attempted to merchandise its services in such a manner as to
14251	misrepresent its services or capacity for service or has engaged
14252	in deceptive, misleading, or unfair practices with respect to
14253	advertising or merchandising; or
14254	(e) The organization is insolvent.
14255	(3) Whenever the financial condition of the health
14256	maintenance organization is such that, if not modified or
14257	corrected, its continued operation would result in impairment or
14258	insolvency, the officedepartmentmay order the health
14259	maintenance organization to file with the officedepartmentand
14260	implement a corrective action plan designed to do one or more of
14261	the following:
14262	(a) Reduce the total amount of present potential liability
14263	for benefits by reinsurance or other means.
14264	(b) Reduce the volume of new business being accepted.
14265	(c) Reduce the expenses of the health maintenance
14266	organization by specified methods.
14267	(d) Suspend or limit the writing of new business for a
14268	period of time.
14269	(e) Require an increase in the health maintenance
14270	organization's net worth.
14271
14272	If the health maintenance organization fails to submit a plan
14273	within 30 days of the office'sdepartment'sorder or submits a
14274	plan which is insufficient to correct the health maintenance
14275	organization's financial condition, the officedepartmentmay
14276	order the health maintenance organization to implement one or
14277	more of the corrective actions listed in this subsection.
14278	(4) The officedepartmentshall, in its order suspending
14279	the authority of a health maintenance organization to enroll new
14280	subscribers, specify the period during which the suspension is
14281	to be in effect and the conditions, if any, which must be met by
14282	the health maintenance organization prior to reinstatement of
14283	its authority to enroll new subscribers. The order of
14284	suspension is subject to rescission or modification by further
14285	order of the officedepartmentprior to the expiration of the
14286	suspension period. Reinstatement shall not be made unless
14287	requested by the health maintenance organization; however, the
14288	officedepartmentshall not grant reinstatement if it finds that
14289	the circumstances for which the suspension occurred still exist
14290	or are likely to recur.
14291	(5) The commissiondepartment shall adoptpromulgaterules
14292	establishing an actuarially sound medical loss ratio for
14293	Medicaid. In determining the appropriate medical loss ratio,
14294	the commissiondepartmentshall consider factors, including but
14295	not limited to, plan age, plan structure, geographic service
14296	area, product mix, provider network, medical inflation, provider
14297	services, other professional services, out of network referrals
14298	and expenditures, in and out of network emergency room
14299	expenditures, inpatient expenditures, other medical
14300	expenditures, incentive pool adjustments, copayments,
14301	coordination of benefits, subrogation, and any other expenses
14302	associated with the delivery of medical benefits. The
14303	commissiondepartmentshall utilize assistance from the Agency
14304	for Health Care Administration, the State University System, an
14305	independent actuary, and representatives from health maintenance
14306	organizations in developing the rule for appropriate medical
14307	loss ratios.
14308	(6) The officedepartmentshall calculate and publish at
14309	least annually the medical loss ratios of all licensed health
14310	maintenance organizations. The publication shall include an
14311	explanation of what the medical loss ratio means and shall
14312	disclose that the medical loss ratio is not a direct reflection
14313	of quality, but must be looked at along with patient
14314	satisfaction and other standards that define quality.
14315	Section 263. Subsections (1), (2), and (3) of section
14316	641.234, Florida Statutes, are amended to read:
14317	641.234 Administrative, provider, and management
14318	contracts.--
14319	(1) The officedepartmentmay require a health maintenance
14320	organization to submit any contract for administrative services,
14321	contract with a provider other than an individual physician,
14322	contract for management services, and contract with an
14323	affiliated entity to the officedepartment.
14324	(2) After review of a contract the officedepartmentmay
14325	order the health maintenance organization to cancel the contract
14326	in accordance with the terms of the contract and applicable law
14327	if it determines:
14328	(a) That the fees to be paid by the health maintenance
14329	organization under the contract are so unreasonably high as
14330	compared with similar contracts entered into by the health
14331	maintenance organization or as compared with similar contracts
14332	entered into by other health maintenance organizations in
14333	similar circumstances that the contract is detrimental to the
14334	subscribers, stockholders, investors, or creditors of the health
14335	maintenance organization; or
14336	(b) That the contract is with an entity that is not
14337	licensed under state statutes, if such license is required, or
14338	is not in good standing with the applicable regulatory agency.
14339	(3) All contracts for administrative services, management
14340	services, provider services other than individual physician
14341	contracts, and with affiliated entities entered into or renewed
14342	by a health maintenance organization on or after October 1,
14343	1988, shall contain a provision that the contract shall be
14344	canceled upon issuance of an order by the officedepartment
14345	pursuant to this section.
14346	Section 264. Section 641.2342, Florida Statutes, is
14347	amended to read:
14348	641.2342 Contract providers.--Each health maintenance
14349	organization shall file, upon the request of the office
14350	department, financial statements for all contract providers of
14351	comprehensive health care services who have assumed, through
14352	capitation or other means, more than 10 percent of the health
14353	care risks of the health maintenance organization. However,
14354	this provision shall not apply to any individual physician.
14355	Section 265. Section 641.25, Florida Statutes, is amended
14356	to read:
14357	641.25 Administrative penalty in lieu of suspension or
14358	revocation.--If the officedepartmentfinds that one or more
14359	grounds exist for the revocation or suspension of a certificate
14360	issued under this part, the officedepartmentmay, in lieu of
14361	revocation or suspension, impose a fine upon the health
14362	maintenance organization. With respect to any nonwillful
14363	violation, the fine must not exceed $2,500 per violation. Such
14364	fines may not exceed an aggregate amount of $25,000 for all
14365	nonwillful violations arising out of the same action. With
14366	respect to any knowing and willful violation of a lawful order
14367	or rule of the office or commissiondepartmentor a provision of
14368	this part, the officedepartmentmay impose upon the
14369	organization a fine in an amount not to exceed $20,000 for each
14370	such violation. Such fines may not exceed an aggregate amount
14371	of $250,000 for all knowing and willful violations arising out
14372	of the same action. The commissiondepartmentmust adopt by
14373	rule by January 1, 1997,penalty categories that specify varying
14374	ranges of monetary fines for willful violations and for
14375	nonwillful violations.
14376	Section 266. Subsection (2) of section 641.255, Florida
14377	Statutes, is amended to read:
14378	641.255 Acquisition, merger, or consolidation.--
14379	(2) In addition to the requirements set forth in ss.
14380	628.451, 628.4615, and 628.471, each party to any transaction
14381	involving any licensee which, as indicated in its most recent
14382	quarterly or annual statement, derives income from Medicaid
14383	funds shall in the filing made with the officedepartment
14384	identify:
14385	(a) Any person who has received any payment from either
14386	party or any person on that party's behalf; or
14387	(b) The existence of any agreement entered into by either
14388	party or by any person on that party's behalf to pay a
14389	consultant fee, a broker fee, a commission, or other fee or
14390	charge,
14391
14392	which in any way relates to the acquisition, merger, or
14393	consolidation. The commissiondepartmentmay adopt a form to be
14394	made part of the application which is to be sworn to by an
14395	officer of the entity which made or will make the payment. The
14396	form shall include the name of the person or entity paying the
14397	fee; the name of the person or entity receiving the fee; the
14398	date of payment; and a brief description of the work performed.
14399	Section 267. Section 641.26, Florida Statutes, is amended
14400	to read:
14401	641.26 Annual and quarterly reports.--
14402	(1) Every health maintenance organization shall, annually
14403	within 3 months after the end of its fiscal year, or within an
14404	extension of time therefor as the officedepartment, for good
14405	cause, may grant, in a form prescribed by the commission
14406	department, file a report with the officedepartment, verified
14407	by the oath of two officers of the organization or, if not a
14408	corporation, of two persons who are principal managing directors
14409	of the affairs of the organization, properly notarized, showing
14410	its condition on the last day of the immediately preceding
14411	reporting period. Such report shall include:
14412	(a) A financial statement of the health maintenance
14413	organization filed by electronic means in a computer-readable
14414	formon a computer diskette using a format acceptable to the
14415	officedepartment.
14416	(b) A financial statement of the health maintenance
14417	organization filed on forms acceptable to the officedepartment.
14418	(c) An audited financial statement of the health
14419	maintenance organization, including its balance sheet and a
14420	statement of operations for the preceding year certified by an
14421	independent certified public accountant, prepared in accordance
14422	with statutory accounting principles.
14423	(d) The number of health maintenance contracts issued and
14424	outstanding and the number of health maintenance contracts
14425	terminated.
14426	(e) The number and amount of damage claims for medical
14427	injury initiated against the health maintenance organization and
14428	any of the providers engaged by it during the reporting year,
14429	broken down into claims with and without formal legal process,
14430	and the disposition, if any, of each such claim.
14431	(f) An actuarial certification that:
14432	1. The health maintenance organization is actuarially
14433	sound, which certification shall consider the rates, benefits,
14434	and expenses of, and any other funds available for the payment
14435	of obligations of, the organization.
14436	2. The rates being charged or to be charged are
14437	actuarially adequate to the end of the period for which rates
14438	have been guaranteed.
14439	3. Incurred but not reported claims and claims reported
14440	but not fully paid have been adequately provided for.
14441	4. The health maintenance organization has adequately
14442	provided for all obligations required by s. 641.35(3)(a).
14443	(g) A report prepared by the certified public accountant
14444	and filed with the officedepartmentdescribing material
14445	weaknesses in the health maintenance organization's internal
14446	control structure as noted by the certified public accountant
14447	during the audit. The report must be filed with the annual
14448	audited financial report as required in paragraph (c). The
14449	health maintenance organization shall provide a description of
14450	remedial actions taken or proposed to correct material
14451	weaknesses, if the actions are not described in the independent
14452	certified public accountant's report.
14453	(h) Such other information relating to the performance of
14454	health maintenance organizations as is required by the
14455	commission or officedepartment.
14456	(2) The officedepartmentmay require updates of the
14457	actuarial certification as to a particular health maintenance
14458	organization if the officedepartmenthas reasonable cause to
14459	believe that such reserves are understated to the extent of
14460	materially misstating the financial position of the health
14461	maintenance organization. Workpapers in support of the
14462	statement of the updated actuarial certification must be
14463	provided to the officedepartmentupon request.
14464	(3) Every health maintenance organization shall file
14465	quarterly, for the first three calendar quarters of each year,
14466	an unaudited financial statement of the organization as
14467	described in paragraphs (1)(a) and (b). The statement for the
14468	quarter ending March 31 shall be filed on or before May 15, the
14469	statement for the quarter ending June 30 shall be filed on or
14470	before August 15, and the statement for the quarter ending
14471	September 30 shall be filed on or before November 15. The
14472	quarterly report shall be verified by the oath of two officers
14473	of the organization, properly notarized.
14474	(4) Any health maintenance organization that neglects to
14475	file an annual report or quarterly report in the form and within
14476	the time required by this section shall forfeit up to $1,000 for
14477	each day for the first 10 days during which the neglect
14478	continues and shall forfeit up to $2,000 for each day after the
14479	first 10 days during which the neglect continues; and, upon
14480	notice by the officedepartmentto that effect, the
14481	organization's authority to enroll new subscribers or to do
14482	business in this state shall cease while such default continues.
14483	The officedepartmentshall deposit all sums collected by it
14484	under this section to the credit of the Insurance Commissioner's
14485	Regulatory Trust Fund. The officedepartmentshall not collect
14486	more than $100,000 for each report.
14487	(5) Each authorized health maintenance organization shall
14488	retain an independent certified public accountant, referred to
14489	in this section as "CPA," who agrees by written contract with
14490	the health maintenance organization to comply with the
14491	provisions of this part.
14492	(a) The CPA shall provide to the HMO audited financial
14493	statements consistent with this part.
14494	(b) Any determination by the CPA that the health
14495	maintenance organization does not meet minimum surplus
14496	requirements as set forth in this part shall be stated by the
14497	CPA, in writing, in the audited financial statement.
14498	(c) The completed work papers and any written
14499	communications between the CPA firm and the health maintenance
14500	organization relating to the audit of the health maintenance
14501	organization shall be made available for review on a visual-
14502	inspection-only basis by the officedepartmentat the offices of
14503	the health maintenance organization, at the officedepartment,
14504	or at any other reasonable place as mutually agreed between the
14505	officedepartmentand the health maintenance organization. The
14506	CPA must retain for review the work papers and written
14507	communications for a period of not less than 6 years.
14508	(d) The CPA shall provide to the officedepartmenta
14509	written report describing material weaknesses in the health
14510	maintenance organization's internal control structure as noted
14511	during the audit.
14512	(6) To facilitate uniformity in financial statements and
14513	to facilitate officedepartment analysis, the commission
14514	departmentmay by rule adopt the form for financial statements
14515	of a health maintenance organization, including supplements as
14516	approved by the National Association of Insurance Commissioners
14517	in 1995, and may adopt subsequent amendments thereto if the
14518	methodology remains substantially consistent, and may by rule
14519	require each health maintenance organization to submit to the
14520	officedepartmentall or part of the information contained in
14521	the annual statement in a computer-readable form compatible with
14522	the electronic data processing system specified by the office
14523	department.
14524	(7) In addition to information called for and furnished in
14525	connection with its annual or quarterly statements, the health
14526	maintenance organization shall furnish to the officedepartment
14527	as soon as reasonably possible such information as to its
14528	material transactions which, in the office'sdepartment's
14529	opinion, may have a material adverse effect on the health
14530	maintenance organization's financial condition, as the office
14531	requestsdepartment may requestin writing. All such information
14532	furnished pursuant to the office'sdepartment'srequest must be
14533	verified by the oath of two executive officers of the health
14534	maintenance organization.
14535	(8) Each health maintenance organization shall file one
14536	copy of its annual statement convention blank in electronic
14537	form, along with such additional filings as prescribed by the
14538	commissiondepartmentfor the preceding calendar year or
14539	quarter, with the National Association of Insurance
14540	Commissioners. Each health maintenance organization shall pay
14541	fees assessed by the National Association of Insurance
14542	Commissioners to cover costs associated with the filing and
14543	analysis of the documents by the National Association of
14544	Insurance Commissioners.
14545	Section 268. Section 641.27, Florida Statutes, is amended
14546	to read:
14547	641.27 Examination by the department.--
14548	(1) The officedepartmentshall examine the affairs,
14549	transactions, accounts, business records, and assets of any
14550	health maintenance organization as often as it deems it
14551	expedient for the protection of the people of this state, but
14552	not less frequently than once every 3 years. In lieu of making
14553	its own financial examination, the officedepartmentmay accept
14554	an independent certified public accountant's audit report
14555	prepared on a statutory accounting basis consistent with this
14556	part. However, except when the medical records are requested
14557	and copies furnished pursuant to s. 456.057, medical records of
14558	individuals and records of physicians providing service under
14559	contract to the health maintenance organization shall not be
14560	subject to audit, although they may be subject to subpoena by
14561	court order upon a showing of good cause. For the purpose of
14562	examinations, the officedepartmentmay administer oaths to and
14563	examine the officers and agents of a health maintenance
14564	organization concerning its business and affairs. The
14565	examination of each health maintenance organization by the
14566	officedepartmentshall be subject to the same terms and
14567	conditions as apply to insurers under chapter 624. In no event
14568	shall expenses of all examinations exceed a maximum of $20,000
14569	for any 1-year period. Any rehabilitation, liquidation,
14570	conservation, or dissolution of a health maintenance
14571	organization shall be conducted under the supervision of the
14572	department, which shall have all power with respect thereto
14573	granted to it under the laws governing the rehabilitation,
14574	liquidation, reorganization, conservation, or dissolution of
14575	life insurance companies.
14576	(2) The officedepartmentmay contract, at reasonable fees
14577	for work performed, with qualified, impartial outside sources to
14578	perform audits or examinations or portions thereof pertaining to
14579	the qualification of an entity for issuance of a certificate of
14580	authority or to determine continued compliance with the
14581	requirements of this part, in which case the payment must be
14582	made directly to the contracted examiner by the health
14583	maintenance organization examined, in accordance with the rates
14584	and terms agreed to by the officedepartmentand the examiner.
14585	Any contracted assistance shall be under the direct supervision
14586	of the officedepartment. The results of any contracted
14587	assistance shall be subject to the review of, and approval,
14588	disapproval, or modification by, the officedepartment.
14589	Section 269. Section 641.28, Florida Statutes, is amended
14590	to read:
14591	641.28 Civil remedy.--In any civil action brought to
14592	enforce the terms and conditions of a health maintenance
14593	organization contract, the prevailing party is entitled to
14594	recover reasonable attorney's fees and court costs. This section
14595	shall not be construed to authorize a civil action against the
14596	commission, office, or department, theirits employees, or the
14597	Chief Financial OfficerInsurance Commissioneror against the
14598	Agency for Health Care Administration, its employees, or the
14599	director of the agency.
14600	Section 270. Section 641.281, Florida Statutes, is amended
14601	to read:
14602	641.281 Injunction.--In addition to the penalties and
14603	other enforcement provisions of this part, the office and
14604	department, within the scope of their regulatory jurisdictions,
14605	areisvested with the power to seek both temporary and
14606	permanent injunctive relief when:
14607	(1) A health maintenance organization is being operated by
14608	any person or entity without a subsisting certificate of
14609	authority.
14610	(2) Any person, entity, or health maintenance organization
14611	has engaged in any activity prohibited by this part or any rule
14612	adopted pursuant thereto.
14613	(3) Any health maintenance organization, person, or entity
14614	is renewing, issuing, or delivering a health maintenance
14615	contract or contracts without a subsisting certificate of
14616	authority.
14617
14618	The office's anddepartment's authority to seek injunctive
14619	relief shall not be conditioned on having conducted any
14620	proceeding pursuant to chapter 120.
14621	Section 271. Section 641.284, Florida Statutes, is amended
14622	to read:
14623	641.284 Liquidation, rehabilitation, reorganization, and
14624	conservation; exclusive methods of remedy.--A delinquency
14625	proceeding under part I of chapter 631, or supervision by the
14626	officedepartment under ss. 624.80-624.87,constitute the sole
14627	and exclusive means of liquidating, reorganizing,
14628	rehabilitating, or conserving a health maintenance organization.
14629	Section 272. Subsections (1), (2), and (3) of section
14630	641.285, Florida Statutes, are amended to read:
14631	641.285 Insolvency protection.--
14632	(1) Each health maintenance organization shall deposit
14633	with the department cash or securities of the type eligible
14634	under s. 625.52, which shall have at all times a market value in
14635	the amount set forth in this subsection. The amount of the
14636	deposit shall be reviewed annually, or more often, as the office
14637	departmentdeems necessary. The market value of the deposit
14638	shall be a minimum of $300,000.
14639	(2) If securities or assets deposited by a health
14640	maintenance organization under this part are subject to material
14641	fluctuations in market value, the officedepartmentmay, in its
14642	discretion, require the organization to deposit and maintain on
14643	deposit additional securities or assets in an amount as may be
14644	reasonably necessary to assure that the deposit will at all
14645	times have a market value of not less than the amount specified
14646	under this section. If for any reason the market value of assets
14647	and securities of a health maintenance organization held on
14648	deposit in this state under this code falls below the amount
14649	required, the organization shall promptly deposit other or
14650	additional assets or securities eligible for deposit sufficient
14651	to cure the deficiency. If the health maintenance organization
14652	has failed to cure the deficiency within 30 days after receipt
14653	of notice thereof by registered or certified mail from the
14654	officedepartment, the officedepartmentmay revoke the
14655	certificate of authority of the health maintenance organization.
14656	(3) Whenever the officedepartmentdetermines that the
14657	financial condition of a health maintenance organization has
14658	deteriorated to the point that the policyholders' or
14659	subscribers' best interests are not being preserved by the
14660	activities of a health maintenance organization, the office
14661	departmentmay require such health maintenance organization to
14662	deposit and maintain deposited in trust with the department for
14663	the protection of the health maintenance organization's
14664	policyholders, subscribers, and creditors, for such time as the
14665	officedepartmentdeems necessary, securities eligible for such
14666	deposit under s. 625.52 having a market value of not less than
14667	the amount that the officedepartmentdetermines is necessary,
14668	which amount must not be less than $100,000 or greater than $2
14669	million. The deposit required under this subsection is in
14670	addition to any other deposits required of a health maintenance
14671	organization pursuant to subsections (1) and (2).
14672	Section 273. Section 641.29, Florida Statutes, is amended
14673	to read:
14674	641.29 Fees.--Every health maintenance organization shall
14675	pay to the officedepartmentthe following fees:
14676	(1) For filing a copy of its application for a certificate
14677	of authority or amendment thereto, a nonrefundable fee in the
14678	amount of $1,000.
14679	(2) For filing each annual report, which must be filed by
14680	electronic means in a computer-readable formon computer
14681	diskettes, $150.
14682	Section 274. Paragraph (b) of subsection (4) of section
14683	641.3007, Florida Statutes, is amended to read:
14684	641.3007 HIV infection and AIDS for contract
14685	(4) UTILIZATION OF MEDICAL TESTS.--
14686	(b) Prior to testing, the health maintenance organization
14687	must disclose its intent to test the person for the HIV
14688	infection or for a specific sickness or medical condition
14689	derived therefrom and must obtain the person's written informed
14690	consent to administer the test. Written informed consent shall
14691	include a fair explanation of the test, including its purpose,
14692	potential uses, and limitations, and the meaning of its results
14693	and the right to confidential treatment of information. Use of
14694	a form approved by the officedepartmentshall raise a
14695	conclusive presumption of informed consent.
14696	Section 275. Section 641.305, Florida Statutes, is amended
14697	to read:
14698	641.305 Language used in contracts and advertisements;
14699	translations.--
14700	(1)(a) All health maintenance contracts or forms shall be
14701	printed in English.
14702	(b) If the negotiations by a health maintenance
14703	organization with a member leading up to the effectuation of a
14704	health maintenance contract are conducted in a language other
14705	than English, the health maintenance organization shall supply
14706	to the member a written translation of the contract, which
14707	translation accurately reflects the substance of the contract
14708	and is in the language used to negotiate the contract. The
14709	written translation shall be affixed to and shall become a part
14710	of the contract or form. Any such translation shall be
14711	furnished to the officedepartmentas part of the filing of the
14712	health maintenance contract form. No translation of a health
14713	maintenance contract form shall be approved by the department
14714	unless the translation accurately reflects the substance of the
14715	health maintenance contract form in translation.
14716	(2) The text of all advertisements by a health maintenance
14717	organization, if printed or broadcast in a language other than
14718	English, also shall be available in English and shall be
14719	furnished to the officedepartmentupon request. As used in
14720	this subsection, the term "advertisement" means any
14721	advertisement, circular, pamphlet, brochure, or other printed
14722	material disclosing or disseminating advertising material or
14723	information by a health maintenance organization to prospective
14724	or existing subscribers and includes any radio or television
14725	transmittal of an advertisement or information.
14726	Section 276. Subsections (2), (3), (5), and (12) and
14727	paragraphs (c) and (e) of subsection (38) of section 641.31,
14728	Florida Statutes, are amended to read:
14729	641.31 Health maintenance contracts.--
14730	(2) The rates charged by any health maintenance
14731	organization to its subscribers shall not be excessive,
14732	inadequate, or unfairly discriminatory or follow a rating
14733	methodology that is inconsistent, indeterminate, or ambiguous or
14734	encourages misrepresentation or misunderstanding. The
14735	commissiondepartment, in accordance with generally accepted
14736	actuarial practice as applied to health maintenance
14737	organizations, may define by rule what constitutes excessive,
14738	inadequate, or unfairly discriminatory rates and may require
14739	whatever information it deems necessary to determine that a rate
14740	or proposed rate meets the requirements of this subsection.
14741	(3)(a) If a health maintenance organization desires to
14742	amend any contract with its subscribers or any certificate or
14743	member handbook, or desires to change any basic health
14744	maintenance contract, certificate, grievance procedure, or
14745	member handbook form, or application form where written
14746	application is required and is to be made a part of the
14747	contract, or printed amendment, addendum, rider, or endorsement
14748	form or form of renewal certificate, it may do so, upon filing
14749	with the officedepartmentthe proposed change or amendment.
14750	Any proposed change shall be effective immediately, subject to
14751	disapproval by the officedepartment. Following receipt of
14752	notice of such disapproval or withdrawal of approval, no health
14753	maintenance organization shall issue or use any form disapproved
14754	by the officedepartment or as to which the officedepartment
14755	has withdrawn approval.
14756	(b) Any change in the rate is subject to paragraph (d) and
14757	requires at least 30 days' advance written notice to the
14758	subscriber. In the case of a group member, there may be a
14759	contractual agreement with the health maintenance organization
14760	to have the employer provide the required notice to the
14761	individual members of the group.
14762	(c) The officedepartmentshall disapprove any form filed
14763	under this subsection, or withdraw any previous approval
14764	thereof, if the form:
14765	1. Is in any respect in violation of, or does not comply
14766	with, any provision of this part or rule adopted thereunder.
14767	2. Contains or incorporates by reference, where such
14768	incorporation is otherwise permissible, any inconsistent,
14769	ambiguous, or misleading clauses or exceptions and conditions
14770	which deceptively affect the risk purported to be assumed in the
14771	general coverage of the contract.
14772	3. Has any title, heading, or other indication of its
14773	provisions which is misleading.
14774	4. Is printed or otherwise reproduced in such a manner as
14775	to render any material provision of the form substantially
14776	illegible.
14777	5. Contains provisions which are unfair, inequitable, or
14778	contrary to the public policy of this state or which encourage
14779	misrepresentation.
14780	6. Excludes coverage for human immunodeficiency virus
14781	infection or acquired immune deficiency syndrome or contains
14782	limitations in the benefits payable, or in the terms or
14783	conditions of such contract, for human immunodeficiency virus
14784	infection or acquired immune deficiency syndrome which are
14785	different than those which apply to any other sickness or
14786	medical condition.
14787	(d) Any change in rates charged for the contract must be
14788	filed with the officedepartmentnot less than 30 days in
14789	advance of the effective date. At the expiration of such 30
14790	days, the rate filing shall be deemed approved unless prior to
14791	such time the filing has been affirmatively approved or
14792	disapproved by order of the officedepartment. The approval of
14793	the filing by the officedepartmentconstitutes a waiver of any
14794	unexpired portion of such waiting period. The officedepartment
14795	may extend by not more than an additional 15 days the period
14796	within which it may so affirmatively approve or disapprove any
14797	such filing, by giving notice of such extension before
14798	expiration of the initial 30-day period. At the expiration of
14799	any such period as so extended, and in the absence of such prior
14800	affirmative approval or disapproval, any such filing shall be
14801	deemed approved.
14802	(e) It is not the intent of this subsection to restrict
14803	unduly the right to modify rates in the exercise of reasonable
14804	business judgment.
14805	(5) Every subscriber shall receive a clear and
14806	understandable description of the method of the health
14807	maintenance organization for resolving subscriber grievances,
14808	and the method shall be set forth in the contract, certificate,
14809	and member handbook. The organization shall also furnish, at
14810	the time of initial enrollment and when necessary due to
14811	substantial changes to the grievance process a separate and
14812	additional communication prepared or approved by the office
14813	departmentnotifying the contract holder of a group contract or
14814	subscriber of an individual contract of their rights and
14815	responsibilities under the grievance process.
14816	(12) Each health maintenance contract, certificate, or
14817	member handbook shall state that emergency services and care
14818	shall be provided to subscribers in emergency situations not
14819	permitting treatment through the health maintenance
14820	organization's providers, without prior notification to and
14821	approval of the organization. Not less than 75 percent of the
14822	reasonable charges for covered services and supplies shall be
14823	paid by the organization, up to the subscriber contract benefit
14824	limits. Payment also may be subject to additional applicable
14825	copayment provisions, not to exceed $100 per claim. The health
14826	maintenance contract, certificate, or member handbook shall
14827	contain the definitions of "emergency services and care" and
14828	"emergency medical condition" as specified in s. 641.19(6)(7)
14829	and (7)(8), shall describe procedures for determination by the
14830	health maintenance organization of whether the services qualify
14831	for reimbursement as emergency services and care, and shall
14832	contain specific examples of what does constitute an emergency.
14833	In providing for emergency services and care as a covered
14834	service, a health maintenance organization shall be governed by
14835	s. 641.513.
14836	(38)
14837	(c) Premiums paid in for the point-of-service riders may
14838	not exceed 15 percent of total premiums for all health plan
14839	products sold by the health maintenance organization offering
14840	the rider. If the premiums paid for point-of-service riders
14841	exceed 15 percent, the health maintenance organization must
14842	notify the officedepartmentand, once this fact is known, must
14843	immediately cease offering such a rider until it is in
14844	compliance with the rider premium cap.
14845	(e) The term "point of service" may not be used by a
14846	health maintenance organization except with riders permitted
14847	under this section or with forms approved by the office
14848	departmentin which a point-of-service product is offered with
14849	an indemnity carrier.
14850	Section 277. Subsection (2) of section 641.3105, Florida
14851	Statutes, is amended to read:
14852	641.3105 Validity of noncomplying contracts.--
14853	(2) Any health maintenance contract delivered or issued
14854	for delivery in this state covering a subscriber, which
14855	subscriber, pursuant to the provisions of this part, the
14856	organization may not lawfully cover under the contract, shall be
14857	cancelable at any time by the organization, any provision of the
14858	contract to the contrary notwithstanding; and the organization
14859	shall promptly cancel the contract in accordance with the
14860	request of the officedepartmenttherefor. No such illegality
14861	or cancellation shall be deemed to relieve the organization of
14862	any liability incurred by it under the contract while in force
14863	or to prohibit the organization from retaining the pro rata
14864	earned premium or rate thereon. This provision does not relieve
14865	the organization from any penalty otherwise incurred by the
14866	organization under this part on account of any such violation.
14867	Section 278. Subsection (5), paragraph (b) of subsection
14868	(7), paragraphs (a) and (e) of subsection (8), paragraph (c) of
14869	subsection (9), and paragraph (b) of subsection (10) of section
14870	641.31071, Florida Statutes, are amended to read:
14871	641.31071 Preexisting conditions.--
14872	(5)(a) The term "creditable coverage" means, with respect
14873	to an individual, coverage of the individual under any of the
14874	following:
14875	1. A group health plan, as defined in s. 2791 of the
14876	Public Health Service Act.
14877	2. Health insurance coverage consisting of medical care,
14878	provided directly, through insurance or reimbursement or
14879	otherwise, and including terms and services paid for as medical
14880	care, under any hospital or medical service policy or
14881	certificate, hospital or medical service plan contract, or
14882	health maintenance contract offered by a health insurance
14883	issuer.
14884	3. Part A or part B of Title XVIII of the Social Security
14885	Act.
14886	4. Title XIX of the Social Security Act, other than
14887	coverage consisting solely of benefits under s. 1928.
14888	5. Chapter 55 of Title 10, United States Code.
14889	6. A medical care program of the Indian Health Service or
14890	of a tribal organization.
14891	7. The Florida Comprehensive Health Association or another
14892	state health benefit risk pool.
14893	8. A health plan offered under chapter 89 of Title 5,
14894	United States Code.
14895	9. A public health plan as defined by rule of the
14896	commissiondepartment. To the greatest extent possible, such
14897	rules must be consistent with regulations adopted by the United
14898	States Department of Health and Human Services.
14899	10. A health benefit plan under s. 5(e) of the Peace Corps
14900	Act (22 U.S.C. s. 2504(e)).
14901	(b) Creditable coverage does not include coverage that
14902	consists solely of one or more or any combination thereof of the
14903	following excepted benefits:
14904	1. Coverage only for accident, or disability income
14905	insurance, or any combination thereof.
14906	2. Coverage issued as a supplement to liability insurance.
14907	3. Liability insurance, including general liability
14908	insurance and automobile liability insurance.
14909	4. Workers' compensation or similar insurance.
14910	5. Automobile medical payment insurance.
14911	6. Credit-only insurance.
14912	7. Coverage for onsite medical clinics.
14913	8. Other similar insurance coverage, specified in rules
14914	adopted by the commissiondepartment, under which benefits for
14915	medical care are secondary or incidental to other insurance
14916	benefits. To the greatest extent possible, such rules must be
14917	consistent with regulations adopted by the United States
14918	Department of Health and Human Services.
14919	(c) The following benefits are not subject to the
14920	creditable coverage requirements, if offered separately;
14921	1. Limited scope dental or vision benefits.
14922	2. Benefits or long-term care, nursing home care, home
14923	health care, community-based care, or any combination of these.
14924	3. Such other similar, limited benefits as are specified
14925	in rules adopted by the commissiondepartment. To the greatest
14926	extent possible, such rules must be consistent with regulations
14927	adopted by the United States Department of Health and Human
14928	Services.
14929	(d) The following benefits are not subject to creditable
14930	coverage requirements if offered as independent, noncoordinated
14931	benefits:
14932	1. Coverage only for a specified disease or illness.
14933	2. Hospital indemnity or other fixed indemnity insurance.
14934	(e) Benefits provided through Medicare supplemental health
14935	insurance, as defined under s. 1882(g)(1) of the Social Security
14936	Act, coverage supplemental to the coverage provided under
14937	chapter 55 of Title 10, United States Code, and similar
14938	supplemental coverage provided to coverage under a group health
14939	plan are not considered creditable coverage if offered as a
14940	separate insurance policy.
14941	(7)
14942	(b) A health maintenance organization may elect to count
14943	as creditable coverage, coverage of benefits within each of
14944	several classes or categories of benefits specified in rules
14945	adopted by the commissiondepartmentrather than as provided
14946	under paragraph (a). Such election shall be made on a uniform
14947	basis for all participants and beneficiaries. Under such
14948	election, a health maintenance organization shall count a period
14949	of creditable coverage with respect to any class or category of
14950	benefits if any level of benefits is covered within such class
14951	or category.
14952	(8)(a) Periods of creditable coverage with respect to an
14953	individual shall be established through presentation of
14954	certifications described in this subsection or in such other
14955	manner as may be specified in rules adopted by the commission
14956	department.
14957	(e) The commissiondepartmentshall adopt rules to prevent
14958	an insurer's or health maintenance organization's failure to
14959	provide information under this subsection with respect to
14960	previous coverage of an individual from adversely affecting any
14961	subsequent coverage of the individual under another group health
14962	plan or health maintenance organization coverage.
14963	(9)
14964	(c) As an alternative to the method authorized by
14965	paragraph (a), a health maintenance organization may address
14966	adverse selection in a method approved by the officedepartment.
14967	(10)
14968	(b) The commissiondepartmentshall adopt rules that
14969	provide a process whereby individuals who need to establish
14970	creditable coverage for periods before July 1, 1996, and who
14971	would have such coverage credited but for paragraph (a), may be
14972	given credit for creditable coverage for such periods through
14973	the presentation of documents or other means.
14974	Section 279. Paragraph (b) of subsection (3) of section
14975	641.31074, Florida Statutes, is amended to read:
14976	641.31074 Guaranteed renewability of coverage.--
14977	(3)
14978	(b)1. In any case in which a health maintenance
14979	organization elects to discontinue offering all coverage in the
14980	small group market or the large group market, or both, in this
14981	state, coverage may be discontinued by the insurer only if:
14982	a. The health maintenance organization provides notice to
14983	the officedepartmentand to each contract holder, and
14984	participants and beneficiaries covered under such coverage, of
14985	such discontinuation at least 180 days prior to the date of the
14986	nonrenewal of such coverage; and
14987	b. All health insurance issued or delivered for issuance
14988	in this state in such market is discontinued and coverage under
14989	such health insurance coverage in such market is not renewed.
14990	2. In the case of a discontinuation under subparagraph 1.
14991	in a market, the health maintenance organization may not provide
14992	for the issuance of any health maintenance organization contract
14993	coverage in the market in this state during the 5-year period
14994	beginning on the date of the discontinuation of the last
14995	insurance contract not renewed.
14996	Section 280. Subsection (2) of section 641.315, Florida
14997	Statutes, is amended to read:
14998	641.315 Provider contracts.--
14999	(2)(a) For all provider contracts executed after October
15000	1, 1991, and within 180 days after October 1, 1991, for
15001	contracts in existence as of October 1, 1991:
15002	1. The contracts must require the provider to give 60
15003	days' advance written notice to the health maintenance
15004	organization and the officedepartmentbefore canceling the
15005	contract with the health maintenance organization for any
15006	reason; and
15007	2. The contract must also provide that nonpayment for
15008	goods or services rendered by the provider to the health
15009	maintenance organization is not a valid reason for avoiding the
15010	60-day advance notice of cancellation.
15011	(b) All provider contracts must provide that the health
15012	maintenance organization will provide 60 days' advance written
15013	notice to the provider and the officedepartmentbefore
15014	canceling, without cause, the contract with the provider, except
15015	in a case in which a patient's health is subject to imminent
15016	danger or a physician's ability to practice medicine is
15017	effectively impaired by an action by the Board of Medicine or
15018	other governmental agency.
15019	Section 281. Subsections (4) and (5) of section 641.3154,
15020	Florida Statutes, are amended to read:
15021	641.3154 Organization liability; provider billing
15022	prohibited.--
15023	(4) A provider or any representative of a provider,
15024	regardless of whether the provider is under contract with the
15025	health maintenance organization, may not collect or attempt to
15026	collect money from, maintain any action at law against, or
15027	report to a credit agency a subscriber of an organization for
15028	payment of services for which the organization is liable, if the
15029	provider in good faith knows or should know that the
15030	organization is liable. This prohibition applies during the
15031	pendency of any claim for payment made by the provider to the
15032	organization for payment of the services and any legal
15033	proceedings or dispute resolution process to determine whether
15034	the organization is liable for the services if the provider is
15035	informed that such proceedings are taking place. It is presumed
15036	that a provider does not know and should not know that an
15037	organization is liable unless:
15038	(a) The provider is informed by the organization that it
15039	accepts liability;
15040	(b) A court of competent jurisdiction determines that the
15041	organization is liable;
15042	(c) The officedepartmentor agency makes a final
15043	determination that the organization is required to pay for such
15044	services subsequent to a recommendation made by the Statewide
15045	Provider and Subscriber Assistance Panel pursuant to s.
15046	408.7056; or
15047	(d) The agency issues a final order that the organization
15048	is required to pay for such services subsequent to a
15049	recommendation made by a resolution organization pursuant to s.
15050	408.7057.
15051	(5) An organization, the office,and the department shall
15052	report any suspected violation of this section by a health care
15053	practitioner to the Department of Health and by a facility to
15054	the agency, which shall take such action as authorized by law.
