HB 1687

1
A bill to be entitled
2An act relating to insurers; amending s. 626.854, F.S.;
3limiting the scope of a public adjuster?s authority;
4requiring public adjusters to provide certain information
5and make certain disclosures; prohibiting a public
6adjuster from restricting access to certain entities and
7communications with certain entities; requiring public
8adjusters to submit certain recorded statements and sworn
9examinations under certain circumstances; amending s.
10631.021, F.S.; authorizing certain domiciliary courts to
11exercise exclusive jurisdiction over certain persons under
12certain circumstances; specifying the Circuit Court of
13Leon County as having exclusive jurisdiction over certain
14proceedings and claims; amending s. 631.041, F.S.;
15entitling the estates of certain injured insurers to
16actual damages; authorizing a receivership court to impose
17additional sanctions; amending s. 631.0515, F.S.;
18subjecting certain managing general agents or holding
19companies to court jurisdiction under certain
20circumstances; amending s. 631.141, F.S.; specifying
21certain expenses as administrative and recoverable by a
22receiver in certain proceedings; amending s. 631.205,
23F.S.; specifying that entry of certain orders does not
24constitute anticipatory breach of certain contracts or
25serve as grounds for certain adverse contract actions by a
26reinsurer; creating s. 631.206, F.S.; voiding certain
27contractual arbitration provisions by insurers in
28receivership; specifying a replacement arbitration
29provision; amending s. 631.261, F.S.; voiding certain
30transfers or liens made by certain persons prior to
31certain delinquency proceedings; specifying a criterion
32for making certain transfers; amending ss. 631.262 and
33631.263, F.S.; specifying a criterion for making certain
34transfers; creating s. 631.400, F.S.; requiring a receiver
35to deposit certain estate funds of a liquidated insurance
36company into a separate closed estate account under
37certain circumstances; specifying use of such funds by the
38Division of Rehabilitation and Liquidation of the
39Department of Financial Services for certain purposes;
40specifying nonreversion of certain funds to the state but
41retention for certain uses; providing an effective date.
42
43Be It Enacted by the Legislature of the State of Florida:
44
45     Section 1.  Section 626.854, Florida Statutes, is amended
46to read:
47     626.854  "Public adjuster" defined; prohibitions;
48disclosure requirements.--The Legislature finds that it is
49necessary for the protection of the public to regulate public
50insurance adjusters and to prevent the unauthorized practice of
51law.
52     (1)  A "public adjuster" is any person, except a duly
53licensed attorney at law as hereinafter in s. 626.860 provided,
54who, for money, commission, or any other thing of value,
55prepares, completes, or files an insurance claim form for an
56insured or third-party claimant or who, for money, commission,
57or any other thing of value, acts or aids in any manner on
58behalf of an insured or third-party claimant in negotiating for
59or effecting the settlement of a claim or claims for loss or
60damage covered by an insurance contract or who advertises for
61employment as an adjuster of such claims, and also includes any
62person who, for money, commission, or any other thing of value,
63solicits, investigates, or adjusts such claims on behalf of any
64such public adjuster.
65     (2)  This definition does not apply to:
66     (a)  A licensed health care provider or employee thereof
67who prepares or files a health insurance claim form on behalf of
68a patient.
69     (b)  A person who files a health claim on behalf of another
70and does so without compensation.
71     (3)(a)  A public adjuster may not give legal advice. A
72public adjuster may not act on behalf of or aid any person in
73negotiating or settling a claim relating to bodily injury,
74death, or noneconomic damages, or issues relating to extra-
75contractual damages, violations of part IX, tort claims,
76statutory interest, or costs and attorney?s fees.
77     (b)  A public adjuster must provide to the insurer and its
78representatives, together with the notice of representation, a
79complete copy of any contract between the public adjuster and
80the insured or claimant. The public adjuster must also provide
81the insurer and its representatives with a copy of any amended,
82revised, or supplemental contract entered into at any point
83during the claims handling process immediately upon entering
84into such amended, revised, or supplemental contract.
85Disclosures under this paragraph shall be in a form specified by
86rule of the Financial Services Commission.
87     (c)  A public adjuster must disclose to his or her client
88and to the insurer any direct or indirect interest the public
89adjuster may have, and any compensation, referral fee, or other
90consideration the public adjuster may receive from any person
91performing services in connection with the adjustment of a claim
92or the repair or replacement of insured property.
93     (d)  A public adjuster may not at any time restrict access
94to an insured, a claimant, or insured property by an insurer,
95company adjuster, independent adjuster, attorney, or other
96person acting on behalf of the insurer.
