Amendment
Bill No. 1643
Amendment No. 388685
CHAMBER ACTION
Senate House
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1Representative Berfield offered the following:
2
3     Amendment (with title amendment)
4     Between lines 202 an 203, insert:
5     Section 4.  Paragraph (a) of subsection (3) of section
6626.2815, Florida Statutes, is amended to read:
7     626.2815  Continuing education required; application;
8exceptions; requirements; penalties.--
9     (3)(a)  Each person subject to the provisions of this
10section must, except as set forth in paragraphs (b) and (c),
11complete a minimum of 24 hours of continuing education courses
12every 2 years in basic or higher-level courses prescribed by
13this section or in other courses approved by the department.
14Each person subject to the provisions of this section must
15complete, as part of his or her required number of continuing
16education hours, 3 hours of continuing education, approved by
17the department, every 2 years on the subject matter of ethics
18and a minimum of 2 hours of continuing education, approved by
19the department, every 2 years on the subject matter of
20unauthorized entities engaging in the business of insurance. The
21scope of the topic of unauthorized entities shall include the
22Florida Nonprofit Multiple Employer Welfare Arrangement Act and
23the Employee Retirement Income Security Act, 29 U.S.C. ss. 1001
24et seq., as it relates to the provision of health insurance by
25employers to their employees and the regulation thereof.
26     Section 5.  Present subsections (15) through (17) of
27section 626.015, Florida Statutes, are renumbered as subsections
28(16) through (18), respectively, and a new subsection (15) is
29added to said section to read:
30     626.015  Definitions.--As used in this part:
31     (15)  "Personal lines agent" means a general lines agent
32who is limited to transacting business related to property and
33casualty insurance sold to individuals and families for
34noncommercial purposes.
35     Section 6.  Subsection (3) is added to section 626.022,
36Florida Statutes, to read:
37     626.022  Scope of part.--
38     (3)  Provisions of this part that apply to general lines
39agents and applicants also apply to personal lines agents and
40applicants, except where otherwise provided.
41     Section 7.  Subsection (8) is added to section 626.241,
42Florida Statutes, to read:
43     626.241  Scope of examination.--
44     (8)  An examination for licensure as a personal lines agent
45shall consist of 100 questions and shall be limited in scope to
46the kinds of business transacted under such license.
47     Section 8.  Subsection (1) of section 626.311, Florida
48Statutes, is amended to read:
49     626.311  Scope of license.--
50     (1)  Except as to personal lines agents and limited
51licenses, the applicant for license as a general lines agent or
52customer representative shall qualify for all property, marine,
53casualty, and surety lines except bail bonds which require a
54separate license under chapter 648.  The license of a general
55lines agent may also cover health insurance if health insurance
56is included in the agent's appointment by an insurer as to which
57the licensee is also appointed as agent for property or casualty
58or surety insurance.  The license of a customer representative
59shall provide, in substance, that it covers all of such classes
60of insurance that his or her appointing general lines agent or
61agency is currently so authorized to transact under the general
62lines agent's license and appointments.  No such license shall
63be issued limited to particular classes of insurance except for
64bail bonds which require a separate license under chapter 648 or
65for personal lines agents. Personal lines agents are limited to
66transacting business related to property and casualty insurance
67sold to individuals and families for noncommercial purposes.
68     Section 9.  Section 626.727, Florida Statutes, is amended
69to read:
70     626.727  Scope of this part.--This part applies only to
71general lines agents, customer representatives, service
72representatives, and managing general agents, all as defined in
73s. 626.015. Provisions of this part which apply to general lines
74agents and applicants also apply to personal lines agents and
75applicants, except where otherwise provided.
76     Section 10.  Subsection (1) of section 626.732, Florida
77Statutes, is amended to read:
78     626.732  Requirement as to knowledge, experience, or
79instruction.--
80     (1)  Except as provided in subsection (3), no applicant for
81a license as a general lines agent or personal lines agent,
82except for a chartered property and casualty underwriter (CPCU),
83other than as to a limited license as to baggage and motor
84vehicle excess liability insurance, credit property insurance,
85credit insurance, in-transit and storage personal property
86insurance, or communications equipment property insurance or
87communication equipment inland marine insurance, shall be
88qualified or licensed unless within the 4 years immediately
89preceding the date the application for license is filed with the
90department the applicant has:
91     (a)  Taught or successfully completed classroom courses in
92insurance, 3 hours of which shall be on the subject matter of
93ethics, satisfactory to the department at a school, college, or
94extension division thereof, approved by the department. To
95qualify for licensure as a personal lines agent, the applicant
96must complete a total of 52 hours of classroom courses in
97insurance;
98     (b)  Completed a correspondence course in insurance, 3
99hours of which shall be on the subject matter of ethics,
100satisfactory to the department and regularly offered by
101accredited institutions of higher learning in this state and,
102except if he or she is applying for a limited license under s.
103626.321, for licensure as a general lines agent, has had at
104least 6 months of responsible insurance duties as a
105substantially full-time bona fide employee in all lines of
106property and casualty insurance set forth in the definition of
107general lines agent under s. 626.015 or, for licensure as a
108personal lines agent, has completed at least 3 months in
109responsible insurance duties as a substantially full-time
110employee in property and casualty insurance sold to individuals
111and families for noncommercial purposes;
112     (c)  For licensure as a general lines agent, completed at
113least 1 year in responsible insurance duties as a substantially
114full-time bona fide employee in all lines of property and
115casualty insurance, exclusive of aviation and wet marine and
116transportation insurances but not exclusive of boats of less
117than 36 feet in length or aircraft not held out for hire, as set
118forth in the definition of a general lines agent under s.