15055	Section 282. Subsection (12) of section 641.3155, Florida
15056	Statutes, is amended to read:
15057	641.3155 Prompt payment of claims.--
15058	(12) A permissible error ratio of 5 percent is established
15059	for health maintenance organizations' claims payment violations
15060	of paragraphs (3)(a),(b), (c), and (e) and (4)(a), (b), (c), and
15061	(e). If the error ratio of a particular insurer does not exceed
15062	the permissible error ratio of 5 percent for an audit period, no
15063	fine shall be assessed for the noted claims violations for the
15064	audit period. The error ratio shall be determined by dividing
15065	the number of claims with violations found on a statistically
15066	valid sample of claims for the audit period by the total number
15067	of claims in the sample. If the error ratio exceeds the
15068	permissible error ratio of 5 percent, a fine may be assessed
15069	according to s. 624.4211 for those claims payment violations
15070	which exceed the error ratio. Notwithstanding the provisions of
15071	this section, the officedepartmentmay fine a health
15072	maintenance organization for claims payment violations of
15073	paragraphs (3)(e) and (4)(e) which create an uncontestable
15074	obligation to pay the claim. The officedepartmentshall not
15075	fine organizations for violations which the officedepartment
15076	determines were due to circumstances beyond the organization's
15077	control.
15078	Section 283. Subsection (4), (6), and (7) of section
15079	641.316, Florida Statutes, are amended to read:
15080	641.316 Fiscal intermediary services.--
15081	(4) A fiscal intermediary services organization, as
15082	described in subsection (3), shall secure and maintain a surety
15083	bond on file with the officedepartment, naming the intermediary
15084	as principal. The bond must be obtained from a company
15085	authorized to write surety insurance in the state, and the
15086	officedepartmentshall be obligee on behalf of itself and third
15087	parties. The penal sum of the bond may not be less than 5
15088	percent of the funds handled by the intermediary in connection
15089	with its fiscal and fiduciary services during the prior year or
15090	$250,000, whichever is less. The minimum bond amount must be
15091	$10,000. The condition of the bond must be that the intermediary
15092	shall register with the officedepartmentand shall not
15093	misappropriate funds within its control or custody as a fiscal
15094	intermediary or fiduciary. The aggregate liability of the surety
15095	for any and all breaches of the conditions of the bond may not
15096	exceed the penal sum of the bond. The bond must be continuous in
15097	form, must be renewed annually by a continuation certificate,
15098	and may be terminated by the surety upon its giving 30 days'
15099	written notice of termination to the officedepartment.
15100	(6) Any fiscal intermediary services organization, other
15101	than a fiscal intermediary services organization owned,
15102	operated, or controlled by a hospital licensed under chapter
15103	395, an insurer licensed under chapter 624, a third-party
15104	administrator licensed under chapter 626, a prepaid limited
15105	health service organization licensed under chapter 636, a health
15106	maintenance organization licensed under this chapter, or
15107	physician group practices as defined in s. 456.053(3)(h), must
15108	register with the officedepartmentand meet the requirements of
15109	this section. In order to register as a fiscal intermediary
15110	services organization, the organization must comply with ss.
15111	641.21(1)(c) and (d) and 641.22(6). Should the officedepartment
15112	determine that the fiscal intermediary services organization
15113	does not meet the requirements of this section, the registration
15114	shall be denied. In the event that the registrant fails to
15115	maintain compliance with the provisions of this section, the
15116	officedepartmentmay revoke or suspend the registration. In
15117	lieu of revocation or suspension of the registration, the office
15118	departmentmay levy an administrative penalty in accordance with
15119	s. 641.25.
15120	(7) The commissiondepartmentshall adopt rules necessary
15121	to administer this section.
15122	Section 284. Subsections (1), (2), (3), and (4), paragraph
15123	(b) of subsection (6), subsection (8), paragraph (c) of
15124	subsection (10), subsections (11) and (12), paragraph (a) of
15125	subsection (14), and subsections (15), (16), and (17) of section
15126	641.35, Florida Statutes, are amended to read:
15127	641.35 Assets, liabilities, and investments.--
15128	(1) ASSETS.--In any determination of the financial
15129	condition of a health maintenance organization, there shall be
15130	allowed as "assets" only those assets that are owned by the
15131	health maintenance organization and that consist of:
15132	(a) Cash or cash equivalents in the possession of the
15133	health maintenance organization, or in transit under its
15134	control, including the true balance of any deposit in a solvent
15135	bank, savings and loan association, or trust company which is
15136	domiciled in the United States. Cash equivalents are short-term,
15137	highly liquid investments, with original maturities of 3 months
15138	or less, which are both readily convertible to known amounts of
15139	cash and so near their maturity that they present insignificant
15140	risk of changes in value because of changes in interest rates.
15141	(b) Investments, securities, properties, and loans
15142	acquired or held in accordance with this part, and in connection
15143	therewith the following items:
15144	1. Interest due or accrued on any bond or evidence of
15145	indebtedness which is not in default and which is not valued on
15146	a basis including accrued interest.
15147	2. Declared and unpaid dividends on stock and shares,
15148	unless the amount of the dividends has otherwise been allowed as
15149	an asset.
15150	3. Interest due or accrued upon a collateral loan which is
15151	not in default in an amount not to exceed 1 year's interest
15152	thereon.
15153	4. Interest due or accrued on deposits or certificates of
15154	deposit in solvent banks, savings and loan associations, and
15155	trust companies domiciled in the United States, and interest due
15156	or accrued on other assets, if such interest is in the judgment
15157	of the officedepartmenta collectible asset.
15158	5. Interest due or accrued on current mortgage loans, in
15159	an amount not exceeding in any event the amount, if any, of the
15160	excess of the value of the property less delinquent taxes
15161	thereon over the unpaid principal; but in no event shall
15162	interest accrued for a period in excess of 90 days be allowed as
15163	an asset.
15164	(c) Premiums in the course of collection, not more than 3
15165	months past due, less commissions payable thereon. The
15166	foregoing limitation shall not apply to premiums payable
15167	directly or indirectly by any governmental body in the United
15168	States or by any of their instrumentalities.
15169	(d) The full amount of reinsurance recoverable from a
15170	solvent reinsurer, which reinsurance is authorized under s.
15171	624.610.
15172	(e) Pharmaceutical and medical supply inventories.
15173	(f) Goodwill created by acquisitions and mergers occurring
15174	on or after January 1, 2001.
15175	(g) Loans or advances by a health maintenance organization
15176	to its parent or principal owner if approved by the office
15177	department.
15178	(h) Other assets, not inconsistent with the provisions of
15179	this section, deemed by the officedepartmentto be available
15180	for the payment of losses and claims, at values to be determined
15181	by it.
15182
15183	The officedepartment, upon determining that a health
15184	maintenance organization's asset has not been evaluated
15185	according to applicable law or that it does not qualify as an
15186	asset, shall require the health maintenance organization to
15187	properly reevaluate the asset or replace the asset with an asset
15188	suitable to the officedepartmentwithin 30 days of receipt of
15189	written notification by the officedepartmentof this
15190	determination, if the removal of the asset from the
15191	organization's assets would impair the organization's solvency.
15192	(2) ASSETS NOT ALLOWED.--In addition to assets impliedly
15193	excluded by the provisions of subsection (1), the following
15194	assets expressly shall not be allowed as assets in any
15195	determination of the financial condition of a health maintenance
15196	organization:
15197	(a) Subscriber lists, patents, trade names, agreements not
15198	to compete, and other like intangible assets.
15199	(b) Any note or account receivable from or advances to
15200	officers, directors, or controlling stockholders, whether
15201	secured or not, and advances to employees, agents, or other
15202	persons on personal security only, other than those transactions
15203	authorized under paragraph (1)(g).
15204	(c) Stock of the health maintenance organization owned by
15205	it directly or owned by it through any entity in which the
15206	organization owns or controls, directly or indirectly, more than
15207	25 percent of the ownership interest.
15208	(d) Leasehold improvements, nonmedical libraries,
15209	stationery, literature, and nonmedical supply inventories,
15210	except that leasehold improvements made prior to October 1,
15211	1985, shall be allowed as an asset and shall be amortized over
15212	the shortest of the following periods:
15213	1. The life of the lease.
15214	2. The useful life of the improvements.
15215	3. The 3-year period following October 1, 1985.
15216	(e) Furniture, fixtures, furnishings, vehicles, medical
15217	libraries, and equipment.
15218	(f) Notes or other evidences of indebtedness which are
15219	secured by mortgages or deeds of trust which are in default and
15220	beyond the express period specified in the instrument for curing
15221	the default.
15222	(g) Bonds in default for more than 60 days.
15223	(h) Prepaid and deferred expenses.
15224	(i) Any note, account receivable, advance, or other
15225	evidence of indebtedness, or investment in:
15226	1. The parent of the health maintenance organization;
15227	2. Any entity directly or indirectly controlled by the
15228	health maintenance organization parent; or
15229	3. An affiliate of the parent or the health maintenance
15230	organization,
15231
15232	except as allowed in subsections (1), (11), and (12). The
15233	officedepartmentmay, however, allow all or a portion of such
15234	asset, at values to be determined by the officedepartment, if
15235	deemed by the officedepartmentto be available for the payment
15236	of losses and claims.
15237	(3) LIABILITIES.--In any determination of the financial
15238	condition of a health maintenance organization, liabilities to
15239	be charged against its assets shall include:
15240	(a) The amount, estimated consistently with the provisions
15241	of this part, necessary to pay all of its unpaid losses and
15242	claims incurred for or on behalf of a subscriber, on or prior to
15243	the end of the reporting period, whether reported or unreported,
15244	including contract and premium deficiency reserves. If a health
15245	maintenance organization, through a health care risk contract,
15246	transfers to any entity the obligation to pay any provider for
15247	any claim arising from services provided to or for the benefit
15248	of any subscriber, the liabilities of the health maintenance
15249	organization under this section shall include the amount of
15250	those losses and claims to the extent that the provider has not
15251	received payment. No liability need be established if the entity
15252	has provided to the health maintenance organization a financial
15253	instrument acceptable to the officedepartmentsecuring the
15254	obligations under the contract or if the health maintenance
15255	organization has in place an escrow or withhold agreement
15256	approved by the officedepartmentwhich assures full payment of
15257	those claims. Financial instruments may include irrevocable,
15258	clean, and evergreen letters of credit. As used in this
15259	paragraph, the term "entity" does not include this state, the
15260	United States, or an agency thereof or an insurer or health
15261	maintenance organization authorized in this state.
15262	(b) The amount equal to the unearned portions of the gross
15263	premiums charged on health maintenance contracts in force.
15264	(c) Taxes, expenses, and other obligations due or accrued
15265	at the date of the statement.
15266
15267	The officedepartment, upon determining that a health
15268	maintenance organization has failed to report liabilities that
15269	should have been reported, shall require a corrected report
15270	which reflects the proper liabilities to be submitted by the
15271	organization to the officedepartmentwithin 10 working days of
15272	receipt of written notification.
15273	(4) INVESTMENTS GENERALLY.--Health maintenance
15274	organizations may invest their funds only in accordance with the
15275	provisions of this part. Notwithstanding the provisions of this
15276	part, however, the officedepartmentmay, after notice and
15277	hearing, order a health maintenance organization to limit or
15278	withdraw from certain investments or to discontinue certain
15279	investment practices, to the extent that the officedepartment
15280	finds the investment practices hazardous to the financial
15281	condition of the organization. At any such hearing, the office
15282	departmentshall have the burden of presenting a prima facie
15283	case that the investment or investment practices are hazardous
15284	to the financial condition of the organization. If the office
15285	departmentpresents such a prima facie case, then it shall be
15286	the organization's burden to demonstrate that the investment or
15287	investment practices are not hazardous to the financial
15288	condition of the organization.
15289	(6) GENERAL QUALIFICATIONS.--
15290	(b) No security or investment shall be eligible for
15291	purchase at a price above its market value unless it is approved
15292	by the officedepartment.
15293	(8) EXCESSIVE COMMISSIONS AND CERTAIN INTERESTS
15294	PROHIBITED.--
15295	(a) No health maintenance organization shall pay any
15296	commission or brokerage for the purchase or sale of property,
15297	whether real or personal, in excess of that usual and customary
15298	at the time and in the locality where the purchases or sales are
15299	made. Information regarding payments of commissions and
15300	brokerage shall be maintained from the date of the most recent
15301	examination by the officedepartmentpursuant to s. 641.27 until
15302	the date of completion of the following examination.
15303	(b) No health maintenance organization shall knowingly
15304	invest in or loan upon any property, directly or indirectly,
15305	whether real or personal, in which any officer or director of
15306	the organization has a financial interest, nor shall any
15307	organization make a loan of any kind to any officer or director
15308	of the organization, except that:
15309	1. This paragraph shall not apply to loans in
15310	circumstances in which the financial interest of the officer or
15311	director is only nominal, trifling, or so remote as not to give
15312	rise to a conflict of interest; and
15313	2. In any case, the officedepartmentmay approve a
15314	transaction between an organization and its officers or
15315	directors under this paragraph if it is satisfied that:
15316	a. The transaction is entered into in good faith for the
15317	advantage and benefit of the organization,
15318	b. The amount of the proposed investment or loan does not
15319	violate any other provision of this part or exceed the
15320	reasonable, normal value of the property or the interest which
15321	the company proposed to acquire,
15322	c. The transaction is otherwise fair and reasonable, and
15323	d. The transaction will not adversely affect, to any
15324	substantial degree, the liquidity of the organization's
15325	investments or its ability thereafter to comply with
15326	requirements of this part or the payment of its claims and
15327	obligations.
15328	(10) PROPERTY USED IN THE HEALTH MAINTENANCE
15329	ORGANIZATION'S BUSINESS.--Real estate, including leasehold
15330	estates, for the convenient accommodation of the organization's
15331	business operations, including home office, branch
15332	administrative offices, hospitals, medical clinics, medical
15333	professional buildings, and any other facility to be used in the
15334	provision of health care services, or real estate for rental to
15335	any health care provider under contract with the organization to
15336	provide health care services which shall be used in the
15337	provision of health care services to members of the organization
15338	by that provider, is acceptable as an investment on the
15339	following conditions:
15340	(c) The greater of the admitted value of the asset, as
15341	determined by statutory accounting principles, or, if approved
15342	by the officedepartment, the health maintenance organization's
15343	equity in the real estate plus all encumbrances on the real
15344	estate owned by the organization under this subsection, when
15345	added to the value of all personal and mixed property used in
15346	the organization's business, shall not exceed 75 percent of its
15347	admitted assets unless, with the permission of the office
15348	department, it finds that the percentage of its admitted assets
15349	is insufficient to provide convenient accommodation for the
15350	organization's business and the operations of the organization
15351	would not otherwise be impaired.
15352	(11) INVESTMENTS IN ADMINISTRATIVE AND MANAGEMENT SERVICE
15353	ENTITIES AND OTHER HEALTH CARE PROVIDERS.--A health maintenance
15354	organization may invest directly or indirectly in real estate,
15355	common and preferred stocks, bonds or debentures, including
15356	convertible debentures, or other evidences of debts of or equity
15357	in an entity if the entity is owned by or, with the approval of
15358	the officedepartment, under contract to the organization to
15359	provide management services, administrative services, or health
15360	care services for the organization, on the following conditions:
15361	(a) Investments authorized under this subsection shall not
15362	exceed 50 percent of admitted assets, and these investments
15363	shall be included in the calculation of the overall limitation
15364	in paragraph (10)(c) relating to all real and personal property.
15365	(b) Investments may qualify under this section only
15366	insofar as a provider of management, administrative, or health
15367	care service relationship as defined herein exists. Upon
15368	cessation of such relationship, each investment shall be subject
15369	to the rules applicable to an investment of that type and must
15370	qualify under the appropriate limitation or, failing that,
15371	become ineligible and subject to disposal under subsection (17).
15372	(12) EXCHANGES OF FACILITIES OR ASSETS.--Health care or
15373	administrative service entities, if subsidiaries of or under
15374	contract to the health maintenance organization to provide
15375	administrative or health care services to the organization's
15376	members, may exchange facilities or similar assets to be used in
15377	the organization's business for stock of the organization.
15378	However, any exchange involving an entity under contract with
15379	the health maintenance organization must have the approval of
15380	the officedepartmentprior to the exchange. These facilities
15381	or assets shall be valued in accordance with statutory
15382	accounting principles.
15383	(14) SPECIAL LIMITATION INVESTMENTS.--
15384	(a) After satisfying the requirements of this part, any
15385	funds of the health maintenance organization may be invested in
15386	the following investments, subject to a cost limitation of 10
15387	percent of its admitted assets in each category of investment:
15388	1. Anticipation obligations of political subdivisions of a
15389	state.--Anticipation obligations of any political subdivision of
15390	any state of the United States, including, but not limited to,
15391	bond anticipation notes, tax anticipation notes, preliminary
15392	loan anticipation notes, revenue anticipation notes, and
15393	construction anticipation notes, for the payment of money within
15394	12 months from the issuance of the obligation, on the following
15395	conditions:
15396	a. The anticipation notes are a direct obligation of the
15397	issuer under conditions set forth in subsection (9).
15398	b. The political subdivision is not in default in the
15399	payment of the principal or interest on any of its direct
15400	general obligations or any obligation guaranteed by such
15401	political subdivision.
15402	c. The anticipated funds are specifically pledged to
15403	secure the obligations.
15404	2. Revenue obligations of state or municipal public
15405	utilities.--Obligations of any state of the United States, a
15406	political subdivision thereof, or a public instrumentality of
15407	any one or more of the foregoing for the payment of money, on
15408	the following conditions:
15409	a. The obligations are payable from revenues or earnings
15410	of a public utility of such state, political subdivision, or
15411	public instrumentality which are specifically pledged therefor.
15412	b. The law under which the obligations are issued requires
15413	that such rates for service shall be charged and collected at
15414	all times so as to produce sufficient revenue or earning,
15415	together with any other revenues or moneys pledged, to pay all
15416	operating and maintenance charges of the public utility and all
15417	principal and interest on such charges.
15418	c. No prior or parity obligations payable from the
15419	revenues or earnings of that public utility are in default at
15420	the date of such investment.
15421	3. Other revenue obligations.--Obligations of any state of
15422	the United States, a political subdivision thereof, or a public
15423	instrumentality of any of the foregoing for the payment of
15424	money, on the following conditions:
15425	a. The obligations are payable from revenues or earnings,
15426	excluding revenues or earnings from public utilities,
15427	specifically pledged therefor by such state, political
15428	subdivision, or public instrumentality.
15429	b. No prior or parity obligation of the same issuer
15430	payable from revenues or earnings from the same source has been
15431	in default as to principal or interest during the 5 years next
15432	preceding the date of the investment, but the issuer need not
15433	have been in existence for that period, and obligations acquired
15434	under this paragraph may be newly issued.
15435	4. Corporate stocks.--Stocks, common or preferred, of any
15436	corporation created or existing under the laws of the United
15437	States or any state thereof. The organization may invest in
15438	stocks, common or preferred, of any corporation created or
15439	existing under the laws of any foreign country if such stocks
15440	are listed and traded on a national securities exchange in the
15441	United States or, in the alternative, if such investment in
15442	stocks of any corporation created or existing under the laws of
15443	any foreign country are first approved by the officedepartment.
15444	Investment in common stock of any one corporation shall not
15445	exceed 3 percent of the health maintenance organization's
15446	admitted assets.
15447	(15) INVESTMENT OF EXCESS FUNDS.--
15448	(a) After satisfying the requirements of this part, any
15449	funds of a health maintenance organization in excess of its
15450	statutorily required reserves and surplus may be invested:
15451	1. Without limitation in any investments otherwise
15452	authorized by this part; or
15453	2. In such other investments not specifically authorized
15454	by this part, provided such investments do not exceed the lesser
15455	of 5 percent of the health maintenance organization's admitted
15456	assets or 25 percent of the amount by which a health maintenance
15457	organization's surplus exceeds its statutorily required minimum
15458	surplus. A health maintenance organization may exceed the
15459	limitations of this subparagraph only with the prior written
15460	approval of the officedepartment.
15461	(b) Nothing in this section authorizes a health
15462	maintenance organization to:
15463	1. Invest any funds in excess of the amount by which its
15464	actual surplus exceeds its statutorily required minimum surplus;
15465	or
15466	2. Make any investment prohibited by this code.
15467	(16) PROHIBITED INVESTMENTS AND INVESTMENT UNDERWRITING.--
15468	(a) In addition to investments excluded pursuant to other
15469	provisions of this act, a health maintenance organization shall
15470	not directly or indirectly invest in or lend its funds upon the
15471	security of:
15472	1. Issued shares of its own capital stock, except in
15473	connection with a plan approved by the officedepartmentfor
15474	purchase of the shares by the organization's officers,
15475	employees, or agents. However, no such stock shall constitute an
15476	asset of the organization in any determination of its financial
15477	condition.
15478	2. Except with the consent of the officedepartment,
15479	securities issued by any corporation or enterprise the
15480	controlling interest of which is, or will after such acquisition
15481	by the organization be, held directly or indirectly by the
15482	organization or any combination of the organization and its
15483	directors, officers, parent corporation, subsidiaries, or
15484	controlling stockholders. Investments in health care providers
15485	under subsections (11) and(12) shall not be subject to this
15486	provision.
15487	3. Any note or other evidence of indebtedness of any
15488	director, officer, or controlling stockholder of the health
15489	maintenance organization.
15490	(b) No health maintenance organization shall underwrite or
15491	participate in the underwriting of an offering of securities or
15492	property by any other person.
15493	(17) TIME LIMIT FOR DISPOSAL OF INELIGIBLE PROPERTY AND
15494	SECURITIES; EFFECT OF FAILURE TO DISPOSE.--
15495	(a) Any property or securities lawfully acquired by a
15496	health maintenance organization which it could not otherwise
15497	have invested in or loaned its funds upon at the time of such
15498	acquisition shall be disposed of within 6 months from the date
15499	of acquisition, unless within such period the security has
15500	attained to the standard of eligibility; except that any
15501	security or property acquired under any agreement of merger or
15502	consolidation may be retained for a longer period if so provided
15503	in the plan for such merger or consolidation, as approved by the
15504	officedepartment. Upon application by the organization and
15505	proof to the officedepartmentthat forced sale of any such
15506	property or security would materially injure the interests of
15507	the health maintenance organization, the officedepartmentshall
15508	extend the disposal period for an additional reasonable time.
15509	(b) Notwithstanding the provisions of paragraph (a), any
15510	ineligible property or securities shall not be allowed as an
15511	asset of the organization.
15512	Section 285. Section 641.36, Florida Statutes, is amended
15513	to read:
15514	641.36 Adoption of rules; penalty for violation.--The
15515	commissiondepartmentshall adopt rules necessary to carry out
15516	the provisions of this part. The officedepartmentshall
15517	collect and make available all health maintenance organization
15518	rules adopted by the commissiondepartment. Any violation of a
15519	rule adopted under this section shall subject the violating
15520	entity to the provisions of s. 641.23.
15521	Section 286. Subsections (1), (2), and (5) of section
15522	641.365, Florida Statutes, are amended to read:
15523	641.365 Dividends.--
15524	(1)(a) A health maintenance organization shall not pay any
15525	dividend or distribute cash or other property to stockholders
15526	except out of that part of its available and accumulated surplus
15527	funds which is derived from realized net operating profits on
15528	its business and net realized capital gains.
15529	(b) Unless prior written approval is obtained from the
15530	officedepartment, a health maintenance organization may not pay
15531	or declare any dividend or distribute cash or other property to
15532	or on behalf of any stockholder if, immediately before or after
15533	such distribution, the health maintenance organization's
15534	available and accumulated surplus funds, which are derived from
15535	realized net operating profits on its business and net realized
15536	gains, are or would be less than zero.
15537	(c) A health maintenance organization may make dividend
15538	payments or distributions to stockholders without the prior
15539	written approval of the officedepartmentwhen:
15540	1. The dividend is equal to or less than the greater of:
15541	a. Ten percent of the health maintenance organization's
15542	accumulated surplus funds which are derived from realized net
15543	operating profits on its business and net realized capital gains
15544	as of the immediate preceding calendar year; or
15545	b. The health maintenance organization's entire net
15546	operating profit and realized net capital gains derived during
15547	the immediately preceding calendar year.
15548	2. The health maintenance organization will have surplus
15549	equal to or exceeding 115 percent of the minimum required
15550	statutory surplus after the dividend or distribution is made.
15551	3. The health maintenance organization has filed a notice
15552	with the officedepartmentat least 30 days prior to the
15553	dividend payment or distribution, or such shorter period of time
15554	as approved by the officedepartmenton a case-by-case basis.
15555	4. The notice includes a certification by an officer of
15556	the health maintenance organization attesting that after payment
15557	of the dividend or distribution the health maintenance
15558	organization will have at least 115 percent of required
15559	statutory surplus.
15560	5. The health maintenance organization has negative
15561	retained earnings, statutory surplus in excess of $50 million,
15562	and statutory surplus greater than or equal to 150 percent of
15563	its required statutory surplus before and after the dividend
15564	distribution is made based upon the health maintenance
15565	organization's most recently filed annual financial statement.
15566	(2) The officedepartmentshall not approve a dividend or
15567	distribution in excess of the maximum amount allowed in
15568	subsection(1) unless it determines that the distribution or
15569	dividend would not jeopardize the financial condition of the
15570	health maintenance organization, considering:
15571	(a) The liquidity, quality, and diversification of the
15572	health maintenance organization's assets and the effect on its
15573	ability to meet its obligations.
15574	(b) Any reduction of investment portfolio and investment
15575	income.
15576	(c) History of capital contributions.
15577	(d) Prior dividend distributions of the health maintenance
15578	organization.
15579	(e) Whether the dividend is only a pass-through dividend
15580	from a subsidiary of the health maintenance organization.
15581	(5) The officedepartmentmay revoke or suspend the
15582	certificate of authority of a health maintenance organization
15583	which has declared or paid such an illegal dividend.
15584	Section 287. Section 641.385, Florida Statutes, is amended
15585	to read:
15586	641.385 Order to discontinue certain advertising.--If in
15587	the opinion of the officedepartmentany advertisement by a
15588	health maintenance organization violates any of the provisions
15589	of this part, the department may enter an immediate order
15590	requiring that the use of the advertisement be discontinued. If
15591	requested by the health maintenance organization, the office
15592	departmentshall conduct a hearing within 10 days of the entry
15593	of such order. If, after the hearing or by agreement with the
15594	health maintenance organization, a final determination is made
15595	that the advertising was in fact violative of any provision of
15596	this part, the officedepartmentmay, in lieu of revocation of
15597	the certificate of authority, require the publication of a
15598	corrective advertisement; impose an administrative penalty of up
15599	to $10,000; and, in the case of an initial solicitation, require
15600	that the health maintenance organization, prior to accepting any
15601	application received in response to the advertisement, provide
15602	an acceptable clarification of the advertisement to each
15603	individual applicant.
15604	Section 288. Subsection (1) of section 641.39001, Florida
15605	Statutes, is amended to read:
15606	641.39001 Soliciting or accepting new or renewal health
15607	maintenance contracts by insolvent or impaired health
15608	maintenance organization prohibited; penalty.--
15609	(1) Whether or not delinquency proceedings as to a health
15610	maintenance organization have been or are to be initiated, a
15611	director or officer of a health maintenance organization, except
15612	with the written permission of the officeDepartment of
15613	Insurance, may not authorize or permit the health maintenance
15614	organization to solicit or accept new or renewal health
15615	maintenance contracts or provider contracts in this state after
15616	the director or officer knew, or reasonably should have known,
15617	that the health maintenance organization was insolvent or
15618	impaired. As used in this section, the term "impaired" means
15619	that the health maintenance organization does not meet the
15620	requirements of s. 641.225.
15621	Section 289. Subsections (6) and (10) of section 641.3903,
15622	Florida Statutes, are amended to read:
15623	641.3903 Unfair methods of competition and unfair or
15624	deceptive acts or practices defined.--The following are defined
15625	as unfair methods of competition and unfair or deceptive acts or
15626	practices:
15627	(6) FAILURE TO MAINTAIN COMPLAINT-HANDLING
15628	PROCEDURES.--Failure of any person to maintain a complete record
15629	of all the complaints received since the date of the most recent
15630	examination of the health maintenance organization by the office
15631	department. For the purposes of this subsection, the term
15632	"complaint" means any written communication primarily expressing
15633	a grievance and requesting a remedy to the grievance.
15634	(10) ILLEGAL DEALINGS IN PREMIUMS; EXCESS OR REDUCED
15635	CHARGES FOR HEALTH MAINTENANCE COVERAGE.--
15636	(a) Knowingly collecting any sum as a premium or charge
15637	for health maintenance coverage which is not then provided or is
15638	not in due course to be provided, subject to acceptance of the
15639	risk by the health maintenance organization, by a health
15640	maintenance contract issued by a health maintenance organization
15641	as permitted by this part.
15642	(b) Knowingly collecting as a premium or charge for health
15643	maintenance coverage any sum in excess of or less than the
15644	premium or charge applicable to health maintenance coverage, in
15645	accordance with the applicable classifications and rates as
15646	filed with the officedepartment, and as specified in the health
15647	maintenance contract.
15648	Section 290. Section 641.3905, Florida Statutes, is
15649	amended to read:
15650	641.3905 General powers and duties of the department and
15651	office.--In addition to the powers and duties set forth in s.
15652	624.307, the department and office shall each have the power
15653	within its respective regulatory jurisdictionto examine and
15654	investigate the affairs of every person, entity, or health
15655	maintenance organization in order to determine whether the
15656	person, entity, or health maintenance organization is operating
15657	in accordance with the provisions of this part or has been or is
15658	engaged in any unfair method of competition or in any unfair or
15659	deceptive act or practice prohibited by s. 641.3901, and each
15660	shall have the powers and duties specified in ss. 641.3907-
15661	641.3913 in connection therewith.
15662	Section 291. Section 641.3907, Florida Statutes, is
15663	amended to read:
15664	641.3907 Defined unfair practices; hearings, witnesses,
15665	appearances, production of books, and service of process.--
15666	(1) Whenever the department or officehas reason to
15667	believe that any person, entity, or health maintenance
15668	organization has engaged, or is engaging, in this state in any
15669	unfair method of competition or any unfair or deceptive act or
15670	practice as defined in s. 641.3903 or is operating a health
15671	maintenance organization without a certificate of authority as
15672	required by this part and that a proceeding by it in respect
15673	thereto would be to the interest of the public, the department
15674	or officeshall conduct or cause to have conducted a hearing in
15675	accordance with chapter 120.
15676	(2) The department or office, a duly empowered hearing
15677	officer, or an administrative law judge shall, during the
15678	conduct of such hearing, have those powers enumerated in s.
15679	120.569; however, the penalties for failure to comply with a
15680	subpoena or with an order directing discovery shall be limited
15681	to a fine not to exceed $1,000 per violation.
15682	(3) Statements of charges, notices, and orders under this
15683	part may be served by anyone duly authorized by the department
15684	or office, either in the manner provided by law for service of
15685	process in civil actions or by certifying and mailing a copy
15686	thereof to the person, entity, or health maintenance
15687	organization affected by the statement, notice, order, or other
15688	process at her or his or its residence or principal office or
15689	place of business. The verified return by the person so serving
15690	such statement, notice, order, or other process, setting forth
15691	the manner of the service, shall be proof of the same, and the
15692	return postcard receipt for such statement, notice, order, or
15693	other process, certified and mailed as aforesaid, shall be proof
15694	of service of the same.
15695	Section 292. Section 641.3909, Florida Statutes, is
15696	amended to read:
15697	641.3909 Cease and desist and penalty orders.--After the
15698	hearing provided in s. 641.3907, the department or officeshall
15699	enter a final order in accordance with s. 120.569. If it is
15700	determined that the person, entity, or health maintenance
15701	organization charged has engaged in an unfair or deceptive act
15702	or practice or the unlawful operation of a health maintenance
15703	organization without a subsisting certificate of authority, the
15704	department or officeshall also issue an order requiring the
15705	violator to cease and desist from engaging in such method of
15706	competition, act, or practice or unlawful operation of a health
15707	maintenance organization. Further, if the act or practice
15708	constitutes a violation of s. 641.3155, s. 641.3901, or s.
15709	641.3903, the department or officemay, at its discretion, order
15710	any one or more of the following:
15711	(1) Suspension or revocation of the health maintenance
15712	organization's certificate of authority if it knew, or
15713	reasonably should have known, it was in violation of this part.
15714	(2) If it is determined that the person or entity charged
15715	has engaged in the business of operating a health maintenance
15716	organization without a certificate of authority, an
15717	administrative penalty not to exceed $1,000 for each health
15718	maintenance contract offered or effectuated.
15719	Section 293. Section 641.3911, Florida Statutes, is
15720	amended to read:
15721	641.3911 Appeals from the department or office.--Any
15722	person, entity, or health maintenance organization subject to an
15723	order of the department or officeunder s. 641.3909 or s.
15724	641.3913 may obtain a review of the order by filing an appeal
15725	therefrom in accordance with the provisions and procedures for
15726	appeal under s. 120.68.
15727	Section 294. Section 641.3913, Florida Statutes, is
15728	amended to read:
15729	641.3913 Penalty for violation of cease and desist
15730	orders.--Any person, entity, or health maintenance organization
15731	which violates a cease and desist order of the department or
15732	officeunder s. 641.3909 while such order is in effect, after
15733	notice and hearing as provided in s. 641.3907, shall be subject,
15734	at the discretion of the department or office, to any one or
15735	more of the following:
15736	(1) A monetary penalty of not more than $200,000 as to all
15737	matters determined in such hearing.
15738	(2) Suspension or revocation of the health maintenance
15739	organization's certificate of authority.
15740	Section 295. Section 641.3917, Florida Statutes, is
15741	amended to read:
15742	641.3917 Civil liability.--The provisions of this part are
15743	cumulative to rights under the general civil and common law, and
15744	no action of the department or officeshall abrogate such rights
15745	to damage or other relief in any court.
15746	Section 296. Subsections (3), (10), and (14) of section
15747	641.3922, Florida Statutes, are amended to read:
15748	641.3922 Conversion contracts; conditions.--Issuance of a
15749	converted contract shall be subject to the following conditions:
15750	(3) CONVERSION PREMIUM.--The premium for the converted
15751	contract shall be determined in accordance with premium rates
15752	applicable to the age and class of risk of each person to be
15753	covered under the converted contract and to the type and amount
15754	of coverage provided. However, the premium for the converted
15755	contract may not exceed 200 percent of the standard risk rate,
15756	as established by the officedepartmentunder s. 627.6675(3).
15757	The mode of payment for the converted contract shall be
15758	quarterly or more frequently at the option of the organization,
15759	unless otherwise mutually agreed upon between the subscriber and
15760	the organization.
15761	(10) ALTERNATE PLANS.--The health maintenance organization
15762	shall offer a standard health benefit plan as established
15763	pursuant to s. 627.6699(12). The health maintenance organization
15764	may, at its option, also offer alternative plans for group
15765	health conversion in addition to those required by this section,
15766	provided any alternative plan is approved by the office
15767	departmentor is a converted policy, approved under s. 627.6675
15768	and issued by an insurance company authorized to transact
15769	insurance in this state. Approval by the officedepartmentof an
15770	alternative plan shall be based on compliance by the alternative
15771	plan with the provisions of this part and the rules promulgated
15772	thereunder, applicable provisions of the Florida Insurance Code
15773	and rules promulgated thereunder, and any other applicable law.
15774	(14) NOTIFICATION.--A notification of the conversion
15775	privilege shall be included in each health maintenance contract
15776	and in any certificate or member's handbook. The organization
15777	shall mail an election and premium notice form, including an
15778	outline of coverage, on a form approved by the office
15779	department, within 14 days after any individual who is eligible
15780	for a converted health maintenance contract gives notice to the
15781	organization that the individual is considering applying for the
15782	converted contract or otherwise requests such information. The
15783	outline of coverage must contain a description of the principal
15784	benefits and coverage provided by the contract and its principal
15785	exclusions and limitations, including, but not limited to,
15786	deductibles and coinsurance.
15787	Section 297. Section 641.402, Florida Statutes, is amended
15788	to read:
15789	641.402 Definitions.--As used in this part, the term:
15790	(1) "Basic services" includes any of the following:
15791	emergency care, physician care other than hospital inpatient
15792	physician services, ambulatory diagnostic treatment, and
15793	preventive health care services.
15794	(2) "Department" means the Department of Insurance.
15795	(2)(3) "Guaranteeing organization" means an organization
15796	thatwhich is domiciled in the United States; thatwhichhas
15797	authorized service of process against it; and thatwhichhas
15798	appointed the Chief Financial OfficerInsurance Commissioner and
15799	Treasureras its agent for service of process in connection with
15800	any cause of action arising in this state, based upon any
15801	guarantee entered into under this part.
15802	(3)(4)"Insolvent" or "insolvency" means the inability of
15803	a prepaid health clinic to discharge its liabilities as they
15804	become due in the normal course of business.
15805	(4)(5)"Prepaid health clinic" means any organization
15806	authorized under this part which provides, either directly or
15807	through arrangements with other persons, basic services to
15808	persons enrolled with such organization, on a prepaid per capita
15809	or prepaid aggregate fixed-sum basis, including those basic
15810	services which subscribers might reasonably require to maintain
15811	good health. However, no clinic thatwhichprovides or contracts
15812	for, either directly or indirectly, inpatient hospital services,
15813	hospital inpatient physician services, or indemnity against the
15814	cost of such services shall be a prepaid health clinic.
15815	(5)(6)"Prepaid health clinic contract" means any contract
15816	entered into by a prepaid health clinic with a subscriber or
15817	group of subscribers to provide any of the basic services in
15818	exchange for a prepaid per capita or prepaid aggregate fixed
15819	sum.
15820	(6)(7)"Provider" means any physician or person other than
15821	a hospital that furnishes health care services and is licensed
15822	or authorized to practice in this state.
15823	(7)(8)"Reporting period" means the particular span of
15824	time by or for which accounts are redeemed on an annualized
15825	basis.
15826	(8)(9)"Subscriber" means an individual who has
15827	contracted, or on whose behalf a contract has been entered into,
15828	with a prepaid health clinic for health care services.
15829	(9)(10)"Surplus" means total unencumbered assets in
15830	excess of total liabilities. Surplus includes capital stock,
15831	capital in excess of par, and retained earnings and may include
15832	surplus notes.
15833	(10)(11) "Surplus notes" means debt thatwhichhas been
15834	guaranteed by the United States Government or its agencies or
15835	debt thatwhichhas been subordinated to all claims of
15836	subscribers and general creditors of the prepaid health clinic.
15837	Section 298. Section 641.403, Florida Statutes, is amended
15838	to read:
15839	641.403 Rulemaking authority.--The commission may
15840	Department of Insurance has authority toadopt rules pursuant to
15841	ss. 120.536(1) and 120.54 to implement the provisions of this
15842	part.
15843	Section 299. Section 641.405, Florida Statutes, is amended
15844	to read:
15845	641.405 Application for certificate of authority to
15846	operate prepaid health clinic.--
15847	(1) No person may operate a prepaid health clinic without
15848	first obtaining a certificate of authority from the office
15849	department. The officedepartmentshall not issue a certificate
15850	of authority to any applicant which does not possess a valid
15851	Health Care Provider Certificate issued by the Agency for Health
15852	Care Administration.
15853	(2) Each application for a certificate of authority shall
15854	be on such form as the commissiondepartmentprescribes, and
15855	such application shall be accompanied by:
15856	(a) A copy of the basic organizational document of the
15857	applicant, if any, such as the articles of incorporation,
15858	articles of association, partnership agreement, trust agreement,
15859	or other applicable document, and all amendments to such
15860	document.