97     (e)  A public adjuster may not, in connection with any
98claim, refuse to speak with an insurer, company adjuster,
99independent adjuster, attorney, or other person acting on behalf
100of the insurer. A public adjuster shall provide a recorded
101statement and an examination under oath upon request of an
102insurer, company adjuster, independent adjuster, attorney, or
103other person acting on behalf of the insurer.
104     (4)  For purposes of this section, the term "insured"
105includes only the policyholder and any beneficiaries named or
106similarly identified in the policy.
107     Section 2.  Subsection (6) is added to section 631.021,
108Florida Statutes, to read:
109     631.021  Jurisdiction of delinquency proceeding; venue;
110change of venue; exclusiveness of remedy; appeal.--
111     (6)  The domiciliary court acquiring jurisdiction over
112persons subject to this section may exercise exclusive
113jurisdiction to the exclusion of all other courts, except as
114limited by the provisions of this section. Upon the issuance of
115an order of conservation, rehabilitation, or liquidation, the
116Circuit Court of Leon County shall have exclusive jurisdiction
117with respect to assets or property of any insurer subject to
118such proceedings and claims against said insurer's assets or
119property.
120     Section 3.  Subsection (6) is added to section 631.041,
121Florida Statutes, to read:
122     631.041  Automatic stay; relief from stay; injunctions.--
123     (6)  The estate of an insurer in rehabilitation or
124liquidation which is injured by any willful violation of an
125applicable stay or injunction shall be entitled to actual
126damages, including costs and attorney's fees, and, in
127appropriate circumstances, the receivership court may impose
128additional sanctions.
129     Section 4.  Section 631.0515, Florida Statutes, is amended
130to read:
131     631.0515  Appointment of receiver; insurance holding
132company.--A delinquency proceeding pursuant to this chapter
133constitutes the sole and exclusive method of dissolving,
134liquidating, rehabilitating, reorganizing, conserving, or
135appointing a receiver of a Florida corporation which is not
136insolvent as defined by s. 607.01401(16); which through its
137shareholders, board of directors, or governing body is
138deadlocked in the management of its affairs; and which directly
139or indirectly owns all of the stock of a Florida domestic
140insurer. The department may petition for an order directing it
141to rehabilitate such corporation if the interests of
142policyholders or the public will be harmed as a result of the
143deadlock. The department shall use due diligence to resolve the
144deadlock. Whether or not the department petitions for an order,
145the circuit court shall not have jurisdiction pursuant to s.
146607.271, s. 607.274, or s. 607.277 to dissolve, liquidate, or
147appoint receivers with respect to, a Florida corporation which
148directly or indirectly owns all of the stock of a Florida
149domestic insurer and which is not insolvent as defined by s.
150607.01401(16). However, a managing general agent or holding
151company with a controlling interest in a domestic insurer in
152this state is subject to jurisdiction of the court under the
153provisions of s. 631.025.
154     Section 5.  Paragraph (a) of subsection (7) of section
155631.141, Florida Statutes, is amended to read:
156     631.141  Conduct of delinquency proceeding; domestic and
157alien insurers.--
158     (7)(a)  In connection with a delinquency proceeding, the
159department may appoint one or more special agents to act for it,
160and it may employ such counsel, clerks, and assistants as it
161deems necessary. The compensation of the special agents,
162counsel, clerks, or assistants and all expenses of taking
163possession of the insurer and of conducting the proceeding shall
164be fixed by the receiver, subject to the approval of the court,
165and shall be paid out of the funds or assets of the insurer.
166Such expenses are administrative expenses and are recoverable by
167the receiver in any actions in which the receiver is authorized
168or entitled to recover its administrative expenses. Within the
169limits of duties imposed upon them, special agents shall possess
170all the powers given to and, in the exercise of those powers,
171shall be subject to all duties imposed upon the receiver with
172respect to such proceeding.
173     Section 6.  Section 631.205, Florida Statutes, is amended
174to read:
175     631.205  Reinsurance proceeds.--All reinsurance proceeds
176payable under a contract of reinsurance to which the insolvent
177insurer is a party are to be paid directly to the domiciliary
178receiver as general assets of the receivership estate unless the
179reinsurance contract contains a clause which specifically names
180the insolvent insurer's insured as a direct beneficiary of the
181reinsurance contract. The entry of an order of conservation,
182rehabilitation, or liquidation shall not be deemed an
183anticipatory breach of any reinsurance contract, nor shall it be
184grounds for retroactive revocation or retroactive cancellation
185of any reinsurance contracts by the reinsurer.
