Senate Bill sb2038c2
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By the Committees on Commerce, Economic Opportunities, and
Consumer Services; Banking and Insurance; and Senator Fasano
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1 A bill to be entitled
2 An act relating to insurance; amending s.
3 20.121, F.S.; requiring the Division of
4 Consumer Services of the Department of
5 Financial Services to designate an employee as
6 primary contact for consumers on issues
7 involving sinkholes; amending s. 501.137, F.S.;
8 requiring an insurer to reinstate, under
9 certain circumstances, an insurance policy that
10 is cancelled due to failure of the lender to
11 pay a premium for which sufficient escrow funds
12 are on deposit; requiring that the lender
13 reimburse the property owner for any penalties
14 or fees paid for purposes of reinstating the
15 policy; requiring the lender to pay the
16 increased cost of insurance premiums for a
17 specified period of time under certain
18 conditions; amending s. 624.4622, F.S.;
19 providing that a local government
20 self-insurance fund comply with specified
21 provisions relating to financial statements;
22 amending s. 624.610, F.S.; revising the
23 requirements of a trust fund for a single
24 assuming insurer; amending s. 625.081, F.S.;
25 providing an exception for credit disability
26 insurance from a health insurance active life
27 reserve requirement; amending s. 625.121, F.S.;
28 providing for valuation of life insurance
29 policies; amending s. 626.321, F.S.; limiting
30 the types of business that may be transacted by
31 personal lines agents; creating s. 626.9743,
1
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1 F.S., relating to claim settlement practices
2 for motor vehicle insurance; prescribing
3 standards to be followed by insurers; creating
4 s. 626.9744, F.S., relating to claim settlement
5 practices for homeowners' insurance;
6 prescribing standards to be followed by
7 insurers; amending s. 627.0629, F.S.; exempting
8 industrial fire insurance policies from certain
9 requirements for rate filings; amending s.
10 627.311, F.S.; allowing the automobile
11 insurance joint underwriting plan to require
12 additional proof from insureds regarding
13 cancellation of coverage; allowing additional
14 time for the investigation of claims against
15 the plan; providing for expiration of the
16 provision; amending s. 627.4091, F.S.;
17 providing additional disclosure requirements
18 with respect to a refusal to insure; amending
19 s. 627.4133, F.S.; requiring property insurers
20 to reinstate a canceled policy as required by
21 s. 501.137, F.S.; restricting the use of
22 certain claims as a cause for cancellation or
23 nonrenewal; amending s. 627.476, F.S.;
24 authorizing the use of certain mortality tables
25 for purposes of the Standard Nonforfeiture Law
26 for Life Insurance; creating s. 627.7077, F.S.;
27 providing for a feasibility study for a
28 proposed Florida Sinkhole Insurance Facility;
29 amending s. 627.838, F.S.; deleting a filing
30 fee; amending s. 627.848, F.S.; specifying
31 provisions for cancellation of insurance
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1 contracts; amending s. 627.849, F.S., to
2 conform to the elimination of a filing fee;
3 providing for a study and report by the Florida
4 State University College of Business on
5 personal lines property and casualty insurance;
6 repealing s. 625.131, F.S., relating to credit
7 life and disability policies; providing for
8 construction of the act; providing effective
9 dates.
10
11 Be It Enacted by the Legislature of the State of Florida:
12
13 Section 1. Paragraph (h) of subsection (2) of section
14 20.121, Florida Statutes, is amended to read:
15 20.121 Department of Financial Services.--There is
16 created a Department of Financial Services.
17 (2) DIVISIONS.--The Department of Financial Services
18 shall consist of the following divisions:
19 (h) The Division of Consumer Services, which shall
20 include a Bureau of Funeral and Cemetery Services.
21 1. The Division of Consumer Services shall perform the
22 following functions concerning products or services regulated
23 by the Department of Financial Services or by either office of
24 the Financial Services Commission:
25 a. Receive inquiries and complaints from consumers.;
26 b. Prepare and disseminate such information as the
27 department deems appropriate to inform or assist consumers.;
28 c. Provide direct assistance and advocacy for
29 consumers who request such assistance or advocacy.;
30 d. With respect to apparent or potential violations of
31 law or applicable rules by a person or entity licensed by the
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1 department or by either office of the commission, report such
2 apparent or potential violation to the appropriate division of
3 the department or office of the commission, which may take
4 such further action as it deems appropriate.