15861	(b) A copy of the constitution, bylaws, rules and
15862	regulations, or similar form of document, if any, regulating the
15863	conduct of the affairs of the applicant.
15864	(c) A list of the names, addresses, and official
15865	capacities with the applicant of the persons who are to be
15866	responsible for the conduct of the affairs of the clinic,
15867	including all members of the governing body, the officers and
15868	directors in the case of a corporation, and the partners or
15869	associates in the case of a partnership or association. Such
15870	persons shall fully disclose to the officedepartmentand the
15871	governing body of the clinic the extent and nature of any
15872	contracts or arrangements between them and the clinic, including
15873	any possible conflicts of interest.
15874	(d) A statement generally describing the clinic and its
15875	operations.
15876	(e) Each form of prepaid health clinic contract that the
15877	applicant proposes to offer the subscribers, showing for each
15878	form of contract the benefits to which the subscribers are
15879	entitled, together with a table of the rates charged, or
15880	proposed to be charged.
15881	(f) A copy of the applicant's Health Care Provider
15882	Certificate from the Agency for Health Care Administration,
15883	issued pursuant to part III of this chapter.
15884	(g) A financial statement prepared on the basis of
15885	generally accepted accounting principles, except that surplus
15886	notes acceptable to the officedepartmentmay be included in the
15887	calculation of surplus.
15888	Section 300. Section 641.406, Florida Statutes, is amended
15889	to read:
15890	641.406 Issuance of certificate of authority.--The office
15891	departmentshall issue a certificate of authority for a prepaid
15892	health clinic to any applicant filing a properly completed
15893	application in conformity with s. 641.405, upon payment of the
15894	prescribed fees and upon the office'sdepartment'sbeing
15895	satisfied that:
15896	(1) As a condition precedent to the issuance of any
15897	certificate, the applicant has obtained a Health Care Provider
15898	Certificate from the Agency for Health Care Administration
15899	pursuant to part III of this chapter.
15900	(2) The proposed rates are actuarially sound for the
15901	benefits provided, including administrative costs.
15902	(3) The applicant has met the minimum surplus requirements
15903	of s. 641.407.
15904	(4) The procedures for offering basic services and
15905	offering and terminating contracts to subscribers will not
15906	unfairly discriminate on the basis of age, health, or economic
15907	status. However, this subsection does not prohibit reasonable
15908	underwriting classifications for the purposes of establishing
15909	contract rates, nor does it prohibit experience rating.
15910	(5) The procedures for offering basic services and
15911	offering and terminating contracts to subscribers will not
15912	discriminate on the basis of sex, race, or national origin.
15913	(6) The applicant furnishes evidence of adequate insurance
15914	coverage or an adequate plan for self-insurance to respond to
15915	claims for injuries arising out of the furnishing of basic
15916	services.
15917	(7) The ownership, control, or management of the applicant
15918	is competent and trustworthy and possesses managerial experience
15919	that would make the proposed clinic operation beneficial to the
15920	subscribers. The officedepartmentshall not grant or continue
15921	authority to transact the business of a prepaid health clinic in
15922	this state at any time during which the officedepartmenthas
15923	good reason to believe that the ownership, control, or
15924	management of the clinic is under the control of any person
15925	whose business operations are or have been marked by business
15926	practices or conduct that is to the detriment of the public,
15927	stockholders, investors, or creditors; by the improper
15928	manipulation of assets or of accounts; or by bad faith.
15929	(8) The application and the applicant are in conformity
15930	with all requirements of this part.
15931	Section 301. Section 641.4065, Florida Statutes, is
15932	amended to read:
15933	641.4065 Insurance business not authorized.--Nothing in
15934	the Florida Insurance Code or this part shall be deemed to
15935	authorize any prepaid health clinic to transact any insurance
15936	business other than that issuing prepaid health clinic contracts
15937	or otherwise to engage in any other type of insurance unless it
15938	is authorized under a certificate of authority issued by the
15939	officedepartmentunder the provisions of the Florida Insurance
15940	Code.
15941	Section 302. Subsection (2) of section 641.407, Florida
15942	Statutes, is amended to read:
15943	641.407 Minimum surplus.--
15944	(2) In lieu of having any minimum surplus, the prepaid
15945	health clinic may provide a written guaranty to assure payment
15946	of covered subscriber claims if the guaranteeing organization
15947	has been in operation for at least 3 years and has a surplus,
15948	not including land, buildings, and equipment, equal to the
15949	product of 2 times the amount of the required statutory surplus.
15950	Such guaranteeing organization and such written guaranty must be
15951	acceptable to, and approved by, the officedepartment. The
15952	officedepartmentshall consider the likelihood of the payment
15953	of subscriber claims in granting or withholding such approval.
15954	Section 303. Section 641.409, Florida Statutes, is amended
15955	to read:
15956	641.409 Insolvency protection.--
15957	(1) Every prepaid health clinic shall comply with one of
15958	the following paragraphs:
15959	(a) The prepaid health clinic shall secure insurance to
15960	the satisfaction of the officedepartmentto protect subscribers
15961	in the event the prepaid health clinic is unable to meet its
15962	obligations to subscribers under the terms of any prepaid health
15963	clinic contract issued to a subscriber.
15964	(b) The prepaid health clinic shall file with the office
15965	departmenta surety bond issued by an authorized surety insurer.
15966	The bond shall be for the same purpose as the insurance in lieu
15967	of which the bond is filed. The officedepartmentshall not
15968	approve any bond under the terms of which the protection
15969	afforded against insolvency is not equivalent to the protection
15970	afforded by such insurance. The bond shall guarantee that the
15971	prepaid health clinic will faithfully and truly perform all the
15972	conditions of any prepaid health clinic contract. No such bond
15973	shall be canceled or subject to cancellation unless at least 60
15974	days' notice of the cancellation, in writing, is filed with the
15975	officedepartment. In the event that the notice of termination
15976	of the bond is filed with the officedepartment, the prepaid
15977	health clinic insured under the bond shall, within 30 days of
15978	the filing of the notice of termination, provide the office
15979	departmentwith a replacement bond meeting the requirements of
15980	this part or secure insurance as required by paragraph (a). The
15981	cancellation of a bond does not relieve the obligation of the
15982	issuer of the bond for claims arising out of contracts issued
15983	prior to the cancellation of the bond unless a replacement bond
15984	or insurance is secured. In no event shall the issuer's
15985	aggregate liability under the bond exceed the face amount of the
15986	bond. If, within 30 days of filing the notice of termination, a
15987	replacement bond or insurance has not been secured and filed
15988	with the officedepartment, the officedepartmentshall suspend
15989	the certificate of the prepaid health clinic until the deposit
15990	requirements are satisfied. Whenever the prepaid health clinic
15991	ceases to do business in this state and furnishes to the office
15992	departmentsatisfactory proof that it has discharged or
15993	otherwise adequately provided for all of its obligations to its
15994	subscribers, the officedepartmentshall release any bond filed
15995	by the prepaid health clinic.
15996	(2) In determining the sufficiency of the insurance
15997	required under paragraph (1)(a) or the surety bond required
15998	under paragraph (1)(b), the officedepartmentmay consider the
15999	number of subscribers, the basic services included in subscriber
16000	contracts, and the cost of providing such basic services to
16001	subscribers in the geographic area served.
16002	(3) Every prepaid health clinic shall deposit with the
16003	department a cash deposit in the amount of $30,000 to guarantee
16004	that the obligations to the subscribers will be performed.
16005	Section 304. Section 641.41, Florida Statutes, is amended
16006	to read:
16007	641.41 Annual report of prepaid health clinic;
16008	administrative penalty.--
16009	(1) Each prepaid health clinic shall file a report with
16010	the officedepartment, annually on or before March 1, or within
16011	3 months of the end of the reporting period of the clinic, or
16012	within such extension of time for the filing of the report as
16013	the officedepartment, for good cause, may grant. The report of
16014	the prepaid health clinic must be filed on forms prescribed by
16015	the commissiondepartmentand must be verified under oath by two
16016	executive officers of the clinic or, if the clinic is not a
16017	corporation, verified under oath by two persons who are
16018	principal managing directors of the affairs of the clinic. The
16019	report of the clinic shall show the condition of the clinic on
16020	the last day of the immediately preceding reporting period.
16021	Such report shall include:
16022	(a) A financial statement of the clinic, including its
16023	balance sheet and a statement of operations for the preceding
16024	year;
16025	(b) A list of the name and residence address of every
16026	person responsible for the conduct of the affairs of the clinic,
16027	together with a disclosure of the extent and nature of any
16028	contract or arrangement between such person and the clinic,
16029	including any possible conflicts of interest;
16030	(c) The number of prepaid health clinic contracts issued
16031	and outstanding, and the number of prepaid health clinic
16032	contracts terminated and a compilation of the reasons for such
16033	terminations;
16034	(d) Such statistical information as is requested by the
16035	commission or officedepartment, which information shows the
16036	rates of the clinic for all basic services provided under
16037	prepaid health clinic contracts;
16038	(e) The number and amount of damage claims for medical
16039	injury initiated against the clinic and any of the providers
16040	engaged by it during the reporting year, broken down into claims
16041	with and without formal legal process, and the disposition, if
16042	any, of each such claim; and
16043	(f) Such other information relating to the performance of
16044	the clinic as is required by the commission or office
16045	department.
16046	(2) Any clinic which neglects to file the annual report in
16047	the form and within the time required by this section is subject
16048	to an administrative penalty, not to exceed $100 for each day
16049	during which the neglect continues; and, upon notice by the
16050	officedepartmentto that effect, the authority of the clinic to
16051	do business in this state shall cease while such default
16052	continues.
16053	Section 305. Section 641.412, Florida Statutes, is amended
16054	to read:
16055	641.412 Fees.--
16056	(1) Every prepaid health clinic shall pay to the office
16057	departmentthe following fees:
16058	(a) For filing a copy of its application for a certificate
16059	of authority or an amendment to such certificate, a
16060	nonrefundable fee in the amount of $150.
16061	(b) For filing each annual report, a fee in the amount of
16062	$150.
16063	(2) The fees charged under this section shall be
16064	distributed as follows:
16065	(a) One-third of the total amount of fees shall be
16066	distributed to the Agency for Health Care Administration; and
16067	(b) Two-thirds of the total amount of fees shall be
16068	distributed to the officeDepartment of Insurance.
16069	Section 306. Section 641.418, Florida Statutes, is amended
16070	to read:
16071	641.418 Examination of prepaid health clinic by the office
16072	department.--The officedepartmentshall examine the affairs,
16073	transactions, accounts, business records, and assets of any
16074	prepaid health clinic as often as the officedepartmentdeems it
16075	expedient for the protection of the people of this state. Every
16076	clinic shall submit its books and records and take other
16077	appropriate action as may be necessary to facilitate an
16078	examination. However, medical records of individuals and
16079	records of physicians providing services under contracts to the
16080	clinic are not subject to audit, although such records may be
16081	subject to subpoena by court order upon a showing of good cause.
16082	For the purpose of examinations, the officedepartmentmay
16083	administer oaths to and examine the officers and agents of a
16084	clinic concerning its business and affairs. The expenses for
16085	the examination of each clinic by the officedepartmentare
16086	subject to the same terms and conditions that apply to insurers
16087	under part II of chapter 624. In no event shall the expenses of
16088	all examinations exceed the maximum amount of $15,000 per year.
16089	Section 307. Subsections (2), (3), (5), and (7) of section
16090	641.42, Florida Statutes, is amended to read:
16091	641.42 Prepaid health clinic contracts.--
16092	(2) The rates charged by any clinic to its subscribers
16093	shall not be excessive, inadequate, or unfairly discriminatory.
16094	The commissiondepartment, in accordance with generally accepted
16095	actuarial practice, may define by rule what constitutes
16096	excessive, inadequate, or unfairly discriminatory rates and may
16097	require whatever information the commissiondepartmentdeems
16098	necessary to determine that a rate or proposed rate meets the
16099	requirements of this subsection.
16100	(3) No clinic shall issue or agree to issue any prepaid
16101	health clinic contract to a subscriber unless the contract has
16102	first been filed with, and approved by, the officedepartment.
16103	(5) Every subscriber shall receive a clear and
16104	understandable description of the method of the clinic for
16105	resolving subscriber grievances; such method shall be set forth
16106	in the contract and shall be approved by the officedepartment
16107	on the basis of its underlying fairness.
16108	(7)(a) If a clinic desires to amend any contract with any
16109	of its subscribers or desires to change any rate charged for the
16110	contract, the clinic may do so, upon filing with the office
16111	departmentthe proposed amendment or change in rates.
16112	(b) No prepaid health clinic contract form or application
16113	form when written application is required and is to be made a
16114	part of the policy or contract, or no printed amendment,
16115	addendum, rider, or endorsement form or form of renewal
16116	certificate, shall be delivered or issued for delivery in this
16117	state, unless the form has been filed with the officedepartment
16118	at its offices in Tallahasseeby or in behalf of the clinic
16119	which proposes to use such form and has been approved by the
16120	officedepartment. Every such filing shall be made not less than
16121	30 days in advance of any such use or delivery. At the
16122	expiration of such 30 days, the form so filed shall be deemed
16123	approved unless prior to the end of the 30 days the form has
16124	been affirmatively approved or disapproved by the office
16125	department. The approval of any such form by the office
16126	departmentconstitutes a waiver of any unexpired portion of such
16127	waiting period. The officedepartmentmay extend by not more
16128	than an additional 15 days the period within which the office
16129	departmentmay so affirmatively approve or disapprove any such
16130	form, by giving notice of such extension before the expiration
16131	of the initial 30-day period. At the expiration of any such
16132	period as so extended, and in the absence of such prior
16133	affirmative approval or disapproval, such form shall be deemed
16134	approved. The officedepartmentmay, for cause, withdraw a
16135	previous approval. No clinic shall issue or use any form which
16136	has been disapproved by the officedepartmentor any form for
16137	which the officedepartmenthas withdrawn approval.
16138	(c) The officedepartmentshall disapprove any form filed
16139	under this subsection, or withdraw any previous approval of the
16140	form, only if the form:
16141	1. Is in any respect in violation of, or does not comply
16142	with, any provision of this part or rule adopted under this
16143	part.
16144	2. Contains or incorporates by reference, where such
16145	incorporation is otherwise permissible, any inconsistent,
16146	ambiguous, or misleading clauses, or exceptions and conditions
16147	which deceptively affect the risk purported to be assumed in the
16148	general coverage of the contract.
16149	3. Has a misleading title, misleading heading, or other
16150	indication of the provisions of the form which is misleading.
16151	4. Is printed or otherwise reproduced in such manner as to
16152	render any material provision of the form substantially
16153	illegible.
16154	5. Provides benefits which are unreasonable in relation to
16155	the rate charged or contains provisions which are unfair,
16156	inequitable, or contrary to the public policy of this state or
16157	encourage misrepresentation.
16158	(d) In determining whether the benefits are reasonable in
16159	relation to the rate charged, the officedepartment, in
16160	accordance with reasonable actuarial techniques, shall consider:
16161	1. Past loss experience and prospective loss experience.
16162	2. Allocation of expenses.
16163	3. Risk and contingency margins, along with justification
16164	of such margins.
16165	4. Acquisition costs.
16166	5. Other factors deemed appropriate by the office
16167	department, based on sound actuarial techniques.
16168	Section 308. Section 641.421, Florida Statutes, is amended
16169	to read:
16170	641.421 Language used in contracts and advertisements;
16171	translations.--
16172	(1)(a) All prepaid health clinic contracts or forms shall
16173	be printed in English.
16174	(b) If the negotiations by a prepaid health clinic with a
16175	subscriber leading up to the effectuation of a prepaid health
16176	clinic contract are conducted in a language other than English,
16177	the prepaid health clinic shall supply to the subscriber a
16178	written translation of the contract, which translation
16179	accurately reflects the substance of the contract and is in the
16180	language used to negotiate the contract. Any such translation
16181	shall be furnished to the officedepartmentas part of the
16182	filing of the prepaid health clinic contract form and shall be
16183	approved by the officedepartmentprior to use. No translation
16184	of a prepaid health clinic contract form shall be approved by
16185	the officedepartmentunless the translation accurately reflects
16186	the substance of the prepaid health clinic contract form in
16187	translation. When a translation of a prepaid health clinic
16188	contract is used, the translation shall clearly and
16189	conspicuously state on its face and in the language of the
16190	translation:
16191	READ THIS FIRST
16192	This is a translation of the document that you are about to
16193	sign.
16194
16195	(2) All advertisements by a prepaid health clinic, if
16196	printed or broadcast in a language other than English, also
16197	shall be available in English and shall be furnished to the
16198	officedepartmentupon request. As used in this subsection, the
16199	term "advertisement" means any advertisement, circular,
16200	pamphlet, brochure, or other printed material disclosing or
16201	disseminating advertising material or information by a clinic to
16202	prospective or existing subscribers and includes any radio or
16203	television transmittal of an advertisement or information.
16204	Section 309. Subsection (2) of section 641.424, Florida
16205	Statutes, is amended to read:
16206	641.424 Validity of noncomplying contracts.--
16207	(2) Any contract delivered or issued for delivery in this
16208	state covering a subscriber resident, located, or to be
16209	performed in this state, which subscriber, pursuant to the
16210	provisions of this part, the clinic may not lawfully provide
16211	under such a contract, is cancelable at any time by the clinic,
16212	any provision of the contract to the contrary notwithstanding;
16213	and the clinic shall promptly cancel the contract in accordance
16214	with the request of the officedepartmentfor such cancellation.
16215	No such illegality or cancellation shall be deemed to relieve
16216	the clinic of any liability incurred by the clinic under the
16217	contract while the contract was in force or to prohibit the
16218	clinic from retaining the pro rata earned premium on the
16219	contract. This provision does not relieve the clinic from any
16220	penalty otherwise incurred by the clinic under this part on
16221	account of any such violation.
16222	Section 310. Section 641.437, Florida Statutes, is amended
16223	to read:
16224	641.437 Investigatory power of officedepartment.--The
16225	officedepartmenthas the power to examine and investigate the
16226	affairs of every person, entity, or prepaid health clinic in
16227	order to determine whether the person, entity, or prepaid health
16228	clinic is operating in accordance with the provisions of this
16229	part or has been or is engaged in any unfair method of
16230	competition or any unfair or deceptive act or practice
16231	prohibited by s. 641.44.
16232	Section 311. Section 641.443, Florida Statutes, is amended
16233	to read:
16234	641.443 Temporary restraining orders.--
16235	(1) The officedepartmentis vested with the power to seek
16236	a temporary restraining order:
16237	(a) On behalf of the officedepartmentor on behalf of a
16238	subscriber or subscribers of a prepaid health clinic that is
16239	being operated by a person or entity without a subsisting
16240	certificate of authority; or
16241	(b) On behalf of the officedepartmentor on behalf of a
16242	subscriber or subscribers to whom a prepaid health clinic,
16243	person, or entity is issuing, delivering, or renewing prepaid
16244	health clinic contracts without an existing certificate of
16245	authority.
16246	(2) The officedepartmentand the Agency for Health Care
16247	Administration are each vested with the power to seek a
16248	temporary restraining order on their behalf or on behalf of a
16249	subscriber or subscribers of a prepaid health clinic that is
16250	being operated in violation of any provision of this part or any
16251	rule promulgated under this part, or any other applicable law or
16252	rule.
16253	Section 312. Section 641.444, Florida Statutes, is amended
16254	to read:
16255	641.444 Injunction.--In addition to the penalties and
16256	other enforcement provisions of this part, if a person, entity,
16257	or prepaid health clinic has engaged in any activity prohibited
16258	by this part or any rule adopted pursuant to this part, the
16259	officedepartmentmay resort to a proceeding for injunction in
16260	the circuit court of the county where such person, entity, or
16261	prepaid health clinic is located or has her or his or its
16262	principal place of business; and the officedepartmentmay apply
16263	in such court for such temporary and permanent orders as the
16264	officedepartmentmay deem necessary to restrain the person,
16265	entity, or prepaid health clinic from engaging in any such
16266	activity, until the person, entity, or prepaid health clinic
16267	complies with the provisions and rules.
16268	Section 313. Section 641.445, Florida Statutes, is amended
16269	to read:
16270	641.445 Defined practices; hearings, witnesses,
16271	appearances, production of books, and service of process.--
16272	(1) Whenever the officedepartmenthas reason to believe
16273	that a person, entity, or prepaid health clinic has engaged, or
16274	is engaging, in this state in any unfair method of competition
16275	or any unfair or deceptive act or practice as defined in s.
16276	641.441, or is operating a prepaid health clinic without a
16277	certificate of authority as required by this part or otherwise
16278	operating in violation of any provision of this part or rule
16279	adopted pursuant to this part, and that a proceeding by the
16280	officedepartmentin respect thereto would be in the interest of
16281	the public, the officedepartmentshall conduct, or cause to
16282	have conducted, a hearing in accordance with chapter 120.
16283	(2) The officedepartment, a duly empowered hearing
16284	officer, or an administrative law judge shall, during the
16285	conduct of such hearing, have those powers enumerated in s.
16286	120.569; however, the penalty for the failure to comply with a
16287	subpoena or with an order directing discovery is limited to a
16288	fine not to exceed $1,000 per violation.
16289	(3) A statement of charges, notice, or order under this
16290	part may be served by anyone duly authorized by the office
16291	department, either in the manner provided by law for service of
16292	process in civil actions or by certifying and mailing a copy of
16293	the statement of charges, notice, or order to the person,
16294	entity, or prepaid health clinic affected by the statement,
16295	notice, or order or other process at his or her or its residence
16296	or principal office or place of business. The verified return
16297	by the person so serving such statement, notice, or order or
16298	other process, setting forth the manner of the service, is proof
16299	of such service; and the return postcard receipt for such
16300	statement, notice, or order or other process, certified and
16301	mailed as provided in this subsection, is proof of the service
16302	of the statement, notice, or order or other process.
16303	Section 314. Section 641.446, Florida Statutes, is amended
16304	to read:
16305	641.446 Cease and desist and penalty orders.--After the
16306	hearing provided in s. 641.445, the officedepartmentshall
16307	enter a final order in accordance with s. 120.569. If it is
16308	determined that the person, entity, or prepaid health clinic
16309	charged has engaged in an unfair or deceptive act or practice or
16310	the unlawful operation of a prepaid health clinic, the office
16311	departmentalso shall issue an order requiring the violator to
16312	cease and desist from engaging in such method of competition,
16313	act, or practice or unlawful operation of a prepaid health
16314	clinic. Furthermore, the officedepartmentmay, at its
16315	discretion, order any one or more of the following:
16316	(1) The suspension or revocation of the certificate of
16317	authority of the prepaid health clinic if it knew, or reasonably
16318	should have known, that it was in violation of this part.
16319	(2) If it is determined that the person or entity charged
16320	has engaged in the business of operating a prepaid health clinic
16321	without a certificate of authority, an administrative penalty
16322	not to exceed $1,000 for each prepaid health clinic contract
16323	offered or effectuated.
16324	Section 315. Section 641.447, Florida Statutes, is amended
16325	to read:
16326	641.447 Appeal from departmentalorder.--Any person,
16327	entity, or prepaid health clinic that is subject to an order of
16328	the officedepartmentunder s. 641.446 may obtain a review of
16329	the order by filing an appeal from the order in accordance with
16330	the provisions and procedures for appeal under s. 120.68.
16331	Section 316. Section 641.448, Florida Statutes, is amended
16332	to read:
16333	641.448 Penalty for violation of cease and desist
16334	order.--Any person, entity, or prepaid health clinic that
16335	violates a cease and desist order of the officedepartmentunder
16336	s. 641.446 while such order is in effect, after notice and
16337	hearing as provided in s. 641.445, is subject, at the discretion
16338	of the officedepartment, to any one or more of the following:
16339	(1) A monetary penalty of not more than $50,000 as to all
16340	matters determined in such hearing.
16341	(2) The suspension or revocation of the certificate of
16342	authority of the prepaid health clinic.
16343	Section 317. Section 641.45, Florida Statutes, is amended
16344	to read:
16345	641.45 Revocation or cancellation of certificate of
16346	authority; suspension of authority to enroll new subscribers;
16347	terms of suspension.--
16348	(1) The maintenance of a valid and current Health Care
16349	Provider Certificate issued pursuant to part III of this chapter
16350	is a condition of the maintenance of a valid and current
16351	certificate of authority issued by the officedepartmentto
16352	operate a prepaid health clinic. Revocation or nonrenewal of a
16353	Health Care Provider Certificate shall be deemed to be an
16354	automatic and immediate cancellation of a prepaid health
16355	clinic's certificate of authority.
16356	(2) The officedepartmentmay suspend the authority of a
16357	clinic to enroll new subscribers or revoke any certificate of
16358	authority issued to a prepaid health clinic, or order compliance
16359	within 60 days, if the officedepartmentfinds that any of the
16360	following conditions exist:
16361	(a) The clinic is not operating in compliance with this
16362	part or any rule promulgated under this part.
16363	(b) The plan is no longer actuarially sound or the clinic
16364	does not have the minimum surplus as required by this part.
16365	(c) The existing contract rates are excessive, inadequate,
16366	or unfairly discriminatory.
16367	(d) The clinic has advertised, merchandised, or attempted
16368	to merchandise its services in such a manner as to misrepresent
16369	its services or capacity for services or has engaged in
16370	deceptive, misleading, or unfair practices with respect to
16371	advertising or merchandising.
16372	(e) The organization is insolvent.
16373	(f) The clinic has not complied with the grievance
16374	procedures for subscribers that are set forth in any prepaid
16375	health clinic contract.
16376	(g) The clinic has not fully satisfied a judgment against
16377	the clinic within 10 days of the entry of the judgment by any
16378	court in the state or, in the case of an appeal from such
16379	judgment, has not fully satisfied the judgment within 60 days
16380	after affirmance of the judgment by the appellate court.
16381	(3) The officedepartmentshall, in its order suspending
16382	the authority of a clinic to enroll new subscribers, specify the
16383	period during which the suspension is to be in effect and the
16384	conditions, if any, which must be met by the clinic prior to
16385	reinstatement of its authority to enroll new subscribers. The
16386	order of suspension is subject to rescission or modification by
16387	further order of the officedepartmentprior to the expiration
16388	of the suspension period. Reinstatement shall not be made unless
16389	requested by the clinic; however, the officedepartmentshall
16390	not grant reinstatement if it finds that the circumstances for
16391	which the suspension occurred still exist or are likely to
16392	recur.
16393	Section 318. Section 641.452, Florida Statutes, is amended
16394	to read:
16395	641.452 Administrative penalty in lieu of suspension or
16396	revocation of certificate of authority.--The officedepartment
16397	may, in lieu of suspension or revocation of a certificate of
16398	authority, levy an administrative penalty in an amount not more
16399	than $10,000 for each violation by a prepaid health clinic. In
16400	levying such fine, the officedepartmentshall consider the
16401	number of members and total revenues of the clinic and whether
16402	the violation was committed knowingly and willfully.
16403	Section 319. Section 641.453, Florida Statutes, is amended
16404	to read:
16405	641.453 Civil liability.--The provisions of this part are
16406	cumulative to the rights under the general civil law and common
16407	law, and no action of the officedepartmentshall abrogate such
16408	rights to damages or other relief in any court.
16409	Section 320. Section 641.454, Florida Statutes, is amended
16410	to read:
16411	641.454 Civil action to enforce prepaid health clinic
16412	contract; attorney's fees; court costs.--In any civil action
16413	brought to enforce the terms and conditions of a prepaid health
16414	clinic contract, the prevailing party is entitled to recover
16415	reasonable attorney's fees and court costs. This section shall
16416	not be construed to authorize a civil action against the
16417	commission or officedepartment, or theirits employees, or the
16418	Insurance Commissioner and Treasureror against the Agency for
16419	Health Care Administration, the employees of the Agency for
16420	Health Care Administration, or the Secretary of Health Care
16421	Administration.
16422	Section 321. Section 641.455, Florida Statutes, is amended
16423	to read:
16424	641.455 Disposition of moneys collected under this
16425	part.--Fees, administrative penalties, examination expenses, and
16426	other sums collected by the officedepartmentunder this part
16427	shall be deposited to the credit of the Insurance Commissioner's
16428	Regulatory Trust Fund; however, fees, examination expenses, and
16429	other sums collected by, or allocated to, the Agency for Health
16430	Care Administration under this part shall be deposited to the
16431	credit of the General Revenue Fund.
16432	Section 322. Section 641.457, Florida Statutes, is amended
16433	to read:
16434	641.457 Exemption for certain operational prepaid health
16435	clinics.--The provisions of this part do not apply to those
16436	prepaid health clinics providing the services defined in ss.
16437	641.40 through 641.459, which clinics have been continuously
16438	engaged in providing such services since January 1, 1947,
16439	provided that any prepaid health clinic claiming an exemption
16440	under this section notifiednotifies the former Department of
16441	Insuranceof its claim on or before January 1, 1985. This
16442	exemption will terminate upon a change in controlling ownership
16443	of the organization.
16444	Section 323. Section 641.48, Florida Statutes, is amended
16445	to read:
16446	641.48 Purpose and application of part.--The purpose of
16447	this part is to ensure that health maintenance organizations and
16448	prepaid health clinics deliver high-quality health care to their
16449	subscribers. To achieve this purpose, this part requires all
16450	such organizations to obtain a health care provider certificate
16451	from the agency as a condition precedent to obtaining a
16452	certificate of authority to do business in Florida from the
16453	officeDepartment of Insurance, under part I or part II of this
16454	chapter.
16455	Section 324. Subsection (2) of section 641.49, Florida
16456	Statutes, is amended to read:
16457	641.49 Certification of health maintenance organization
16458	and prepaid health clinic as health care providers; application
16459	procedure.--
16460	(2) The officeDepartment of Insuranceshall not issue a
16461	certificate of authority under part I or part II of this chapter
16462	to any applicant which does not possess a valid health care
16463	provider certificate issued by the agency under this part.
16464	Section 325. Subsection (4) of section 641.495, Florida
16465	Statutes, is amended to read:
16466	641.495 Requirements for issuance and maintenance of
16467	certificate.--
16468	(4) The organization shall ensure that the health care
16469	services it provides to subscribers, including physician
16470	services as required by s. 641.19(12)(13)(d) and (e), are
16471	accessible to the subscribers, with reasonable promptness, with
16472	respect to geographic location, hours of operation, provision of
16473	after-hours service, and staffing patterns within generally
16474	accepted industry norms for meeting the projected subscriber
16475	needs. The health maintenance organization must provide
16476	treatment authorization 24 hours a day, 7 days a week. Requests
16477	for treatment authorization may not be held pending unless the
16478	requesting provider contractually agrees to take a pending or
16479	tracking number.
16480	Section 326. Subsections (7), (8), and (11) of section
16481	641.511, Florida Statutes, are amended to read:
16482	641.511 Subscriber grievance reporting and resolution
16483	requirements.--
16484	(7) Each organization shall send to the agency a copy of
16485	its quarterly grievance reports submitted to the office
16486	Department of Insurancepursuant to s. 408.7056(12).
16487	(8) The agency shall investigate all reports of unresolved
16488	quality of care grievances received from:
16489	(a) Annual and quarterly grievance reports submitted by
16490	the organization to the officeDepartment of Insurance.
16491	(b) Review requests of subscribers whose grievances remain
16492	unresolved after the subscriber has followed the full grievance
16493	procedure of the organization.
16494	(11) Each organization, as part of its contract with any
16495	provider, must require the provider to post a consumer
16496	assistance notice prominently displayed in the reception area of
16497	the provider and clearly noticeable by all patients. The
16498	consumer assistance notice must state the addresses and toll-
16499	free telephone numbers of the Agency for Health Care
16500	Administration, the Statewide Provider and Subscriber Assistance
16501	Program, and the Department of Financial ServicesInsurance. The
16502	consumer assistance notice must also clearly state that the
16503	address and toll-free telephone number of the organization's
16504	grievance department shall be provided upon request. The agency
16505	may adoptis authorized to promulgaterules to implement this
16506	section.
16507	Section 327. Subsections (1), (3), and (6) of section
16508	641.512, Florida Statutes, are amended to read:
16509	641.512 Accreditation and external quality assurance
16510	assessment.--
16511	(1)(a) To promote the quality of health care services
16512	provided by health maintenance organizations and prepaid health
16513	clinics in this state, the officedepartmentshall require each
16514	health maintenance organization and prepaid health clinic to be
16515	accredited within 1 year of the organization's receipt of its
16516	certificate of authority and to maintain accreditation by an
16517	accreditation organization approved by the officedepartment, as
16518	a condition of doing business in the state.
16519	(b) In the event that no accreditation organization can be
16520	approved by the officedepartment, the officedepartmentshall
16521	require each health maintenance organization and prepaid health
16522	clinic to have an external quality assurance assessment
16523	performed by a review organization approved by the office
16524	department, as a condition of doing business in the state. The
16525	assessment shall be conducted within 1 year of the
16526	organization's receipt of its certificate of authority and every
16527	2 years thereafter, or when the officedepartmentdeems
16528	additional assessments necessary.
16529	(3) A representative of the officedepartmentshall
16530	accompany the accreditation or review organization throughout
16531	the accreditation or assessment process, but shall not
16532	participate in the final accreditation or assessment
16533	determination. The accreditation or review organization shall
16534	monitor and evaluate the quality and appropriateness of patient
16535	care, the organization's pursuance of opportunities to improve
16536	patient care and resolve identified problems, and the
16537	effectiveness of the internal quality assurance program required
16538	for health maintenance organization and prepaid health clinic
16539	certification pursuant to s. 641.49(3)(p).
16540	(6) The accreditation or review organization shall issue a
16541	written report of its findings to the health maintenance
16542	organization's or prepaid health clinic's board of directors. A
16543	copy of the report shall be submitted to the officedepartment
16544	by the organization within 30 business days of its receipt by
16545	the health maintenance organization or prepaid health clinic.
16546	Section 328. Section 641.52, Florida Statutes, is amended
16547	to read:
16548	641.52 Revocation of certificate; suspension of new
16549	enrollment; suspension of the health care provider certificate;
16550	administrative fine; notice of action to the officeDepartment
16551	of Insurance; penalty for use of unlicensed providers.--
16552	(1) The agency may suspend the authority of an
16553	organization to enroll new subscribers or revoke the health care
16554	provider certificate of any organization, or order compliance
16555	within a time certain, if it finds that any of the following
16556	conditions exist:
16557	(a) The organization is in substantial violation of its
16558	contracts.
16559	(b) The organization is unable to fulfill its obligations
16560	under outstanding contracts entered into with its subscribers.
16561	(c) The organization knowingly utilizes a provider who is
16562	furnishing or has furnished health care services and who does
16563	not have a subsisting license or other authority to practice or
16564	furnish health care services in this state.
16565	(d) The organization no longer meets the requirements for
16566	the certificate as originally issued.
16567	(e) The organization has violated any lawful rule or order
16568	of the agency or any provision of this part.
16569	(f) The organization has refused to be examined or to
16570	produce its accounts, records, and files for examination or to
16571	perform any other legal obligation as to such examination, when
16572	required by the agency.
16573	(g) The organization has not, after given reasonable
16574	notice, maintained accreditation or received favorable external
16575	quality assurance reviews under s. 641.512 or, following an
16576	investigation under s. 641.515, has been determined to not
16577	materially meet requirements under this part.
16578	(2) Revocation of an organization's certificate shall be
16579	for a period of 2 years. After 2 years, the organization may
16580	apply for a new certificate by compliance with all application
16581	requirements applicable to first-time applicants.
16582	(3) Suspension of an organization's authority to enroll
16583	new subscribers shall be for such period, not to exceed 1 year,
16584	as is fixed by the agency. The agency shall, in its order
16585	suspending the authority of an organization to enroll new
16586	subscribers, specify the period during which the suspension is
16587	to be in effect and the conditions, if any, which must be met by
16588	the organization prior to reinstatement of its authority to
16589	enroll new subscribers. The order of suspension is subject to
16590	rescission or modification by further order of the agency prior
16591	to the expiration of the suspension period. Authority to enroll
16592	new subscribers shall not be reinstated unless requested by the
16593	organization; however, the agency may not grant reinstatement if
16594	it finds that the circumstances for which the suspension of
16595	authority to enroll new subscribers occurred still exist or are
16596	likely to recur.
16597	(4) The agency may suspend the health care provider
16598	certificate issued to an organization. The agency shall, in its
16599	order suspending the health care provider certificate, specify
16600	the period during which the suspension is to be in effect and
16601	the conditions, if any, which must be met by the organization
16602	for reinstatement. Upon expiration of the suspension period, the
16603	organization's certificate automatically reinstates unless the
16604	agency finds that the causes of the suspension have not been
16605	removed or that the organization is otherwise not in compliance
16606	with this part. If the agency makes such a finding, the health
16607	care provider certificate shall not be reinstated and is
16608	considered to have expired as of the end of the suspension
16609	period.
16610	(5) If the agency finds that one or more grounds exist for
16611	the revocation or suspension of a certificate issued under this
16612	part, the agency may, in lieu of such revocation or suspension,
16613	impose a fine upon the organization. With respect to any
16614	nonwillful violation, the fine may not exceed $2,500 per
16615	violation. Such fines may not exceed an aggregate amount of
16616	$25,000 for all nonwillful violations arising out of the same
16617	action. With respect to any knowing and willful violation of a
16618	lawful order or rule of the agency or a provision of this part,
16619	the agency may impose a fine upon the organization in an amount
16620	not to exceed $20,000 for each such violation. Such fines may
16621	not exceed an aggregate amount of $250,000 for all knowing and
16622	willful violations arising out of the same action. The agency
16623	shall, by January 1, 1997, adopt by rule penalty categories that
16624	specify varying ranges of fines for willful violations and for
16625	nonwillful violations.
16626	(6) The agency shall immediately notify the office
16627	Department of Insurancewhenever it issues an administrative
16628	complaint or an order or otherwise initiates legal proceedings
16629	resulting in or which may result in suspension or revocation of
16630	an organization's health care provider certificate or suspension
16631	of new enrollment.
16632	(7) Any organization that knowingly utilizes the services
16633	of a provider who is not licensed or otherwise authorized by law
16634	to provide such services is guilty of a felony of the third
16635	degree, punishable as provided in s. 775.082, s. 775.083, or s.
16636	775.084.
16637	Section 329. Subsection (2) of section 641.54, Florida
16638	Statutes, is amended to read:
16639	641.54 Information disclosure.--
16640	(2) The list shall be made available, upon request, to the
16641	officedepartment. The list shall also be made available, upon
16642	request:
16643	(a) With respect to negotiation, application, or
16644	effectuation of a group health maintenance contract, to the
16645	employer or other person who will hold the contract on behalf of
16646	the subscriber group. The list may be restricted to include
16647	only physicians and hospitals in the group's geographic area.
16648	(b) With respect to an individual health maintenance
16649	contract or any contract offered to a person who is entitled to
16650	have payments for health care costs made under Medicare, to the
16651	person considering or making application to, or under contract
16652	with, the health maintenance organization. The list may be
16653	restricted to include only physicians and hospitals in the
16654	person's geographic area.