119626.015, without the education requirement mentioned in
120paragraph (a) or paragraph (b) or, for licensure as a personal
121lines agent, has completed at least 6 months in responsible
122insurance duties as a substantially full-time employee in
123property and casualty insurance sold to individuals and families
124for noncommercial purposes without the education requirement in
125paragraph (a) or paragraph(b); or
126     (d)1.  For licensure as a general lines agent, completed at
127least 1 year of responsible insurance duties as a licensed and
128appointed customer representative or limited customer
129representative in commercial or personal lines of property and
130casualty insurance and 40 hours of classroom courses approved by
131the department covering the areas of property, casualty, surety,
132health, and marine insurance; or
133     2.  For licensure as a personal lines agent, completed at
134least 6 months of responsible duties as a licensed and appointed
135customer representative or limited customer representative in
136property and casualty insurance sold to individuals and families
137for noncommercial purposes and 20 hours of classroom courses
138approved by the department which are related to property and
139casualty insurance sold to individuals and families for
140noncommercial purposes;
141     (e)1.2.  For licensure as a general lines agent, completed
142at least 1 year of responsible insurance duties as a licensed
143and appointed service representative in either commercial or
144personal lines of property and casualty insurance and 80 hours
145of classroom courses approved by the department covering the
146areas of property, casualty, surety, health, and marine
147insurance; or.
148     2.  For licensure as a personal lines agent, completed at
149least 6 months of responsible insurance duties as a licensed and
150appointed service representative in property and casualty
151insurance sold to individuals and families for noncommercial
152purposes and 40 hours of classroom courses approved by the
153department related to property and casualty insurance sold to
154individuals and families for noncommercial purposes; or
155     (f)  For licensure as a personal lines agent, completed at
156least 3 years of responsible duties as a licensed and appointed
157customer representative in property and casualty insurance sold
158to individuals and families for noncommercial purposes.
159     Section 11.  The Department of Financial Services does not
160have to begin issuing licenses to personal lines agents on the
161effective date of this act if the department has not completed
162the process of incorporating necessary procedures for issuing
163personal lines licenses into its licensing systems.
164     Section 12.  Subsection (1) of section 626.747, Florida
165Statutes, is amended to read:
166     626.747  Branch agencies.--
167     (1)  Each branch place of business established by an agent
168or agency, firm, corporation, or association shall be in the
169active full-time charge of a licensed general lines agent who is
170appointed to represent one or more insurers.  Any agent or
171agency, firm, corporation, or association which has established
172one or more branch places of business shall be required to have
173at least one licensed general lines agent who is appointed to
174represent one or more insurers at each location of the agency
175including its headquarters location.
176     Section 13.  Paragraph (r) is added to subsection (6) of
177section 627.351, Florida Statutes, to read:
178     627.351  Insurance risk apportionment plans.--
179     (6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
180     (r)  A salaried employee of the corporation who performs
181policy administration services subsequent to the effectuation of
182a corporation policy is not required to be licensed as an agent
183under the provisions of s. 626.112.
184     Section 14.  Paragraphs (c) and (d) of subsection (1) of
185section 626.321, Florida Statutes, are amended to read:
186     626.321  Limited licenses.--
187     (1)  The department shall issue to a qualified individual,
188or a qualified individual or entity under paragraphs (c), (d),
189(e), and (i), a license as agent authorized to transact a
190limited class of business in any of the following categories:
191     (c)  Personal accident insurance.--License covering only
192policies of personal accident insurance covering the risks of
193travel, except as provided in subparagraph 2.  The license may
194be issued only:
195     1.  To a full-time salaried employee of a common carrier or
196a full-time salaried employee or owner of a transportation
197ticket agency and may authorize the sale of such ticket policies
198only in connection with the sale of transportation tickets, or
199to the full-time salaried employee of such an agent.  No such
200policy shall be for a duration of more than 48 hours or for the
201duration of a specified one-way trip or round trip.
202     2.  To a full-time salaried employee of a business which
203offers motor vehicles for rent or lease, or to a business entity
204office of a business which offers motor vehicles for rent or
205lease if insurance sales activities authorized by the license
206are limited to full-time salaried employees.  A business office
207licensed or a person licensed pursuant to this subparagraph may,
208as an agent of an insurer, transact insurance that provides
209coverage for accidental personal injury or death of the lessee
210and any passenger who is riding or driving with the covered
211lessee in the rental motor vehicle if the lease or rental
212agreement is for not more than 30 days, or if the lessee is not
213provided coverage for more than 30 consecutive days per lease
214period; however, if the lease is extended beyond 30 days, the
215coverage may be extended one time only for a period not to
216exceed an additional 30 days.
217     (d)  Baggage and motor vehicle excess liability insurance.-
218-
219     1.  License covering only insurance of personal effects
220except as provided in subparagraph 2.  The license may be issued
221only:
222     a.  To a full-time salaried employee of a common carrier or
223a full-time salaried employee or owner of a transportation
224ticket agency, which person is engaged in the sale or handling
225of transportation of baggage and personal effects of travelers,
226and may authorize the sale of such insurance only in connection
227with such transportation; or
228     b.  To the full-time salaried employee of a licensed
229general lines agent, a full-time salaried employee of a business
230which offers motor vehicles for rent or lease, or to a business
231office of a business entity that which offers motor vehicles for
232rent or lease if insurance sales activities authorized by the
233license are in connection with and incidental to the rental of
234a motor vehicle limited to full-time salaried employees. An
235entity applying for a license under this sub-subparagraph:
236     (I)  Is required to submit only one application for a
237license under s. 626.171. The requirements of s. 626.171(5)
238shall apply only to the officers and directors of the entity
239submitting the application.
240     (II)  Is required to obtain a license for each office,
241branch office, or place of business making use of the entity's
242business name by applying to the department for the license on a
243simplified application form developed by rule of the department
244for this purpose.
245     (III)  Is required to pay the applicable fees for a license
246as prescribed in s. 624.501, be appointed under s. 626.112, and
247pay the prescribed appointment fee under s. 624.501. A licensed
248and appointed entity shall be directly responsible and
249accountable for all acts of the licensee's employees.