5 e. Designate an employee of the division as primary
6 contact for consumers on issues relating to sinkholes.
7 2. Any person licensed or issued a certificate of
8 authority by the department or by the Office of Insurance
9 Regulation shall respond, in writing, to the Division of
10 Consumer Services within 20 days after receipt of a written
11 request for information from the division concerning a
12 consumer complaint. The response must address the issues and
13 allegations raised in this complaint. The division may, in its
14 discretion, impose an administrative penalty for failure to
15 comply with this subparagraph in an amount up to $2,500 per
16 violation upon any entity licensed by the department or the
17 Office of Insurance Regulation and $250 for the first
18 violation, $500 for the second violation and up to $1,000 per
19 violation thereafter upon any individual licensed by the
20 department or the Office of Insurance Regulation.
21 3. The department may adopt rules to implement the
22 provisions of this paragraph.
23 4. The powers, duties, and responsibilities expressed
24 or granted in this paragraph shall not limit the powers,
25 duties, and responsibilities of the Department of Financial
26 Services, the Financial Services Commission, the Office of
27 Insurance Regulation, or the Office of Financial Regulation
28 set forth elsewhere in the Florida Statutes.
29 Section 2. Section 501.137, Florida Statutes, is
30 amended to read:
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1 501.137 Mortgage lenders; tax and insurance payments
2 from escrow accounts; duties.--
3 (1) Every lender of money, whether a natural person or
4 an artificial entity, whose loans are secured by a mortgage on
5 real estate located within the state and who receives funds
6 incidental thereto or in connection therewith for the payment
7 of property taxes or hazard insurance premiums when the such
8 funds are held in escrow by or on behalf of the lender, shall
9 promptly pay the such taxes or insurance premiums when the
10 such taxes or premiums become due and adequate escrow funds
11 are deposited, so that the maximum tax discount available may
12 be obtained with regard to the taxable property and so that
13 insurance coverage on the property does not lapse.
14 (2) If an escrow account for the such taxes or
15 insurance premiums is deficient, the lender shall notify the
16 property owner within 15 days after the lender receives the
17 notification of taxes due from the county tax collector or
18 receives the notification from the insurer that a premium is
19 due.
20 (3)(a) If the lender, as a result of neglect, fails to
21 pay any tax or insurance premium when the tax or premium is
22 due and there are sufficient escrow funds on deposit to pay
23 the tax or premium, and if the property owner suffers a loss
24 as a result of this such failure, then the lender is will be
25 liable for the such loss; except, however, that with respect
26 to any loss which would otherwise have been insured, the
27 extent of the such liability shall not exceed the coverage
28 limits of any insurance policy which has lapsed.
29 (b) If the lender violates paragraph (a) and the
30 premium payment is not more than 90 days overdue, the insurer
31 shall reinstate the insurance policy, retroactive to the date
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1 of cancellation, and the lender shall reimburse the property
2 owner for any penalty or fees imposed by the insurer and paid
3 by the property owner for purposes of reinstating the policy.
4 (c) If the lender violates paragraph (a) and the
5 premium payment is more than 90 days overdue or if the insurer
6 refuses to reinstate the insurance policy, the lender shall
7 pay the difference between the cost of the previous insurance
8 policy and a new, comparable insurance policy for a period of
9 2 years.
10 (4) At the expiration of the annual accounting period,
11 the lender shall issue to the property owner an annual
12 statement of the escrow account.
13 Section 3. Subsection (3) is added to section
14 624.4622, Florida Statutes, to read:
15 624.4622 Local government self-insurance funds.--
16 (3)(a) A local government self-insurance fund formed
17 after January 1, 2005, shall, for its first 5 fiscal years,
18 file with the office full and true statements of its financial
19 condition, transactions, and affairs. An annual statement
20 covering the preceding fiscal year shall be filed within 60
21 days after the end of the fund's fiscal year and quarterly
22 statements shall be filed within 45 days after each such date.
23 The office may, for good cause, grant an extension of time for
24 filing an annual or quarterly statement. The statements shall
25 contain information generally included in insurers' financial
26 statements prepared in accordance with generally accepted
27 insurance accounting principles and practices and in a form
28 generally used by insurers for financial statements, sworn to
29 by at least two executive officers of the self-insurance fund.