16655	Section 330. Subsection (4) of section 641.55, Florida
16656	Statutes, is amended to read:
16657	641.55 Internal risk management program.--
16658	(4) The Agency for Health Care Administration shall adopt
16659	rules necessary to carry out the provisions of this section,
16660	including rules governing the establishment of required internal
16661	risk management programs to meet the needs of individual
16662	organizations and each specific organization type governed by
16663	this part. The officeDepartment of Insuranceshall assist the
16664	agency in preparing these rules. Each internal risk management
16665	program shall include the use of incident reports to be filed
16666	with the risk manager. The risk manager shall have free access
16667	to all organization or provider medical records. The incident
16668	reports shall be considered to be a part of the workpapers of
16669	the attorney defending the organization in litigation relating
16670	thereto and shall be subject to discovery, but not be admissible
16671	as evidence in court, nor shall any person filing an incident
16672	report be subject to civil suit by virtue of the incident report
16673	and the matters it contains. As a part of each internal risk
16674	management program, the incident reports shall be utilized to
16675	develop categories of incidents which identify problem areas.
16676	Once identified, procedures must be adjusted to correct these
16677	problem areas.
16678
16679	The gross data compiled under this section or s. 395.0197 shall
16680	be furnished by the agency upon request to organizations to be
16681	utilized for risk management purposes. The agency shall adopt
16682	rules necessary to carry out the provisions of this section.
16683	Section 331. Subsection (2) of section 641.58, Florida
16684	Statutes, is amended to read:
16685	641.58 Regulatory assessment; levy and amount; use of
16686	funds; tax returns; penalty for failure to pay.--
16687	(2) The officeDepartment of Insuranceshall determine the
16688	amount of gross premiums for the purposes of the regulatory
16689	assessment, and then the agency shall determine on or before
16690	December 1 of each year the regulatory assessment percentage
16691	necessary to be imposed for that calendar year, payable on or
16692	before the following April 1, as herein prescribed, to provide
16693	the funds appropriated to the agency to carry out the provisions
16694	of subsection (4).
16695	Section 332. Subsections (3) and (4) of section 642.0475,
16696	Florida Statutes, are amended to read:
16697	642.0475 Civil remedy.--
16698	(3) As a condition precedent to bringing an action under
16699	this section, the officedepartmentand the person against whom
16700	the action is to be brought shall be given notice of the
16701	violation. The notice shall state with specificity the facts
16702	which allegedly constitute the violation and the law which the
16703	plaintiff is relying upon. No action shall lie if, within 30
16704	days thereafter, the damages are paid or the circumstances
16705	giving rise to the violation are corrected.
16706	(4) This section shall not be construed to authorize a
16707	class action suit against a legal expense insurance corporation
16708	or a civil action against the department, commission, or office
16709	or theirits employees, or the Insurance Commissioner.
16710	Section 333. Section 651.119, Florida Statutes, is amended
16711	to read:
16712	651.119 Assistance to persons affected by closure due to
16713	liquidation or pending liquidation.--
16714	(1) If a facility closes and ceases to operate as a result
16715	of liquidation or pending liquidation and residents are forced
16716	to relocate, the department shall become a creditor of the
16717	facility for the purpose of providing moving expenses for
16718	displaced residents and such other care or services as is made
16719	possible by the unencumbered assets of the facility. To the
16720	extent that another provider provides, as approved by the office
16721	department, direct assistance to such residents, the cost of
16722	such direct assistance shall be offset against reserves pursuant
16723	to subsection (4). The department shall provide proportional
16724	reimbursements of such costs to the respective providers from
16725	such unencumbered assets.
16726	(2) If the moneys and direct assistance made available
16727	under subsection(1) are not sufficient to cover moving costs,
16728	the officedepartmentmay seek voluntary contributions from the
16729	reserves maintained by providers under s. 651.035 in amounts
16730	approved by the officedepartmentto provide for the moving
16731	expenses of the residents in moving to another residence within
16732	the state.
16733	(3) If the moneys and direct assistance provided under
16734	subsections (1) and(2) are not sufficient to provide for the
16735	moving expenses of displaced residents in moving to other
16736	residences within the state, the officedepartmentmay levy pro
16737	rata assessments on the reserves of providers maintained under
16738	s. 651.035 for such moving expenses of any displaced resident
16739	who lacks sufficient assets to pay for such moving expenses. The
16740	assessments for such moving expenses on any particular provider
16741	may not exceed for any 12-month period an aggregate of 1 percent
16742	of the unencumbered portion of the reserves maintained by the
16743	provider under s. 651.035. If the officedepartmentdetermines
16744	that payment of an assessment under this subsection would impair
16745	the financial standing of a facility or its residents, the
16746	officedepartmentmay waive or temporarily defer all or part of
16747	the assessment with respect to that provider. The office
16748	departmentshall apply any moneys voluntarily paid by a provider
16749	under subsection (1) or subsection (2) to satisfaction of
16750	assessments under this subsection.
16751	(4) The officedepartmentshall permanently reduce the
16752	reserves required of a provider under s. 651.035 to the extent
16753	of the provider's costs under subsection (1), voluntary
16754	contributions under subsection (2), and assessments under
16755	subsection (3). However, the officedepartmentshall thereafter
16756	raise the reserve requirements of a provider to the extent of
16757	reimbursements paid to the provider under subsection (1) unless
16758	such increase would raise the reserve requirement above the
16759	amount required under s. 651.035.
16760	(5) No payment, contribution, or assessment may be paid by
16761	a provider under this section if the release of funds from the
16762	reserves of the provider would violate a bond or lending
16763	commitment or covenant.
16764	(6) Moneys received under this section for the support of
16765	residents shall be kept in a separate fund maintained and
16766	administered by the department. The Continuing Care Advisory
16767	Council shall monitor the collection and use of such funds and
16768	shall advise the office ordepartment on plans for resident
16769	relocation. The council shall seek the assistance of providers
16770	licensed under this chapter and other service providers in
16771	locating alternative housing and care arrangements.
16772	(7) For the purposes of this section, "moving expenses"
16773	means transportation expenses and the cost of packing and
16774	relocating personal belongings.
16775	Section 334. Section 252.62, Florida Statutes, is amended
16776	to read:
16777	252.62 Director of Office of Financial Institutions and
16778	Securities RegulationComptroller'spowers in a state of
16779	emergency.--
16780	(1) It is the purpose and intent of this section to
16781	provide the Director of the Office of Financial Institutions and
16782	Securities Regulation of the Financial Services Commission
16783	Comptroller, as head of the Department of Banking and Finance,
16784	the authority to make temporary modifications to or suspensions
16785	of the financial institutions codes in order to expedite the
16786	recovery of communities affected by a disaster or other
16787	emergency and in order to encourage financial institutions to
16788	meet the credit, deposit, and other financial needs of such
16789	communities.
16790	(2)(a) When the Governor declares a state of emergency
16791	pursuant to s. 252.36, the Director of the Office of Financial
16792	Institutions and Securities RegulationComptrollermay issue:
16793	1. One or more general orders applicable to all financial
16794	institutions that are subject to the financial institutions
16795	codes and that serve any portion of the area of the state under
16796	the state of emergency; or
16797	2. One or more specific orders to particular financial
16798	institutions that are subject to the financial institution codes
16799	and that normally derive more than 60 percent of their deposits
16800	from persons in the area of the state under the state of
16801	emergency,
16802
16803	which orders may modify or suspend, as to those institutions,
16804	all or any part of the financial institutions codes, as defined
16805	in s. 655.005, or any applicable rule, consistent with the
16806	stated purposes of the financial institutions codes and with
16807	maintaining the safety and soundness of the financial
16808	institutions system in this state.
16809	(b) An order issued by the directorComptrollerunder this
16810	section becomes effective upon issuance and continues for 120
16811	days unless it is terminated by the directorComptroller. The
16812	directorComptrollermay extend an order for one additional
16813	period of 120 days if he or shethe Comptrollerdetermines that
16814	the emergency conditions that gave rise to the Comptroller's
16815	initial order still exist. The Legislature, by concurrent
16816	resolution, may terminate any order issued under this section.
16817	(3) The directorComptrollershall publish, in the next
16818	available publication of the Florida Administrative Weekly, a
16819	copy of the text of any order issued under this section,
16820	together with a statement describing the modification or
16821	suspension and explaining how the modification or suspension
16822	will facilitate recovery from the emergency and maintain the
16823	safety and soundness of financial institutions in this state.
16824	Section 335. Section 288.778, Florida Statutes, is amended
16825	to read:
16826	288.778 Office of Financial Institutions and Securities
16827	RegulationDepartment of Banking and Finance.--The Office of
16828	Financial Institutions and Securities RegulationDepartment of
16829	Banking and Financeshall review the corporation's activities
16830	once every 24 months to determine compliance with this part and
16831	other related laws and rules and to evaluate the corporation's
16832	operations. The officedepartmentshall prepare a report based
16833	on its review and evaluation with recommendation for any
16834	corrective action. The president shall submit to the office
16835	departmentregular reports on the corporation's activities. The
16836	content and frequency of such reports shall be determined by the
16837	officedepartment. The officedepartmentshall charge a fee for
16838	conducting the review and evaluation and preparing the related
16839	report, which fee shall not be in excess of the examination fee
16840	paid by financial institutions chartered or licensed under the
16841	financial institutions code of this state.
16842	Section 336. Paragraphs (c) and (e) through (p) of
16843	subsection (3), paragraphs (a), (b),(c), (d), (g), and (h) of
16844	subsection (4), paragraph (b) of subsection (5), subsection (7),
16845	paragraphs (a) and (c) of subsection (8), paragraph (b) of
16846	subsection (9), paragraphs (a) through (e), (h), and (j) of
16847	subsection (10), subsections (12), (13), and (14), paragraphs
16848	(a), (c), (d), (e), and (g) of subsection (15), and subsection
16849	(17) of section 288.99, Florida Statutes, are amended to read:
16850	288.99 Certified Capital Company Act.--
16851	(3) DEFINITIONS.--As used in this section, the term:
16852	(c) "Certified capital company" means a corporation,
16853	partnership, or limited liability company which:
16854	1. Is certified by the officedepartmentin accordance
16855	with this act.
16856	2. Receives investments of certified capital from two or
16857	more unaffiliated certified investors.
16858	3. Makes qualified investments as its primary activity.
16859	(e) "Commission" means the Financial Services Commission
16860	"Department" means the Department of Banking and Finance.
16861	(f) "Director" means the director of the Office of
16862	Tourism, Trade, and Economic Development.
16863	(f)(g)"Early stage technology business" means a qualified
16864	business that is:
16865	1. Involved, at the time of the certified capital
16866	company's initial investment in such business, in activities
16867	related to developing initial product or service offerings, such
16868	as prototype development or the establishment of initial
16869	production or service processes;
16870	2. Less than 2 years old and has, together with its
16871	affiliates, less than $3 million in annual revenues for the
16872	fiscal year immediately preceding the initial investment by the
16873	certified capital company on a consolidated basis, as determined
16874	in accordance with generally accepted accounting principles;
16875	3. The Florida Black Business Investment Board;
16876	4. Any entity that is majority owned by the Florida Black
16877	Business Investment Board; or
16878	5. Any entity in which the Florida Black Business
16879	Investment Board holds a majority voting interest on the board
16880	of directors.
16881	(g)(h) "Office" means the Office of Financial Institutions
16882	and Securities Regulation of the commissionTourism, Trade, and
16883	Economic Development.
16884	(h)(i)"Premium tax liability" means any liability
16885	incurred by an insurance company under the provisions of ss.
16886	624.509 and 624.5091.
16887	(i)(j)"Principal" means an executive officer of a
16888	corporation, partner of a partnership, manager of a limited
16889	liability company, or any other person with equivalent executive
16890	functions.
16891	(j)(k)"Qualified business" means the Digital Divide Trust
16892	Fund established under the State of Florida Technology Office or
16893	a business that meets the following conditions as evidenced by
16894	documentation required by commissiondepartmentrule:
16895	1. The business is headquartered in this state and its
16896	principal business operations are located in this state or at
16897	least 75 percent of the employees are employed in the state.
16898	2. At the time a certified capital company makes an
16899	initial investment in a business, the business would qualify for
16900	investment under 13 C.F.R. s. 121.301(c), which is involved in
16901	manufacturing, processing or assembling products, conducting
16902	research and development, or providing services.
16903	3. At the time a certified capital company makes an
16904	initial investment in a business, the business certifies in an
16905	affidavit that:
16906	a. The business is unable to obtain conventional
16907	financing, which means that the business has failed in an
16908	attempt to obtain funding for a loan from a bank or other
16909	commercial lender or that the business cannot reasonably be
16910	expected to qualify for such financing under the standards of
16911	commercial lending;
16912	b. The business plan for the business projects that the
16913	business is reasonably expected to achieve in excess of $25
16914	million in sales revenue within 5 years after the initial
16915	investment, or the business is located in a designated Front
16916	Porch community, enterprise zone, urban high crime area, rural
16917	job tax credit county, or nationally recognized historic
16918	district;
16919	c. The business will maintain its headquarters in this
16920	state for the next 10 years and any new manufacturing facility
16921	financed by a qualified investment will remain in this state for
16922	the next 10 years, or the business is located in a designated
16923	Front Porch community, enterprise zone, urban high crime area,
16924	rural job tax credit county, or nationally recognized historic
16925	district; and
16926	d. The business has fewer than 200 employees and at least
16927	75 percent of the employees are employed in this state. For
16928	purposes of this subsection, the term also includes the Florida
16929	Black Business Investment Board, any entity majority owned by
16930	the Florida Black Business Investment Board, or any entity in
16931	which the Florida Black Business Investment Board holds a
16932	majority voting interest on the board of directors.
16933	4. The term does not include:
16934	a. Any business predominantly engaged in retail sales,
16935	real estate development, insurance, banking, lending, or oil and
16936	gas exploration.
16937	b. Any business predominantly engaged in professional
16938	services provided by accountants, lawyers, or physicians.
16939	c. Any company that has no historical revenues and either
16940	has no specific business plan or purpose or has indicated that
16941	its business plan is solely to engage in a merger or acquisition
16942	with any unidentified company or other entity.
16943	d. Any company that has a strategic plan to grow through
16944	the acquisition of firms with substantially similar business
16945	which would result in the planned net loss of Florida-based jobs
16946	over a 12-month period after the acquisition as determined by
16947	the officedepartment.
16948	(k)(l)"Qualified debt instrument" means a debt
16949	instrument, or a hybrid of a debt instrument, issued by a
16950	certified capital company, at par value or a premium, with an
16951	original maturity date of at least 5 years after the date of
16952	issuance, a repayment schedule which is no faster than a level
16953	principal amortization over a 5-year period, and interest,
16954	distribution, or payment features which are not related to the
16955	profitability of the certified capital company or the
16956	performance of the certified capital company's investment
16957	portfolio.
16958	(l)(m)"Qualified distribution" means any distribution or
16959	payment by a certified capital company for:
16960	1. Reasonable costs and expenses, including, but not
16961	limited to, professional fees, of forming and syndicating the
16962	certified capital company, if no such costs or expenses are paid
16963	to a certified investor, except as provided in subparagraph
16964	(4)(f)2., and the total cash, cash equivalents, and other
16965	current assets permitted by sub-subparagraph (5)(b)3.g. that can
16966	be converted into cash within 5 business days available to the
16967	certified capital company at the time of receipt of certified
16968	capital from certified investors, after deducting the costs and
16969	expenses of forming and syndicating the certified capital
16970	company, including any payments made over time for obligations
16971	incurred at the time of receipt of certified capital but
16972	excluding other future qualified distributions and payments made
16973	under paragraph (9)(a), are an amount equal to or greater than
16974	50 percent of the total certified capital allocated to the
16975	certified capital pursuant to subsection (7);
16976	2. Reasonable costs of managing and operating the
16977	certified capital company, not exceeding 5 percent of the
16978	certified capital in any single year, including an annual
16979	management fee in an amount that does not exceed 2.5 percent of
16980	the certified capital of the certified capital company;
16981	3. Reasonable and necessary fees in accordance with
16982	industry custom for professional services, including, but not
16983	limited to, legal and accounting services, related to the
16984	operation of the certified capital company; or
16985	4. Any projected increase in federal or state taxes,
16986	including penalties and interest related to state and federal
16987	income taxes, of the equity owners of a certified capital
16988	company resulting from the earnings or other tax liability of
16989	the certified capital company to the extent that the increase is
16990	related to the ownership, management, or operation of a
16991	certified capital company.
16992	(m)(n)1. "Qualified investment" means the investment of
16993	cash by a certified capital company in a qualified business for
16994	the purchase of any debt, equity, or hybrid security, including
16995	a debt instrument or security that has the characteristics of
16996	debt but which provides for conversion into equity or equity
16997	participation instruments such as options or warrants.
16998	2. The term does not include:
16999	a. Any investment made after the effective date of this
17000	act the contractual terms of which require the repayment of any
17001	portion of the principal in instances, other than default as
17002	determined by commissiondepartmentrule, within 12 months
17003	following the initial investment by the certified capital
17004	company unless such investment has a repayment schedule no
17005	faster than a level principal amortization of at least 2 years;
17006	b. Any "follow-on" or "add-on" investment except for the
17007	amount by which the new investment is in addition to the amount
17008	of the certified capital company's initial investment returned
17009	to it other than in the form of interest, dividends, or other
17010	types of profit participation or distributions; or
17011	c. Any investment in a qualified business or affiliate of
17012	a qualified business that exceeds 15 percent of certified
17013	capital.
17014	(n)(o)"Program One" means the $150 million in premium tax
17015	credits issued under this section in 1999, the allocation of
17016	such credits under this section, and the regulation of certified
17017	capital companies and investments made by them hereunder.
17018	(o)(p)"Program Two" means the $150 million in premium tax
17019	credits to be issued under subsection (17), the allocation of
17020	such credits under this section, and the regulation of certified
17021	capital companies and investments made by them hereunder.
17022	(4) CERTIFICATION; GROUNDS FOR DENIAL OR
17023	DECERTIFICATION.--
17024	(a) To operate as a certified capital company, a
17025	corporation, partnership, or limited liability company must be
17026	certified by the Department of Banking and Finance or the office
17027	pursuant to this act.
17028	(b) An applicant for certification as a certified capital
17029	company must file a verified application with the Department of
17030	Banking and Financeon or before December 1, 1998, a date
17031	determined in rules adopted pursuant to subsection (17) in the
17032	case of applicants for Program Two, in a form which the
17033	commissiondepartmentmay prescribe by rule. The applicant shall
17034	submit a nonrefundable application fee of $7,500 to the office
17035	department. The applicant shall provide:
17036	1. The name of the applicant and the address of its
17037	principal office and each office in this state.
17038	2. The applicant's form and place of organization and the
17039	relevant organizational documents, bylaws, and amendments or
17040	restatements of such documents, bylaws, or amendments.
17041	3. Evidence from the Department of State that the
17042	applicant is registered with the Department of State as required
17043	by law, maintains an active status with the Department of State,
17044	and has not been dissolved or had its registration revoked,
17045	canceled, or withdrawn.
17046	4. The applicant's proposed method of doing business.
17047	5. The applicant's financial condition and history,
17048	including an audit report on the financial statements prepared
17049	in accordance with generally accepted accounting principles. The
17050	applicant must have, at the time of application for
17051	certification, an equity capitalization of at least $500,000 in
17052	the form of cash or cash equivalents. The applicant must
17053	maintain this equity capitalization until the applicant receives
17054	an allocation of certified capital pursuant to this act. If the
17055	date of the application is more than 90 days after preparation
17056	of the applicant's fiscal year-end financial statements, the
17057	applicant may file financial statements reviewed by an
17058	independent certified public accountant for the period
17059	subsequent to the audit report, together with the audited
17060	financial statement for the most recent fiscal year. If the
17061	applicant has been in business less than 12 months, and has not
17062	prepared an audited financial statement, the applicant may file
17063	a financial statement reviewed by an independent certified
17064	public accountant.
17065	6. Copies of any offering materials used or proposed to be
17066	used by the applicant in soliciting investments of certified
17067	capital from certified investors.
17068	(c) Within 60 days after receipt of a verified
17069	application, the officedepartmentshall grant or deny
17070	certification as a certified capital company. If the office
17071	departmentdenies certification within the time period
17072	specified, the officedepartmentshall inform the applicant of
17073	the grounds for the denial. If the officedepartmenthas not
17074	granted or denied certification within the time specified, the
17075	application shall be deemed approved. The officedepartment
17076	shall approve the application if the officedepartmentfinds
17077	that:
17078	1. The applicant satisfies the requirements of paragraph
17079	(b).
17080	2. No evidence exists that the applicant has committed any
17081	act specified in paragraph (d).
17082	3. At least two of the principals have a minimum of 5
17083	years of experience making venture capital investments out of
17084	private equity funds, with not less than $20 million being
17085	provided by third-party investors for investment in the early
17086	stage of operating businesses. At least one full-time manager or
17087	principal of the certified capital company who has such
17088	experience must be primarily located in an office of the
17089	certified capital company which is based in this state.
17090	4. The applicant's proposed method of doing business and
17091	raising certified capital as described in its offering materials
17092	and other materials submitted to the officedepartmentconforms
17093	with the requirements of this section.
17094	(d) The officedepartmentmay deny certification or
17095	decertify a certified capital company if the grounds for
17096	decertification are not removed or corrected within 90 days
17097	after the notice of such grounds is received by the certified
17098	capital company. The officedepartmentmay deny certification or
17099	decertify a certified capital company if the certified capital
17100	company fails to maintain common stock or paid-in capital of at
17101	least $500,000, or if the officedepartmentdetermines that the
17102	applicant, or any principal or director of the certified capital
17103	company, has:
17104	1. Violated any provision of this section;
17105	2. Made a material misrepresentation or false statement or
17106	concealed any essential or material fact from any person during
17107	the application process or with respect to information and
17108	reports required of certified capital companies under this
17109	section;
17110	3. Been convicted of, or entered a plea of guilty or nolo
17111	contendere to, a crime against the laws of this state or any
17112	other state or of the United States or any other country or
17113	government, including a fraudulent act in connection with the
17114	operation of a certified capital company, or in connection with
17115	the performance of fiduciary duties in another capacity;
17116	4. Been adjudicated liable in a civil action on grounds of
17117	fraud, embezzlement, misrepresentation, or deceit; or
17118	5.a. Been the subject of any decision, finding,
17119	injunction, suspension, prohibition, revocation, denial,
17120	judgment, or administrative order by any court of competent
17121	jurisdiction, administrative law judge, or any state or federal
17122	agency, national securities, commodities, or option exchange, or
17123	national securities, commodities, or option association,
17124	involving a material violation of any federal or state
17125	securities or commodities law or any rule or regulation adopted
17126	under such law, or any rule or regulation of any national
17127	securities, commodities, or options exchange, or national
17128	securities, commodities, or options association; or
17129	b. Been the subject of any injunction or adverse
17130	administrative order by a state or federal agency regulating
17131	banking, insurance, finance or small loan companies, real
17132	estate, mortgage brokers, or other related or similar
17133	industries.
17134	(g) On or before December 31 of each year, each certified
17135	capital company shall pay to the officedepartmentan annual,
17136	nonrefundable renewal certification fee of $5,000. If a
17137	certified capital company fails to pay its renewal fee by the
17138	specified deadline, the company must pay a late fee of $5,000 in
17139	addition to the renewal fee on or by January 31 of each year in
17140	order to continue its certification in the program. On or before
17141	April 30 of each year, each certified capital company shall file
17142	audited financial statements with the officedepartment. No
17143	renewal fees shall be required within 6 months after the date of
17144	initial certification.
17145	(h) The commission and officedepartmentshall administer
17146	and provide for the enforcement of certification requirements
17147	for certified capital companies as provided in this act. The
17148	commissiondepartmentmay adopt any rules necessary to carry out
17149	its duties, obligations, and powers related to certification,
17150	renewal of certification, or decertification of certified
17151	capital companies and the commission and officemay perform any
17152	other acts necessary for the proper administration and
17153	enforcement of such duties, obligations, and powers.
17154	(5) INVESTMENTS BY CERTIFIED CAPITAL COMPANIES.--
17155	(b) All capital not invested in qualified investments by
17156	the certified capital company:
17157	1. Must be held in a financial institution as defined by
17158	s. 655.005(1)(h) or held by a broker-dealer registered under s.
17159	517.12, except as set forth in sub-subparagraph 3.g.
17160	2. Must not be invested in a certified investor of the
17161	certified capital company or any affiliate of the certified
17162	investor of the certified capital company, except for an
17163	investment permitted by sub-subparagraph 3.g., provided
17164	repayment terms do not permit the obligor to directly or
17165	indirectly manage or control the investment decisions of the
17166	certified capital company.
17167	3. Must be invested only in:
17168	a. Any United States Treasury obligations;
17169	b. Certificates of deposit or other obligations, maturing
17170	within 3 years after acquisition of such certificates or
17171	obligations, issued by any financial institution or trust
17172	company incorporated under the laws of the United States;
17173	c. Marketable obligations, maturing within 10 years or
17174	less after the acquisition of such obligations, which are rated
17175	"A" or better by any nationally recognized credit rating agency;
17176	d. Mortgage-backed securities, with an average life of 5
17177	years or less, after the acquisition of such securities, which
17178	are rated "A" or better by any nationally recognized credit
17179	rating agency;
17180	e. Collateralized mortgage obligations and real estate
17181	mortgage investment conduits that are direct obligations of an
17182	agency of the United States Government; are not private-label
17183	issues; are in book-entry form; and do not include the classes
17184	of interest only, principal only, residual, or zero;
17185	f. Interests in money market funds, the portfolio of which
17186	is limited to cash and obligations described in sub-
17187	subparagraphs a.-d.; or
17188	g. Obligations that are issued by an insurance company
17189	that is not a certified investor of the certified capital
17190	company making the investment, that has provided a guarantee
17191	indemnity bond, insurance policy, or other payment undertaking
17192	in favor of the certified capital company's certified investors
17193	as permitted by subparagraph (3)(l)(m)1. or an affiliate of such
17194	insurance company as defined by subparagraph (3)(a)3. that is
17195	not a certified investor of the certified capital company making
17196	the investment, provided that such obligations are:
17197	(I) Issued or guaranteed as to principal by an entity
17198	whose senior debt is rated "AA" or better by Standard & Poor's
17199	Ratings Group or such other nationally recognized credit rating
17200	agency as the commissiondepartmentmay by rule determine.
17201	(II) Not subordinated to other unsecured indebtedness of
17202	the issuer or the guarantor.
17203	(III) Invested by such issuing entity in accordance with
17204	sub-subparagraphs 3.a.-f.
17205	(IV) Readily convertible into cash within 5 business days
17206	for the purpose of making a qualified investment unless such
17207	obligations are held to provide a guarantee, indemnity bond,
17208	insurance policy, or other payment undertaking in favor of the
17209	certified capital company's certified investors as permitted by
17210	subparagraph (3)(l)(m)1.
17211	(7) ANNUAL TAX CREDIT; MAXIMUM AMOUNT; ALLOCATION
17212	PROCESS.--
17213	(a) The total amount of tax credits which may be allocated
17214	by the Office of Tourism, Trade, and Economic Developmentshall
17215	not exceed $150 million with respect to Program One and $150
17216	million with respect to Program Two. The total amount of tax
17217	credits which may be used by certified investors under this act
17218	shall not exceed $15 million annually with respect to credits
17219	earned under Program One and $15 million annually with respect
17220	to credits earned under Program Two.
17221	(b) The Office of Tourism, Trade, and Economic Development
17222	shall be responsible for allocating premium tax credits as
17223	provided for in this act to certified capital companies.
17224	(c) Each certified capital company must apply to the
17225	Office of Tourism, Trade, and Economic Developmentfor an
17226	allocation of premium tax credits for potential certified
17227	investors on a form developed by the Office of Tourism, Trade,
17228	and Economic Developmentwith the cooperation of the Department
17229	of Revenue. The form shall be accompanied by an affidavit from
17230	each potential certified investor confirming that the potential
17231	certified investor has agreed to make an investment of certified
17232	capital in a certified capital company up to a specified amount,
17233	subject only to the receipt of a premium tax credit allocation
17234	pursuant to this subsection. No certified capital company shall
17235	submit premium tax allocation claims on behalf of certified
17236	investors that in the aggregate would exceed the total dollar
17237	amount appropriated by the Legislature for the specific program.
17238	No allocation shall be made to the potential investors of a
17239	certified capital company under Program Two unless such
17240	certified capital company has filed premium tax allocation
17241	claims of not less than $15 million in the aggregate.
17242	(d) The Office of Tourism, Trade, and Economic Development
17243	shall inform each certified capital company of its share of
17244	total premium tax credits available for allocation to each of
17245	its potential investors.
17246	(e) If a certified capital company does not receive
17247	certified capital equaling the amount of premium tax credits
17248	allocated to a potential certified investor for which the
17249	investor filed a premium tax allocation claim within 10 business
17250	days after the investor received a notice of allocation, the
17251	certified capital company shall notify the Office of Tourism,
17252	Trade, and Economic Developmentby overnight common carrier
17253	delivery service of the company's failure to receive the
17254	capital. That portion of the premium tax credits allocated to
17255	the certified capital company shall be forfeited. If the Office
17256	of Tourism, Trade, and Economic Developmentmust make a pro rata
17257	allocation under paragraph (f), thattheoffice shall reallocate
17258	such available credits among the other certified capital
17259	companies on the same pro rata basis as the initial allocation.
17260	(f) If the total amount of capital committed by all
17261	certified investors to certified capital companies in premium
17262	tax allocation claims under Program Two exceeds the aggregate
17263	cap on the amount of credits that may be awarded under Program
17264	Two, the premium tax credits that may be allowed to any one
17265	certified investor under Program Two shall be allocated using
17266	the following ratio:
17267	A/B = X/>$150,000,000
17268
17269	where the letter "A" represents the total amount of certified
17270	capital certified investors have agreed to invest in any one
17271	certified capital company under Program Two, the letter "B"
17272	represents the aggregate amount of certified capital that all
17273	certified investors have agreed to invest in all certified
17274	capital companies under Program Two, the letter "X" is the
17275	numerator and represents the total amount of premium tax credits
17276	and certified capital that may be allocated to a certified
17277	capital company on a date determined by rule adopted by the
17278	commissiondepartmentpursuant to subsection (17), and $150
17279	million is the denominator and represents the total amount of
17280	premium tax credits and certified capital that may be allocated
17281	to all certified investors under Program Two. Any such premium
17282	tax credits are not first available for utilization until annual
17283	filings are made in 2001 for calendar year 2000 in the case of
17284	Program One, and the tax credits may be used at a rate not to
17285	exceed 10 percent annually per program.
17286	(g) The maximum amount of certified capital for which
17287	premium tax allocation claims may be filed on behalf of any
17288	certified investor and its affiliates by one or more certified
17289	capital companies may not exceed $15 million for Program One and
17290	$22.5 million for Program Two.
17291	(h) To the extent that less than $150 million in certified
17292	capital is raised in connection with the procedure set forth in
17293	paragraphs (c)-(g), the commissiondepartmentmay adopt rules to
17294	allow a subsequent allocation of the remaining premium tax
17295	credits authorized under this section.
17296	(i) The Office of Tourism, Trade, and Economic Development
17297	shall issue a certification letter for each certified investor,
17298	showing the amount invested in the certified capital company
17299	under each program. The applicable certified capital company
17300	shall attest to the validity of the certification letter.
17301	(8) ANNUAL TAX CREDIT; CLAIM PROCESS.--
17302	(a) On an annual basis, on or before January 31, each
17303	certified capital company shall file with the officedepartment
17304	and the Office of Tourism, Trade, and Economic Development, in
17305	consultation with the officedepartment, on a form prescribed by
17306	the Office of Tourism, Trade, and Economic Development, for each
17307	calendar year:
17308	1. The total dollar amount the certified capital company
17309	received from certified investors, the identity of the certified
17310	investors, and the amount received from each certified investor
17311	during the immediately preceding calendar year.
17312	2. The total dollar amount the certified capital company
17313	invested and the amount invested in qualified businesses,
17314	together with the identity and location of those businesses and
17315	the amount invested in each qualified business during the
17316	immediately preceding calendar year.
17317	3. For informational purposes only, the total number of
17318	permanent, full-time jobs either created or retained by the
17319	qualified business during the immediately preceding calendar
17320	year, the average wage of the jobs created or retained, the
17321	industry sectors in which the qualified businesses operate, and
17322	any additional capital invested in qualified businesses from
17323	sources other than certified capital companies.
17324	(c) The Office of Tourism, Trade, and Economic Development
17325	shall review the form, and any supplemental documentation,
17326	submitted by each certified capital company for the purpose of
17327	verifying:
17328	1. That the businesses in which certified capital has been
17329	invested by the certified capital company are in fact qualified
17330	businesses, and that the amount of certified capital invested by
17331	the certified capital company is as represented in the form.
17332	2. The amount of certified capital invested in the
17333	certified capital company by the certified investors.
17334	3. The amount of premium tax credit available to certified
17335	investors.
17336	(9) REQUIREMENT FOR 100 PERCENT INVESTMENT; STATE
17337	PARTICIPATION.--
17338	(b) Cumulative distributions from a certified capital
17339	company from funds related to a particular program to its
17340	certified investors and equity holders under such program, other
17341	than qualified distributions, in excess of the certified capital
17342	company's original certified capital raised under such program
17343	and any additional capital contributions to the certified
17344	capital company with respect to such program may be audited by a
17345	nationally recognized certified public accounting firm
17346	acceptable to the officedepartment, at the expense of the
17347	certified capital company, if the officedepartmentdirects such
17348	audit be conducted. The audit shall determine whether aggregate
17349	cumulative distributions from the funds related to a particular
17350	program made by the certified capital company to all certified
17351	investors and equity holders under such program, other than
17352	qualified distributions, have equaled the sum of the certified
17353	capital company's original certified capital raised under such
17354	program and any additional capital contributions to the
17355	certified capital company with respect to such program. If at
17356	the time of any such distribution made by the certified capital
17357	company, such distribution taken together with all other such
17358	distributions from the funds related to such program made by the
17359	certified capital company, other than qualified distributions,
17360	exceeds in the aggregate the sum of the certified capital
17361	company's original certified capital raised under such program
17362	and any additional capital contributions to the certified
17363	capital company with respect to such program, as determined by
17364	the audit, the certified capital company shall pay to the
17365	Department of Revenue 10 percent of the portion of such
17366	distribution in excess of such amount. Payments to the
17367	Department of Revenue by a certified capital company pursuant to
17368	this paragraph shall not exceed the aggregate amount of tax
17369	credits used by all certified investors in such certified
17370	capital company for such program.
17371	(10) DECERTIFICATION.--
17372	(a) The officedepartmentshall conduct an annual review
17373	of each certified capital company to determine if the certified
17374	capital company is abiding by the requirements of certification,
17375	to advise the certified capital company as to the eligibility
17376	status of its qualified investments, and to ensure that no
17377	investment has been made in violation of this act. The cost of
17378	the annual review shall be paid by each certified capital
17379	company.
17380	(b) Nothing contained in this subsection shall be
17381	construed to limit the Chief Financial Officer's or the office's
17382	Comptroller'sauthority to conduct audits of certified capital
17383	companies as deemed appropriate and necessary.
17384	(c) Any material violation of this section, or a finding
17385	that the certified capital company or any principal or director
17386	thereof has committed any act specified in paragraph (4)(d),
17387	shall be grounds for decertification of the certified capital
17388	company. If the officedepartmentdetermines that a certified
17389	capital company is no longer in compliance with the
17390	certification requirements of this act, the officedepartment
17391	shall, by written notice, inform the officers of such company
17392	that the company may be subject to decertification 90 days after
17393	the date of mailing of the notice, unless the deficiencies are
17394	corrected and such company is again found to be in compliance
17395	with all certification requirements.
17396	(d) At the end of the 90-day grace period, if the
17397	certified capital company is still not in compliance with the
17398	certification requirements, the officedepartmentmay issue a
17399	notice to revoke or suspend the certification or to impose an
17400	administrative fine. The officedepartmentshall advise each
17401	respondent of the right to an administrative hearing under
17402	chapter 120 prior to final action by the officedepartment.
17403	(e) If the officedepartmentrevokes a certification, such
17404	revocation shall also deny, suspend, or revoke the
17405	certifications of all affiliates of the certified capital
17406	company.
17407	(h) The Office of Tourism, Trade, and Economic Development
17408	shall send written notice to the address of each certified
17409	investor whose premium tax credit has been subject to recapture
17410	or forfeiture, using the address last shown on the last premium
17411	tax filing.
17412	(j) The certified investor shall file with the Department
17413	of Revenue an amended return or such other report as the
17414	commissiondepartment may prescribe by ruleregulationand pay
17415	any required tax, not later than 60 days after such
17416	decertification has been agreed to or finally determined,
17417	whichever shall first occur.
17418	(12) REPORTING REQUIREMENTS.--The Office of Tourism,
17419	Trade, and Economic Developmentshall report on an annual basis
17420	to the Governor, the President of the Senate, and the Speaker of
17421	the House of Representatives on or before April 1:
17422	(a) The total dollar amount each certified capital company
17423	received from all certified investors and any other investor,
17424	the identity of the certified investors, and the total amount of
17425	premium tax credit used by each certified investor for the
17426	previous calendar year.
17427	(b) The total dollar amount invested by each certified
17428	capital company and that portion invested in qualified
17429	businesses, the identity and location of those businesses, the
17430	amount invested in each qualified business, and the total number
17431	of permanent, full-time jobs created or retained by each
17432	qualified business.
17433	(c) The return for the state as a result of the certified
17434	capital company investments, including the extent to which:
17435	1. Certified capital company investments have contributed
17436	to employment growth.
17437	2. The wage level of businesses in which certified capital
17438	companies have invested exceed the average wage for the county
17439	in which the jobs are located.
17440	3. The investments of the certified capital companies in
17441	qualified businesses have contributed to expanding or
17442	diversifying the economic base of the state.
17443	(13) FEES.--All fees and charges of any nature collected
17444	by the officedepartmentpursuant to this act shall be paid into
17445	the State Treasury and credited to the General Revenue Fund.
17446	(14) RULEMAKING AUTHORITY.--
17447	(a) The Department of Revenue may by rule prescribe forms
17448	and procedures for the tax credit filings, audits, and
17449	forfeiture of premium tax credits described in this section, and
17450	for certified capital company payments under paragraph (9)(b).
17451	(b) The commission and the Office of Tourism, Trade, and
17452	Economic Development may adopt any rules necessary to carry out
17453	their respectiveitsduties, obligations, and powers related to
17454	the administration, review, and reporting provisions of this
17455	section and may perform any other acts necessary for the proper
17456	administration and enforcement of such duties, obligations, and
17457	powers.