250
251The purchaser of baggage insurance shall be provided written
252information disclosing that the insured's homeowner's policy may
253provide coverage for loss of personal effects and that the
254purchase of such insurance is not required in connection with
255the purchase of tickets or in connection with the lease or
256rental of a motor vehicle.
257     2.  A business entity that office licensed pursuant to
258subparagraph 1., or a person licensed pursuant to subparagraph
2591. who is a full-time salaried employee of a business which
260offers motor vehicles for rent or lease, may include lessees
261under a master contract providing coverage to the lessor or may
262transact excess motor vehicle liability insurance providing
263coverage in excess of the standard liability limits provided by
264the lessor in its lease to a person renting or leasing a motor
265vehicle from the licensee's employer for liability arising in
266connection with the negligent operation of the leased or rented
267motor vehicle, provided that the lease or rental agreement is
268for not more than 30 days; that the lessee is not provided
269coverage for more than 30 consecutive days per lease period,
270and, if the lease is extended beyond 30 days, the coverage may
271be extended one time only for a period not to exceed an
272additional 30 days; that the lessee is given written notice that
273his or her personal insurance policy providing coverage on an
274owned motor vehicle may provide additional excess coverage; and
275that the purchase of the insurance is not required in connection
276with the lease or rental of a motor vehicle.  The excess
277liability insurance may be provided to the lessee as an
278additional insured on a policy issued to the licensee's
279employer.
280     3.  A business entity that office licensed pursuant to
281subparagraph 1., or a person licensed pursuant to subparagraph
2821. who is a full-time salaried employee of a business which
283offers motor vehicles for rent or lease, may, as an agent of an
284insurer, transact insurance that provides coverage for the
285liability of the lessee to the lessor for damage to the leased
286or rented motor vehicle if:
287     a.  The lease or rental agreement is for not more than 30
288days; or the lessee is not provided coverage for more than 30
289consecutive days per lease period, but, if the lease is extended
290beyond 30 days, the coverage may be extended one time only for a
291period not to exceed an additional 30 days;
292     b.  The lessee is given written notice that his or her
293personal insurance policy that provides coverage on an owned
294motor vehicle may provide such coverage with or without a
295deductible; and
296     c.  The purchase of the insurance is not required in
297connection with the lease or rental of a motor vehicle.
298     Section 15.  Subsection (2) of section 628.709, Florida
299Statutes, is amended to read:
300     628.709  Formation of a mutual insurance holding company.--
301     (2)  All of the initial shares of the capital stock of the
302insurance company which reorganized as a subsidiary insurance
303company shall be issued either to the mutual insurance holding
304company, or to an intermediate holding company which is wholly
305owned by the mutual insurance holding company. This restriction
306does not preclude the subsequent issuance of additional shares
307of stock by the subsidiary insurance company so long as the
308mutual insurance holding company at all times owns directly or
309through one or more intermediate holding companies, a majority
310of the voting shares of the capital stock of the subsidiary
311insurance company. The membership interests of the policyholders
312of the subsidiary insurance company shall become membership
313interests in the mutual insurance holding company. Policyholders
314of the subsidiary insurance company which was formerly the
315mutual insurer shall be members of the mutual insurance holding
316company in accordance with the articles of incorporation and
317bylaws of the mutual insurance holding company. At the time of
318formation, policyholders of any other subsidiary insurance
319company of the mutual insurance holding company shall not be
320members of the mutual insurance holding company unless:
321     (a)  They are policyholders of a subsidiary which was a
322mutual insurer which merged with the holding company pursuant to
323s. 628.715; or
324     (b)  They are policyholders of an affiliated stock
325insurance company, provided such policyholders were members of
326the mutual insurance company at the time the mutual insurance
327company policies were assumed by the affiliated stock insurance
328company and the assumption occurred in connection with the
329conversion.
330
331Subsequent to formation, membership shall be governed by s.
332628.727.
333     Section 16.  Subsection (6) is added to section 631.021,
334Florida Statutes, to read:
335     631.021  Jurisdiction of delinquency proceeding; venue;
336change of venue; exclusiveness of remedy; appeal.--
337     (6)  The domiciliary court acquiring jurisdiction over
338persons subject to this chapter may exercise exclusive
339jurisdiction to the exclusion of all other courts, except as
340limited by the provisions of this chapter. Upon the issuance of
341an order of conservation, rehabilitation, or liquidation, the
342Circuit Court of Leon County shall have exclusive jurisdiction
343with respect to assets or property of any insurer subject to
344such proceedings and claims against said insurer's assets or
345property.
346     Section 17.  Subsection (6) is added to section 631.041,
347Florida Statutes, to read:
348     631.041  Automatic stay; relief from stay; injunctions.--
349     (6)  The estate of an insurer in rehabilitation or
350liquidation which is injured by any willful violation of an
351applicable stay or injunction shall be entitled to actual
352damages, including costs and attorney's fees, and, in
353appropriate circumstances, the receivership court may impose
354additional sanctions.
355     Section 18.  Section 631.0515, Florida Statutes, is amended
356to read:
357     631.0515  Appointment of receiver; insurance holding
358company.--A delinquency proceeding pursuant to this chapter
359constitutes the sole and exclusive method of dissolving,
360liquidating, rehabilitating, reorganizing, conserving, or
361appointing a receiver of a Florida corporation which is not
362insolvent as defined by s. 607.01401(16); which through its
363shareholders, board of directors, or governing body is
364deadlocked in the management of its affairs; and which directly
365or indirectly owns all of the stock of a Florida domestic
366insurer. The department may petition for an order directing it
367to rehabilitate such corporation if the interests of
368policyholders or the public will be harmed as a result of the
369deadlock. The department shall use due diligence to resolve the
370deadlock. Whether or not the department petitions for an order,
371the circuit court shall not have jurisdiction pursuant to s.