30 The form for financial statements shall be the form currently
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1 approved by the National Association of Insurance
2 Commissioners for use by property and casualty insurers.
3 (b) Each annual statement shall contain a statement of
4 opinion on loss and loss adjustment expense reserves made by a
5 member of the American Academy of Actuaries. Workpapers in
6 support of the statement of opinion must be provided to the
7 office upon request.
8 Section 4. Paragraph (c) of subsection (3) of section
9 624.610, Florida Statutes, is amended to read:
10 624.610 Reinsurance.--
11 (3)
12 (c)1. Credit must be allowed when the reinsurance is
13 ceded to an assuming insurer that maintains a trust fund in a
14 qualified United States financial institution, as defined in
15 paragraph (5)(b), for the payment of the valid claims of its
16 United States ceding insurers and their assigns and successors
17 in interest. To enable the office to determine the sufficiency
18 of the trust fund, the assuming insurer shall report annually
19 to the office information substantially the same as that
20 required to be reported on the NAIC Annual Statement form by
21 authorized insurers. The assuming insurer shall submit to
22 examination of its books and records by the office and bear
23 the expense of examination.
24 2.a. Credit for reinsurance must not be granted under
25 this subsection unless the form of the trust and any
26 amendments to the trust have been approved by:
27 (I) The insurance regulator of the state in which the
28 trust is domiciled; or
29 (II) The insurance regulator of another state who,
30 pursuant to the terms of the trust instrument, has accepted
31 principal regulatory oversight of the trust.
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1 b. The form of the trust and any trust amendments must
2 be filed with the insurance regulator of every state in which
3 the ceding insurer beneficiaries of the trust are domiciled.
4 The trust instrument must provide that contested claims are
5 valid and enforceable upon the final order of any court of
6 competent jurisdiction in the United States. The trust must
7 vest legal title to its assets in its trustees for the benefit
8 of the assuming insurer's United States ceding insurers and
9 their assigns and successors in interest. The trust and the
10 assuming insurer are subject to examination as determined by
11 the insurance regulator.
12 c. The trust remains in effect for as long as the
13 assuming insurer has outstanding obligations due under the
14 reinsurance agreements subject to the trust. No later than
15 February 28 of each year, the trustee of the trust shall
16 report to the insurance regulator in writing the balance of
17 the trust and list the trust's investments at the preceding
18 year end, and shall certify that the trust will not expire
19 prior to the following December 31.
20 3. The following requirements apply to the following
21 categories of assuming insurer:
22 a. The trust fund for a single assuming insurer
23 consists of funds in trust in an amount not less than the
24 assuming insurer's liabilities attributable to reinsurance
25 ceded by United States ceding insurers, and, in addition, the
26 assuming insurer shall maintain a trusteed surplus of not less
27 than $20 million. Not less than 50 percent of the funds in the
28 trust covering the assuming insurer's liabilities attributable
29 to reinsurance ceded by United States ceding insurers and
30 trusteed surplus shall consist of assets of a quality
31 substantially similar to that required in part II of chapter
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1 625. Clean, irrevocable, unconditional, and evergreen letters
2 of credit, issued or confirmed by a qualified United States
3 financial institution, as defined in paragraph (5)(a),
4 effective no later than December 31 of the year for which the
5 filing is made and in the possession of the trust on or before
6 the filing date of its annual statement, may be used to fund
7 the remainder of the trust and trusted surplus.
8 b.(I) In the case of a group including incorporated
9 and individual unincorporated underwriters:
10 (A) For reinsurance ceded under reinsurance agreements
11 with an inception, amendment, or renewal date on or after
12 August 1, 1995, the trust consists of a trusteed account in an
13 amount not less than the group's several liabilities
14 attributable to business ceded by United States domiciled
15 ceding insurers to any member of the group;
16 (B) For reinsurance ceded under reinsurance agreements
17 with an inception date on or before July 31, 1995, and not
18 amended or renewed after that date, notwithstanding the other
19 provisions of this section, the trust consists of a trusteed
20 account in an amount not less than the group's several
21 insurance and reinsurance liabilities attributable to business
22 written in the United States; and
23 (C) In addition to these trusts, the group shall
24 maintain in trust a trusteed surplus of which $100 million
25 must be held jointly for the benefit of the United States
26 domiciled ceding insurers of any member of the group for all
27 years of account.
28 (II) The incorporated members of the group must not be
29 engaged in any business other than underwriting of a member of
30 the group, and are subject to the same level of regulation and
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1 solvency control by the group's domiciliary regulator as the
2 unincorporated members.