17458	(15)(a) CONFIDENTIALITY OF INVESTIGATION AND REVIEW
17459	INFORMATION.--Except as otherwise provided by this section, any
17460	information relating to an investigation or officedepartment
17461	review of a certified capital company, including any consumer
17462	complaint, is confidential and exempt from the provisions of s.
17463	119.07(1) and s. 24(a), Art. I of the State Constitution until
17464	the investigation or review is complete or ceases to be active.
17465	Such information shall remain confidential and exempt from the
17466	provisions of s. 119.07(1) and s. 24(a), Art. I of the State
17467	Constitution after the investigation or review is complete or
17468	ceases to be active if the information is submitted to any law
17469	enforcement or administrative agency for further investigation,
17470	and shall remain confidential and exempt from the provisions of
17471	s. 119.07(1) and s. 24(a), Art. I of the State Constitution
17472	until that agency's investigation is complete or ceases to be
17473	active. For purposes of this subsection, an investigation or
17474	review shall be considered "active" so long as the office
17475	department, a law enforcement agency, or an administrative
17476	agency is proceeding with reasonable dispatch and has a
17477	reasonable good faith belief that the investigation may lead to
17478	the filing of an administrative, civil, or criminal proceeding.
17479	This section shall not be construed to prohibit disclosure of
17480	information which is required by law to be filed with the office
17481	departmentand which, but for the investigation, would otherwise
17482	be subject to s. 119.07(1).
17483	(c) Nothing in this section shall be construed to prohibit
17484	the officedepartmentfrom providing information to any law
17485	enforcement or administrative agency. Any law enforcement or
17486	administrative agency receiving confidential information in
17487	connection with its official duties shall maintain the
17488	confidentiality of the information so long as it would otherwise
17489	be confidential.
17490	(d) In the event officedepartmentpersonnel are or have
17491	been involved in an investigation or review of such nature as to
17492	endanger their lives or physical safety or that of their
17493	families, the home addresses, telephone numbers, places of
17494	employment, and photographs of such personnel, together with the
17495	home addresses, telephone numbers, photographs, and places of
17496	employment of spouses and children of such personnel and the
17497	names and locations of schools and day care facilities attended
17498	by the children of such personnel are confidential and exempt
17499	from s. 119.07(1).
17500	(e) All information obtained by the officedepartmentfrom
17501	any person which is only made available to the officedepartment
17502	on a confidential or similarly restricted basis shall be
17503	confidential and exempt from s. 119.07(1). This exemption shall
17504	not be construed to prohibit disclosure of information which is
17505	specifically required by law to be filed with the office
17506	departmentor which is otherwise subject to s. 119.07(1).
17507	(g) A privilege against civil liability is granted to a
17508	person with regard to information or evidence furnished to the
17509	officedepartment, unless such person acts in bad faith or with
17510	malice in providing such information or evidence.
17511	(17) Notwithstanding the limitations set forth in
17512	paragraph (7)(a), in the first fiscal year in which the total
17513	insurance premium tax collections as determined by the Revenue
17514	Estimating Conference exceed collections for fiscal year 2000-
17515	2001 by more than the total amount of tax credits issued
17516	pursuant to this section which were used by certified investors
17517	in that year, the Office of Tourism, Trade, and Economic
17518	Developmentmay allocate to certified investors in accordance
17519	with paragraph (7)(a) tax credits for Program Two. The
17520	commissiondepartmentshall establish, by rule, a date and
17521	procedures by which certified capital companies must file
17522	applications for allocations of such additional premium tax
17523	credits, which date shall be no later than 180 days from the
17524	date of determination by the Revenue Estimating Conference. With
17525	respect to new certified capital invested and premium tax
17526	credits earned pursuant to this subsection, the schedule
17527	specified in subparagraphs (5)(a)1.-4. is satisfied by
17528	investments by December 31 of the 2nd, 3rd, 4th, and 5th
17529	calendar year, respectively, after the date established by the
17530	commissiondepartmentfor applications of additional premium tax
17531	credits. The commissiondepartmentshall adopt rules by which an
17532	entity not already certified as a certified capital company may
17533	apply for certification as a certified capital company for
17534	participation in this additional allocation. The insurance
17535	premium tax credit authorized by Program Two may not be used by
17536	certified investors until the annual return due March 1, 2004,
17537	and may be used on all subsequent returns and estimated
17538	payments; however, notwithstanding the provisions of s.
17539	624.5092(2)(b), the installments of taxes due and payable on
17540	April 15, 2004, and June 15, 2004, shall be based on the net tax
17541	due in 2003 not taking into account credits granted pursuant to
17542	this section for Program Two.
17543	Section 337. Paragraph (c) of subsection (1) of section
17544	289.051, Florida Statutes, is amended to read:
17545	289.051 Membership of financial institutions; loans to
17546	corporation, limitations.--
17547	(1) Any financial institution may request membership in
17548	the corporation by making application to the board of directors
17549	on such form and in such manner as said board of directors may
17550	require, and membership shall become effective upon acceptance
17551	of such application by said board. Each member of the
17552	corporation shall make loans to the corporation as and when
17553	called upon by it to do so, on such terms and other conditions
17554	as shall be approved from time to time by the board of
17555	directors, subject to the following conditions:
17556	(c) The total amount outstanding on loans to the
17557	corporation made by any member at any one time, when added to
17558	the amount of the investment in the capital stock of the
17559	corporation then held by such member, shall not exceed:
17560	1. Twenty percent of the total amount then outstanding on
17561	loans to the corporation by all members, including, in said
17562	total amount outstanding, amounts validly called for loan but
17563	not yet loaned.
17564	2. The following limit, to be determined as of the time
17565	such member becomes a member on the basis of the audited balance
17566	sheet of such member at the close of its fiscal year immediately
17567	preceding its application for membership, or, in the case of an
17568	insurance company, its last annual statement to the Office of
17569	Insurance Regulation of the Financial Services Commission
17570	Department of Insurance: 2.5 percent of the capital and surplus
17571	of commercial banks and trust companies; 0.5 percent of the
17572	total outstanding loans made by savings and loan associations
17573	and building and loan associations; 2.5 percent of the capital
17574	and unassigned surplus of stock insurance companies, except fire
17575	insurance companies; 2.5 percent of the unassigned surplus of
17576	mutual insurance companies, except fire insurance companies; 0.1
17577	percent of the assets of fire insurance companies; and such
17578	limits as may be approved by the board of directors of the
17579	corporation for other financial institutions.
17580	Section 338. Subsection (1) of section 289.081, Florida
17581	Statutes, is amended to read:
17582	289.081 Amendments to articles of incorporation.--
17583	(1) The articles of incorporation may be amended by the
17584	votes of the stockholders and the members of the corporation,
17585	voting separately by classes, and such amendments shall require
17586	approval by the affirmative vote of two-thirds of the votes to
17587	which the stockholders shall be entitled and two-thirds of the
17588	votes to which the members shall be entitled. No amendment of
17589	the articles of incorporation which is inconsistent with the
17590	general purposes expressed herein, or which authorizes any
17591	additional class of capital stock to be issued, or which
17592	eliminates or curtails the right of the Office of Financial
17593	Institutions and Securities Regulation of the Financial Services
17594	CommissionDepartment of Banking and Financeto examine the
17595	corporation or the obligation of the corporation to make reports
17596	as provided in s. 289.121, shall be made. No amendment of the
17597	articles of incorporation which increases the obligation of a
17598	member to make loans to the corporation, or makes any change in
17599	the principal amount, interest rate, maturity date, or in the
17600	security or credit position of any outstanding loan of a member
17601	to the corporation, or affects a member's right to withdraw from
17602	membership as provided herein, or affects a member's voting
17603	rights as provided herein, shall be made without the consent of
17604	each member affected by such amendment.
17605	Section 339. Section 289.121, Florida Statutes, is amended
17606	to read:
17607	289.121 Periodic examinations; reports.--The corporation
17608	shall be examined at least once annually by the Office of
17609	Financial Institutions and Securities Regulation of the
17610	Financial Services CommissionDepartment of Banking and Finance
17611	and shall make reports of its condition not less than annually
17612	to that officesaid departmentand more frequently upon call of
17613	the officedepartment, which in turn shall make copies of such
17614	reports available to the Office of Insurance Regulation of the
17615	Financial Services CommissionDepartment of Insuranceand the
17616	Governor; and the corporation shall also furnish such other
17617	information as may from time to time be required by the Office
17618	of Financial Institutions and Securities RegulationDepartment
17619	of Banking and Financeand Department of State. The corporation
17620	shall pay the actual cost of said examinations. The office
17621	Department of Banking and Financeshall exercise the same power
17622	and authority over corporations organized under this act as is
17623	exercised over financial institutions under the provisions of
17624	the financial institutions codes, when such codes are not in
17625	conflict with this act.
17626	Section 340. Paragraph (d) of subsection (1) of section
17627	420.101, Florida Statutes, is amended to read:
17628	420.101 Housing Development Corporation of Florida;
17629	creation, membership, and purposes.--
17630	(1) Twenty-five or more persons, a majority of whom shall
17631	be residents of this state, who may desire to create a housing
17632	development corporation under the provisions of this part for
17633	the purpose of promoting and developing housing and advancing
17634	the prosperity and economic welfare of the state and, to that
17635	end, to exercise the powers and privileges hereinafter provided,
17636	may be incorporated by filing in the Department of State, as
17637	hereinafter provided, articles of incorporation. The articles
17638	of incorporation shall contain:
17639	(d) The names and post office addresses of the members of
17640	the first board of directors. The first board of directors shall
17641	be elected by and from the stockholders of the corporation and
17642	shall consist of 21 members. However, five of such members
17643	shall consist of the following persons, who shall be nonvoting
17644	members: the secretary of the Department of Community Affairs or
17645	her or his designee; the head of the Department of Financial
17646	ServicesBanking and Finance or her or his designee with
17647	expertise in insurance matters; a designee ofthe head of the
17648	Department of Financial Services with expertise in banking
17649	mattersInsurance or her or his designee;one state senator
17650	appointed by the President of the Senate; and one representative
17651	appointed by the Speaker of the House of Representatives.
17652	Section 341. Section 494.00125, Florida Statutes, is
17653	amended to read:
17654	494.00125 Confidentiality of information relating to
17655	investigations and examinations.--
17656	(1)(a) Except as otherwise provided by this section,
17657	information relative to an investigation or examination by the
17658	officedepartmentpursuant to this chapter, including any
17659	consumer complaint received by the office or the Department of
17660	Financial Services, is confidential and exempt from s. 119.07(1)
17661	until the investigation or examination is completed or ceases to
17662	be active. The information compiled by the officedepartmentin
17663	such an investigation or examination shall remain confidential
17664	and exempt from s. 119.07(1) after the office'sdepartment's
17665	investigation or examination is completed or ceases to be active
17666	if the officedepartmentsubmits the information to any law
17667	enforcement or administrative agency for further investigation.
17668	Such information shall remain confidential and exempt from s.
17669	119.07(1) until that agency's investigation is completed or
17670	ceases to be active. For purposes of this section, an
17671	investigation or examination shall be considered "active" so
17672	long as the officedepartmentor any law enforcement or
17673	administrative agency is proceeding with reasonable dispatch and
17674	has a reasonable good faith belief that the investigation or
17675	examination may lead to the filing of an administrative, civil,
17676	or criminal proceeding or to the denial or conditional grant of
17677	a license. This section shall not be construed to prohibit
17678	disclosure of information which is required by law to be filed
17679	with the officedepartmentand which, but for the investigation
17680	or examination, would be subject to s. 119.07(1).
17681	(b) Except as necessary for the officedepartmentto
17682	enforce the provisions of this chapter, a consumer complaint and
17683	other information relative to an investigation or examination
17684	shall remain confidential and exempt from s. 119.07(1) after the
17685	investigation or examination is completed or ceases to be active
17686	to the extent disclosure would:
17687	1. Jeopardize the integrity of another active
17688	investigation or examination.
17689	2. Reveal the name, address, telephone number, social
17690	security number, or any other identifying number or information
17691	of any complainant, customer, or account holder.
17692	3. Disclose the identity of a confidential source.
17693	4. Disclose investigative techniques or procedures.
17694	5. Reveal a trade secret as defined in s. 688.002.
17695	(c) In the event that officedepartmentpersonnel are or
17696	have been involved in an investigation or examination of such
17697	nature as to endanger their lives or physical safety or that of
17698	their families, then the home addresses, telephone numbers,
17699	places of employment, and photographs of such personnel,
17700	together with the home addresses, telephone numbers,
17701	photographs, and places of employment of spouses and children of
17702	such personnel and the names and locations of schools and day
17703	care facilities attended by the children of such personnel are
17704	confidential and exempt from s. 119.07(1).
17705	(d) Nothing in this section shall be construed to prohibit
17706	the officedepartmentfrom providing information to any law
17707	enforcement or administrative agency. Any law enforcement or
17708	administrative agency receiving confidential information in
17709	connection with its official duties shall maintain the
17710	confidentiality of the information so long as it would otherwise
17711	be confidential.
17712	(e) All information obtained by the officedepartmentfrom
17713	any person which is only made available to the officedepartment
17714	on a confidential or similarly restricted basis shall be
17715	confidential and exempt from s. 119.07(1). This exemption shall
17716	not be construed to prohibit disclosure of information which is
17717	required by law to be filed with the officedepartmentor which
17718	is otherwise subject to s. 119.07(1).
17719	(2) If information subject to subsection (1) is offered in
17720	evidence in any administrative, civil, or criminal proceeding,
17721	the presiding officer may, in her or his discretion, prevent the
17722	disclosure of information which would be confidential pursuant
17723	to paragraph (1)(b).
17724	(3) A privilege against civil liability is granted to a
17725	person who furnishes information or evidence to the office
17726	department, unless such person acts in bad faith or with malice
17727	in providing such information or evidence.
17728	Section 342. Subsection (7) of section 494.00421, Florida
17729	Statutes, is amended to read:
17730	494.00421 Fees earned upon obtaining a bona fide
17731	commitment.--Notwithstanding the provisions of ss. 494.001-
17732	494.0077, any mortgage brokerage business which contracts to
17733	receive from a borrower a mortgage brokerage fee upon obtaining
17734	a bona fide commitment shall accurately disclose in the mortgage
17735	brokerage agreement:
17736	(7)(a) The following statement, in no less than 12-point
17737	boldface type immediately above the signature lines for the
17738	borrowers:
17739
17740	"You are entering into a contract with a mortgage brokerage
17741	business to obtain a bona fide mortgage loan commitment under
17742	the same terms and conditions as stated hereinabove or in a
17743	separate executed good faith estimate form. If the mortgage
17744	brokerage business obtains a bona fide commitment under the same
17745	terms and conditions, you will be obligated to pay the mortgage
17746	brokerage business fees, including, but not limited to, a
17747	mortgage brokerage fee, even if you choose not to complete the
17748	loan transaction. If the provisions of s. 494.00421, Florida
17749	Statutes, are not met, the mortgage brokerage fee can only be
17750	earned upon the funding of the mortgage loan. The borrower may
17751	contact the Department of Financial ServicesBanking and
17752	Finance, Tallahassee, Florida, regarding any complaints that the
17753	borrower may have against the mortgage broker or the mortgage
17754	brokerage business. The telephone number of the department as
17755	set by rule of the departmentis: . . . [insert telephone
17756	number] . . . ."
17757	(b) Paragraph (a) does not apply to nonresidential
17758	mortgage loan commitments in excess of $1 million.
17759	Section 343. Subsection (7) of section 517.021, Florida
17760	Statutes, is amended, present subsections (8)-(20) of said
17761	section are renumbered as subsections (9)-(21), respectively,
17762	and a new subsection (8) is added to that section to read:
17763	517.021 Definitions.--When used in this chapter, unless
17764	the context otherwise indicates, the following terms have the
17765	following respective meanings:
17766	(7) "Commission" means the Financial Services Commission
17767	"Department" means the Department of Banking and Finance.
17768	(8) "Office" means the Office of Financial Institutions
17769	and Securities Regulation of the commission.
17770	Section 344. Section 517.03, Florida Statutes, is amended
17771	to read:
17772	517.03 Rulemaking; immunity for acts in conformity with
17773	rules.--
17774	(1) The officeDepartment of Banking and Financeshall
17775	administer and provide for the enforcement of all the provisions
17776	of this chapter. The commission maydepartment has authority to
17777	adopt rules pursuant to ss. 120.536(1) and 120.54 to implement
17778	the provisions of this chapter conferring powers or duties upon
17779	the officeit, including, without limitation, adopting rules and
17780	forms governing reports. The commissiondepartmentshall also
17781	have the nonexclusive power to define by rule any term, whether
17782	or not used in this chapter, insofar as the definition is not
17783	inconsistent with the provisions of this chapter.
17784	(2) No provision of this chapter imposing liability shall
17785	apply to an act done, or omitted to be done, in conformity with
17786	a rule of the commissiondepartmentin existence at the time of
17787	the act or omission, even though such rule may thereafter be
17788	amended or repealed or determined by judicial or other authority
17789	to be invalid for any reason.
17790	Section 345. Section 517.051, Florida Statutes, is amended
17791	to read:
17792	517.051 Exempt securities.--The exemptions provided herein
17793	from the registration requirements of s. 517.07 are self-
17794	executing and do not require any filing with the office
17795	departmentprior to claiming such exemption. Any person who
17796	claims entitlement to any of these exemptions bears the burden
17797	of proving such entitlement in any proceeding brought under this
17798	chapter. The registration provisions of s. 517.07 do not apply
17799	to any of the following securities:
17800	(1) A security issued or guaranteed by the United States
17801	or any territory or insular possession of the United States, by
17802	the District of Columbia, or by any state of the United States
17803	or by any political subdivision or agency or other
17804	instrumentality thereof; provided that no person shall directly
17805	or indirectly offer or sell securities, other than general
17806	obligation bonds, under this subsection if the issuer or
17807	guarantor is in default or has been in default any time after
17808	December 31, 1975, as to principal or interest:
17809	(a) With respect to an obligation issued by the issuer or
17810	successor of the issuer; or
17811	(b) With respect to an obligation guaranteed by the
17812	guarantor or successor of the guarantor,
17813
17814	except by an offering circular containing a full and fair
17815	disclosure as prescribed by rule of the commissiondepartment.
17816	(2) A security issued or guaranteed by any foreign
17817	government with which the United States is maintaining
17818	diplomatic relations at the time of the sale or offer of sale of
17819	the security, or by any state, province, or political
17820	subdivision thereof having the power of taxation or assessment,
17821	which security is recognized at the time it is offered for sale
17822	in this state as a valid obligation by such foreign government
17823	or by such state, province, or political subdivision thereof
17824	issuing the security.
17825	(3) A security issued or guaranteed by:
17826	(a) A national bank, a federally chartered savings and
17827	loan association, or a federally chartered savings bank, or the
17828	initial subscription for equity securities in such national
17829	bank, federally chartered savings and loan association, or
17830	federally chartered savings bank;
17831	(b) Any federal land bank, joint-stock land bank, or
17832	national farm loan association under the provisions of the
17833	Federal Farm Loan Act of July 17, 1916;
17834	(c) An international bank of which the United States is a
17835	member; or
17836	(d) A corporation created and acting as an instrumentality
17837	of the government of the United States.
17838	(4) A security issued or guaranteed, as to principal,
17839	interest, or dividend, by a corporation owning or operating a
17840	railroad or any other public service utility; provided that such
17841	corporation is subject to regulation or supervision whether as
17842	to its rates and charges or as to the issue of its own
17843	securities by a public commission, board, or officer of the
17844	government of the United States, of any state, territory, or
17845	insular possession of the United States, of any municipality
17846	located therein, of the District of Columbia, or of the Dominion
17847	of Canada or of any province thereof; also equipment securities
17848	based on chattel mortgages, leases, or agreements for
17849	conditional sale of cars, motive power, or other rolling stock
17850	mortgaged, leased, or sold to or furnished for the use of or
17851	upon such railroad or other public service utility corporation
17852	or where the ownership or title of such equipment is pledged or
17853	retained in accordance with the provisions of the laws of the
17854	United States or of any state or of the Dominion of Canada to
17855	secure the payment of such equipment securities; and also bonds,
17856	notes, or other evidences of indebtedness issued by a holding
17857	corporation and secured by collateral consisting of any
17858	securities hereinabove described; provided, further, that the
17859	collateral securities equal in fair value at least 125 percent
17860	of the par value of the bonds, notes, or other evidences of
17861	indebtedness so secured.
17862	(5) A security issued or guaranteed by any of the
17863	following which are subject to the examination, supervision, or
17864	control of this state or of the Federal Deposit Insurance
17865	Corporation or the National Credit Union Association:
17866	(a) A bank,
17867	(b) A trust company,
17868	(c) A savings institution,
17869	(d) A building or savings and loan association,
17870	(e) An international development bank, or
17871	(f) A credit union;
17872
17873	or the initial subscription for equity securities of any
17874	institution listed in paragraphs (a)-(f), provided such
17875	institution is subject to the examination, supervision, or
17876	control of this state.
17877	(6) A security, other than common stock, providing for a
17878	fixed return, which security has been outstanding in the hands
17879	of the public for a period of not less than 5 years, and upon
17880	which security no default in payment of principal or failure to
17881	pay the fixed return has occurred for an immediately preceding
17882	period of 5 years.
17883	(7) Securities of nonprofit agricultural cooperatives
17884	organized under the laws of this state when the securities are
17885	sold or offered for sale to persons principally engaged in
17886	agricultural production or selling agricultural products.
17887	(8) A note, draft, bill of exchange, or banker's
17888	acceptance having a unit amount of $25,000 or more which arises
17889	out of a current transaction, or the proceeds of which have been
17890	or are to be used for current transactions, and which has a
17891	maturity period at the time of issuance not exceeding 9 months
17892	exclusive of days of grace, or any renewal thereof which has a
17893	maturity period likewise limited. This subsection applies only
17894	to prime quality negotiable commercial paper of a type not
17895	ordinarily purchased by the general public; that is, paper
17896	issued to facilitate well-recognized types of current
17897	operational business requirements and of a type eligible for
17898	discounting by Federal Reserve banks.
17899	(9) A security issued by a corporation organized and
17900	operated exclusively for religious, educational, benevolent,
17901	fraternal, charitable, or reformatory purposes and not for
17902	pecuniary profit, no part of the net earnings of which
17903	corporation inures to the benefit of any private stockholder or
17904	individual, or any security of a fund that is excluded from the
17905	definition of an investment company under s. 3(c)(10)(B) of the
17906	Investment Company Act of 1940; provided that no person shall
17907	directly or indirectly offer or sell securities under this
17908	subsection except by an offering circular containing full and
17909	fair disclosure, as prescribed by the rules of the commission
17910	department, of all material information, including, but not
17911	limited to, a description of the securities offered and terms of
17912	the offering, a description of the nature of the issuer's
17913	business, a statement of the purpose of the offering and the
17914	intended application by the issuer of the proceeds thereof, and
17915	financial statements of the issuer prepared in conformance with
17916	generally accepted accounting principles. Section 6(c) of the
17917	Philanthropy Protection Act of 1995, Pub. L. No. 104-62, shall
17918	not preempt any provision of this chapter.
17919	(10) Any insurance or endowment policy or annuity contract
17920	or optional annuity contract or self-insurance agreement issued
17921	by a corporation, insurance company, reciprocal insurer, or risk
17922	retention group subject to the supervision of the insurance
17923	regulatorcommissioner or bank regulatorcommissioner, or any
17924	agency or officer performing like functions, of any state or
17925	territory of the United States or the District of Columbia.
17926	Section 346. Section 517.061, Florida Statutes, is amended
17927	to read:
17928	517.061 Exempt transactions.--The exemption for each
17929	transaction listed below is self-executing and does not require
17930	any filing with the officedepartmentprior to claiming such
17931	exemption. Any person who claims entitlement to any of the
17932	exemptions bears the burden of proving such entitlement in any
17933	proceeding brought under this chapter. The registration
17934	provisions of s. 517.07 do not apply to any of the following
17935	transactions; however, such transactions are subject to the
17936	provisions of ss. 517.301, 517.311, and 517.312:
17937	(1) At any judicial, executor's, administrator's,
17938	guardian's, or conservator's sale, or at any sale by a receiver
17939	or trustee in insolvency or bankruptcy, or any transaction
17940	incident to a judicially approved reorganization in which a
17941	security is issued in exchange for one or more outstanding
17942	securities, claims, or property interests.
17943	(2) By or for the account of a pledgeholder or mortgagee
17944	selling or offering for sale or delivery in the ordinary course
17945	of business and not for the purposes of avoiding the provisions
17946	of this chapter, to liquidate a bona fide debt, a security
17947	pledged in good faith as security for such debt.
17948	(3) The isolated sale or offer for sale of securities when
17949	made by or on behalf of a vendor not the issuer or underwriter
17950	of the securities, who, being the bona fide owner of such
17951	securities, disposes of her or his own property for her or his
17952	own account, and such sale is not made directly or indirectly
17953	for the benefit of the issuer or an underwriter of such
17954	securities or for the direct or indirect promotion of any scheme
17955	or enterprise with the intent of violating or evading any
17956	provision of this chapter. For purposes of this subsection,
17957	isolated offers or sales include, but are not limited to, an
17958	isolated offer or sale made by or on behalf of a vendor of
17959	securities not the issuer or underwriter of the securities if:
17960	(a) The offer or sale of securities is in a transaction
17961	satisfying all of the requirements of subparagraphs (11)(a)1.,
17962	2., 3., and 4. and paragraph(11)(b); or
17963	(b) The offer or sale of securities is in a transaction
17964	exempt under s. 4(1) of the Securities Act of 1933, as amended.
17965
17966	For purposes of this subsection, any person, including, without
17967	limitation, a promoter or affiliate of an issuer, shall not be
17968	deemed an underwriter, an issuer, or a person acting for the
17969	direct or indirect benefit of the issuer or an underwriter with
17970	respect to any securities of the issuer which she or he has
17971	owned beneficially for at least 1 year.
17972	(4) The distribution by a corporation, trust, or
17973	partnership, actively engaged in the business authorized by its
17974	charter or other organizational articles or agreement, of
17975	securities to its stockholders or other equity security holders,
17976	partners, or beneficiaries as a stock dividend or other
17977	distribution out of earnings or surplus.
17978	(5) The issuance of securities to such equity security
17979	holders or other creditors of a corporation, trust, or
17980	partnership in the process of a reorganization of such
17981	corporation or entity, made in good faith and not for the
17982	purpose of avoiding the provisions of this chapter, either in
17983	exchange for the securities of such equity security holders or
17984	claims of such creditors or partly for cash and partly in
17985	exchange for the securities or claims of such equity security
17986	holders or creditors.
17987	(6) Any transaction involving the distribution of the
17988	securities of an issuer exclusively among its own security
17989	holders, including any person who at the time of the transaction
17990	is a holder of any convertible security, any nontransferable
17991	warrant, or any transferable warrant which is exercisable within
17992	not more than 90 days of issuance, when no commission or other
17993	remuneration is paid or given directly or indirectly in
17994	connection with the sale or distribution of such additional
17995	securities.
17996	(7) The offer or sale of securities to a bank, trust
17997	company, savings institution, insurance company, dealer,
17998	investment company as defined by the Investment Company Act of
17999	1940, pension or profit-sharing trust, or qualified
18000	institutional buyer as defined by rule of the commission
18001	departmentin accordance with Securities and Exchange Commission
18002	Rule 144A (17 C.F.R. 230.144(A)(a)), whether any of such
18003	entities is acting in its individual or fiduciary capacity;
18004	provided that such offer or sale of securities is not for the
18005	direct or indirect promotion of any scheme or enterprise with
18006	the intent of violating or evading any provision of this
18007	chapter.
18008	(8) The sale of securities from one corporation to another
18009	corporation provided that:
18010	(a) The sale price of the securities is $50,000 or more;
18011	and
18012	(b) The buyer and seller corporations each have assets of
18013	$500,000 or more.
18014	(9) The offer or sale of securities from one corporation
18015	to another corporation, or to security holders thereof, pursuant
18016	to a vote or consent of such security holders as may be provided
18017	by the articles of incorporation and the applicable corporate
18018	statutes in connection with mergers, share exchanges,
18019	consolidations, or sale of corporate assets.
18020	(10) The issuance of notes or bonds in connection with the
18021	acquisition of real property or renewals thereof, if such notes
18022	or bonds are issued to the sellers of, and are secured by all or
18023	part of, the real property so acquired.
18024	(11)(a) The offer or sale, by or on behalf of an issuer,
18025	of its own securities, which offer or sale is part of an
18026	offering made in accordance with all of the following
18027	conditions:
18028	1. There are no more than 35 purchasers, or the issuer
18029	reasonably believes that there are no more than 35 purchasers,
18030	of the securities of the issuer in this state during an offering
18031	made in reliance upon this subsection or, if such offering
18032	continues for a period in excess of 12 months, in any
18033	consecutive 12-month period.
18034	2. Neither the issuer nor any person acting on behalf of
18035	the issuer offers or sells securities pursuant to this
18036	subsection by means of any form of general solicitation or
18037	general advertising in this state.
18038	3. Prior to the sale, each purchaser or the purchaser's
18039	representative, if any, is provided with, or given reasonable
18040	access to, full and fair disclosure of all material information.
18041	4. No person defined as a "dealer" in this chapter is paid
18042	a commission or compensation for the sale of the issuer's
18043	securities unless such person is registered as a dealer under
18044	this chapter.
18045	5. When sales are made to five or more persons in this
18046	state, any sale in this state made pursuant to this subsection
18047	is voidable by the purchaser in such sale either within 3 days
18048	after the first tender of consideration is made by such
18049	purchaser to the issuer, an agent of the issuer, or an escrow
18050	agent or within 3 days after the availability of that privilege
18051	is communicated to such purchaser, whichever occurs later.
18052	(b) The following purchasers are excluded from the
18053	calculation of the number of purchasers under subparagraph
18054	(a)1.:
18055	1. Any relative or spouse, or relative of such spouse, of
18056	a purchaser who has the same principal residence as such
18057	purchaser.
18058	2. Any trust or estate in which a purchaser, any of the
18059	persons related to such purchaser specified in subparagraph 1.,
18060	and any corporation specified in subparagraph 3. collectively
18061	have more than 50 percent of the beneficial interest (excluding
18062	contingent interest).
18063	3. Any corporation or other organization of which a
18064	purchaser, any of the persons related to such purchaser
18065	specified in subparagraph 1., and any trust or estate specified
18066	in subparagraph 2. collectively are beneficial owners of more
18067	than 50 percent of the equity securities or equity interest.
18068	4. Any purchaser who makes a bona fide investment of
18069	$100,000 or more, provided such purchaser or the purchaser's
18070	representative receives, or has access to, the information
18071	required to be disclosed by subparagraph (a)3.
18072	5. Any accredited investor, as defined by rule of the
18073	commissiondepartmentin accordance with Securities and Exchange
18074	Commission Regulation 230.501 (17 C.F.R. 230.501).
18075	(c)1. For purposes of determining which offers and sales
18076	of securities constitute part of the same offering under this
18077	subsection and are therefore deemed to be integrated with one
18078	another:
18079	a. Offers or sales of securities occurring more than 6
18080	months prior to an offer or sale of securities made pursuant to
18081	this subsection shall not be considered part of the same
18082	offering, provided there are no offers or sales by or for the
18083	issuer of the same or a similar class of securities during such
18084	6-month period.
18085	b. Offers or sales of securities occurring at any time
18086	after 6 months from an offer or sale made pursuant to this
18087	subsection shall not be considered part of the same offering,
18088	provided there are no offers or sales by or for the issuer of
18089	the same or a similar class of securities during such 6-month
18090	period.
18091	2. Offers or sales which do not satisfy the conditions of
18092	any of the provisions of subparagraph 1. may or may not be part
18093	of the same offering, depending on the particular facts and
18094	circumstances in each case. The commissiondepartment may, but
18095	is not required to,adopt a rule or rules indicating what
18096	factors should be considered in determining whether offers and
18097	sales not qualifying for the provisions of subparagraph 1. are
18098	part of the same offering for purposes of this subsection.
18099	(d) Offers or sales of securities made pursuant to, and in
18100	compliance with, any other subsection of this section or any
18101	subsection of s. 517.051 shall not be considered part of an
18102	offering pursuant to this subsection, regardless of when such
18103	offers and sales are made.
18104	(12) The sale of securities by a bank or trust company
18105	organized or incorporated under the laws of the United States or
18106	this state at a profit to such bank or trust company of not more
18107	than 2 percent of the total sale price of such securities;
18108	provided that there is no solicitation of this business by such
18109	bank or trust company where such bank or trust company acts as
18110	agent in the purchase or sale of such securities.
18111	(13) An unsolicited purchase or sale of securities on
18112	order of, and as the agent for, another by a dealer registered
18113	with the Department of Banking and Financepursuant to the
18114	provisions of s. 517.12; provided that this exemption applies
18115	solely and exclusively to such registered dealers and does not
18116	authorize or permit the purchase or sale of securities on order
18117	of, and as agent for, another by any person other than a dealer
18118	so registered; and provided, further, that such purchase or sale
18119	is not directly or indirectly for the benefit of the issuer or
18120	an underwriter of such securities or for the direct or indirect
18121	promotion of any scheme or enterprise with the intent of
18122	violation or evading any provision of this chapter.
18123	(14) The offer or sale of shares of a corporation which
18124	represent ownership, or entitle the holders of the shares to
18125	possession and occupancy, of specific apartment units in
18126	property owned by such corporation and organized and operated on
18127	a cooperative basis, solely for residential purposes.
18128	(15) The offer or sale of securities under a bona fide
18129	employer-sponsored stock option, stock purchase, pension,
18130	profit-sharing, savings, or other benefit plan when offered only
18131	to employees of the sponsoring organization or to employees of
18132	its controlled subsidiaries.
18133	(16) The sale by or through a registered dealer of any
18134	securities option if at the time of the sale of the option:
18135	(a) The performance of the terms of the option is
18136	guaranteed by any dealer registered under the federal Securities
18137	Exchange Act of 1934, as amended, which guaranty and dealer are
18138	in compliance with such requirements or rules as may be approved
18139	or adopted by the commissiondepartment; or
18140	(b) Such options transactions are cleared by the Options
18141	Clearing Corporation or any other clearinghouse recognized by
18142	the officedepartment; and
18143	(c) The option is not sold by or for the benefit of the
18144	issuer of the underlying security; and
18145	(d) The underlying security may be purchased or sold on a
18146	recognized securities exchange or is quoted on the National
18147	Association of Securities Dealers Automated Quotation System;
18148	and
18149	(e) Such sale is not directly or indirectly for the
18150	purpose of providing or furthering any scheme to violate or
18151	evade any provisions of this chapter.
18152	(17)(a) The offer or sale of securities, as agent or
18153	principal, by a dealer registered pursuant to s. 517.12, when
18154	such securities are offered or sold at a price reasonably
18155	related to the current market price of such securities, provided
18156	such securities are:
18157	1. Securities of an issuer for which reports are required
18158	to be filed by s. 13 or s. 15(d) of the Securities Exchange Act
18159	of 1934, as amended;
18160	2. Securities of a company registered under the Investment
18161	Company Act of 1940, as amended;
18162	3. Securities of an insurance company, as that term is
18163	defined in s. 2(a)(17) of the Investment Company Act of 1940, as
18164	amended;
18165	4. Securities, other than any security that is a federal
18166	covered security pursuant to s. 18(b)(1) of the Securities Act
18167	of 1933 and is not subject to any registration or filing
18168	requirements under this act, which appear in any list of
18169	securities dealt in on any stock exchange registered pursuant to
18170	the Securities Exchange Act of 1934, as amended, and which
18171	securities have been listed or approved for listing upon notice
18172	of issuance by such exchange, and also all securities senior to
18173	any securities so listed or approved for listing upon notice of
18174	issuance, or represented by subscription rights which have been
18175	so listed or approved for listing upon notice of issuance, or
18176	evidences of indebtedness guaranteed by companies any stock of
18177	which is so listed or approved for listing upon notice of
18178	issuance, such securities to be exempt only so long as such
18179	listings or approvals remain in effect. The exemption provided
18180	for herein does not apply when the securities are suspended from
18181	listing approval for listing or trading.
18182	(b) The exemption provided in this subsection does not
18183	apply if the sale is made for the direct or indirect benefit of
18184	an issuer or controlling persons of such issuer or if such
18185	securities constitute the whole or part of an unsold allotment
18186	to, or subscription or participation by, a dealer as an
18187	underwriter of such securities.
18188	(c) This exemption shall not be available for any
18189	securities which have been denied registration by the department
18190	pursuant to s. 517.111. Additionally, the officedepartmentmay
18191	deny this exemption with reference to any particular security,
18192	other than a federal covered security, by order published in
18193	such manner as the officedepartmentfinds proper.
18194	(18) The offer or sale of any security effected by or
18195	through a person registered pursuant to s. 517.12(17).
18196	(19) Other transactions defined by rules as transactions
18197	exempted from the registration provisions of s. 517.07, which
18198	rules the commissiondepartment may, but is not required to,
18199	adopt from time to time, but only after a finding by the office
18200	departmentthat the application of the provisions of s. 517.07
18201	to a particular transaction is not necessary in the public
18202	interest and for the protection of investors because of the
18203	small dollar amount of securities involved or the limited
18204	character of the offering. In conjunction with its adoption of
18205	such rules, the commissiondepartmentmay also provide in such
18206	rules that persons selling or offering for sale the exempted
18207	securities are exempt from the registration requirements of s.
18208	517.12. No rule so adopted may have the effect of narrowing or
18209	limiting any exemption provided for by statute in the other
18210	subsections of this section.
18211	(20) Any nonissuer transaction by a registered associated
18212	person of a registered dealer, and any resale transaction by a
18213	sponsor of a unit investment trust registered under the
18214	Investment Company Act of 1940, in a security of a class that
18215	has been outstanding in the hands of the public for at least 90
18216	days; provided, at the time of the transaction:
18217	(a) The issuer of the security is actually engaged in
18218	business and is not in the organization stage or in bankruptcy
18219	or receivership and is not a blank check, blind pool, or shell
18220	company whose primary plan of business is to engage in a merger
18221	or combination of the business with, or an acquisition of, any
18222	unidentified person;
18223	(b) The security is sold at a price reasonably related to
18224	the current market price of the security;
18225	(c) The security does not constitute the whole or part of
18226	an unsold allotment to, or a subscription or participation by,
18227	the broker-dealer as an underwriter of the security;
18228	(d) A nationally recognized securities manual designated
18229	by rule of the commission or order of the officedepartmentor a
18230	document filed with the Securities and Exchange Commission that
18231	is publicly available through the commission's electronic data
18232	gathering and retrieval system contains:
18233	1. A description of the business and operations of the
18234	issuer;
18235	2. The names of the issuer's officers and directors, if
18236	any, or, in the case of an issuer not domiciled in the United
18237	States, the corporate equivalents of such persons in the
18238	issuer's country of domicile;
18239	3. An audited balance sheet of the issuer as of a date
18240	within 18 months before such transaction or, in the case of a
18241	reorganization or merger in which parties to the reorganization
18242	or merger had such audited balance sheet, a pro forma balance
18243	sheet; and
18244	4. An audited income statement for each of the issuer's
18245	immediately preceding 2 fiscal years, or for the period of
18246	existence of the issuer, if in existence for less than 2 years
18247	or, in the case of a reorganization or merger in which the
18248	parties to the reorganization or merger had such audited income
18249	statement, a pro forma income statement; and
18250	(e) The issuer of the security has a class of equity
18251	securities listed on a national securities exchange registered
18252	under the Securities Exchange Act of 1934 or designated for
18253	trading on the National Association of Securities Dealers
18254	Automated Quotation System, unless:
18255	1. The issuer of the security is a unit investment trust
18256	registered under the Investment Company Act of 1940;
18257	2. The issuer of the security has been engaged in
18258	continuous business, including predecessors, for at least 3
18259	years; or
18260	3. The issuer of the security has total assets of at least
18261	$2 million based on an audited balance sheet as of a date within
18262	18 months before such transaction or, in the case of a
18263	reorganization or merger in which parties to the reorganization
18264	or merger had such audited balance sheet, a pro forma balance
18265	sheet.