372607.271, s. 607.274, or s. 607.277 to dissolve, liquidate, or
373appoint receivers with respect to, a Florida corporation which
374directly or indirectly owns all of the stock of a Florida
375domestic insurer and which is not insolvent as defined by s.
376607.01401(16). However, a managing general agent or holding
377company with a controlling interest in a domestic insurer in
378this state is subject to jurisdiction of the court under the
379provisions of s. 631.025.
380     Section 19.  Paragraph (a) of subsection (7) of section
381631.141, Florida Statutes, is amended to read:
382     631.141  Conduct of delinquency proceeding; domestic and
383alien insurers.--
384     (7)(a)  In connection with a delinquency proceeding, the
385department may appoint one or more special agents to act for it,
386and it may employ such counsel, clerks, and assistants as it
387deems necessary. The compensation of the special agents,
388counsel, clerks, or assistants and all expenses of taking
389possession of the insurer and of conducting the proceeding shall
390be fixed by the receiver, subject to the approval of the court,
391and shall be paid out of the funds or assets of the insurer.
392Such expenses are administrative expenses and are recoverable by
393the receiver in any actions in which the receiver is authorized
394or entitled to recover its administrative expenses. Within the
395limits of duties imposed upon them, special agents shall possess
396all the powers given to and, in the exercise of those powers,
397shall be subject to all duties imposed upon the receiver with
398respect to such proceeding.
399     Section 20.  Section 631.205, Florida Statutes, is amended
400to read:
401     631.205  Reinsurance proceeds.--All reinsurance proceeds
402payable under a contract of reinsurance to which the insolvent
403insurer is a party are to be paid directly to the domiciliary
404receiver as general assets of the receivership estate unless the
405reinsurance contract contains a clause which specifically names
406the insolvent insurer's insured as a direct beneficiary of the
407reinsurance contract. The entry of an order of conservation,
408rehabilitation, or liquidation shall not be deemed an
409anticipatory breach of any reinsurance contract, nor shall
410insolvency or notice of insolvency be grounds for retroactive
411revocation or retroactive cancellation of any reinsurance
412contracts by the reinsurer.
413     Section 21.  Section 631.206, Florida Statutes, is created
414to read:
415     631.206  Arbitration.--If an insurer in receivership has
416entered into an agreement containing an arbitration provision
417for resolution of disputes, that provision is void and shall be
418replaced by operation of law with the following provision:
419
420Any controversy or claim arising out of or relating to this
421contract, or the breach thereof, shall be settled by arbitration
422pursuant to the American Arbitration Association Commercial
423Arbitration Rules and chapter 682, Florida Statutes, and
424judgment on the award rendered by the arbitrators shall be
425entered by the receivership court. Venue shall be in Leon
426County, Florida. Disputes shall be submitted to a panel of three
427arbitrators, one to be chosen by each party and the third by the
428two so chosen. Arbitrators shall be selected from a list of
429potential qualified arbitrators with 10 years' experience
430involving the insurance industry. If the parties do not agree
431upon the qualifications of a mediator, each party shall select
432its mediator from a list of potential mediators approved by the
433receivership court.
434     Section 22.  Subsection (1) of section 631.261, Florida
435Statutes, is amended, and subsection (4) is added to said
436section, to read:
437     631.261  Voidable transfers.--
438     (1)(a)  Any transfer of, or lien upon, the property of an
439insurer or affiliate which is made or created within 4 months
440prior to the commencement of any delinquency proceeding under
441this chapter which gives with the intent of giving to any
442creditor of the insurer a preference or enables of enabling the
443creditor to obtain a greater percentage of her or his debt than
444any other creditor of the same class, and which is accepted by
445such creditor having reasonable cause to believe that such
446preference will occur, shall be voidable.
447     (b)  Any transfer of, or lien upon, the property of an
448insurer or affiliate which is made or created between 4 months
449and 1 year prior to the commencement of any delinquency
450proceeding under this chapter is void if such transfer or lien
451inured to the benefit of a director, officer, employee,
452stockholder, member, subscriber, affiliate, managing general
453agent, or insider or any relative of any director, officer,
454employee, stockholder, member, subscriber, affiliate, managing
455general agent, or insider.
456     (4)  For purposes of this section, a transfer is not made
457or created until the insurer or affiliate has acquired rights in
458the property transferred.
459     Section 23.  Subsection (2) of section 631.262, Florida
460Statutes, is amended to read:
461     631.262  Transfers prior to petition.--
462     (2)  Transfers shall be deemed to have been made or
463suffered, or obligations incurred, when perfected according to
464the following criteria:
465     (a)  A transfer of property other than real property shall
466be deemed to be made or suffered when it becomes so far
467perfected that no subsequent lien obtainable by legal or
468equitable proceedings on a simple contract could become superior
469to the rights of the transferee.;
470     (b)  A transfer of real property shall be deemed to be made
471or suffered when it becomes so far perfected that no subsequent
472bona fide purchaser from the insurer could obtain rights
473superior to the rights of the transferee.;
474     (c)  A transfer which creates an equitable lien shall not
475be deemed to be perfected if there are available means by which
476a legal lien could be created.;
477     (d)  Any transfer not perfected prior to the filing of a
478petition in a delinquency proceeding shall be deemed to be made
479immediately before the filing of a successful petition.;
480     (e)  For the purposes of this section, a transfer is not
481made until the insurer or affiliate has acquired rights in the
482property transferred.
483     (f)(e)  Paragraphs (a)-(e) (a)-(d) apply whether or not
484there are or were creditors who might have obtained any liens or
485persons who might have become bona fide purchasers.
486     Section 24.  Subsection (6) is added to section 631.263,
487Florida Statutes, to read:
488     631.263  Transfers after petition.--
489     (6)  For the purposes of this section, a transfer is not
490made until the insurer or affiliate has acquired rights in the
491property transferred.