3 (III) Within 90 days after its financial statements
4 are due to be filed with the group's domiciliary regulator,
5 the group shall provide to the insurance regulator an annual
6 certification by the group's domiciliary regulator of the
7 solvency of each underwriter member or, if a certification is
8 unavailable, financial statements, prepared by independent
9 public accountants, of each underwriter member of the group.
10 Section 5. Section 625.081, Florida Statutes, is
11 amended to read:
12 625.081 Reserve for health insurance.--For all health
13 insurance policies, the insurer shall maintain an active life
14 reserve which places a sound value on the insurer's
15 liabilities under such policies; is not less than the reserve
16 according to appropriate standards set forth in rules issued
17 by the commission; and, with the exception of credit
18 disability insurance, in no event, is less in the aggregate
19 than the pro rata gross unearned premiums for such policies.
20 Section 6. Paragraphs (a), (e), and (f) of subsection
21 (5) and subsection (13) of section 625.121, Florida Statutes,
22 are amended, and paragraphs (k) and (l) are added to
23 subsection (5) of that section, to read:
24 625.121 Standard Valuation Law; life insurance.--
25 (5) MINIMUM STANDARD FOR VALUATION OF POLICIES AND
26 CONTRACTS ISSUED ON OR AFTER OPERATIVE DATE OF STANDARD
27 NONFORFEITURE LAW.--Except as otherwise provided in paragraph
28 (h) and subsections (6), (11), and (14), the minimum standard
29 for the valuation of all such policies and contracts issued on
30 or after the operative date of s. 627.476 (Standard
31 Nonforfeiture Law for Life Insurance) shall be the
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1 commissioners' reserve valuation method defined in subsections
2 (7), (11), and (14); 5 percent interest for group annuity and
3 pure endowment contracts and 3.5 percent interest for all
4 other such policies and contracts, or in the case of life
5 insurance policies and contracts, other than annuity and pure
6 endowment contracts, issued on or after July 1, 1973, 4
7 percent interest for such policies issued prior to October 1,
8 1979, and 4.5 percent interest for such policies issued on or
9 after October 1, 1979; and the following tables:
10 (a) For all ordinary policies of life insurance issued
11 on the standard basis, excluding any disability and accidental
12 death benefits in such policies:
13 1. For policies issued prior to the operative date of
14 s. 627.476(9), the commissioners' 1958 Standard Ordinary
15 Mortality Table; except that, for any category of such
16 policies issued on female risks, modified net premiums and
17 present values, referred to in subsection (7), may be
18 calculated according to an age not more than 6 years younger
19 than the actual age of the insured.; and
20 2. For policies issued on or after the operative date
21 of s. 627.476(9), the commissioners' 1980 Standard Ordinary
22 Mortality Table or, at the election of the insurer for any one
23 or more specified plans of life insurance, the commissioners'
24 1980 Standard Ordinary Mortality Table with Ten-Year Select
25 Mortality Factors.
26 3. For policies issued on or after July 1, 2004,
27 ordinary mortality tables, adopted after 1980 by the National
28 Association of Insurance Commissioners, adopted by rule by the
29 commission for use in determining the minimum standard of
30 valuation for such policies.
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1 (e) For total and permanent disability benefits in or
2 supplementary to ordinary policies or contracts:
3 1. For policies or contracts issued on or after
4 January 1, 1966, the tables of period 2 disablement rates and
5 the 1930 to 1950 termination rates of the 1952 disability
6 study of the Society of Actuaries, with due regard to the type
7 of benefit;
8 2. For policies or contracts issued on or after
9 January 1, 1961, and prior to January 1, 1966, either those
10 tables or, at the option of the insurer, the class three
11 disability table (1926); and
12 3. For policies issued prior to January 1, 1961, the
13 class three disability table (1926); and.
14 4. For policies or contracts issued on or after July
15 1, 2004, tables of disablement rates and termination rates
16 adopted after 1980 by the National Association of Insurance
17 Commissioners, adopted by rule by the commission for use in
18 determining the minimum standard of valuation for those
19 policies or contracts.
20
21 Any such table for active lives shall be combined with a
22 mortality table permitted for calculating the reserves for
23 life insurance policies.