18266	Section 347. Section 517.07, Florida Statutes, is amended
18267	to read:
18268	517.07 Registration of securities.--
18269	(1) It is unlawful and a violation of this chapter for any
18270	person to sell or offer to sell a security within this state
18271	unless the security is exempt under s. 517.051, is sold in a
18272	transaction exempt under s. 517.061, is a federal covered
18273	security, or is registered pursuant to this chapter.
18274	(2) No securities that are required to be registered under
18275	this chapter shall be sold or offered for sale within this state
18276	unless such securities have been registered pursuant to this
18277	chapter and unless prior to each sale the purchaser is furnished
18278	with a prospectus meeting the requirements of rules adopted by
18279	the commissiondepartment.
18280	(3) The officedepartmentshall issue a permit when
18281	registration has been granted by the officedepartment. A
18282	permit to sell securities is effective for 1 year from the date
18283	it was granted. Registration of securities shall be deemed to
18284	include the registration of rights to subscribe to such
18285	securities if the application under s. 517.081 or s. 517.082 for
18286	registration of such securities includes a statement that such
18287	rights are to be issued.
18288	(4) A record of the registration of securities shall be
18289	kept byin the office of the department, in which register of
18290	securities shall also be recorded any orders entered by the
18291	officedepartmentwith respect to such securities. Such
18292	register, and all information with respect to the securities
18293	registered therein, shall be open to public inspection.
18294	(5) Notwithstanding any other provision of this section,
18295	offers of securities required to be registered by this section
18296	may be made in this state before the registration of such
18297	securities if the offers are made in conformity with rules
18298	adopted by the commissiondepartment.
18299	Section 348. Subsections (2), (3), (4), and (5) of section
18300	517.075, Florida Statutes, are amended to read:
18301	517.075 Cuba, prospectus disclosure of doing business
18302	with, required.--
18303	(2) Any disclosure required by subsection (1) must
18304	include:
18305	(a) The name of such person, affiliate, or government with
18306	which the issuer does business and the nature of that business;
18307	(b) A statement that the information is accurate as of the
18308	date the securities were effective with the United States
18309	Securities and Exchange Commission or with the office
18310	department, whichever date is later; and
18311	(c) A statement that current information concerning the
18312	issuer's business dealings with the government of Cuba or with
18313	any person or affiliate located in Cuba may be obtained from the
18314	officeDepartment of Banking and Finance, which statement must
18315	include the address and phone number of the officedepartment.
18316	(3) If an issuer commences engaging in business with the
18317	government of Cuba or with any person or affiliate located in
18318	Cuba, after the date issuer's securities become effective with
18319	the Securities and Exchange Commission or with the office
18320	department, whichever date is later, or if the information
18321	reported in the prospectus concerning that business changes in
18322	any material way, the issuer must provide the officedepartment
18323	notice of that business or change, as appropriate, in a manner
18324	form acceptable to the officedepartment. The commission
18325	departmentshall prescribe by rule a form for persons to use to
18326	report the commencement of such business or any change in such
18327	business which occurs after the effective registration of such
18328	securities. This form must include, at a minimum, the
18329	information required by subsection (2). The information reported
18330	on the form must be kept current. Information is current if
18331	reported to the officedepartmentwithin 90 days after the
18332	commencement of business or within 90 days after the change
18333	occurs with respect to previously reported information.
18334	(4) The officedepartmentshall provide, upon request, a
18335	copy of any form filed with the officedepartmentunder
18336	subsection (3) to any person requesting the form.
18337	(5) Each securities offering sold in violation of this
18338	section, and each failure of an issuer to timely file the form
18339	required by subsection (3), subjects the issuer to a fine of up
18340	to $5,000. Any fine collected under this section shall be
18341	deposited into the Anti-Fraud Trust Fund of the office
18342	Department of Banking and Finance.
18343	Section 349. Section 517.081, Florida Statutes, is amended
18344	to read:
18345	517.081 Registration procedure.--
18346	(1) All securities required by this chapter to be
18347	registered before being sold in this state and not entitled to
18348	registration by notification shall be registered in the manner
18349	provided by this section.
18350	(2) The officedepartmentshall receive and act upon
18351	applications to have securities registered and the commission
18352	may prescribe forms on which it may require such applications to
18353	be submitted. Applications shall be duly signed by the
18354	applicant, sworn to by any person having knowledge of the facts,
18355	and filed with the officedepartment. The commissiondepartment
18356	may establish, by rule, procedures for depositing fees and
18357	filing documents by electronic means provided such procedures
18358	provide the officedepartmentwith the information and data
18359	required by this section. An application may be made either by
18360	the issuer of the securities for which registration is applied
18361	or by any registered dealer desiring to sell the same within the
18362	state.
18363	(3) The officedepartmentmay require the applicant to
18364	submit to the officedepartmentthe following information
18365	concerning the issuer and such other relevant information as the
18366	officedepartmentmay in its judgment deem necessary to enable
18367	it to ascertain whether such securities shall be registered
18368	pursuant to the provisions of this section:
18369	(a) The names and addresses of the directors, trustees,
18370	and officers, if the issuer be a corporation, association, or
18371	trust; of all the partners, if the issuer be a partnership; or
18372	of the issuer, if the issuer be an individual.
18373	(b) The location of the issuer's principal business office
18374	and of its principal office in this state, if any.
18375	(c) The general character of the business actually to be
18376	transacted by the issuer and the purposes of the proposed issue.
18377	(d) A statement of the capitalization of the issuer.
18378	(e) A balance sheet showing the amount and general
18379	character of its assets and liabilities on a day not more than
18380	90 days prior to the date of filing such balance sheet or such
18381	longer period of time, not exceeding 6 months, as the office
18382	departmentmay permit at the written request of the issuer on a
18383	showing of good cause therefor.
18384	(f) A detailed statement of the plan upon which the issuer
18385	proposes to transact business.
18386	(g)1. A specimen copy of the security and a copy of any
18387	circular, prospectus, advertisement, or other description of
18388	such securities.
18389	2. The commissiondepartmentshall adopt a form for a
18390	simplified offering circular to be used solely by corporations
18391	to register, under this section, securities of the corporation
18392	that are sold in offerings in which the aggregate offering price
18393	in any consecutive 12-month period does not exceed the amount
18394	provided in s. 3(b) of the Securities Act of 1933. The
18395	following issuers shall not be eligible to submit a simplified
18396	offering circular adopted pursuant to this subparagraph:
18397	a. An issuer seeking to register securities for resale by
18398	persons other than the issuer.
18399	b. An issuer who is subject to any of the
18400	disqualifications described in 17 C.F.R. s. 230.262, adopted
18401	pursuant to the Securities Act of 1933, or who has been or is
18402	engaged or is about to engage in an activity that would be
18403	grounds for denial, revocation, or suspension under s. 517.111.
18404	For purposes of this subparagraph, an issuer includes an
18405	issuer's director, officer, shareholder who owns at least 10
18406	percent of the shares of the issuer, promoter, or selling agent
18407	of the securities to be offered or any officer, director, or
18408	partner of such selling agent.
18409	c. An issuer who is a development-stage company that
18410	either has no specific business plan or purpose or has indicated
18411	that its business plan is to merge with an unidentified company
18412	or companies.
18413	d. An issuer of offerings in which the specific business
18414	or properties cannot be described.
18415	e. Any issuer the officedepartmentdetermines is
18416	ineligible if the form would not provide full and fair
18417	disclosure of material information for the type of offering to
18418	be registered by the issuer.
18419	f. Any corporation which has failed to provide the office
18420	departmentthe reports required for a previous offering
18421	registered pursuant to this subparagraph.
18422
18423	As a condition precedent to qualifying for use of the simplified
18424	offering circular, a corporation shall agree to provide the
18425	officedepartmentwith an annual financial report containing a
18426	balance sheet as of the end of the issuer's fiscal year and a
18427	statement of income for such year, prepared in accordance with
18428	generally accepted accounting principles and accompanied by an
18429	independent accountant's report. If the issuer has more than
18430	100 security holders at the end of a fiscal year, the financial
18431	statements must be audited. Annual financial reports must be
18432	filed with the officedepartmentwithin 90 days after the close
18433	of the issuer's fiscal year for each of the first 5 years
18434	following the effective date of the registration.
18435	(h) A statement of the amount of the issuer's income,
18436	expenses, and fixed charges during the last fiscal year or, if
18437	in actual business less than 1 year, then for such time as the
18438	issuer has been in actual business.
18439	(i) A statement of the issuer's cash sources and
18440	application during the last fiscal year or, if in actual
18441	business less than 1 year, then for such time as the issuer has
18442	been in actual business.
18443	(j) A statement showing the maximum price at which such
18444	security is proposed to be sold, together with the maximum
18445	amount of commission, including expenses, or other form of
18446	remuneration to be paid in cash or otherwise, directly or
18447	indirectly, for or in connection with the sale or offering for
18448	sale of such securities.
18449	(k) A copy of the opinion or opinions of counsel
18450	concerning the legality of the issue or other matters which the
18451	officedepartmentmay determine to be relevant to the issue.
18452	(l) A detailed statement showing the items of cash,
18453	property, services, patents, good will, and any other
18454	consideration in payment for which such securities have been or
18455	are to be issued.
18456	(m) The amount of securities to be set aside and disposed
18457	of and a statement of all securities issued from time to time
18458	for promotional purposes.
18459	(n) If the issuer is a corporation, there shall be filed
18460	with the application a copy of its articles of incorporation
18461	with all amendments and of its existing bylaws, if not already
18462	on file in the officedepartment. If the issuer is a trustee,
18463	there shall be filed with the application a copy of all
18464	instruments by which the trust is created or declared and in
18465	which it is accepted and acknowledged. If the issuer is a
18466	partnership, unincorporated association, joint-stock company, or
18467	any other form of organization whatsoever, there shall be filed
18468	with the application a copy of its articles of partnership or
18469	association and all other papers pertaining to its organization,
18470	if not already on file in the officedepartment.
18471	(4) All of the statements, exhibits, and documents of
18472	every kind required by the departmentunder this section, except
18473	properly certified public documents, shall be verified by the
18474	oath of the applicant or of the issuer in such manner and form
18475	as may be required by the commissiondepartment.
18476	(5) The commissiondepartmentmay by rule fix the maximum
18477	discounts, commissions, expenses, remuneration, and other
18478	compensation to be paid in cash or otherwise, not to exceed 20
18479	percent, directly or indirectly, for or in connection with the
18480	sale or offering for sale of such securities in this state.
18481	(6) An issuer filing an application under this section
18482	shall, at the time of filing, pay the officedepartmenta
18483	nonreturnable fee of $1,000 per application.
18484	(7) If upon examination of any application the office
18485	departmentshall find that the sale of the security referred to
18486	therein would not be fraudulent and would not work or tend to
18487	work a fraud upon the purchaser, that the terms of the sale of
18488	such securities would be fair, just, and equitable, and that the
18489	enterprise or business of the issuer is not based upon unsound
18490	business principles, it shall record the registration of such
18491	security in the register of securities; and thereupon such
18492	security so registered may be sold by any registered dealer,
18493	subject, however, to the further order of the officedepartment.
18494	Section 350. Section 517.082, Florida Statutes, is amended
18495	to read:
18496	517.082 Notification registration.--
18497	(1) Except as provided in subsection (3), securities
18498	offered or sold pursuant to a registration statement filed under
18499	the Securities Act of 1933 shall be entitled to registration by
18500	notification in the manner provided in subsection (2), provided
18501	that prior to the offer or sale the registration statement has
18502	become effective.
18503	(2) An application for registration by notification shall
18504	be filed with the officedepartment, shall contain the following
18505	information, and shall be accompanied by the following:
18506	(a) An application to sell executed by the issuer, any
18507	person on whose behalf the offering is made, a dealer registered
18508	under this chapter, or any duly authorized agent of any such
18509	person, setting forth the name and address of the applicant, the
18510	name and address of the issuer, and the title of the securities
18511	to be offered and sold;
18512	(b) Copies of such documents filed with the Securities and
18513	Exchange Commission as the Financial Services Commission
18514	departmentmay by rule require;
18515	(c) An irrevocable written consent to service as required
18516	by s. 517.101; and
18517	(d) A nonreturnable fee of $1,000 per application.
18518
18519	A registration under this section becomes effective when the
18520	federal registration statement becomes effective or as of the
18521	date the application is filed with the officedepartment,
18522	whichever is later, provided that, in addition to the items
18523	listed in paragraphs (a)-(d), the officedepartmenthas received
18524	written notification of effective registration under the
18525	Securities Act of 1933 or the Investment Company Act of 1940
18526	within 10 business days from the date federal registration is
18527	granted. Failure to provide all the information required by
18528	this subsection to the officedepartmentwithin 60 days of the
18529	date the registration statement becomes effective with the
18530	Securities and Exchange Commission shall be a violation of this
18531	chapter.
18532	(3) Except for units of limited partnership interests or
18533	such other securities as the commissiondepartmentdescribes by
18534	rule as exempt from this subsection due to high investment
18535	quality, the provisions of this section may not be used to
18536	register securities if the offering price at the time of
18537	effectiveness with the Securities and Exchange Commission is $5
18538	or less per share, unless such securities are listed or
18539	designated, or approved for listing or designation upon notice
18540	of issuance, on a stock exchange registered pursuant to the
18541	Securities Exchange Act of 1934 or on the National Association
18542	of Securities Dealers Automated Quotation (NASDAQ) System, or
18543	unless such securities are of the same issuer and of senior or
18544	substantially equal rank to securities so listed or designated.
18545	(4) In lieu of filing with the officedepartmentthe
18546	application, fees, and documents for registration required by
18547	subsection (2), the commissiondepartmentmay establish, by
18548	rule, procedures for depositing fees and filing documents by
18549	electronic means, provided such procedures provide the office
18550	departmentwith the information and data required by this
18551	section.
18552	Section 351. Section 517.101, Florida Statutes, is amended
18553	to read:
18554	517.101 Consent to service.--
18555	(1) Upon any initial application for registration under s.
18556	517.081 or s. 517.082 or upon request of the officedepartment,
18557	the issuer shall file with such application the irrevocable
18558	written consent of the issuer that in suits, proceedings, and
18559	actions growing out of the violation of any provision of this
18560	chapter, the service on the officedepartmentof a notice,
18561	process, or pleading therein, authorized by the laws of this
18562	state, shall be as valid and binding as if due service had been
18563	made on the issuer.
18564	(2) Any such action shall be brought either in the county
18565	of the plaintiff's residence or in the county in which the
18566	officedepartmenthas its official headquarters. The written
18567	consent shall be authenticated by the seal of said issuer, if it
18568	has a seal, and by the acknowledged signature of a member of the
18569	copartnership or company, or by the acknowledged signature of
18570	any officer of the incorporated or unincorporated association,
18571	if it be an incorporated or unincorporated association, duly
18572	authorized by resolution of the board of directors, trustees, or
18573	managers of the corporation or association, and shall in such
18574	case be accompanied by a duly certified copy of the resolution
18575	of the board of directors, trustees, or managers of the
18576	corporation or association, authorizing the officers to execute
18577	the same. In case any process or pleadings mentioned in this
18578	chapter are served upon the officedepartment, it shall be by
18579	duplicate copies, one of which shall be filed in the office
18580	department and another immediately forwarded by the office
18581	departmentby registered mail to the principal office of the
18582	issuer against which said process or pleadings are directed.
18583	Section 352. Section 517.111, Florida Statutes, is amended
18584	to read:
18585	517.111 Revocation or denial of registration of
18586	securities.--
18587	(1) The officedepartmentmay revoke or suspend the
18588	registration of any security, or may deny any application to
18589	register securities, if upon examination into the affairs of the
18590	issuer of such security it shall appear that:
18591	(a) The issuer is insolvent;
18592	(b) The issuer or any officer, director, or control person
18593	of the issuer has violated any provision of this chapter or any
18594	rule made hereunder or any order of the officedepartmentof
18595	which such issuer has notice;
18596	(c) The issuer or any officer, director, or control person
18597	of the issuer has been or is engaged or is about to engage in
18598	fraudulent transactions;
18599	(d) The issuer or any officer, director, or control person
18600	of the issuer has been found guilty of a fraudulent act in
18601	connection with any sale of securities, has engaged, is engaged,
18602	or is about to engage, in making a fictitious sale or purchase
18603	of any security, or in any practice or sale of any security
18604	which is fraudulent or a violation of any law;
18605	(e) The issuer or any officer, director, or control person
18606	of the issuer has had a final judgment entered against such
18607	issuer or person in a civil action on the grounds of fraud,
18608	embezzlement, misrepresentation, or deceit;
18609	(f) The issuer or any officer, director, or control person
18610	of the issuer has demonstrated any evidence of unworthiness;
18611	(g) The issuer or any officer, director, or control person
18612	of the issuer is in any other way dishonest or has made any
18613	fraudulent representations or failed to disclose any material
18614	information in any prospectus or in any circular or other
18615	literature that has been distributed concerning the issuer or
18616	its securities;
18617	(h) The security registered or sought to be registered is
18618	the subject of an injunction entered by a court of competent
18619	jurisdiction or is the subject of an administrative stop-order
18620	or similar order prohibiting the offer or sale of the security;
18621	(i) For any security for which registration has been
18622	applied pursuant to s. 517.081, the terms of the offer or sale
18623	of such securities would not be fair, just, or equitable; or
18624	(j) The issuer or any person acting on behalf of the
18625	issuer has failed to timely complete any application for
18626	registration filed with the officedepartmentpursuant to the
18627	provisions of s. 517.081 or s. 517.082 or any rule adopted under
18628	such sections.
18629
18630	In making such examination, the officedepartmentshall have
18631	access to and may compel the production of all the books and
18632	papers of such issuer and may administer oaths to and examine
18633	the officers of such issuer or any other person connected
18634	therewith as to its business and affairs and may also require a
18635	balance sheet exhibiting the assets and liabilities of any such
18636	issuer or its income statement, or both, to be certified to by a
18637	public accountant either of this state or of any other state
18638	where the issuer's business is located. Whenever the office
18639	deemsdepartment may deemit necessary, it may also require such
18640	balance sheet or income statement, or both, to be made more
18641	specific in such particulars as the officedepartmentmay
18642	require.
18643	(2) If any issuer shall refuse to permit an examination to
18644	be made by the officedepartment, it shall be proper ground for
18645	revocation of registration.
18646	(3) If the office deemsdepartment shall deemit
18647	necessary, it may enter an order suspending the right to sell
18648	securities pending any investigation, provided that the order
18649	shall state the office'sdepartment'sgrounds for taking such
18650	action.
18651	(4) Notice of the entry of such order shall be given by
18652	mail, personally, by telephone confirmed in writing, or by
18653	telegraph to the issuer. Before such order is made final, the
18654	issuer applying for registration shall, on application, be
18655	entitled to a hearing.
18656	(5) The officedepartmentmay deny any request to
18657	terminate any registration or to withdraw any application for
18658	registration if the officedepartmentbelieves that an act which
18659	would be grounds for denial, suspension, or revocation under
18660	this chapter has been committed.
18661	Section 353. Section 517.12, Florida Statutes, is amended
18662	to read:
18663	517.12 Registration of dealers, associated persons,
18664	investment advisers, and branch offices.--
18665	(1) No dealer, associated person, or issuer of securities
18666	shall sell or offer for sale any securities in or from offices
18667	in this state, or sell securities to persons in this state from
18668	offices outside this state, by mail or otherwise, unless the
18669	person has been registered with the officedepartmentpursuant
18670	to the provisions of this section. The officedepartmentshall
18671	not register any person as an associated person of a dealer
18672	unless the dealer with which the applicant seeks registration is
18673	lawfully registered with the officedepartmentpursuant to this
18674	chapter.
18675	(2) The registration requirements of this section do not
18676	apply to the issuers of securities exempted by s. 517.051(1)-(8)
18677	and (10).
18678	(3) Except as otherwise provided in s. 517.061(11)(a)4.,
18679	(13), (16), (17), or (19), the registration requirements of this
18680	section do not apply in a transaction exempted by s. 517.061(1)-
18681	(12), (14), and (15).
18682	(4) No investment adviser or associated person of an
18683	investment adviser or federal covered adviser shall engage in
18684	business from offices in this state, or render investment advice
18685	to persons of this state, by mail or otherwise, unless the
18686	federal covered adviser has made a notice filing with the office
18687	departmentpursuant to s. 517.1201 or the investment adviser is
18688	registered pursuant to the provisions of this chapter and
18689	associated persons of the federal covered adviser or investment
18690	adviser have been registered with the officedepartmentpursuant
18691	to this section. The officedepartmentshall not register any
18692	person or an associated person of a federal covered adviser or
18693	an investment adviser unless the federal covered adviser or
18694	investment adviser with which the applicant seeks registration
18695	is in compliance with the notice filing requirements of s.
18696	517.1201 or is lawfully registered with the officedepartment
18697	pursuant to this chapter. A dealer or associated person who is
18698	registered pursuant to this section may render investment advice
18699	upon notification to and approval from the officedepartment.
18700	(5) No dealer or investment adviser shall conduct business
18701	from a branch office within this state unless the branch office
18702	is registered with the officedepartmentpursuant to the
18703	provisions of this section.
18704	(6) A dealer, associated person, investment adviser, or
18705	branch office, in order to obtain registration, must file with
18706	the officedepartment a written application, on a form which the
18707	commissiondepartmentmay by rule prescribe, verified under
18708	oath. The commissiondepartmentmay establish, by rule,
18709	procedures for depositing fees and filing documents by
18710	electronic means provided such procedures provide the office
18711	departmentwith the information and data required by this
18712	section. Each dealer or investment adviser must also file an
18713	irrevocable written consent to service of civil process similar
18714	to that provided for in s. 517.101. The application shall
18715	contain such information as the commission or officedepartment
18716	may require concerning such matters as:
18717	(a) The name of the applicant and the address of its
18718	principal office and each office in this state.
18719	(b) The applicant's form and place of organization; and,
18720	if the applicant is a corporation, a copy of its articles of
18721	incorporation and amendments to the articles of incorporation
18722	or, if a partnership, a copy of the partnership agreement.
18723	(c) The applicant's proposed method of doing business and
18724	financial condition and history, including a certified financial
18725	statement showing all assets and all liabilities, including
18726	contingent liabilities of the applicant as of a date not more
18727	than 90 days prior to the filing of the application.
18728	(d) The names and addresses of all associated persons of
18729	the applicant to be employed in this state and the offices to
18730	which they will be assigned.
18731	(7) The application shall also contain such information as
18732	the commission or officedepartmentmay require about the
18733	applicant; any partner, officer, or director of the applicant or
18734	any person having a similar status or performing similar
18735	functions; any person directly or indirectly controlling the
18736	applicant; or any employee of a dealer or of an investment
18737	adviser rendering investment advisory services. Each applicant
18738	shall file a complete set of fingerprints taken by an authorized
18739	law enforcement officer. Such fingerprints shall be submitted
18740	to the Department of Law Enforcement or the Federal Bureau of
18741	Investigation for state and federal processing. The commission
18742	departmentmay waive, by rule, the requirement that applicants
18743	must file a set of fingerprints or the requirement that such
18744	fingerprints must be processed by the Department of Law
18745	Enforcement or the Federal Bureau of Investigation. The
18746	commission or officedepartmentmay require information about
18747	any such applicant or person concerning such matters as:
18748	(a) His or her full name, and any other names by which he
18749	or she may have been known, and his or her age, photograph,
18750	qualifications, and educational and business history.
18751	(b) Any injunction or administrative order by a state or
18752	federal agency, national securities exchange, or national
18753	securities association involving a security or any aspect of the
18754	securities business and any injunction or administrative order
18755	by a state or federal agency regulating banking, insurance,
18756	finance, or small loan companies, real estate, mortgage brokers,
18757	or other related or similar industries, which injunctions or
18758	administrative orders relate to such person.
18759	(c) His or her conviction of, or plea of nolo contendere
18760	to, a criminal offense or his or her commission of any acts
18761	which would be grounds for refusal of an application under s.
18762	517.161.
18763	(d) The names and addresses of other persons of whom the
18764	officedepartmentmay inquire as to his or her character,
18765	reputation, and financial responsibility.
18766	(8) The commission or officedepartmentmay require the
18767	applicant or one or more principals or general partners, or
18768	natural persons exercising similar functions, or any associated
18769	person applicant to successfully pass oral or written
18770	examinations. Because any principal, manager, supervisor, or
18771	person exercising similar functions shall be responsible for the
18772	acts of the associated persons affiliated with a dealer or
18773	investment adviser, the examination standards may be higher for
18774	a dealer, office manager, principal, or person exercising
18775	similar functions than for a nonsupervisory associated person.
18776	The commissiondepartmentmay waive the examination process when
18777	it determines that such examinations are not in the public
18778	interest. The officedepartmentshall waive the examination
18779	requirements for any person who has passed any tests as
18780	prescribed in s. 15(b)(7) of the Securities Exchange Act of 1934
18781	that relates to the position to be filled by the applicant.
18782	(9)(a) All dealers, except securities dealers who are
18783	designated by the Federal Reserve Bank of New York as primary
18784	government securities dealers or securities dealers registered
18785	as issuers of securities, shall comply with the net capital and
18786	ratio requirements imposed pursuant to the Securities Exchange
18787	Act of 1934. The commissiondepartmentmay by rule require a
18788	dealer to file with the officedepartmentany financial or
18789	operational information that is required to be filed by the
18790	Securities Exchange Act of 1934 or any rules adopted under such
18791	act.
18792	(b) The commissiondepartmentmay by rule require the
18793	maintenance of a minimum net capital for securities dealers who
18794	are designated by the Federal Reserve Bank of New York as
18795	primary government securities dealers and securities dealers
18796	registered as issuers of securities and investment advisers, or
18797	prescribe a ratio between net capital and aggregate
18798	indebtedness, to assure adequate protection for the investing
18799	public. The provisions of this section shall not apply to any
18800	investment adviser that maintains its principal place of
18801	business in a state other than this state, provided such
18802	investment adviser is registered in the state where it maintains
18803	its principal place of business and is in compliance with such
18804	state's net capital requirements.
18805	(10) An applicant for registration shall pay an assessment
18806	fee of $200, in the case of a dealer or investment adviser, or
18807	$40, in the case of an associated person. The assessment fee of
18808	an associated person shall be reduced to $30, but only after the
18809	officedepartmentdetermines, by final order, that sufficient
18810	funds have been allocated to the Securities Guaranty Fund
18811	pursuant to s. 517.1203 to satisfy all valid claims filed in
18812	accordance with s. 517.1203(2) and after all amounts payable
18813	under any service contract entered into by the officedepartment
18814	pursuant to s. 517.1204, and all notes, bonds, certificates of
18815	indebtedness, other obligations, or evidences of indebtedness
18816	secured by such notes, bonds, certificates of indebtedness, or
18817	other obligations, have been paid or provision has been made for
18818	the payment of such amounts, notes, bonds, certificates of
18819	indebtedness, other obligations, or evidences of indebtedness.
18820	An associated person not having current fingerprint cards filed
18821	with the National Association of Securities Dealers or a
18822	national securities exchange registered with the Securities and
18823	Exchange Commission shall be assessed an additional fee to cover
18824	the cost for said fingerprint cards to be processed by the
18825	officedepartment. Such fee shall be determined by rule of the
18826	commissiondepartment. Each dealer and each investment adviser
18827	shall pay an assessment fee of $100 for each office in this
18828	state, except its designated principal office. Such fees become
18829	the revenue of the state, except for those assessments provided
18830	for under s. 517.131(1) until such time as the Securities
18831	Guaranty Fund satisfies the statutory limits, and are not
18832	returnable in the event that registration is withdrawn or not
18833	granted.
18834	(11) If the officedepartmentfinds that the applicant is
18835	of good repute and character and has complied with the
18836	provisions of this chapter and the rules made pursuant hereto,
18837	it shall register the applicant. The registration of each
18838	dealer, investment adviser, and associated person will expire on
18839	December 31, and the registration of each branch office will
18840	expire on March 31, of the year in which it became effective
18841	unless the registrant has renewed its registration on or before
18842	that date. Registration may be renewed by furnishing such
18843	information as the commissiondepartmentmay require, together
18844	with payment of the fee required in subsection (10) for dealers,
18845	investment advisers, associated persons, or branch offices and
18846	the payment of any amount lawfully due and owing to the office
18847	department pursuant to any order of the officedepartmentor
18848	pursuant to any agreement with the officedepartment. Any
18849	dealer, investment adviser, or associated person registrant who
18850	has not renewed a registration by the time the current
18851	registration expires may request reinstatement of such
18852	registration by filing with the officedepartment, on or before
18853	January 31 of the year following the year of expiration, such
18854	information as may be required by the commissiondepartment,
18855	together with payment of the fee required in subsection (10) for
18856	dealers, investment advisers, or associated persons and a late
18857	fee equal to the amount of such fee. Any reinstatement of
18858	registration granted by the officedepartmentduring the month
18859	of January shall be deemed effective retroactive to January 1 of
18860	that year.
18861	(12)(a) The officedepartmentmay issue a license to a
18862	dealer, investment adviser, associated person, or branch office
18863	to evidence registration under this chapter. The office
18864	department may require the return to the officedepartmentof
18865	any license it may issue prior to issuing a new license.
18866	(b) Every dealer, investment adviser, or federal covered
18867	adviser shall promptly file with the officedepartment, as
18868	prescribed by rules adopted by the commissiondepartment, notice
18869	as to the termination of employment of any associated person
18870	registered for such dealer or investment adviser in this state
18871	and shall also furnish the reason or reasons for such
18872	termination.
18873	(c) Each dealer or investment adviser shall designate in
18874	writing to, and register with, the officedepartmenta manager
18875	for each office the dealer or investment adviser has in this
18876	state.
18877	(13) Changes in registration occasioned by changes in
18878	personnel of a partnership or in the principals, copartners,
18879	officers, or directors of any dealer or investment adviser or by
18880	changes of any material fact or method of doing business shall
18881	be reported by written amendment in such form and at such time
18882	as the commissiondepartmentmay specify. In any case in which
18883	a person or a group of persons, directly or indirectly or acting
18884	by or through one or more persons, proposes to purchase or
18885	acquire a controlling interest in a registered dealer or
18886	investment adviser, such person or group shall submit an initial
18887	application for registration as a dealer or investment adviser
18888	prior to such purchase or acquisition. The commissiondepartment
18889	shall adopt rules providing for waiver of the application
18890	required by this subsection where control of a registered dealer
18891	or investment adviser is to be acquired by another dealer or
18892	investment adviser registered under this chapter or where the
18893	application is otherwise unnecessary in the public interest.
18894	(14) Every dealer, investment adviser, or branch office
18895	registered or required to be registered with the office
18896	departmentshall keep records of all currency transactions in
18897	excess of $10,000 and shall file reports, as prescribed under
18898	the financial recordkeeping regulations in 31 C.F.R. part 103,
18899	with the officedepartmentwhen transactions occur in or from
18900	this state. All reports required by this subsection to be filed
18901	with the officedepartmentshall be confidential and exempt from
18902	s. 119.07(1) except that any law enforcement agency or the
18903	Department of Revenue shall have access to, and shall be
18904	authorized to inspect and copy, such reports.
18905	(15) In lieu of filing with the officedepartmentthe
18906	applications specified in subsection (6), the fees required by
18907	subsection(10), and the termination notices required by
18908	subsection (12), the commissiondepartmentmay by rule establish
18909	procedures for the deposit of such fees and documents with the
18910	Central Registration Depository of the National Association of
18911	Securities Dealers, Inc., as developed under contract with the
18912	North American Securities Administrators Association, Inc.;
18913	provided, however, that such procedures shall provide the office
18914	departmentwith the information and data as required by this
18915	section.
18916	(16) Except for securities dealers who are designated by
18917	the Federal Reserve Bank of New York as primary government
18918	securities dealers or securities dealers registered as issuers
18919	of securities, every applicant for initial or renewal
18920	registration as a securities dealer and every person registered
18921	as a securities dealer shall be registered as a broker or dealer
18922	with the Securities and Exchange Commission and shall be subject
18923	to insurance coverage by the Securities Investor Protection
18924	Corporation.
18925	(17)(a) A dealer that is located in Canada and has no
18926	office or other physical presence in this state may, provided
18927	the dealer is registered in accordance with this section, effect
18928	transactions in securities with or for, or induce or attempt to
18929	induce the purchase or sale of any security by:
18930	1. A person from Canada who temporarily resides in this
18931	state and with whom the Canadian dealer had a bona fide dealer-
18932	client relationship before the person entered the United States;
18933	or
18934	2. A person from Canada who is a resident of this state,
18935	and whose transactions are in a self-directed tax advantage
18936	retirement plan in Canada of which the person is the holder or
18937	contributor.
18938	(b) An associated person who represents a Canadian dealer
18939	registered under this section may, provided the agent is
18940	registered in accordance with this section, effect transactions
18941	in securities in this state as permitted for a dealer, under
18942	subsection (a).
18943	(c) A Canadian dealer may register under this section
18944	provided that such dealer:
18945	1. Files an application in the form required by the
18946	jurisdiction in which the dealer has a head office.
18947	2. Files a consent to service of process.
18948	3. Is registered as a dealer in good standing in the
18949	jurisdiction from which it is effecting transactions into this
18950	state and files evidence of such registration with the office
18951	department.
18952	4. Is a member of a self-regulatory organization or stock
18953	exchange in Canada.
18954	(d) An associated person who represents a Canadian dealer
18955	registered under this section in effecting transactions in
18956	securities in this state may register under this section
18957	provided that such person:
18958	1. Files an application in the form required by the
18959	jurisdiction in which the dealer has its head office.
18960	2. Is registered in good standing in the jurisdiction from
18961	which he or she is effecting transactions into this state and
18962	files evidence of such registration with the officedepartment.
18963	(e) If the officedepartmentfinds that the applicant is
18964	of good repute and character and has complied with the
18965	provisions of this chapter, the officedepartmentshall register
18966	the applicant.
18967	(f) A Canadian dealer registered under this section shall:
18968	1. Maintain its provincial or territorial registration and
18969	its membership in a self-regulatory organization or stock
18970	exchange in good standing.
18971	2. Provide the officedepartmentupon request with its
18972	books and records relating to its business in this state as a
18973	dealer.
18974	3. Provide the officedepartmentnotice of each civil,
18975	criminal, or administrative action initiated against the dealer.
18976	4. Disclose to its clients in this state that the dealer
18977	and its agents are not subject to the full regulatory
18978	requirements under this chapter.
18979	5. Correct any inaccurate information within 30 days, if
18980	the information contained in the application form becomes
18981	inaccurate for any reason before or after the dealer becomes
18982	registered.
18983	(g) An associated person of a Canadian dealer registered
18984	under this section shall:
18985	1. Maintain provincial or territorial registration in good
18986	standing.
18987	2. Provide the officedepartmentwith notice of each
18988	civil, criminal, or administrative action initiated against such
18989	person.
18990	3. Through the dealer, correct any inaccurate information
18991	within 30 days, if the information contained in the application
18992	form becomes inaccurate for any reason before or after the
18993	associated person becomes registered.
18994	(h) Renewal applications for Canadian dealers and
18995	associated persons under this section must be filed before
18996	December 31 each year. Every applicant for registration or
18997	renewal registration under this section shall pay the fee for
18998	dealers and associated persons under this chapter.
18999	(18) Every dealer or associated person registered or
19000	required to be registered with the officedepartmentshall
19001	satisfy any continuing education requirements established by
19002	rule pursuant to law.
19003	(19) The registration requirements of this section which
19004	apply to investment advisers and associated persons do not apply
19005	to a commodity trading adviser who:
19006	(a) Is registered as such with the Commodity Futures
19007	Trading Commission pursuant to the Commodity Exchange Act.
19008	(b) Advises or exercises trading discretion, with respect
19009	to foreign currency options listed and traded exclusively on the
19010	Philadelphia Stock Exchange, on behalf of an "appropriate
19011	person" as defined by the Commodity Exchange Act.
19012
19013	The exemption provided in this subsection does not apply to a
19014	commodity trading adviser who engages in other activities that
19015	require registration under this chapter.
19016	(20) The registration requirements of this section do not
19017	apply to any general lines insurance agent or life insurance
19018	agent licensed under chapter 626individuals licensed under s.
19019	626.041 or its successor statute, or s. 626.051 or its successor
19020	statute, for the sale of a security as defined in s.
19021	517.021(20)(19)(g), if the individual is directly authorized by
19022	the issuer to offer or sell the security on behalf of the issuer
19023	and the issuer is a federally chartered savings bank subject to
19024	regulation by the Federal Deposit Insurance Corporation. Actions
19025	under this subsection shall constitute activity under the
19026	insurance agent's license for purposes of ss. 626.611 and
19027	626.621.
19028	Section 354. Section 517.1201, Florida Statutes, is
19029	amended to read:
19030	517.1201 Notice filing requirements for federal covered
19031	advisers.--
19032	(1) It is unlawful for a person to transact business in
19033	this state as a federal covered adviser unless such person has
19034	made a notice filing with the officedepartment. A notice
19035	filing under this section shall consist of a copy of those
19036	documents that have been filed or are required to be filed by
19037	the federal covered adviser with the Securities and Exchange
19038	Commission that the Financial Services Commissiondepartmentby
19039	rule requires to be filed, together with a consent to service of
19040	process and a filing fee of $200. The commissiondepartmentmay
19041	establish by rule procedures for the deposit of fees and the
19042	filing of documents to be made through electronic means, if the
19043	procedures provide to the officedepartmentthe information and
19044	data required by this section.