492     Section 25.  Subsection (3) of section 631.54, Florida
493Statutes, is amended to read:
494     631.54  Definitions.--As used in this part:
495     (3)  "Covered claim" means an unpaid claim, including one
496of unearned premiums, which arises out of, and is within the
497coverage, and not in excess of, the applicable limits of an
498insurance policy to which this part applies, issued by an
499insurer, if such insurer becomes an insolvent insurer after
500October 1, 1970, and the claimant or insured is a resident of
501this state at the time of the insured event or the property from
502which the claim arises is permanently located in this state.
503"Covered claim" shall not include:
504     (a)  Any amount due any reinsurer, insurer, insurance pool,
505or underwriting association, sought directly or indirectly
506through a third party, as subrogation, contribution,
507indemnification, or otherwise; or
508     (b)  Any claim that would otherwise be a covered claim
509under this part that has been rejected by any other state
510guaranty fund on the grounds that an insured's net worth is
511greater than that allowed under that state's guaranty law .
512Member insurers shall have no right of subrogation,
513contribution, indemnification, or otherwise, sought directly or
514indirectly through a third party, against the insured of any
515insolvent member.
516     Section 26.  Subsection (2) of section 631.904, Florida
517Statutes, is amended to read:
518     631.904  Definitions.--As used in this part, the term:
519     (2)  "Covered claim" means an unpaid claim, including a
520claim for return of unearned premiums, which arises out of, is
521within the coverage of, and is not in excess of the applicable
522limits of, an insurance policy to which this part applies, which
523policy was issued by an insurer and which claim is made on
524behalf of a claimant or insured who was a resident of this state
525at the time of the injury. The term "covered claim" does not
526include any amount sought as a return of premium under any
527retrospective rating plan; any amount due any reinsurer,
528insurer, insurance pool, or underwriting association, as
529subrogation recoveries or otherwise; any claim that would
530otherwise be a covered claim that has been rejected by any other
531state guaranty fund on the grounds that the insured's net worth
532is greater than that allowed under that state's guaranty fund or
533liquidation law, except this exclusion from the definition of
534covered claim shall not apply to claims of employers who, prior
535to April 30, 2004, entered into an agreement with the
536corporation preserving the employer's right to seek coverage of
537claims rejected by another state's guaranty fund; or any return
538of premium resulting from a policy that was not in force on the
539date of the final order of liquidation. Member insurers have no
540right of subrogation against the insured of any insolvent
541insurer. This provision shall be applied retroactively to cover
542claims of an insolvent self-insurance fund resulting from
543accidents or losses incurred prior to January 1, 1994,
544regardless of the date the petition in circuit court was filed
545alleging insolvency and the date the court entered an order
546appointing a receiver.
547     Section 27.  Section 634.1815, Florida Statutes, is created
548to read:
549     634.1815  Rebating; when allowed.--
550     (1)  No salesperson shall rebate any portion of his or her
551commission except as follows:
552     (a)  The rebate shall be available to all consumers in the
553same actuarial class.
554     (b)  The rebate shall be in accordance with a rebating
555schedule filed by the salesperson with the service agreement
556company issuing the service agreement to which the rebate
557applies. The service agreement company shall maintain a copy of
558all rebating schedules for a period of 3 years.
559     (c)  The rebating schedule shall be uniformly applied so
560all consumers who purchase the same service agreement through
561the salesperson for the same coverage shall receive the same
562percentage rebate.
563     (d)  The rebate schedule shall be prominently displayed in
564public view in the salesperson's place of business, and a copy
565shall be made available to consumers on request at no charge.
566     (e)  The age, sex, place of residence, race, nationality,
567ethnic origin, marital status, or occupation of the consumer
568shall not be used in determining the percentage of the rebate or
569whether a rebate is available.
570     (2)  No rebate shall be withheld or limited in amount based
571on factors which are unfairly discriminatory.
572     (3)  No rebate shall be given which is not reflected on the
573rebate schedule.
574     (4)  No rebate shall be refused or granted based upon the
575purchase of or failure to purchase collateral business.
576     Section 28.  Section 634.3205, Florida Statutes, is created
577to read:
578     634.3205  Rebating; when allowed.--
579     (1)  No sales representative shall rebate any portion of
580his or her commission except as follows:
581     (a)  The rebate shall be available to all consumers in the
582same actuarial class.
583     (b)  The rebate shall be in accordance with a rebating
584schedule filed by the sales representative with the home
585warranty association issuing the home warranty to which the
586rebate applies. The home warranty association shall maintain a
587copy of all rebating schedules for a period of 3 years.
588     (c)  The rebating schedule shall be uniformly applied so
589all consumers who purchase the same home warranty through the
590sales representative for the same coverage shall receive the
591same percentage rebate.
592     (d)  The rebate schedule shall be prominently displayed in
593public view in the sales representative's place of business, and
594a copy shall be made available to consumers on request at no
595charge.
596     (e)  The age, sex, place of residence, race, nationality,
597ethnic origin, marital status, or occupation of the consumer
598shall not be used in determining the percentage of the rebate or
599whether a rebate is available.
600     (2)  No rebate shall be withheld or limited in amount based
601on factors which are unfairly discriminatory.
602     (3)  No rebate shall be given which is not reflected on the
603rebate schedule.
604     (4)  No rebate shall be refused or granted based upon the
605purchase of or failure to purchase collateral business.
606     Section 29.  Subsection (8) is added to section 634.406,
607Florida Statutes, to read:
608     634.406  Financial requirements.--
609     (8)  An association licensed under this part and holding no
610other license under part I or part II of this chapter is not
611required to establish an unearned premium reserve or maintain
612contractual liability insurance and may allow its premiums to
613exceed the ratio to net assets limitation of this section if the
614association complies with the following:
615     (a)  The association or, if the association is a direct or
616indirect wholly owned subsidiary of a parent corporation, its
617parent corporation has, and maintains at all times, a minimum
618net worth of at least $100 million and provides the office with
619the following:
620     1.  A copy of the association's annual audited financial
621statements or the audited consolidated financial statements of
622the association's parent corporation, prepared by an independent
623certified public accountant in accordance with generally
624accepted accounting principles, which clearly demonstrate the
625net worth of the association or its parent corporation to be
626$100 million and a quarterly written certification to the office
627that such entity continues to maintain the net worth required
628under this paragraph.