24 (f) For accidental death benefits in or supplementary
25 to policies:
26 1. For policies issued on or after January 1, 1966,
27 the 1959 Accidental Death Benefits Table;
28 2. For policies issued on or after January 1, 1961,
29 and prior to January 1, 1966, either that table or, at the
30 option of the insurer, the Intercompany Double Indemnity
31 Mortality Table; and
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1 3. For policies issued prior to January 1, 1961, the
2 Intercompany Double Indemnity Mortality Table; and.
3 4. For policies issued on or after July 1, 2004,
4 tables of accidental death benefits adopted after 1980 by the
5 National Association of Insurance Commissioners, adopted by
6 rule by the commission for use in determining the minimum
7 standard of valuation for those policies.
8
9 Either table shall be combined with a mortality table
10 permitted for calculating the reserves for life insurance
11 policies.
12 (k) For individual annuity and pure endowment
13 contracts issued on or after July 1, 2004, excluding any
14 disability and accidental death benefits purchased under those
15 contracts, individual annuity mortality tables adopted after
16 1980 by the National Association of Insurance Commissioners,
17 adopted by rule by the commission for use in determining the
18 minimum standard of valuation for those contracts.
19 (l) For all annuities and pure endowments purchased on
20 or after July 1, 2004, under group annuity and pure endowment
21 contracts, excluding any disability and accidental death
22 benefits purchased under those contracts, group annuity
23 mortality tables adopted after 1980 by the National
24 Association of Insurance Commissioners, adopted by rule by the
25 commission for use in determining the minimum standard of
26 valuation for those contracts.
27 (13) APPLICABILITY TO CREDIT LIFE AND DISABILITY
28 INSURANCE POLICIES.--
29 (a) For policies issued prior to January 1, 2004:
30 1. The minimum reserve for single-premium credit
31 disability insurance, monthly premium credit life insurance
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1 and monthly premium credit disability insurance shall be the
2 unearned gross premium.
3 2. As to single-premium credit life insurance
4 policies, the insurer shall establish and maintain reserves
5 that are not less than the value, at the valuation date, of
6 the risk for the unexpired portion of the period for which the
7 premium has been paid as computed on the basis of the
8 commissioners' 1980 Standard Ordinary Mortality Table and 3.5
9 percent interest. At the discretion of the office, the insurer
10 may make a reasonable assumption as to the ages at which net
11 premiums are to be determined. In lieu of the foregoing basis,
12 reserves based upon unearned gross premiums may be used at the
13 option of the insurer.
14 (b) For policies issued on or after January 1, 2004:
15 1. The minimum reserve for single-premium credit
16 disability insurance shall be either:
17 a. The unearned gross premium, or
18 b. Based upon a morbidity table that is adopted by the
19 National Association of Insurance Commissioners and is
20 specified in a rule the commission adopts pursuant to
21 subsection (14).
22 2. The minimum reserve for monthly premium credit
23 disability insurance shall be the unearned gross premium.
24 3. The minimum reserve for monthly premium credit life
25 insurance shall be the unearned gross premium.
26 4. As to single-premium credit life insurance
27 policies, the insurer shall establish and maintain reserves
28 that are not less than the value, at the valuation date, of
29 the risk for the unexpired portion of the period for which the
30 premium has been paid as computed on the basis of the
31 commissioners' 1980 Standard Ordinary Mortality Table or any
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1 ordinary mortality table, adopted after 1980 by the National
2 Association of Insurance Commissioners, that is approved by
3 rule adopted by the commission for use in determining the
4 minimum standard of valuation for such policies; and an
5 interest rate determined in accordance with subsection (6). At
6 the discretion of the office, the insurer may make a
7 reasonable assumption as to the ages at which net premiums are
8 to be determined. In lieu of the foregoing basis, reserves
9 based upon unearned gross premiums may be used at the option
10 of the insurer. This section does not apply as to those credit
11 life insurance policies for which reserves are computed and
12 maintained as required under s. 625.131.