19045	(2) A notice filing shall be effective upon receipt. A
19046	notice filing shall expire on December 31 of the year in which
19047	the filing became effective unless the federal covered adviser
19048	has renewed the filing on or before that date. A federal covered
19049	adviser may renew a notice filing by furnishing to the office
19050	departmentsuch information that has been filed or is required
19051	to be filed with the Securities and Exchange Commission, as the
19052	Financial Services Commission or officedepartmentmay require,
19053	together with a renewal fee of $200 and the payment of any
19054	amount due and owing the officedepartmentpursuant to any
19055	agreement with the officedepartment. Any federal covered
19056	adviser who has not renewed a notice filing by the time a
19057	current notice filing expires may request reinstatement of such
19058	notice filing by filing with the officedepartment, on or before
19059	January 31 of the year following the year the notice filing
19060	expires, such information that has been filed or is required to
19061	be filed with the Securities and Exchange Commission as may be
19062	required by the Financial Services Commission or office
19063	department, together with the payment of $200 and a late fee
19064	equal to $200. Any reinstatement of a notice filing granted by
19065	the officedepartmentduring the month of January shall be
19066	deemed effective retroactive to January 1 of that year.
19067	(3) The commissiondepartmentmay require, by rule, a
19068	federal covered adviser who has made a notice filing pursuant to
19069	this section to file with the officedepartmentcopies of any
19070	amendments filed or required to be filed with the Securities and
19071	Exchange Commission.
19072	(4) The officedepartmentmay issue a permit to evidence
19073	the effectiveness of a notice filing for a federal covered
19074	adviser.
19075	(5) A notice filing may be terminated by filing notice of
19076	such termination with the officedepartment. Unless another
19077	date is specified by the federal covered adviser, such notice
19078	shall be effective upon its receipt by the officedepartment.
19079	(6) All fees collected under this section become the
19080	revenue of the state, except for those assessments provided for
19081	under s. 517.131(1) until such time as the Securities Guaranty
19082	Fund satisfies the statutory limits, and are not returnable in
19083	the event that a notice filing is withdrawn.
19084	Section 355. Section 517.1203, Florida Statutes, is
19085	amended to read:
19086	517.1203 Allocation and disbursement of assessment fees.--
19087	(1) Notwithstanding s. 517.131(1), an additional amount
19088	equal to 25 percent of all revenues received as assessment fees
19089	pursuant to s. 517.12(10) and (11) from persons applying for or
19090	renewing registrations as associated persons shall be allocated
19091	to the Securities Guaranty Fund and disbursed as provided in
19092	this section. This allocation shall continue until the office
19093	departmentdetermines, by final order, that sufficient funds
19094	have been allocated to the Securities Guaranty Fund pursuant to
19095	this section to satisfy all valid claims filed in accordance
19096	with subsection (2) and until all amounts payable under any
19097	service contract entered into by the officedepartmentpursuant
19098	to s. 517.1204, and all notes, bonds, certificates of
19099	indebtedness, other obligations, or evidences of indebtedness
19100	secured by such notes, bonds, certificates of indebtedness, or
19101	other obligations, have been paid or provision has been made for
19102	the payment of such amounts, notes, bonds, certificates of
19103	indebtedness, other obligations, or evidences of indebtedness.
19104	This assessment fee shall be part of the regular license fee and
19105	shall be transferred to or deposited into the Securities
19106	Guaranty Fund. The moneys allocated to the Securities Guaranty
19107	Fund under this section shall not be included in the calculation
19108	of the allocation of the assessment fees referred to in s.
19109	517.131(1)(b). Moneys allocated under this section in excess of
19110	the valid claims filed pursuant to subsection (2) shall be
19111	allocated to the Anti-Fraud Trust Fund.
19112	(2)(a) Notwithstanding the provisions of ss. 517.131 and
19113	517.141, moneys allocated to the Securities Guaranty Fund under
19114	this section shall be used to pay amounts payable under any
19115	service contract entered into by the officedepartmentpursuant
19116	to s. 517.1204, subject to annual appropriation by the
19117	Legislature, and to pay investors who have filed claims with the
19118	Department of Banking and Finance after October 1, 1996, and on
19119	or before December 31, 1998, who have:
19120	1. Received a final judgment against an associated person
19121	of GIC Government Securities, Inc., based upon allegations which
19122	would amount to a violation of s. 517.07 or s. 517.301; or
19123	2. Demonstrated to the former Department of Banking and
19124	Finance or officethat the claimant has suffered monetary
19125	damages as a result of the acts or actions of GIC Government
19126	Securities, Inc., or any associated person thereof, based upon
19127	allegations which would amount to a violation of s. 517.07 or s.
19128	517.301.
19129	(b)1. Claims shall be paid in the order that they were
19130	have been filed with the former Department of Banking and
19131	Finance, unless the department hasnoticed its intent to deny
19132	the claim in whole or in part. If a notice of intent to deny a
19133	claim in whole or in part wasisissued, the claim shall not be
19134	paid until a final order has been entered which is not subject
19135	to an order staying its effect.
19136	2. If at any time the money in the Securities Guaranty
19137	Fund allocated under this section is insufficient to satisfy any
19138	valid claim or portion of a valid claim approved by the
19139	department or office under this section, the officedepartment
19140	shall prorate the payment based upon the ratio that the person's
19141	claim bears to the total approved claims filed on the same day.
19142	The officedepartmentshall satisfy the unpaid claims as soon as
19143	a sufficient amount of money has been deposited in or
19144	transferred to the fund as provided in this section.
19145	3. A claimant shall not be substantially affected by the
19146	payment of another person's claim.
19147	(c) Claims shall be limited to the amount of the
19148	investment, reduced by any amounts received from a bankruptcy
19149	proceeding or from any other source. If an investor is deceased,
19150	the award shall be made to the surviving spouse. If the investor
19151	and surviving spouse are both deceased, the award shall be made
19152	pursuant to the laws of descent and distribution. Neither the
19153	officedepartmentnor the Investment Fraud Restoration Financing
19154	Corporation shall make payment to assignees, secured parties,
19155	lien creditors, or other such entities.
19156	(3) In rendering a determination, the officedepartment
19157	may rely on records from the bankruptcy proceeding regarding GIC
19158	Government Securities, Inc., unless there is good cause to
19159	believe that the record is not genuine.
19160	(4) Amounts deposited into the Securities Guaranty Fund
19161	pursuant to this section shall be applied to or allocated for
19162	payment of amounts payable by the officedepartmentpursuant to
19163	paragraph (2)(a), under a service contract entered into by the
19164	officedepartmentpursuant to s. 517.1204, subject to annual
19165	appropriation by the Legislature, before making or providing for
19166	any other disbursements from the fund.
19167	Section 356. Subsection (2), paragraph (e) of subsection
19168	(3), and subsections (4), (5), and(6) of section 517.1204,
19169	Florida Statutes, are amended to read:
19170	517.1204 Investment Fraud Restoration Financing
19171	Corporation.--
19172	(2) The corporation shall be governed by a board of
19173	directors consisting of the director of the office or his or her
19174	designeeassistant comptroller, the Secretary of Elderly Affairs
19175	or the secretary's designee, and the executive director of the
19176	Department of Veterans' Affairs or the executive director's
19177	designee. The executive director of the State Board of
19178	Administration shall be the chief executive officer of the
19179	corporation and shall direct and supervise the administrative
19180	affairs of the corporation and shall control, direct, and
19181	supervise the operation of the corporation. The corporation
19182	shall also have such other officers as may be determined by the
19183	board of directors.
19184	(3) The corporation shall have all the powers of a
19185	corporate body under the laws of this state to the extent not
19186	inconsistent with or restricted by the provisions of this
19187	section, including, but not limited to, the power to:
19188	(e) Elect or appoint and employ such officers, agents, and
19189	employees as the corporation deems advisable to operate and
19190	manage the affairs of the corporation, which officers, agents,
19191	and employees may be officers or employees of the office
19192	departmentand the state agencies represented on the board of
19193	directors of the corporation.
19194	(4) The corporation is authorized to enter into one or
19195	more service contracts with the officedepartmentpursuant to
19196	which the corporation shall provide services to the office
19197	departmentin connection with financing the functions and
19198	activities provided for in s. 517.1203. The officedepartment
19199	may enter into one or more such service contracts with the
19200	corporation and provide for payments under such contracts
19201	pursuant to s. 517.1203(2)(a), subject to annual appropriation
19202	by the Legislature. The proceeds from such service contracts
19203	may be used for the costs and expenses of administration of the
19204	corporation after payments as set forth in subsection(5). Each
19205	service contract shall have a term not to exceed 15 years and
19206	shall terminate no later than July 1, 2021. The aggregate
19207	amount payable from the Securities Guaranty Fund under all such
19208	service contracts shall not exceed the amount provided by s.
19209	517.1203(1). In compliance with provisions of s. 287.0641 and
19210	other applicable provisions of law, the obligations of the
19211	officedepartmentunder such service contracts shall not
19212	constitute a general obligation of the state or a pledge of the
19213	faith and credit or taxing power of the state nor shall such
19214	obligations be construed in any manner as an obligation of the
19215	State Board of Administration or entities for which it invests
19216	funds, other than the officedepartmentas provided in this
19217	section, but shall be payable solely from amounts available in
19218	the Securities Guaranty Fund, subject to annual appropriation.
19219	In compliance with this subsection and s. 287.0582, such service
19220	contracts shall expressly include the following statement: "The
19221	State of Florida's performance and obligation to pay under this
19222	contract is contingent upon an annual appropriation by the
19223	Legislature."
19224	(5) The corporation may issue and incur notes, bonds,
19225	certificates of indebtedness, or other obligations or evidences
19226	of indebtedness payable from and secured by amounts payable to
19227	the corporation by the officedepartmentunder a service
19228	contract entered into pursuant to subsection (4) for the purpose
19229	of the simultaneous payment of all claims approved pursuant to
19230	s. 517.1203. The term of any such note, bond, certificate of
19231	indebtedness, or other obligation or evidence of indebtedness
19232	shall not exceed 15 years. The corporation may select a
19233	financing team and issue obligations through competitive bidding
19234	or negotiated contracts, whichever is most cost-effective. Any
19235	such indebtedness of the corporation shall not constitute a debt
19236	or obligation of the state or a pledge of the faith and credit
19237	or taxing power of the state, but shall be payable from and
19238	secured by payments made by the officedepartmentunder the
19239	service contract pursuant to subsection (4).
19240	(6) The corporation shall pay all claims approved pursuant
19241	to s. 517.1203 as determined by and at the direction of the
19242	officedepartment.
19243	Section 357. Section 517.121, Florida Statutes, is amended
19244	to read:
19245	517.121 Books and records requirements; examinations.--
19246	(1) A dealer, investment adviser, branch office, or
19247	associated person shall maintain such books and records as the
19248	commissiondepartmentmay prescribe by rule.
19249	(2) The officedepartmentshall, at intermittent periods,
19250	examine the affairs and books and records of each registered
19251	dealer, investment adviser, branch office, or associated person,
19252	or require such records and reports to be submitted to it as
19253	requiredit may require by rule of the commission, to determine
19254	compliance with this act.
19255	Section 358. Paragraph (a) of subsection (1), paragraphs
19256	(b) and (e) of subsection (3), and subsection (4) of section
19257	517.131, Florida Statutes, are amended to read:
19258	517.131 Securities Guaranty Fund.--
19259	(1)(a) The Chief Financial OfficerTreasurershall
19260	establish a Securities Guaranty Fund. An amount not exceeding
19261	20 percent of all revenues received as assessment fees pursuant
19262	to s. 517.12(10) and (11) for dealers and investment advisers or
19263	s. 517.1201 for federal covered advisers and an amount not
19264	exceeding 10 percent of all revenues received as assessment fees
19265	pursuant to s. 517.12(10) and (11) for associated persons shall
19266	be allocated to the fund. An additional amount not exceeding
19267	3.5 percent of all revenues received as assessment fees for
19268	associated persons pursuant to s. 517.12(10) and (11) shall be
19269	allocated to the Securities Guaranty Fund but only after the
19270	officedepartmentdetermines, by final order, that sufficient
19271	funds have been allocated to the fund pursuant to s. 517.1203 to
19272	satisfy all valid claims filed in accordance with s. 517.1203(2)
19273	and after all amounts payable under any service contract entered
19274	into by the officedepartmentpursuant to s. 517.1204, and all
19275	notes, bonds, certificates of indebtedness, other obligations,
19276	or evidences of indebtedness secured by such notes, bonds,
19277	certificates of indebtedness, or other obligations, have been
19278	paid or provision has been made for the payment of such amounts,
19279	notes, bonds, certificates of indebtedness, other obligations,
19280	or evidences of indebtedness. This assessment fee shall be part
19281	of the regular license fee and shall be transferred to or
19282	deposited in the Securities Guaranty Fund.
19283	(3) Any person is eligible to seek recovery from the
19284	Securities Guaranty Fund if:
19285	(b) Such person has made all reasonable searches and
19286	inquiries to ascertain whether the judgment debtor possesses
19287	real or personal property or other assets subject to being sold
19288	or applied in satisfaction of the judgment, and by her or his
19289	search the person has discovered no property or assets; or she
19290	or he has discovered property and assets and has taken all
19291	necessary action and proceedings for the application thereof to
19292	the judgment, but the amount thereby realized was insufficient
19293	to satisfy the judgment. To verify compliance with such
19294	condition, the officedepartmentmay require such person to have
19295	a writ of execution be issued upon such judgment and may further
19296	require a showing that no personal or real property of the
19297	judgment debtor liable to be levied upon in complete
19298	satisfaction of the judgment can be found.
19299	(e) The officedepartmentwaives compliance with the
19300	requirements of paragraph (a) or paragraph (b). The office
19301	departmentmay waive such compliance if the dealer, investment
19302	adviser, or associated person which is the subject of the claim
19303	filed with the officedepartmentis the subject of any
19304	proceeding in which a receiver has been appointed by a court of
19305	competent jurisdiction. If the officedepartmentwaives such
19306	compliance, the officedepartmentmay, upon petition by the
19307	debtor or the court-appointed trustee, examiner, or receiver,
19308	distribute funds from the Securities Guaranty Fund up to the
19309	amount allowed under s. 517.141. Any waiver granted pursuant to
19310	this section shall be considered a judgment for purposes of
19311	complying with the requirements of this section and of s.
19312	517.141.
19313	(4) Any person who files an action that may result in the
19314	disbursement of funds from the Securities Guaranty Fund pursuant
19315	to the provisions of s. 517.141 shall give written notice by
19316	certified mail to the officedepartmentas soon as practicable
19317	after such action has been filed. The failure to give such
19318	notice shall not bar a payment from the Securities Guaranty Fund
19319	if all of the conditions specified in subsection (3) are
19320	satisfied.
19321	Section 359. Section 517.141, Florida Statutes, is amended
19322	to read:
19323	517.141 Payment from the fund.--
19324	(1) Any person who meets all of the conditions prescribed
19325	in s. 517.131 may apply to the officedepartmentfor payment to
19326	be made to such person from the Securities Guaranty Fund in the
19327	amount equal to the unsatisfied portion of such person's
19328	judgment or $10,000, whichever is less, but only to the extent
19329	and amount reflected in the judgment as being actual or
19330	compensatory damages, excluding costs and attorney's fees.
19331	(2) Regardless of the number of claimants involved,
19332	payments for claims shall be limited in the aggregate to
19333	$100,000 against any one dealer, investment adviser, or
19334	associated person. If the total claims exceed the aggregate
19335	limit of $100,000, the officedepartmentshall prorate the
19336	payment based upon the ratio that the person's claim bears to
19337	the total claims filed.
19338	(3) No payment shall be made on any claim against any one
19339	dealer, investment adviser, or associated person before the
19340	expiration of 2 years from the date any claimant is found by the
19341	officedepartmentto be eligible for recovery pursuant to this
19342	section. If during this 2-year period more than one claim is
19343	filed against the same dealer, investment adviser, or associated
19344	person, or if the officedepartmentreceives notice pursuant to
19345	s. 517.131(4) that an action against the same dealer, investment
19346	adviser, or associated person is pending, all such claims and
19347	notices of pending claims received during this period against
19348	the same dealer, investment adviser, or associated person may be
19349	handled by the officedepartmentas provided in this section.
19350	Two years after the first claimant against that same dealer,
19351	investment adviser, or associated person applies for payment
19352	pursuant to this section:
19353	(a) The officedepartmentshall determine those persons
19354	eligible for payment or for potential payment in the event of a
19355	pending action. All such persons may be entitled to receive
19356	their pro rata shares of the fund as provided in this section.
19357	(b) Those persons who meet all the conditions prescribed
19358	in s. 517.131 and who have applied for payment pursuant to this
19359	section will be entitled to receive their pro rata shares of the
19360	total disbursement.
19361	(c) Those persons who have filed notice with the office
19362	departmentof a pending claim pursuant to s. 517.131(4) but who
19363	are not yet eligible for payment from the fund will be entitled
19364	to receive their pro rata shares of the total disbursement once
19365	they have complied with subsection (1). However, in the event
19366	that the amounts they are eligible to receive pursuant to
19367	subsection (1) are less than their pro rata shares as determined
19368	under this section, any excess shall be distributed pro rata to
19369	those persons entitled to disbursement under this subsection
19370	whose pro rata shares of the total disbursement were less than
19371	the amounts of their claims.
19372	(4) Individual claims filed by persons owning the same
19373	joint account, or claims stemming from any other type of account
19374	maintained by a particular licensee on which more than one name
19375	appears, shall be treated as the claims of one eligible claimant
19376	with respect to payment from the fund. If a claimant who has
19377	obtained a judgment which qualifies for disbursement under s.
19378	517.131 has maintained more than one account with the dealer,
19379	investment adviser, or associated person who is the subject of
19380	the claims, for purposes of disbursement of the fund, all such
19381	accounts, whether joint or individual, shall be considered as
19382	one account and shall entitle such claimant to only one
19383	distribution from the fund not to exceed the lesser of $10,000
19384	or the unsatisfied portion of such claimant's judgment as
19385	provided in subsection (1). To the extent that a claimant
19386	obtains more than one judgment against a dealer, investment
19387	adviser, or one or more associated persons arising out of the
19388	same transactions, occurrences, or conduct or out of the
19389	dealer's, investment adviser's, or associated person's handling
19390	of the claimant's account, such judgments shall be consolidated
19391	for purposes of this section and shall entitle the claimant to
19392	only one disbursement from the fund not to exceed the lesser of
19393	$10,000 or the unsatisfied portion of such claimant's judgment
19394	as provided in subsection (1).
19395	(5) If the final judgment which gave rise to the claim is
19396	overturned in any appeal or in any collateral proceeding, the
19397	claimant shall reimburse the fund all amounts paid to the
19398	claimant on the claim. Such reimbursement shall be paid to the
19399	officedepartmentwithin 60 days after the final resolution of
19400	the appellate or collateral proceedings, with the 60-day period
19401	commencing on the date the final order or decision is entered in
19402	such proceedings.
19403	(6) If a claimant receives payments in excess of that
19404	which is permitted under this chapter, the claimant shall
19405	reimburse the fund such excess within 60 days after the claimant
19406	receives such excess payment or after the payment is determined
19407	to be in excess of that permitted by law, whichever is later.
19408	(7) The officedepartmentmay institute legal proceedings
19409	to enforce compliance with this section and with s. 517.131 to
19410	recover moneys owed to the fund, and shall be entitled to
19411	recover interest, costs, and attorney's fees in any action
19412	brought pursuant to this section in which the officedepartment
19413	prevails.
19414	(8) If at any time the money in the Securities Guaranty
19415	Fund is insufficient to satisfy any valid claim or portion of a
19416	valid claim approved by the officedepartment, the office
19417	departmentshall satisfy such unpaid claim or portion of such
19418	valid claim as soon as a sufficient amount of money has been
19419	deposited in or transferred to the fund. When there is more
19420	than one unsatisfied claim outstanding, such claims shall be
19421	paid in the order in which the claims were approved by final
19422	order of the officedepartment, which order is not subject to an
19423	appeal or other pending proceeding.
19424	(9) Upon receipt by the claimant of the payment from the
19425	Securities Guaranty Fund, the claimant shall assign any
19426	additional right, title, and interest in the judgment, to the
19427	extent of such payment, to the officedepartment. If the
19428	provisions of s. 517.131(3)(e) apply, the claimant must assign
19429	to the officedepartmentany right, title, and interest in the
19430	debt to the extent of any payment by the officedepartmentfrom
19431	the Securities Guaranty Fund.
19432	(10) All payments and disbursements made from the
19433	Securities Guaranty Fund shall be made by the Chief Financial
19434	OfficerTreasurer upon authorizationa voucher signed by the
19435	director of the officeComptroller, as head of the department,
19436	or such agent as she or he may designate.
19437	Section 360. Section 517.151, Florida Statutes, is amended
19438	to read:
19439	517.151 Investments of the fund.--The funds of the
19440	Securities Guaranty Fund shall be invested by the Chief
19441	Financial OfficerTreasurerunder the same limitations as other
19442	state funds, and the interest earned thereon shall be deposited
19443	to the credit of the fund and available for the same purpose as
19444	other moneys deposited in the Securities Guaranty Fund.
19445	Section 361. Subsection (1), (3), and (5), and paragraph
19446	(b) of subsection (6) of section 517.161, Florida Statutes, are
19447	amended to read:
19448	517.161 Revocation, denial, or suspension of registration
19449	of dealer, investment adviser, associated person, or branch
19450	office.--
19451	(1) Registration under s. 517.12 may be denied or any
19452	registration granted may be revoked, restricted, or suspended by
19453	the officedepartment if the officedepartmentdetermines that
19454	such applicant or registrant:
19455	(a) Has violated any provision of this chapter or any rule
19456	or order made under this chapter;
19457	(b) Has made a material false statement in the application
19458	for registration;
19459	(c) Has been guilty of a fraudulent act in connection with
19460	rendering investment advice or in connection with any sale of
19461	securities, has been or is engaged or is about to engage in
19462	making fictitious or pretended sales or purchases of any such
19463	securities or in any practice involving the rendering of
19464	investment advice or the sale of securities which is fraudulent
19465	or in violation of the law;
19466	(d) Has made a misrepresentation or false statement to, or
19467	concealed any essential or material fact from, any person in the
19468	rendering of investment advice or the sale of a security to such
19469	person;
19470	(e) Has failed to account to persons interested for all
19471	money and property received;
19472	(f) Has not delivered, after a reasonable time, to persons
19473	entitled thereto securities held or agreed to be delivered by
19474	the dealer, broker, or investment adviser, as and when paid for,
19475	and due to be delivered;
19476	(g) Is rendering investment advice or selling or offering
19477	for sale securities through any associated person not registered
19478	in compliance with the provisions of this chapter;
19479	(h) Has demonstrated unworthiness to transact the business
19480	of dealer, investment adviser, or associated person;
19481	(i) Has exercised management or policy control over or
19482	owned 10 percent or more of the securities of any dealer or
19483	investment adviser that has been declared bankrupt, or had a
19484	trustee appointed under the Securities Investor Protection Act;
19485	or is, in the case of a dealer or investment adviser, insolvent;
19486	(j) Has been convicted of, or has entered a plea of guilty
19487	or nolo contendere to, a crime against the laws of this state or
19488	any other state or of the United States or of any other country
19489	or government which relates to registration as a dealer,
19490	investment adviser, issuer of securities, associated person, or
19491	branch office; which relates to the application for such
19492	registration; or which involves moral turpitude or fraudulent or
19493	dishonest dealing;
19494	(k) Has had a final judgment entered against her or him in
19495	a civil action upon grounds of fraud, embezzlement,
19496	misrepresentation, or deceit;
19497	(l) Is of bad business repute; or
19498	(m) Has been the subject of any decision, finding,
19499	injunction, suspension, prohibition, revocation, denial,
19500	judgment, or administrative order by any court of competent
19501	jurisdiction, administrative law judge, or by any state or
19502	federal agency, national securities, commodities, or option
19503	exchange, or national securities, commodities, or option
19504	association, involving a violation of any federal or state
19505	securities or commodities law or any rule or regulation
19506	promulgated thereunder, or any rule or regulation of any
19507	national securities, commodities, or options exchange or
19508	national securities, commodities, or options association, or has
19509	been the subject of any injunction or adverse administrative
19510	order by a state or federal agency regulating banking,
19511	insurance, finance or small loan companies, real estate,
19512	mortgage brokers, or other related or similar industries. For
19513	purposes of this subsection, the officedepartmentmay not deny
19514	registration to any applicant who has been continuously
19515	registered with the officedepartmentfor 5 years from the entry
19516	of such decision, finding, injunction, suspension, prohibition,
19517	revocation, denial, judgment, or administrative order provided
19518	such decision, finding, injunction, suspension, prohibition,
19519	revocation, denial, judgment, or administrative order has been
19520	timely reported to the officedepartment pursuant to the
19521	commission'sdepartment's rules and regulations.
19522	(3) In the event the officedepartmentdetermines to deny
19523	an application or revoke a registration, it shall enter a final
19524	order with its findings on the register of dealers and
19525	associated persons; and denial, suspension, or revocation of the
19526	registration of a dealer or investment adviser shall also deny,
19527	suspend, or revoke the registration of all her or his associated
19528	persons.
19529	(5) The officedepartmentmay deny any request to
19530	terminate or withdraw any application or registration if the
19531	officedepartmentbelieves that an act which would be a ground
19532	for denial, suspension, restriction, or revocation under this
19533	chapter has been committed.
19534	(6) Registration under s. 517.12 may be denied or any
19535	registration granted may be suspended or restricted if an
19536	applicant or registrant is charged, in a pending enforcement
19537	action or pending criminal prosecution, with any conduct that
19538	would authorize denial or revocation under subsection (1).
19539	(b) Any order of suspension or restriction under this
19540	subsection shall:
19541	1. Take effect only after a hearing, unless no hearing is
19542	requested by the registrant or unless the suspension or
19543	restriction is made in accordance with s. 120.60(6).
19544	2. Contain a finding that evidence of a prima facie case
19545	supports the charge made in the enforcement action or criminal
19546	prosecution.
19547	3. Operate for no longer than 10 days beyond receipt of
19548	notice by the officedepartmentof termination with respect to
19549	the registrant of the enforcement action or criminal
19550	prosecution.
19551	Section 362. Section 517.181, Florida Statutes, is amended
19552	to read:
19553	517.181 Escrow agreement.--
19554	(1) If the statement containing information as to
19555	securities to be registered, as provided for in s. 517.081,
19556	shall disclose that any such securities or any securities senior
19557	thereto shall have been or shall be intended to be issued for
19558	any patent right, copyright, trademark, process, formula, or
19559	goodwill; for organization or promotion fees or expenses; or for
19560	goodwill or going-concern value or other intangible assets, then
19561	the amount and nature thereof shall be fully set forth, and the
19562	officedepartmentmay require that such securities so issued in
19563	payment of such patent right, copyright, trademark, process,
19564	formula, or goodwill; for organization or promotion fees or
19565	expenses; or for other intangible assets shall be delivered in
19566	escrow to the officedepartmentor other depository satisfactory
19567	to the officedepartmentunder an escrow agreement. The escrow
19568	agreement shall be in a form suitable to the officedepartment
19569	and shall provide for the escrow or impoundment of such
19570	securities for a reasonable length of time determined by the
19571	officedepartmentto be in the best interest of other
19572	shareholders. The securities subject to escrow shall also
19573	include any dividend, cash, or stock that may be paid during the
19574	life of the escrow and any stock issued through, or by reason
19575	of, any stock split, exchange of shares, recapitalization,
19576	merger, consolidation, reorganization, or similar combination or
19577	subdivision in substitution for or in lieu of any stock subject
19578	to this provision; and in case of dissolution or insolvency
19579	during the time such securities are held in escrow, the owners
19580	of such securities shall not participate in the assets until
19581	after the owners of all other securities shall have been paid in
19582	full.
19583	(2) Any securities held in escrow under this section on
19584	November 1, 1978, may be released to the owners thereof upon
19585	request, if satisfactory financial data is submitted to the
19586	officedepartmentshowing that the issuer is currently operating
19587	on sound business principles and has net income in accordance
19588	with criteria-implementing rules of the commissiondepartment
19589	relating to escrow of securities. At any time, the office
19590	departmentmay review any existing escrow agreement made under
19591	this section and determine that the same may be amended in order
19592	to permit a subsequent release of the securities upon terms and
19593	conditions which are just and equitable as defined by said
19594	rules.
19595	(3) When it shall appear from information available to the
19596	officedepartmentthat the issuer of securities held in escrow
19597	has been dissolved or disbanded or is defunct or no longer
19598	actively engaged in business and such securities are of no
19599	value, the officedepartment, after giving at least 60 days'
19600	notice in at least one newspaper of general circulation and
19601	after giving interested parties opportunity for hearing, may
19602	enter its order authorizing the destruction of said securities.
19603	Any affected escrow agent may rely on such order and shall not
19604	be required to determine the validity or sufficiency thereof.
19605	Section 363. Section 517.191, Florida Statutes, is amended
19606	to read:
19607	517.191 Injunction to restrain violations.--
19608	(1) When it appearsshall appear to the officedepartment,
19609	either upon complaint or otherwise, that a person has engaged or
19610	is about to engage in any act or practice constituting a
19611	violation of this chapter or a rule or order hereunder, the
19612	officedepartmentmay investigate; and whenever it shall believe
19613	from evidence satisfactory to it that any such person has
19614	engaged, is engaged, or is about to engage in any act or
19615	practice constituting a violation of this chapter or a rule or
19616	order hereunder, the officedepartmentmay, in addition to any
19617	other remedies, bring action in the name and on behalf of the
19618	state against such person and any other person concerned in or
19619	in any way participating in or about to participate in such
19620	practices or engaging therein or doing any act or acts in
19621	furtherance thereof or in violation of this chapter to enjoin
19622	such person or persons from continuing such fraudulent practices
19623	or engaging therein or doing any act or acts in furtherance
19624	thereof or in violation of this chapter. In any such court
19625	proceedings, the officedepartmentmay apply for, and on due
19626	showing be entitled to have issued, the court's subpoena
19627	requiring forthwith the appearance of any defendant and her or
19628	his employees, associated persons, or agents and the production
19629	of documents, books, and records that may appear necessary for
19630	the hearing of such petition, to testify or give evidence
19631	concerning the acts or conduct or things complained of in such
19632	application for injunction. In such action, the equity courts
19633	shall have jurisdiction of the subject matter, and a judgment
19634	may be entered awarding such injunction as may be proper.
19635	(2) In addition to all other means provided by law for the
19636	enforcement of any temporary restraining order, temporary
19637	injunction, or permanent injunction issued in any such court
19638	proceedings, the court shall have the power and jurisdiction,
19639	upon application of the officedepartment, to impound and to
19640	appoint a receiver or administrator for the property, assets,
19641	and business of the defendant, including, but not limited to,
19642	the books, records, documents, and papers appertaining thereto.
19643	Such receiver or administrator, when appointed and qualified,
19644	shall have all powers and duties as to custody, collection,
19645	administration, winding up, and liquidation of said property and
19646	business as shall from time to time be conferred upon her or him
19647	by the court. In any such action, the court may issue orders
19648	and decrees staying all pending suits and enjoining any further
19649	suits affecting the receiver's or administrator's custody or
19650	possession of the said property, assets, and business or, in its
19651	discretion, may with the consent of the presiding judge of the
19652	circuit require that all such suits be assigned to the circuit
19653	court judge appointing the said receiver or administrator.
19654	(3) In addition to any other remedies provided by this
19655	chapter, the officedepartmentmay apply to the court hearing
19656	this matter for an order of restitution whereby the defendants
19657	in such action shall be ordered to make restitution of those
19658	sums shown by the officedepartmentto have been obtained by
19659	them in violation of any of the provisions of this chapter.
19660	Such restitution shall, at the option of the court, be payable
19661	to the administrator or receiver appointed pursuant to this
19662	section or directly to the persons whose assets were obtained in
19663	violation of this chapter.
19664	Section 364. Section 517.201, Florida Statutes, is amended
19665	to read:
19666	517.201 Investigations; examinations; subpoenas; hearings;
19667	witnesses.--
19668	(1) The officedepartment:
19669	(a) May make investigations and examinations within or
19670	outside of this state as it deems necessary:
19671	1. To determine whether a person has violated or is about
19672	to violate any provision of this chapter or a rule or order
19673	hereunder; or
19674	2. To aid in the enforcement of this chapter.
19675	(b) May require or permit a person to file a statement in
19676	writing, under oath or otherwise as the officedepartment
19677	determines, as to all the facts and circumstances concerning the
19678	matter to be investigated.
19679	(2) When it is proposed to conduct an investigation or
19680	examination, the officedepartmentmay gather evidence in the
19681	matter. The officedepartmentmay administer oaths, examine
19682	witnesses, and issue subpoenas.
19683	(3) Subpoenas for witnesses whose evidence is deemed
19684	material to any investigation or examination may be issued by
19685	the officedepartment under the seal of the officedepartment,
19686	or by any county court judge or clerk of the circuit court or
19687	county court, commanding such witnesses to be or appear before
19688	the officedepartmentat a time and place to be therein named
19689	and to bring such books, records, and documents as may be
19690	specified or to submit such books, records, and documents to
19691	inspection; and such subpoenas may be served by an authorized
19692	representative of the officedepartment.
19693	(4)(a) In the event of substantial noncompliance with a
19694	subpoena or subpoena duces tecum issued or caused to be issued
19695	by the officedepartment pursuant to this section, the office
19696	departmentmay petition the circuit court of the county in which
19697	the person subpoenaed resides or has its principal place of
19698	business for an order requiring the subpoenaed person to appear
19699	and testify and to produce such books, records, and documents as
19700	are specified in such subpoena duces tecum. The court may grant
19701	injunctive relief restraining the issuance, sale or offer for
19702	sale, purchase or offer to purchase, promotion, negotiation,
19703	advertisement, or distribution in or from offices in this state
19704	of securities or investments by a person or agent, employee,
19705	broker, partner, officer, director, or stockholder thereof, and
19706	may grant such other relief, including, but not limited to, the
19707	restraint, by injunction or appointment of a receiver, of any
19708	transfer, pledge, assignment, or other disposition of such
19709	person's assets or any concealment, alteration, destruction, or
19710	other disposition of subpoenaed books, records, or documents, as
19711	the court deems appropriate, until such person has fully
19712	complied with such subpoena or subpoena duces tecum and the
19713	officedepartmenthas completed its investigation or
19714	examination. The officedepartmentis entitled to the summary
19715	procedure provided in s. 51.011, and the court shall advance the
19716	cause on its calendar. Costs incurred by the officedepartment
19717	to obtain an order granting, in whole or in part, such petition
19718	for enforcement of a subpoena or subpoena duces tecum shall be
19719	taxed against the subpoenaed person, and failure to comply with
19720	such order shall be a contempt of court.
19721	(b) When it shall appear to the officedepartmentthat the
19722	compliance with a subpoena or subpoena duces tecum issued or
19723	caused to be issued by the officedepartmentpursuant to this
19724	section is essential and otherwise unavailable to an
19725	investigation or examination, the officedepartment, in addition
19726	to the other remedies provided for herein, may, by verified
19727	petition setting forth the facts, apply to the circuit court of
19728	the county in which the subpoenaed person resides or has its
19729	principal place of business for a writ of ne exeat. The court
19730	shall thereupon direct the issuance of the writ against the
19731	subpoenaed person requiring sufficient bond conditioned on
19732	compliance with the subpoena or subpoena duces tecum. The court
19733	shall cause to be endorsed on the writ a suitable amount of bond
19734	on payment of which the person named in the writ shall be freed,
19735	having a due regard to the nature of the case.
19736	(5) Witnesses shall be entitled to the same fees and
19737	mileage as they may be entitled by law for attending as
19738	witnesses in the circuit court, except where such examination or
19739	investigation is held at the place of business or residence of
19740	the witness.
19741	Section 365. Subsections (1) and (3) of section 517.2015,
19742	Florida Statutes, are amended to read:
19743	517.2015 Confidentiality of information relating to
19744	investigations and examinations.--
19745	(1)(a) Except as otherwise provided by this section,
19746	information relative to an investigation or examination by the
19747	officedepartmentpursuant to this chapter, including any
19748	consumer complaint, is confidential and exempt from s. 119.07(1)
19749	until the investigation or examination is completed or ceases to
19750	be active. The information compiled by the officedepartmentin
19751	such an investigation or examination shall remain confidential
19752	and exempt from s. 119.07(1) after the office'sdepartment's
19753	investigation or examination is completed or ceases to be active
19754	if the officedepartmentsubmits the information to any law
19755	enforcement or administrative agency or regulatory organization
19756	for further investigation. Such information shall remain
19757	confidential and exempt from s. 119.07(1) until that agency's or
19758	organization's investigation is completed or ceases to be
19759	active. For purposes of this section, an investigation or
19760	examination shall be considered "active" so long as the office
19761	departmentor any law enforcement or administrative agency or
19762	regulatory organization is proceeding with reasonable dispatch
19763	and has a reasonable good faith belief that the investigation or
19764	examination may lead to the filing of an administrative, civil,
19765	or criminal proceeding or to the denial or conditional grant of
19766	a license, registration, or permit. This section shall not be
19767	construed to prohibit disclosure of information which is
19768	required by law to be filed with the officedepartmentand
19769	which, but for the investigation or examination, would be
19770	subject to s. 119.07(1).
19771	(b) Except as necessary for the officedepartmentto
19772	enforce the provisions of this chapter, a consumer complaint and
19773	other information relative to an investigation or examination
19774	shall remain confidential and exempt from s. 119.07(1) after the
19775	investigation or examination is completed or ceases to be active
19776	to the extent disclosure would:
19777	1. Jeopardize the integrity of another active
19778	investigation or examination.
19779	2. Reveal the name, address, telephone number, social
19780	security number, or any other identifying number or information
19781	of any complainant, customer, or account holder.
19782	3. Disclose the identity of a confidential source.
19783	4. Disclose investigative techniques or procedures.
19784	5. Reveal a trade secret as defined in s. 688.002.
19785	(c) In the event that officedepartmentpersonnel are or
19786	have been involved in an investigation or examination of such
19787	nature as to endanger their lives or physical safety or that of
19788	their families, then the home addresses, telephone numbers,
19789	places of employment, and photographs of such personnel,
19790	together with the home addresses, telephone numbers,
19791	photographs, and places of employment of spouses and children of
19792	such personnel and the names and locations of schools and day
19793	care facilities attended by the children of such personnel are
19794	confidential and exempt from s. 119.07(1).
19795	(d) Nothing in this section shall be construed to prohibit
19796	the officedepartmentfrom providing information to any law
19797	enforcement or administrative agency or regulatory organization.
19798	Any law enforcement or administrative agency or regulatory
19799	organization receiving confidential information in connection
19800	with its official duties shall maintain the confidentiality of
19801	the information so long as it would otherwise be confidential.
19802	(e) All information obtained by the officedepartmentfrom
19803	any person which is only made available to the officedepartment
19804	on a confidential or similarly restricted basis shall be
19805	confidential and exempt from s. 119.07(1). This exemption shall
19806	not be construed to prohibit disclosure of information which is
19807	required by law to be filed with the officedepartmentor which
19808	is otherwise subject to s. 119.07(1).
19809	(3) A privilege against civil liability is granted to a
19810	person who furnishes information or evidence to the office
19811	department, unless such person acts in bad faith or with malice
19812	in providing such information or evidence.