629     2.  The association's, or its parent corporation's, Form
63010K, Form 10Q, or Form 20F as filed with the United States
631Securities and Exchange Commission or such other documents
632required to be filed with a recognized stock exchange, which
633shall be provided on a quarterly and annual basis within 10 days
634after the last date each such report must be filed with the
635Securities and Exchange Commission, the National Association of
636Security Dealers Automated Quotation system, or other recognized
637stock exchange.
638
639Failure to timely file the documents required under this
640paragraph may, at the discretion of the office, subject the
641association to suspension or revocation of its license under
642this part. An association or parent corporation demonstrating
643compliance with subparagraph 1. and subparagraph 2. must
644maintain outstanding debt obligations, if any, rated in the top
645four rating categories by a recognized rating service.
646     (b)  If the net worth of a parent corporation is used to
647satisfy the net worth provisions of paragraph (a), the following
648provisions must be met:
649     1.  The parent corporation must guarantee all service
650warranty obligations of the association, wherever written, on a
651form approved in advance by the office. No cancellation,
652termination, or modification of the guarantee shall become
653effective unless the parent corporation provides the office
654written notice at least 90 days before the effective date of the
655cancellation, termination, or modification and the office
656approves the request in writing. Prior to the effective date of
657cancellation, termination, or modification of the guarantee, the
658association must demonstrate to the satisfaction of the office
659compliance with all applicable provisions of this part,
660including whether the association will meet the requirements of
661this section by the purchase of contractual liability insurance,
662establishing required reserves, or other method allowed under
663this section. If the association or parent corporation does not
664demonstrate to the satisfaction of the office compliance with
665all applicable provisions of this part, it shall immediately
666cease writing new and renewal business upon the effective date
667of the cancellation, termination, or modification.
668     2.  The association must maintain at all times net assets
669of at least $750,000.
670     Section 30.  Section 634.4225, Florida Statutes, is created
671to read:
672     634.4225  Rebating; when allowed.--
673     (1)  No sales representative shall rebate any portion of
674his or her commission except as follows:
675     (a)  The rebate shall be available to all consumers in the
676same actuarial class.
677     (b)  The rebate shall be in accordance with a rebating
678schedule filed by the sales representative with the association
679issuing the service warranty to which the rebate applies. The
680association shall maintain a copy of all rebating schedules for
681a period of 3 years.
682     (c)  The rebating schedule shall be uniformly applied so
683all consumers who purchase the same service warranty through the
684sales representative for the same coverage shall receive the
685same percentage rebate.
686     (d)  The rebate schedule shall be prominently displayed in
687public view in the sales representative's place of business, and
688a copy shall be made available to consumers on request at no
689charge.
690     (e)  The age, sex, place of residence, race, nationality,
691ethnic origin, marital status, or occupation of the consumer
692shall not be used in determining the percentage of the rebate or
693whether a rebate is available.
694     (2)  No rebate shall be withheld or limited in amount based
695on factors which are unfairly discriminatory.
696     (3)  No rebate shall be given which is not reflected on the
697rebate schedule.
698     (4)  No rebate shall be refused or granted based upon the
699purchase of or failure to purchase collateral business.
700     Section 31.  Subsection (2) of section 624.4072, Florida
701Statutes, is amended to read:
702     624.4072  Minority-owned property and casualty insurers;
703limited exemption for taxation and assessments.--
704     (2)  Subsection (1) applies only to personal lines and
705commercial lines residential property insurance policies as
706defined in s. 627.4025, and applies only to an insurer that has
707employees in this state and has a home office or a regional
708office in this state.  With respect to any tax year or
709assessment year, beginning with the original enactment of this
710section, the exemptions provided by subsection (1) apply only if
711during the year an average of at least 10 percent of the
712insurer's Florida residential property policies in force
713included coverage of covered properties located in enterprise
714zones designated pursuant to s. 290.0065.
715     Section 32.  Subsection (1) of section 627.0629, Florida
716Statutes, is amended to read:
717     627.0629  Residential property insurance; rate filings.--
718     (1)(a)  Effective June 1, 2002, a rate filing for
719residential property insurance must include actuarially
720reasonable discounts, credits, or other rate differentials, or
721appropriate reductions in deductibles, for properties on which
722fixtures or construction techniques demonstrated to reduce the
723amount of loss in a windstorm have been installed or
724implemented. The fixtures or construction techniques shall
725include, but not be limited to, fixtures or construction
726techniques which enhance roof strength, roof covering
727performance, roof-to-wall strength, wall-to-floor-to-foundation
728strength, opening protection, and window, door, and skylight
729strength. Credits, discounts, or other rate differentials for
730fixtures and construction techniques which meet the minimum
731requirements of the Florida Building Code must be included in
732the rate filing. All insurance companies must make a rate filing
733which includes the credits, discounts, or other rate
734differentials by February 28, 2003.
735     (b)  An insurer may petition the office for a hardship
736exemption from the requirements of this section. In applying for
737such an exemption, the insurer must demonstrate:
738     1.a.  That the number of policies written is insufficient
739or of insufficient size to determine the appropriate credit,
740discount, or other rate differential or reduction in
741deductibles; or
742     b.  That the premium derived from the number of policies
743written is so low as to render any credit, discount, or other
744rate differential or appropriate reduction in deductibles not
745cost-effective;
746     3.  That the cost of complying is greater to the insurer
747than the resultant likely savings by virtue of any such credit,
748discount, or other rate differential or appropriate reduction in
749deductibles due to the actuarially demonstrated or actual small
750number of policyholders likely to qualify for or qualifying for
751the discount, credit, or other rate differential or appropriate
752reduction in deductibles;
753     4.  That the type and condition of the market generally and
754specifically to the insurer is such that the discount, credit,
755or other rate differential or appropriate reduction in
756deductibles is not actuarially justified;
757     5.  That granting the exemption is in the best interest of
758the insurer; and
759     6.  That granting the exemption will not place the insurer
760in an unfair competitive position with respect to other insurers
761in the marketplace.