13 Section 7. Paragraph (d) of subsection (1) of section
14 626.321, Florida Statutes, is amended to read:
15 626.321 Limited licenses.--
16 (1) The department shall issue to a qualified
17 individual, or a qualified individual or entity under
18 paragraphs (c), (d), (e), and (i), a license as agent
19 authorized to transact a limited class of business in any of
20 the following categories:
21 (d) Baggage and motor vehicle excess liability
22 insurance.--
23 1. License covering only insurance of personal effects
24 except as provided in subparagraph 2. The license may be
25 issued only:
26 a. To a full-time salaried employee of a common
27 carrier or a full-time salaried employee or owner of a
28 transportation ticket agency, which person is engaged in the
29 sale or handling of transportation of baggage and personal
30 effects of travelers, and may authorize the sale of such
31 insurance only in connection with such transportation; or
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1 b. To the full-time salaried employee of a licensed
2 general lines agent, a full-time salaried employee of a
3 business which offers motor vehicles for rent or lease, or to
4 a business office of a business entity that which offers motor
5 vehicles for rent or lease if insurance sales activities
6 authorized by the license are in connection with and
7 incidental to the rental of a motor vehicle limited to
8 full-time salaried employees. An entity applying for a license
9 under this sub-subparagraph:
10 (I) Is required to submit only one application for a
11 license under s. 626.171. The requirements of s. 626.171(5)
12 shall apply only to the officers and directors of the entity
13 submitting the application.
14 (II) Is required to obtain a license for each office,
15 branch office, or place of business making use of the entity's
16 business name by applying to the department for the license on
17 a simplified application form developed by rule of the
18 department for this purpose.
19 (III) Is required to pay the applicable fees for a
20 license as prescribed in s. 624.501, be appointed under s.
21 626.112, and pay the prescribed appointment fee under s.
22 624.501. A licensed and appointed entity shall be directly
23 responsible and accountable for all acts of the licensee's
24 employees.
25
26 The purchaser of baggage insurance shall be provided written
27 information disclosing that the insured's homeowner's policy
28 may provide coverage for loss of personal effects and that the
29 purchase of such insurance is not required in connection with
30 the purchase of tickets or in connection with the lease or
31 rental of a motor vehicle.
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1 2. A business entity that office licensed pursuant to
2 subparagraph 1., or a person licensed pursuant to subparagraph
3 1. who is a full-time salaried employee of a business which
4 offers motor vehicles for rent or lease, may include lessees
5 under a master contract providing coverage to the lessor or
6 may transact excess motor vehicle liability insurance
7 providing coverage in excess of the standard liability limits
8 provided by the lessor in its lease to a person renting or
9 leasing a motor vehicle from the licensee's employer for
10 liability arising in connection with the negligent operation
11 of the leased or rented motor vehicle, provided that the lease
12 or rental agreement is for not more than 30 days; that the
13 lessee is not provided coverage for more than 30 consecutive
14 days per lease period, and, if the lease is extended beyond 30
15 days, the coverage may be extended one time only for a period
16 not to exceed an additional 30 days; that the lessee is given
17 written notice that his or her personal insurance policy
18 providing coverage on an owned motor vehicle may provide
19 additional excess coverage; and that the purchase of the
20 insurance is not required in connection with the lease or
21 rental of a motor vehicle. The excess liability insurance may
22 be provided to the lessee as an additional insured on a policy
23 issued to the licensee's employer.
24 3. A business entity that office licensed pursuant to
25 subparagraph 1., or a person licensed pursuant to subparagraph
26 1. who is a full-time salaried employee of a business which
27 offers motor vehicles for rent or lease, may, as an agent of
28 an insurer, transact insurance that provides coverage for the
29 liability of the lessee to the lessor for damage to the leased
30 or rented motor vehicle if:
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1 a. The lease or rental agreement is for not more than
2 30 days; or the lessee is not provided coverage for more than
3 30 consecutive days per lease period, but, if the lease is
4 extended beyond 30 days, the coverage may be extended one time
5 only for a period not to exceed an additional 30 days;
6 b. The lessee is given written notice that his or her
7 personal insurance policy that provides coverage on an owned
8 motor vehicle may provide such coverage with or without a
9 deductible; and
10 c. The purchase of the insurance is not required in
11 connection with the lease or rental of a motor vehicle.
12 Section 8. Section 626.9743, Florida Statutes, is
13 created to read:
14 626.9743 Claim settlement practices relating to motor
15 vehicle insurance.--
16 (1) This section shall apply to the adjustment and
17 settlement of personal and commercial motor vehicle insurance
18 claims.
19 (2) An insurer may not, when liability and damages
20 owed under the policy are reasonably clear, recommend that a
21 third-party claimant make a claim under his or her own policy
22 solely to avoid paying the claim under the policy issued by
23 that insurer. However, the insurer may identify options to a
24 third-party claimant relative to the repair of his or her
25 vehicle.