19813	Section 366. Section 517.221, Florida Statutes, is amended
19814	to read:
19815	517.221 Cease and desist orders.--
19816	(1) The officedepartmentmay issue and serve upon a
19817	person a cease and desist order whenever the officedepartment
19818	has reason to believe that such person is violating, has
19819	violated, or is about to violate any provision of this chapter,
19820	any rule or order promulgated by the commission or office
19821	department, or any written agreement entered into with the
19822	officedepartment.
19823	(2) Whenever the officedepartmentfinds that conduct
19824	described in subsection (1) presents an immediate danger to the
19825	public requiring an immediate final order, it may issue an
19826	emergency cease and desist order reciting with particularity the
19827	facts underlying such findings. The emergency cease and desist
19828	order is effective immediately upon service of a copy of the
19829	order on the respondent named therein and remains effective for
19830	90 days. If the officedepartmentbegins nonemergency cease and
19831	desist proceedings under subsection (1), the emergency cease and
19832	desist order remains effective until conclusion of the
19833	proceedings under ss. 120.569 and 120.57.
19834	(3) The officedepartmentmay impose and collect an
19835	administrative fine against any person found to have violated
19836	any provision of this chapter, any rule or order promulgated by
19837	the commission or officedepartment, or any written agreement
19838	entered into with the officedepartmentin an amount not to
19839	exceed $5,000 for each such violation. All fines collected
19840	hereunder shall be deposited as received in the Anti-Fraud Trust
19841	Fund.
19842	Section 367. Subsection (1) of section 517.241, Florida
19843	Statutes, is amended to read:
19844	517.241 Remedies.--
19845	(1) Any person aggrieved by a final order of the office
19846	departmentmay have the order reviewed as provided by chapter
19847	120, the Administrative Procedure Act.
19848	Section 368. Paragraph (c) of subsection (1) and paragraph
19849	(b) of subsection (2) of section 517.301, Florida Statutes, are
19850	amended to read:
19851	517.301 Fraudulent transactions; falsification or
19852	concealment of facts.--
19853	(1) It is unlawful and a violation of the provisions of
19854	this chapter for a person:
19855	(c) In any matter within the jurisdiction of the office
19856	department, to knowingly and willfully falsify, conceal, or
19857	cover up, by any trick, scheme, or device, a material fact, make
19858	any false, fictitious, or fraudulent statement or
19859	representation, or make or use any false writing or document,
19860	knowing the same to contain any false, fictitious, or fraudulent
19861	statement or entry.
19862	(2) For purposes of ss. 517.311 and 517.312 and this
19863	section, the term "investment" means any commitment of money or
19864	property principally induced by a representation that an
19865	economic benefit may be derived from such commitment, except
19866	that the term "investment" does not include a commitment of
19867	money or property for:
19868	(b) The purchase of tangible personal property through a
19869	person not engaged in telephone solicitation, where said
19870	property is offered and sold in accordance with the following
19871	conditions:
19872	1. There are no specific representations or guarantees
19873	made by the offeror or seller as to the economic benefit to be
19874	derived from the purchase;
19875	2. The tangible property is delivered to the purchaser
19876	within 30 days after sale, except that such 30-day period may be
19877	extended by the officedepartmentif market conditions so
19878	warrant; and
19879	3. The seller has offered the purchaser a full refund
19880	policy in writing, exercisable by the purchaser within 10 days
19881	of the date of delivery of such tangible personal property,
19882	except that the amount of such refund in no event shall exceed
19883	the bid price in effect at the time the property is returned to
19884	the seller. If the applicable sellers' market is closed at the
19885	time the property is returned to the seller for a refund, the
19886	amount of such refund shall be based on the bid price for such
19887	property at the next opening of such market.
19888	Section 369. Subsection (3) of section 517.302, Florida
19889	Statutes, is amended to read:
19890	517.302 Criminal penalties; alternative fine; Anti-Fraud
19891	Trust Fund; time limitation for criminal prosecution.--
19892	(3) In lieu of a fine otherwise authorized by law, a
19893	person who has been convicted of or who has pleaded guilty or no
19894	contest to having engaged in conduct in violation of the
19895	provisions of this chapter may be sentenced to pay a fine that
19896	does not exceed the greater of three times the gross value
19897	gained or three times the gross loss caused by such conduct,
19898	plus court costs and the costs of investigation and prosecution
19899	reasonably incurred.
19900	(a) There is created within the officedepartmenta trust
19901	fund to be known as the Anti-Fraud Trust Fund. Any amounts
19902	assessed as costs of investigation and prosecution under this
19903	subsection shall be deposited in the trust fund. Funds deposited
19904	in such trust fund shall be used, when authorized by
19905	appropriation, for investigation and prosecution of
19906	administrative, civil, and criminal actions arising under the
19907	provisions of this chapter. Funds may also be used to improve
19908	the public's awareness and understanding of prudent investing.
19909	(b) The officedepartmentshall report to the Executive
19910	Office of the Governor annually by November 15, the amounts
19911	deposited into the Anti-Fraud Trust Fund during the previous
19912	fiscal year. The Executive Office of the Governor shall
19913	distribute these reports to the President of the Senate and the
19914	Speaker of the House of Representatives.
19915	Section 370. Subsections (1) and (2) of section 517.313,
19916	Florida Statutes, are amended to read:
19917	517.313 Destroying certain records; reproduction.--
19918	(1) The commission and office maydepartment is authorized
19919	tophotograph, microphotograph, or reproduce on film or prints
19920	documents, records, data, and information of a permanent
19921	character.
19922	(2) The commission and office maydepartment is authorized
19923	to destroy any of said documents after audit of the officehas
19924	been completed for the period embracing the dates of said
19925	instruments, after complying with the provisions of chapter 119.
19926	Section 371. Section 517.315, Florida Statutes, is amended
19927	to read:
19928	517.315 Fees.--All fees and charges of any nature
19929	collected by the officedepartmentpursuant to this chapter,
19930	except the fees and charges collected pursuant to s. 517.131,
19931	shall be paid into the State Treasury and credited to the
19932	General Revenue Fund; and an appropriation shall be made
19933	annually of necessary funds for the administration of the
19934	provisions of this chapter.
19935	Section 372. Section 517.32, Florida Statutes, is amended
19936	to read:
19937	517.32 Exemption from excise tax, certain obligations to
19938	pay.--There shall be exempt from all excise taxes imposed by
19939	chapter 201 all promissory notes, nonnegotiable notes, and other
19940	written obligations to pay money bearing dates subsequent to
19941	July 1, 1957, when the maker thereof is a security dealer
19942	registered by the officedepartmentunder this chapter and when
19943	such promissory note, nonnegotiable note or notes, or other
19944	written obligation to pay money shall be for the duration of 30
19945	days or less and secured by pledge or deposit, as collateral
19946	security for the payment thereof, security or securities as
19947	defined in s. 517.021, provided all excise taxes imposed by
19948	chapter 201 shall have been paid upon such collateral security.
19949	Section 373. Section 520.996, Florida Statutes, is amended
19950	to read:
19951	520.996 Investigations and complaints.--
19952	(1)(a) The officedepartmentor its agent may, at
19953	intermittent periods, make such investigations and examinations
19954	of any licensee or other person as it deems necessary to
19955	determine compliance with this chapter. For such purposes, it
19956	may examine the books, accounts, records, and other documents or
19957	matters of any licensee or other person. It shall have the power
19958	to compel the production of all relevant books, records, and
19959	other documents and materials relative to an examination or
19960	investigation. Such investigations and examinations shall not
19961	be made more often than once during any 12-month period unless
19962	the officedepartmenthas good and sufficient reason to believe
19963	the licensee is not complying with the provisions of this
19964	chapter. Such examination fee shall be calculated on an hourly
19965	basis and shall be rounded to the nearest hour.
19966	(b) The officedepartmentshall conduct all examinations
19967	at a convenient location in this state unless the office
19968	departmentdetermines that it is more effective or cost-
19969	efficient to perform an examination at the licensee's out-of-
19970	state location. For an examination performed at the licensee's
19971	out-of-state location, the licensee shall pay the travel expense
19972	and per diem subsistence at the rate provided by law for up to
19973	thirty 8-hour days per year for each examiner who participates
19974	in such an examination. However, if the examination involves or
19975	reveals possible fraudulent conduct of the licensee, the
19976	licensee shall pay the travel expenses and per diem subsistence
19977	provided by law, without limitation, for each participating
19978	examiner.
19979	(2) The examination expenses incurred by the office
19980	departmentin each examination shall be paid by the licensee
19981	examined. The expenses of the officedepartmentincurred in
19982	each examination of a home improvement finance seller or of an
19983	employee representing such home improvement finance seller shall
19984	be paid by the home improvement finance seller. Expenses
19985	incurred for each examination of a sales finance company shall
19986	be paid by it. The examination expenses shall be paid by such
19987	licensee examined or such other person obligated to pay such
19988	examination expenses within 30 days after demand therefor by the
19989	officedepartment.
19990	(3) Any retail buyer or owner having reason to believe
19991	that the provisions of this chapter have been violated may file
19992	with the office or the Department of Financial Servicesa
19993	written complaint setting forth the details of such alleged
19994	violations and the officedepartmentupon receipt of such
19995	complaint, may inspect the pertinent books, records, letters,
19996	and contracts of the licensee and of the seller involved,
19997	relating to such specific written complaint.
19998	Section 374. Section 520.9965, Florida Statutes, is
19999	amended to read:
20000	520.9965 Confidentiality of information relating to
20001	investigations and examinations.--
20002	(1)(a) Except as otherwise provided by this section,
20003	information relative to an investigation or examination by the
20004	officedepartmentpursuant to this chapter, including any
20005	consumer complaint received by the office or the Department of
20006	Financial Services, is confidential and exempt from s. 119.07(1)
20007	until the investigation or examination is completed or ceases to
20008	be active. The information compiled by the officedepartmentin
20009	such an investigation or examination shall remain confidential
20010	and exempt from s. 119.07(1) after the office'sdepartment's
20011	investigation or examination is completed or ceases to be active
20012	if the officedepartmentsubmits the information to any law
20013	enforcement or administrative agency for further investigation.
20014	Such information shall remain confidential and exempt from s.
20015	119.07(1) until that agency's investigation is completed or
20016	ceases to be active. For purposes of this section, an
20017	investigation or examination shall be considered "active" so
20018	long as the officedepartmentor any law enforcement or
20019	administrative agency is proceeding with reasonable dispatch and
20020	has a reasonable good faith belief that the investigation or
20021	examination may lead to the filing of an administrative, civil,
20022	or criminal proceeding or to the denial or conditional grant of
20023	a license, registration, or permit. This section shall not be
20024	construed to prohibit disclosure of information which is
20025	required by law to be filed with the officedepartmentand
20026	which, but for the investigation or examination, would be
20027	subject to s. 119.07(1).
20028	(b) Except as necessary for the officedepartmentto
20029	enforce the provisions of this chapter, a consumer complaint and
20030	other information relative to an investigation or examination
20031	shall remain confidential and exempt from s. 119.07(1) after the
20032	investigation or examination is completed or ceases to be active
20033	to the extent disclosure would:
20034	1. Jeopardize the integrity of another active
20035	investigation or examination.
20036	2. Reveal the name, address, telephone number, social
20037	security number, or any other identifying number or information
20038	of any complainant, customer, or account holder.
20039	3. Disclose the identity of a confidential source.
20040	4. Disclose investigative techniques or procedures.
20041	5. Reveal a trade secret as defined in s. 688.002.
20042	(c) In the event that officedepartment personnel or
20043	personnel of the former Department of Banking and Financeare or
20044	have been involved in an investigation or examination of such
20045	nature as to endanger their lives or physical safety or that of
20046	their families, then the home addresses, telephone numbers,
20047	places of employment, and photographs of such personnel,
20048	together with the home addresses, telephone numbers,
20049	photographs, and places of employment of spouses and children of
20050	such personnel and the names and locations of schools and day
20051	care facilities attended by the children of such personnel are
20052	confidential and exempt from s. 119.07(1).
20053	(d) Nothing in this section shall be construed to prohibit
20054	the officedepartmentfrom providing information to any law
20055	enforcement or administrative agency. Any law enforcement or
20056	administrative agency receiving confidential information in
20057	connection with its official duties shall maintain the
20058	confidentiality of the information so long as it would otherwise
20059	be confidential.
20060	(e) All information obtained by the officedepartmentfrom
20061	any person which is only made available to the officedepartment
20062	on a confidential or similarly restricted basis shall be
20063	confidential and exempt from s. 119.07(1). This exemption shall
20064	not be construed to prohibit disclosure of information which is
20065	required by law to be filed with the officedepartmentor which
20066	is otherwise subject to s. 119.07(1).
20067	(2) If information subject to subsection (1) is offered in
20068	evidence in any administrative, civil, or criminal proceeding,
20069	the presiding officer may, in his or her discretion, prevent the
20070	disclosure of information which would be confidential pursuant
20071	to paragraph (1)(b).
20072	(3) A privilege against civil liability is granted to a
20073	person who furnishes information or evidence to the office
20074	department, unless such person acts in bad faith or with malice
20075	in providing such information or evidence.
20076	Section 375. Paragraph (b) of subsection (2) of section
20077	537.008, Florida Statutes, is amended to read:
20078	537.008 Title loan agreement.--
20079	(2) The following information shall also be printed on all
20080	title loan agreements:
20081	(b) The name and address of the Department of Financial
20082	Servicesas well as a telephone number to which consumers may
20083	address complaints.
20084	Section 376. Section 537.009, Florida Statutes, is amended
20085	to read:
20086	537.009 Recordkeeping; reporting; safekeeping of
20087	property.--
20088	(1) Every title loan lender shall maintain, at the
20089	lender's title loan office, such books, accounts, and records of
20090	the business conducted under the license issued for such place
20091	of business as will enable the officedepartmentto determine
20092	the licensee's compliance with this act.
20093	(2) The officedepartmentmay authorize the maintenance of
20094	books, accounts, and records at a location other than the
20095	lender's title loan office. The officedepartmentmay require
20096	books, accounts, and records to be produced and available at a
20097	reasonable and convenient location in this state within a
20098	reasonable period of time after such a request.
20099	(3) The title loan lender shall maintain the original copy
20100	of each completed title loan agreement on the title loan office
20101	premises, and shall not obliterate, discard, or destroy any such
20102	original copy, for a period of at least 2 years after making the
20103	final entry on any loan recorded in such office or after ana
20104	department examination by the Office of Financial Institutions
20105	and Securities Regulation, whichever is later.
20106	(4) Loan property which is delivered to a title loan
20107	lender shall be securely stored and maintained at the title loan
20108	office unless the loan property has been forwarded to the
20109	appropriate state agency for the purpose of having a lien
20110	recorded or deleted.
20111	(5) The commissiondepartmentmay prescribe by rule the
20112	books, accounts, and records, and the minimum information to be
20113	shown in the books, accounts, and records, of licensees so that
20114	such records will enable the officedepartmentto determine
20115	compliance with the provisions of this act.
20116	Section 377. Subsection (2) and paragraph (c) of
20117	subsection (4) of section 537.011, Florida Statutes, are amended
20118	to read:
20119	537.011 Title loan charges.--
20120	(2) The annual percentage rate that may be charged for a
20121	title loan may equal, but not exceed, the annual percentage rate
20122	that must be computed and disclosed as required by the federal
20123	Truth in Lending Act and Regulation Z of the Board of Governors
20124	of the Federal Reserve System. The maximum annual percentage
20125	rate of interest that may be charged is 12 times the maximum
20126	monthly rate, and the maximum monthly rate must be computed on
20127	the basis of one-twelfth of the annual rate for each full month.
20128	The commissionDepartment of Banking and Financeshall establish
20129	by rule the rate for each day in a fraction of a month when the
20130	period for which the charge is computed is more or less than 1
20131	month.
20132	(4) Any interest contracted for or received, directly or
20133	indirectly, by a title loan lender, or an agent of the title
20134	loan lender, in excess of the amounts authorized under this
20135	chapter is prohibited and may not be collected by the title loan
20136	lender or an agent of the title loan lender.
20137	(c) The officedepartmentmay order a title loan lender,
20138	or an agent of the title loan lender, to comply with the
20139	provisions of paragraphs (a) and (b).
20140	Section 378. Paragraphs (b), (f), and (n) of subsection
20141	(1) of section 537.013, Florida Statutes, are amended to read:
20142	537.013 Prohibited acts.--
20143	(1) A title loan lender, or any agent or employee of a
20144	title loan lender, shall not:
20145	(b) Refuse to allow the officedepartmentto inspect
20146	completed title loan agreements, extensions of such agreements,
20147	or loan property during the ordinary operating hours of the
20148	title loan lender's business or other times acceptable to both
20149	parties.
20150	(f) Fail to exercise reasonable care, as defined by
20151	commissiondepartmentrule, in the safekeeping of loan property
20152	or of titled personal property repossessed pursuant to this act.
20153	(n) Act as a title loan lender under this act within a
20154	place of business in which the licensee solicits or engages in
20155	business outside the scope of this act if the officedepartment
20156	determines that the licensee's operation of and conduct
20157	pertaining to such other business results in an evasion of this
20158	act. Upon making such a determination, the officedepartment
20159	shall order the licensee to cease and desist from such evasion;
20160	provided, no licensee shall engage in the pawnbroker business.
20161	Section 379. Section 537.016, Florida Statutes, is amended
20162	to read:
20163	537.016 Subpoenas; enforcement actions; rules.--
20164	(1) The officedepartmentmay issue and serve subpoenas to
20165	compel the attendance of witnesses and the production of
20166	documents, papers, books, records, and other evidence before the
20167	officedepartment in any matter pertaining to this act. The
20168	officedepartmentmay administer oaths and affirmations to any
20169	person whose testimony is required. If any person refuses to
20170	testify; produce books, records, and documents; or otherwise
20171	refuses to obey a subpoena issued under this section, the office
20172	departmentmay enforce the subpoena in the same manner as
20173	subpoenas issued under the Administrative Procedure Act are
20174	enforced. Witnesses are entitled to the same fees and mileage as
20175	they are entitled to by law for attending as witnesses in the
20176	circuit court, unless such examination or investigation is held
20177	at the place of business or residence of the witness.
20178	(2) In addition to any other powers conferred upon the
20179	officedepartment to enforce or administer this act, the office
20180	departmentmay:
20181	(a) Bring an action in any court of competent jurisdiction
20182	to enforce or administer this act, any rule or order adopted
20183	under this act, or any written agreement entered into with the
20184	officedepartment. In such action, the officedepartmentmay
20185	seek any relief at law or equity, including a temporary or
20186	permanent injunction, appointment of a receiver or
20187	administrator, or an order of restitution.
20188	(b) Issue and serve upon a person an order requiring such
20189	person to cease and desist and take corrective action whenever
20190	the officedepartmentfinds that such person is violating, has
20191	violated, or is about to violate any provision of this act, any
20192	rule or order adopted under this act, or any written agreement
20193	entered into with the officedepartment.
20194	(c) Whenever the officedepartmentfinds that conduct
20195	described in paragraph (b) presents an immediate danger to the
20196	public health, safety, or welfare requiring an immediate final
20197	order, the officedepartmentmay issue an emergency cease and
20198	desist order reciting with particularity the facts underlying
20199	such findings. The emergency cease and desist order is effective
20200	immediately upon service of a copy of the order on the
20201	respondent named in the order and shall remain effective for 90
20202	days. If the officedepartmentbegins nonemergency proceedings
20203	under paragraph (b), the emergency cease and desist order
20204	remains effective until the conclusion of the proceedings under
20205	ss. 120.569 and 120.57.
20206	(3) The commissiondepartmentmay adopt rules to
20207	administer this act.
20208	Section 380. Section 537.017, Florida Statutes, is amended
20209	to read:
20210	537.017 Investigations and complaints.--
20211	(1) The officedepartmentmay make any investigation and
20212	examination of any licensee or other person the office
20213	departmentdeems necessary to determine compliance with this
20214	act. For such purposes, the officedepartmentmay examine the
20215	books, accounts, records, and other documents or matters of any
20216	licensee or other person. The officedepartmentmay compel the
20217	production of all relevant books, records, and other documents
20218	and materials relative to an examination or investigation.
20219	Examinations shall not be made more often than once during any
20220	12-month period unless the officedepartmenthas reason to
20221	believe the licensee is not complying with the provisions of
20222	this act.
20223	(2) The officedepartmentshall conduct all examinations
20224	at a convenient location in this state unless the office
20225	departmentdetermines that it is more effective or cost-
20226	efficient to perform an examination at the licensee's out-of-
20227	state location. For an examination performed at the licensee's
20228	out-of-state location, the licensee shall pay the travel expense
20229	and per diem subsistence at the rate provided by law for up to
20230	thirty 8-hour days per year for each officedepartmentexaminer
20231	who participates in such an examination. However, if the
20232	examination involves or reveals possible fraudulent conduct by
20233	the licensee, the licensee shall pay the travel expenses and per
20234	diem subsistence provided by law, without limitation, for each
20235	participating examiner.
20236	(3) Any person having reason to believe that any provision
20237	of this act has been violated may file with the Department of
20238	Financial Services or the officea written complaint setting
20239	forth the details of such alleged violation, and the office
20240	departmentmay investigate such complaint.
20241	Section 381. Section 559.725, Florida Statutes, is amended
20242	to read:
20243	559.725 Consumer complaints; administrative duties.--
20244	(1) The Division of Consumer Services of the Department of
20245	Financial Servicesshall serve as the registry for receiving and
20246	maintaining records of inquiries, correspondence, and complaints
20247	from consumers concerning any and all persons who collect debts,
20248	including consumer collection agencies.
20249	(2) The division shall classify complaints by type and
20250	identify the number of written complaints against persons
20251	collecting or attempting to collect debts in this state,
20252	including credit grantors collecting their own debts, debt
20253	collectors generally, and, specifically, consumer collection
20254	agencies as distinguished from other persons who collect debts
20255	such as commercial debt collection agencies regulated under part
20256	V of this chapter. The division shall identify the nature and
20257	number of various kinds of written complaints, including
20258	specifically those alleging violations of s. 559.72.
20259	(3) The division shall inform and furnish relevant
20260	information to the appropriate regulatory body of the state, or
20261	The Florida Bar in the case of attorneys, when any consumer debt
20262	collector exempt from registration under this part has been
20263	named in five or more written consumer complaints alleging
20264	violations of s. 559.72 within a 12-month period.
20265	(4) The division shall furnish a form to each complainant
20266	whose complaint concerns an alleged violation of s. 559.72 by a
20267	consumer collection agency. Such form may be filed with the
20268	officeDepartment of Banking and Finance. The form shall
20269	identify the accused consumer collection agency and provide for
20270	the complainant's summary of the nature of the alleged violation
20271	and facts which allegedly support the complaint. The form shall
20272	include a provision for the complainant to state under oath
20273	before a notary public that the allegations therein made are
20274	true.
20275	(5) Upon receipt of such sworn complaint, the office
20276	departmentshall promptly furnish a copy of the sworn complaint
20277	to the accused consumer collection agency.
20278	(6) The officedepartmentshall investigate sworn
20279	complaints by direct written communication with the complainant
20280	and the affected consumer collection agency. In addition, the
20281	officedepartmentshall attempt to resolve each sworn complaint
20282	and shall record the resolution of such complaints.
20283	(7) Periodically, the officedepartmentshall identify
20284	consumer collection agencies that have unresolved sworn consumer
20285	complaints from five or more different consumers within a 12-
20286	month period under the provisions of this part.
20287	(8) The officedepartmentshall issue a written warning
20288	notice to the accused consumer collection agency if the office
20289	departmentis unable to resolve all such sworn complaints and
20290	fewer than five unresolved complaints remain. Such notice shall
20291	include a statement that the warning may constitute evidence in
20292	any future investigation of similar complaints against that
20293	agency and in any future administrative determination of the
20294	imposition of other administrative remedies available to the
20295	officedepartmentunder this part.
20296	(9) The officedepartmentmay issue a written reprimand
20297	when five or more such unresolved sworn complaints against a
20298	consumer collection agency collectively fall short of
20299	constituting apparent repeated violations that warrant more
20300	serious administrative sanctions. Such reprimand shall include a
20301	statement that the reprimand may constitute evidence in any
20302	future investigation of similar complaints against that agency
20303	and in any future administrative determination of the imposition
20304	of other administrative remedies available to the office
20305	department.
20306	(10) The officedepartmentshall issue a notice of intent
20307	either to revoke or suspend the registration or to impose an
20308	administrative fine when the officedepartmentpreliminarily
20309	determines that repeated violations of s. 559.72 by an accused
20310	registrant have occurred which would warrant more serious
20311	administrative sanctions being imposed under this part. The
20312	officedepartmentshall advise each registrant of the right to
20313	require an administrative hearing under chapter 120, prior to
20314	the agency's final action on the matter as authorized by s.
20315	559.730.
20316	(11) The officedepartmentshall advise the appropriate
20317	state attorney, or the Attorney General in the case of an out-
20318	of-state consumer debt collector, of any determination by the
20319	officedepartmentof a violation of the requirements of this
20320	part by any consumer collection agency which is not registered
20321	as required by this part. The officedepartmentshall furnish
20322	the state attorney or Attorney General with the office's
20323	department'sinformation concerning the alleged violations of
20324	such requirements.
20325	Section 382. Section 560.128, Florida Statutes, is amended
20326	to read:
20327	560.128 Consumer disclosure.--
20328	(1) Every money transmitter and authorized vendor shall
20329	provide each consumer of a money transmitter transaction a toll-
20330	free telephone number for the purpose of consumer contacts;
20331	however, in lieu of such toll-free telephone number, the money
20332	transmitter or authorized vendor may provide the address and
20333	telephone number of the office and the Division of Consumer
20334	Services of the Department of Financial Servicesdepartment.
20335	(2) The commissiondepartmentmay by rule require every
20336	money transmitter to display its registration at each location,
20337	including the location of each person designated by the
20338	registrant as an authorized vendor, where the money transmitter
20339	engages in the activities authorized by the registration.
20340	Section 383. Section 560.129, Florida Statutes, is amended
20341	to read:
20342	560.129 Confidentiality.--
20343	(1) For purposes of this section, the definitions
20344	contained in s. 560.103, as created by chapter 94-238, Laws of
20345	Florida, and chapter 94-354, Laws of Florida, apply.
20346	(1)(2)(a) Except as otherwise provided in this section,
20347	all information concerning an investigation or examination by
20348	the officedepartmentpursuant to this chapter, including any
20349	consumer complaint received by the office or the Department of
20350	Financial Services, is confidential and exempt from s. 119.07(1)
20351	and s. 24(a), Art. I of the State Constitution until the
20352	investigation or examination ceases to be active. For purposes
20353	of this section, an investigation or examination is considered
20354	"active" so long as the officedepartmentor any other
20355	administrative, regulatory, or law enforcement agency of any
20356	jurisdiction is proceeding with reasonable dispatch and has a
20357	reasonable good faith belief that action may be initiated by the
20358	officedepartmentor other administrative, regulatory, or law
20359	enforcement agency.
20360	(b) Notwithstanding paragraph (a), all information
20361	obtained by the officedepartmentin the course of its
20362	investigation or examination which is a trade secret, as defined
20363	in s. 688.002, or which is personal financial information shall
20364	remain confidential. If any administrative, civil, or criminal
20365	proceeding against the money transmitter or a money transmitter-
20366	affiliated party is initiated and the officedepartmentseeks to
20367	use matter that a registrant believes to be a trade secret or
20368	personal financial information, such records shall be subject to
20369	an in camera review by the administrative law judge, if the
20370	matter is before the Division of Administrative Hearings, or a
20371	judge of any court of this state, any other state, or the United
20372	States, as appropriate, for the purpose of determining if the
20373	matter is a trade secret or is personal financial information.
20374	If it is determined that the matter is a trade secret, the
20375	matter shall remain confidential. If it is determined that the
20376	matter is personal financial information, the matter shall
20377	remain confidential unless the administrative law judge or judge
20378	determines that, in the interests of justice, the matter should
20379	become public.
20380	(c) If any administrative, civil, or criminal proceeding
20381	against the money transmitter or a money transmitter-affiliated
20382	party results in an acquittal or the dismissal of all of the
20383	allegations against the money transmitter or a money
20384	transmitter-affiliated party, upon the request of any party, the
20385	administrative law judge or the judge may order all or a portion
20386	of the record of the proceeding to be sealed, and it shall
20387	thereafter be confidential and exempt from s. 119.07(1) and s.
20388	24(a), Art. I of the State Constitution.
20389	(d) Except as necessary for the officedepartmentor any
20390	other administrative, regulatory, or law enforcement agency of
20391	any jurisdiction to enforce the provisions of this chapter or
20392	the law of any other state or the United States, a consumer
20393	complaint and other information concerning an investigation or
20394	examination shall remain confidential and exempt from s.
20395	119.07(1) and s. 24(a), Art. I of the State Constitution after
20396	the investigation or examination ceases to be active to the
20397	extent that disclosure would:
20398	1. Jeopardize the integrity of another active
20399	investigation;
20400	2. Reveal personal financial information;
20401	3. Reveal the identity of a confidential source; or
20402	4. Reveal investigative techniques or procedures.
20403	(2)(3)This section does not prevent or restrict:
20404	(a) Furnishing records or information to any appropriate
20405	regulatory agency if such agency adheres to the confidentiality
20406	provisions of the code;
20407	(b) Furnishing records or information to an independent
20408	third party or a certified public accountant who has been
20409	approved by the officedepartmentto conduct an examination
20410	under s. 560.118(1)(b), if the independent third party or
20411	certified public accountant adheres to the confidentiality
20412	provisions of the code; or
20413	(c) Reporting any suspected criminal activity, with
20414	supporting documents and information, to appropriate law
20415	enforcement or prosecutorial agencies.
20416	(3)(4)All quarterly reports submitted by a money
20417	transmitter to the officedepartmentunder s. 560.118(2)(b) are
20418	confidential and exempt from s. 119.07(1) and s. 24(a), Art. I
20419	of the State Constitution.
20420	(4)(5)Examination reports, investigatory records,
20421	applications, and related information compiled by the office
20422	department, or photographic copies thereof, shall be retained by
20423	the officedepartmentfor a period of at least 10 years.
20424	(5)(6)Any person who willfully discloses information made
20425	confidential by this section commits a felony of the third
20426	degree, punishable as provided in s. 775.082 or s. 775.083.
20427	Section 384. Subsection (3), paragraph (b) of subsection
20428	(19), paragraph (b) of subsection(22), and subsection (23) of
20429	section 560.404, Florida Statutes, are amended to read:
20430	560.404 Requirements for deferred presentment
20431	transactions.--
20432	(3) Each written agreement shall contain the following
20433	information, in addition to any information the commission
20434	departmentrequires by rule:
20435	(a) The name or trade name, address, and telephone number
20436	of the deferred presentment provider and the name and title of
20437	the person who signs the agreement on behalf of the deferred
20438	presentment provider.
20439	(b) The date the deferred presentment transaction was
20440	made.
20441	(c) The amount of the drawer's check.
20442	(d) The length of deferral period.
20443	(e) The last day of the deferment period.
20444	(f) The address and telephone number of the office and the
20445	Division of Consumer Services of the Department of Financial
20446	Servicesdepartment.
20447	(g) A clear description of the drawer's payment
20448	obligations under the deferred presentment transaction.
20449	(h) The transaction number assigned by the office's
20450	department'sdatabase.
20451	(19) A deferred presentment provider may not enter into a
20452	deferred presentment transaction with a person who has an
20453	outstanding deferred presentment transaction with that provider
20454	or with any other deferred presentment provider, or with a
20455	person whose previous deferred presentment transaction with that
20456	provider or with any other provider has been terminated for less
20457	than 24 hours. The deferred presentment provider must verify
20458	such information as follows:
20459	(b) The deferred presentment provider shall access the
20460	office'sdepartment'sdatabase established pursuant to
20461	subsection (23) and shall verify whether any other deferred
20462	presentment provider has an outstanding deferred presentment
20463	transaction with a particular person or has terminated a
20464	transaction with that person within the previous 24 hours. Prior
20465	to the time that the officedepartmenthas implemented such a
20466	database, the deferred presentment provider may rely upon the
20467	written verification of the drawer as provided in subsection
20468	(20).
20469	(22)
20470	(b) At the commencement of the grace period, the deferred
20471	presentment provider shall provide the drawer:
20472	1. Verbal notice of the availability of the grace period
20473	consistent with the written notice in subsection (20).
20474	2. A list of approved consumer credit counseling agencies
20475	prepared by the officedepartment. The department shall prepare
20476	the list by October 1, 2001. The officedepartmentlist shall
20477	include nonprofit consumer credit counseling agencies affiliated
20478	with the National Foundation for Credit Counseling which provide
20479	credit counseling services to Florida residents in person, by
20480	telephone, or through the Internet. The officedepartmentlist
20481	must include phone numbers for the agencies, the counties served
20482	by the agencies, and indicate the agencies that provide
20483	telephone counseling and those that provide Internet counseling.
20484	The officedepartmentshall update the list at least once each
20485	year.
20486	3. The following notice in at least 14-point type in
20487	substantially the following form:
20488
20489	AS A CONDITION OF OBTAINING A GRACE PERIOD EXTENDING THE TERM OF
20490	YOUR DEFERRED PRESENTMENT AGREEMENT FOR AN ADDITIONAL 60 DAYS,
20491	UNTIL [DATE], WITHOUT ANY ADDITIONAL FEES, YOU MUST COMPLETE
20492	CONSUMER CREDIT COUNSELING PROVIDED BY AN AGENCY INCLUDED ON THE
20493	LIST THAT WILL BE PROVIDED TO YOU BY THIS PROVIDER. YOU MAY ALSO
20494	AGREE TO COMPLY WITH AND ADHERE TO A REPAYMENT PLAN APPROVED BY
20495	THE AGENCY. THE COUNSELING MAY BE IN PERSON, BY TELEPHONE, OR
20496	THROUGH THE INTERNET. YOU MUST NOTIFY US WITHIN SEVEN (7) DAYS,
20497	BY [DATE], THAT YOU HAVE MADE AN APPOINTMENT WITH SUCH A
20498	CONSUMER CREDIT COUNSELING AGENCY. YOU MUST ALSO NOTIFY US
20499	WITHIN SIXTY (60) DAYS, BY [DATE], THAT YOU HAVE COMPLETED THE
20500	CONSUMER CREDIT COUNSELING. WE MAY VERIFY THIS INFORMATION WITH
20501	THE AGENCY. IF YOU FAIL TO PROVIDE EITHER THE 7-DAY OR 60-DAY
20502	NOTICE, OR IF YOU HAVE NOT MADE THE APPOINTMENT OR COMPLETED THE
20503	COUNSELING WITHIN THE TIME REQUIRED, WE MAY DEPOSIT OR PRESENT
20504	YOUR CHECK FOR PAYMENT AND PURSUE ALL LEGALLY AVAILABLE CIVIL
20505	MEANS TO ENFORCE THE DEBT.
20506	(23) On or before March 1, 2002, the officedepartment
20507	shall implement a common database with real-time access through
20508	an Internet connection for deferred presentment providers, as
20509	provided in this subsection. The database must be accessible to
20510	the officedepartmentand the deferred presentment providers to
20511	verify whether any deferred presentment transactions are
20512	outstanding for a particular person. Deferred presentment
20513	providers shall submit such data before entering into each
20514	deferred presentment transaction in such format as the
20515	commissiondepartmentshall require by rule, including the
20516	drawer's name, social security number or employment
20517	authorization alien number, address, driver's license number,
20518	amount of the transaction, date of transaction, the date that
20519	the transaction is closed, and such additional information as is
20520	required by the commissiondepartment. The commissiondepartment
20521	may impose a fee not to exceed $1 per transaction for data
20522	required to be submitted by a deferred presentment provider. A
20523	deferred presentment provider may rely on the information
20524	contained in the database as accurate and is not subject to any
20525	administrative penalty or civil liability as a result of relying
20526	on inaccurate information contained in the database. The
20527	commissiondepartmentmay adopt rules to administer and enforce
20528	the provisions of this section and to assure that the database
20529	is used by deferred presentment providers in accordance with
20530	this section.
20531	Section 385. Section 609.05, Florida Statutes, is amended
20532	to read:
20533	609.05 Qualification with Office of Financial Institutions
20534	and Securities RegulationDepartment of Banking and
20535	Finance.--Before any person may offer for sale, barter or sell
20536	any unit, share, contract, note, bond, mortgage, oil or mineral
20537	lease or other security of an association doing business under
20538	what is known as a "declaration of trust" in this state, such
20539	person shall procure from the Office of Financial Institutions
20540	and Securities Regulation of the Financial Services Commission
20541	Department of Banking and Financea permit to offer for sale and
20542	sell such securities, which permit shall be applied for and
20543	granted under the same conditions as like permits are applied
20544	for and granted to corporations.
20545	Section 386. Section 655.012, Florida Statutes, is amended
20546	to read:
20547	655.012 General supervisory powers of the department;
20548	rulemaking; seal.--
20549	(1)In addition to other powers conferred by the financial
20550	institutions codes, the officedepartmentshall have:
20551
20552	(a)(1)General supervision over all state financial
20553	institutions, their subsidiaries, and service corporations.
20554	(b)(2)Access to all books and records of all persons over
20555	whom the officedepartmentexercises general supervision as is
20556	necessary for the performance of the duties and functions of the
20557	officedepartmentprescribed by the financial institutions
20558	codes.
20559	(c)(3)Power to issue orders and declaratory statements,
20560	disseminate information, and otherwise exercise its discretion
20561	to effectuate the purposes, policies, and provisions of the
20562	financial institutions codes.
20563	(2) In addition to other powers conferred by the financial
20564	institutions codes, the commission shall have the powerandto
20565	adopt rules pursuant to ss. 120.536(1) and 120.54 to implement
20566	the provisions of such codes.
20567	(3) The office shall have an official seal by which its
20568	proceedings are authenticated.
20569	Section 387. This act shall not affect the validity of any
20570	administrative or judicial action involving the Department of
20571	Banking and Finance or the Department of Insurance occurring
20572	prior to, or pending on, January 7, 2003, and the Department of
20573	Financial Services or the Financial Services Commission, or the
20574	respective office, shall be substituted as a party in interest
20575	on any such pending action.
20576	Section 388. Any certificate of authority, license, form,
20577	rate, or other filing or action that was approved or authorized
20578	by the Department of Insurance or the Department of Banking and
20579	Finance, or that was otherwise lawfully in use prior to January
20580	7, 2003, may continue to be used or be effective as originally
20581	authorized or permitted, until the Chief Financial Officer, the
20582	Department of Financial Services, the Financial Services
20583	Commission, or either of the respective offices, otherwise
20584	prescribes.
20585	Section 389 Section 627.3111, Florida Statutes, is
20586	transferred and renumbered as section 624.23, Florida Statutes.
20587	Section 390 Section 624.305, Florida Statutes, is
20588	repealed.
20589	Section 391. In the event of any conflict between any
20590	provision of this act and any provision of other legislation
20591	enacted during the 2003 Regular Session, the provisions of this
20592	act shall control.
20593	Section 392. This act shall take effect upon becoming a
20594	law.