762
763The office may grant the exemption upon its determination that
764the conditions and standards set forth in this paragraph have
765been met. The exemption is valid for 3 years after the date
766granted. With respect to any petition for renewal of the
767exemption, the chief executive officer of the insurer must
768certify that there has been no material change in the conditions
769under which the exemption was granted.
770     Section 33.  Section 627.066, Florida Statutes, is
771repealed.
772     Section 34.  Paragraph (d) of subsection (2) of section
773627.0651, Florida Statutes, is amended to read:
774     627.0651  Making and use of rates for motor vehicle
775insurance.--
776     (2)  Upon receiving notice of a rate filing or rate change,
777the office shall review the rate or rate change to determine if
778the rate is excessive, inadequate, or unfairly discriminatory.
779In making that determination, the office shall in accordance
780with generally accepted and reasonable actuarial techniques
781consider the following factors:
782     (d)  Investment income reasonably expected by the insurer,
783consistent with the insurer's investment practices, from
784investable premiums anticipated in the filing, plus any other
785expected income from currently invested assets representing the
786amount expected on unearned premium reserves and loss reserves.  
787Such investment income shall not include income from invested
788surplus.  The commission may adopt rules utilizing reasonable
789techniques of actuarial science and economics to specify the
790manner in which insurers shall calculate investment income
791attributable to motor vehicle insurance policies written in this
792state and the manner in which such investment income is used in
793the calculation of insurance rates.  Such manner shall
794contemplate the use of a positive underwriting profit allowance
795in the rates that will be compatible with a reasonable rate of
796return plus provisions for contingencies. The total of the
797profit and contingency factor as specified in the filing shall
798be utilized in computing excess profits in conjunction with s.
799627.066. In adopting such rules, the commission shall in all
800instances adhere to and implement the provisions of this
801paragraph.
802     Section 35.  Subsection (4) of section 628.6017, Florida
803Statutes, is amended to read:
804     628.6017  Converting assessable mutual insurer.--
805     (4)  An assessable mutual insurer becoming a stock insurer
806or a nonassessable mutual insurer shall not be subject to s.
807627.215 or s. 627.351(5) for 5 years following authorization of
808the conversion by the office. However, the converted stock
809insurer or nonassessable mutual insurer shall file all necessary
810data required by s. 627.215. Such amounts otherwise subject to
811s. 627.215(10) shall be maintained as surplus as to
812policyholders and not be available for dividends for a period of
8135 years.
814     Section 36.  Effective upon this act becoming a law, and
815contingent upon the enactment of SB 2910, HB 1629, or similar
816legislation, subsection (20) of section 627.64872, Florida
817Statutes, is created to read:
818     627.64872  Florida Health Insurance Plan.--
819     (20)  COMBINING MEMBERSHIP OF THE FLORIDA COMPREHENSIVE
820HEALTH ASSOCIATION.--
821     (a)1.  Upon implementation of the Florida Health Insurance
822Plan, the Florida Comprehensive Health Association, as specified
823in s. 627.6488, is abolished as a separate nonprofit entity and
824shall be subsumed under the Board of Directors of the Florida
825Health Insurance Plan. All individuals actively enrolled in the
826Florida Comprehensive Health Association shall be enrolled in
827the plan subject to its rules and requirements, except as
828otherwise specified in this section. Maximum lifetime benefits
829paid to an individual in the plan may not exceed the amount
830established under subsection (16), and benefits previously paid
831for any individual by the Florida Comprehensive Health
832Association shall be used in the determination of the total
833lifetime benefits paid under the plan.
834     2.  All persons enrolled in the Florida Comprehensive
835Health Association upon implementation of the Florida Health
836Insurance Plan are eligible only for the benefits authorized
837under subsection (16). Persons identified by this section shall
838convert to the benefits authorized under subsection (16) no
839later than January 1, 2005.
840     3.  Except as otherwise provided in this section, the
841Florida Comprehensive Health Association shall operate under the
842existing plan of operation without modification until the
843adoption of the new plan of operation for the Florida Health
844Insurance Plan.
845     (b)  As a condition of doing business in this state, an
846insurer shall pay an assessment to the board in the amount
847prescribed by this paragraph. For operating losses incurred on
848or after July 1, 2004, by persons previously enrolled in the
849Florida Comprehensive Health Association, each insurer shall
850annually be assessed by the board in the following calendar year
851a portion of such incurred operating losses of the plan. Such
852portion shall be determined by multiplying such operating losses
853by a fraction, the numerator of which equals the insurer's
854earned premium pertaining to direct writings of health insurance
855in the state during the calendar year proceeding that for which
856the assessment is levied, and the denominator of which equals
857the total of all such premiums earned by participating insurers
858in the state during such calendar year. For the purposes of this
859section only, the term "health insurance" means any hospital and
860medical expense incurred policy, minimum premium plan, stop-loss
861coverage, health maintenance organization contract, prepaid
862health clinic contract, multiple-employer welfare arrangement
863contract, or fraternal benefit society health benefits contract,
864whether sold as an individual or group policy or contract. The
865term does not include any policy covering medical payment
866coverage or personal injury protection coverage in a motor
867vehicle policy, coverage issued as a supplement to liability
868insurance, or workers' compensation.