186     Section 7.  Section 631.206, Florida Statutes, is created
187to read:
188     631.206  Arbitration.--If an insurer in receivership has
189entered into an agreement containing an arbitration provision
190for resolution of disputes, that provision is void and shall be
191replaced by operation of law with the following provision:
192
193Any controversy or claim arising out of or relating to
194this contract, or the breach thereof, shall be settled
195by arbitration pursuant to the American Arbitration
196Association Commercial Arbitration Rules and chapter
197682, Florida Statutes, and judgment on the award
198rendered by the arbitrators shall be entered by the
199receivership court. Venue shall be in Leon County,
200Florida. Disputes shall be submitted to a panel of
201three arbitrators, one to be chosen by each party and
202the third by the two so chosen. Arbitrators shall be
203selected from a list of potential qualified
204arbitrators with 10 years' experience involving the
205insurance industry. If the parties do not agree upon
206the qualifications of a mediator, each party shall
207select its mediator from a list of potential mediators
208approved by the receivership court.
209
210     Section 8.  Subsection (1) of section 631.261, Florida
211Statutes, is amended, and subsection (4) is added to said
212section, to read:
213     631.261  Voidable transfers.--
214     (1)(a)  Any transfer of, or lien upon, the property of an
215insurer or affiliate which is made or created within 4 months
216prior to the commencement of any delinquency proceeding under
217this chapter which gives with the intent of giving to any
218creditor of the insurer a preference or enables of enabling the
219creditor to obtain a greater percentage of her or his debt than
220any other creditor of the same class, and which is accepted by
221such creditor having reasonable cause to believe that such
222preference will occur, shall be voidable.
223     (b)  Any transfer of, or lien upon, the property of an
224insurer or affiliate which is made or created between 4 months
225and 1 year prior to the commencement of any delinquency
226proceeding under this chapter is void if such transfer or lien
227inured to the benefit of a director, officer, employee,
228stockholder, member, subscriber, affiliate, managing general
229agent, or insider or any relative of any director, officer,
230employee, stockholder, member, subscriber, affiliate, managing
231general agent, or insider.
232     (4)  For purposes of this section, a transfer is not made
233or created until the insurer or affiliate has acquired rights in
234the property transferred.
235     Section 9.  Paragraph (e) of subsection (2) of section
236631.262, Florida Statutes, is redesignated as paragraph (f) and
237amended, and new paragraph (e) is added to said subsection, to
238read:
239     631.262  Transfers prior to petition.--
240     (2)  Transfers shall be deemed to have been made or
241suffered, or obligations incurred, when perfected according to
242the following criteria:
243     (a)  A transfer of property other than real property shall
244be deemed to be made or suffered when it becomes so far
245perfected that no subsequent lien obtainable by legal or
246equitable proceedings on a simple contract could become superior
247to the rights of the transferee.;
248     (b)  A transfer of real property shall be deemed to be made
249or suffered when it becomes so far perfected that no subsequent
250bona fide purchaser from the insurer could obtain rights
251superior to the rights of the transferee.;
252     (c)  A transfer which creates an equitable lien shall not
253be deemed to be perfected if there are available means by which
254a legal lien could be created.;
255     (d)  Any transfer not perfected prior to the filing of a
256petition in a delinquency proceeding shall be deemed to be made
257immediately before the filing of a successful petition.;
258     (e)  For the purposes of this section, a transfer is not
259made until the insurer or affiliate has acquired rights in the
260property transferred.
261     (f)(e)  Paragraphs (a)-(e)(d) apply whether or not there
262are or were creditors who might have obtained any liens or
263persons who might have become bona fide purchasers.
264     Section 10.  Subsection (6) is added to section 631.263,
265Florida Statutes, to read:
266     631.263  Transfers after petition.--
267     (6)  For the purposes of this section, a transfer is not
268made until the insurer or affiliate has acquired rights in the
269property transferred.
270     Section 11.  Section 631.400, Florida Statutes, is created
271to read:
272     631.400  Closed estate account.--
273     (1)  If unclaimed funds remain in the estate of a liquidated
274insurance company after the estate is closed or a receiver
275recovers funds in an estate of a liquidated insurance company
276after the estate is closed, the receiver shall deposit those
277funds when received into a separate closed estate account.
278     (2)  Funds received and deposited in the account pursuant to
279subsection (1) shall be used by the Division of Rehabilitation
280and Liquidation of the Department of Financial Services to defray
281the division?s expenses in the discharge of its duties as
282prescribed by law, including the initiation of delinquency
283proceedings and all other legitimate expenses relating to the
284discharge of the duties imposed in and charged to the division.
285     (3)  If, at the end of any fiscal year, a balance of funds
286remains in a closed estate account, such balance shall not
287revert to the general fund of the state but shall be retained in
288the closed estate account to be used for the purposes set forth
289in subsection (2).
290     Section 12.  This act shall take effect upon becoming a
291law.


CODING: Words stricken are deletions; words underlined are additions.