869     Section 37.  Section 624.428, Florida Statutes, is amended
870to read:
871     624.428  Licensed agent law, life and health insurances.--
872     (1)  No life insurer shall deliver or issue for delivery in
873this state any policy of life insurance, master group life
874insurance contract, master credit life policy or agreement,
875annuity contract, or contract or policy of health insurance,
876unless the application for such policy or contract is taken by,
877and the delivery of such policy or contract is made through, a
878resident or nonresident an insurance agent of the insurer duly
879licensed and appointed under the law of this state, who shall
880receive the usual commission due to an agent from such insurer.
881     (2)  Each such insurer shall maintain a licensed and
882appointed resident or nonresident agent at all times for the
883purpose of and through whom policies or contracts issued or
884delivered in this state shall be serviced.
885     (3)  This section does not apply to policies of insurance
886or annuity contracts on nonresidents which are applied for
887outside, and delivered in, the state or to reissuance of
888insurance policies or endorsements thereto which are part of a
889mass reissuance of such policies or endorsements and do not
890involve a change of premium or payment of agent's commissions.
891     Section 38.  Section 627.0915, Florida Statutes, is amended
892to read:
893     627.0915  Rate filings; workers' compensation, drug-free
894workplace, and safe employers.-
895     (1)  The office shall approve rating plans for workers'
896compensation and employer's liability insurance that give
897specific identifiable consideration in the setting of rates to
898employers that either implement a drug-free workplace program
899pursuant to s. 440.102 and rules adopted under such section by
900the commission or implement a safety program pursuant to
901provisions of the rating plan or implement both a drug-free
902workplace program and a safety program. The plans must be
903actuarially sound and must state the savings anticipated to
904result from such drug-testing and safety programs.
905     (2)  An insurer offering a rate plan approved under this
906section shall notify the employer at the time of a written offer
907of insurance and at the time of each renewal of the policy of
908the availability of the premium discount where a drug fee
909workplace plan is used by the employer pursuant to s. 440.102
910and related rules. The Financial Services Commission may adopt
911rules to implement the provisions of this subsection.
912
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914     Remove line 25 and insert:
915an insured; providing criteria and limitations; amending s.
916626.2815, F.S.; deleting certain minimum continuing education
917requirements; amending s. 626.015, F.S.; defining the term
918"personal lines agent";  amending s. 626.022, F.S.; providing
919for application; amending s. 626.241, F.S.; limiting the scope
920of personal lines agent examinations; amending s. 626.311, F.S.;
921limiting the types of business that may be transacted by
922personal lines agents; amending s. 626.727, F.S.; providing that
923certain provisions apply to personal lines agents; amending s.
924626.732, F.S.; revising certain education and experience
925requirements for personal lines agents; amending s. 626.747,
926F.S.; requiring branch agencies to have certain licensed agents
927at each location; amending s. 627.351, F.S.; providing that
928certain employees of the Citizens' Property Insurance
929Corporation need not be licensed as agents; providing that the
930act does not require the Department of Financial Services to
931begin issuing certain licenses by the effective date of the act,
932under specified conditions; amending s. 626.321, F.S.; limiting
933the types of business that may be transacted by personal lines
934agents; amending s. 628.709, F.S.; revising membership criteria
935for mutual insurance holding companies relating to policyholders
936of subsidiary insurance companies; amending s. 631.021, F.S.;
937authorizing certain domiciliary courts to exercise exclusive
938jurisdiction over certain persons under certain circumstances;
939specifying the Circuit Court of Leon County as having exclusive
940jurisdiction over certain proceedings and claims; amending s.
941631.041, F.S.; entitling the estates of certain injured insurers
942to actual damages; authorizing a receivership court to impose
943additional sanctions; amending s. 631.0515, F.S.; subjecting
944certain managing general agents or holding companies to court
945jurisdiction under certain circumstances; amending s. 631.141,
946F.S.; specifying certain expenses as administrative and
947recoverable by a receiver in certain proceedings; amending s.
948631.205, F.S.; specifying that entry of certain orders does not
949constitute anticipatory breach of certain contracts or serve as
950grounds for certain adverse contract actions by a reinsurer;
951creating s. 631.206, F.S.; voiding certain contractual
952arbitration provisions by insurers in receivership; specifying a
953replacement arbitration provision; amending s. 631.261, F.S.;
954voiding certain transfers or liens made by certain persons prior
955to certain delinquency proceedings; specifying a criterion for
956making certain transfers; amending ss. 631.262 and 631.263,
957F.S.; specifying a criterion for making certain transfers;
958amending ss. 631.54 and 631.904, F.S.; revising the definition
959of covered claim; excluding certain claims rejected by another
960state's guaranty fund under certain circumstances; providing an
961exception; denying member insurers any right to indemnification
962or contribution sought through third parties; creating s.
963634.1815, F.S.; providing conditions under which a salesperson
964of a motor vehicle service agreement company may rebate his or
965her commission; creating s. 634.3205, F.S.; providing conditions
966under which a sales representative of a home warranty
967association may rebate his or her commission; amending s.
968634.406, F.S.; providing conditions under which a service
969warranty association is exempt from certain premium reserve and
970liability insurance requirements and may allow premiums to
971exceed certain limits; creating s. 634.4225, F.S.; providing
972conditions under which a sales representative of a service
973warranty association may rebate his or her commission; amending
974s. 624.4072, F.S.; specifying applicability of certain
975exemptions for minority-owned property and casualty insurers;
976amending s. 627.0629, F.S.; authorizing an exemption for certain
977insurers under certain circumstances; repealing s. 627.066,
978F.S., relating to insurance profits; amending ss. 627.0651 and
979628.6017, F.S., to conform; creating s. 627.64872(20), F.S.;
980defining the term "health insurance" for purposes of this
981section; creating s. 17.0416, F.S.; amending s. 624.428, F.S.;
982clarifying provisions relating to resident agent requirements
983for insurers issuing specified types of life insurance policies;
984amending s. 627.0915, F.S.; providing for notice by insurers to
985employers of the availability of premium discounts where drug
986free workplace programs are used; authorizing the Financial
987Services Commission to adopt rules; providing


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