26 (3) An insurer that elects to repair a motor vehicle
27 and specifically requires a particular repair shop for vehicle
28 repairs shall cause the damaged vehicle to be restored to its
29 physical condition as to performance and appearance
30 immediately prior to the loss at no additional cost to the
31
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1 insured or third-party claimant other than as stated in the
2 policy.
3 (4) An insurer may not require the use of replacement
4 parts in the repair of a motor vehicle which are not at least
5 equivalent in kind and quality to the damaged parts prior to
6 the loss in terms of fit, appearance, and performance.
7 (5) When the insurance policy provides for the
8 adjustment and settlement of first-party motor vehicle total
9 losses on the basis of actual cash value or replacement with
10 another of like kind and quality, the insurer shall use one of
11 the following methods:
12 (a) The insurer may elect a cash settlement based upon
13 the actual cost to purchase a comparable motor vehicle,
14 including sales tax, if applicable pursuant to subsection (9).
15 Such cost may be derived from:
16 1. When comparable motor vehicles are available in the
17 local market area, the cost of two or more such comparable
18 motor vehicles available within the preceding 90 days;
19 2. The retail cost as determined from a generally
20 recognized used motor vehicle industry source such as:
21 a. An electronic database if the pertinent portions of
22 the valuation documents generated by the database are provided
23 by the insurer to the first-party insured upon request; or
24 b. A guidebook that is generally available to the
25 general public if the insurer identifies the guidebook used as
26 the basis for the retail cost to the first-party insured upon
27 request; or
28 3. The retail cost using two or more quotations
29 obtained by the insurer from two or more licensed dealers in
30 the local market area.
31
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1 (b) The insurer may elect to offer a replacement motor
2 vehicle that is a specified comparable motor vehicle available
3 to the insured, including sales tax if applicable pursuant to
4 subsection (9), paid for by the insurer at no cost other than
5 any deductible provided in the policy and betterment as
6 provided in subsection (6). The offer must be documented in
7 the insurer's claim file. For purposes of this subsection, a
8 comparable motor vehicle is one that is made by the same
9 manufacturer, of the same or newer model year, and of similar
10 body type and that has similar options and mileage as the
11 insured vehicle. Additionally, a comparable motor vehicle must
12 be in as good or better overall condition than the insured
13 vehicle and available for inspection within a reasonable
14 distance of the insured's residence.
15 (c) When a motor vehicle total loss is adjusted or
16 settled on a basis that varies from the methods described in
17 paragraph (a) or paragraph (b), the determination of value
18 must be supported by documentation, and any deductions from
19 value must be itemized and specified in appropriate dollar
20 amounts. The basis for such settlement shall be explained to
21 the claimant in writing, if requested, and a copy of the
22 explanation shall be retained in the insurer's claim file.
23 (d) Any other method agreed to by the claimant.
24 (6) When the amount offered in settlement reflects a
25 reduction by the insurer because of betterment or
26 depreciation, information pertaining to the reduction shall be
27 maintained with the insurer's claim file. Deductions shall be
28 itemized and specific as to dollar amount and shall accurately
29 reflect the value assigned to the betterment or depreciation.
30 The basis for any deduction shall be explained to the claimant
31
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1 in writing, if requested, and a copy of the explanation shall
2 be maintained with the insurer's claim file.
3 (7) Every insurer shall, if partial losses are settled
4 on the basis of a written estimate prepared by or for the
5 insurer, supply the insured a copy of the estimate upon which
6 the settlement is based.
7 (8) Every insurer shall provide notice to an insured
8 before termination of payment for previously authorized
9 storage charges, and the notice shall provide 72 hours for the
10 insured to remove the vehicle from storage before terminating
11 payment of the storage charges.
12 (9) If sales tax will necessarily be incurred by a
13 claimant upon replacement of a total loss or upon repair of a
14 partial loss, the insurer may defer payment of the sales tax
15 unless and until the obligation has actually been incurred.
16 (10) Nothing in this section shall be construed to
17 authorize or preclude enforcement of policy provisions
18 relating to settlement disputes.
19 Section 9. Section 626.9744, Florida Statutes, is
20 created to read:
21 626.9744 Claim settlement practices relating to
22 property insurance.--Unless otherwise provided by the policy,
23 when a homeowner's insurance policy provides for the
24 adjustment and settlement of first-party losses based on
25 repair or replacement cost, the following requirements apply:
26 (1) When a loss requires repair or replacement of an
27 item or part, any physical damage incurred in making such
28 repair or replacement which is covered and not otherwise
29 excluded by the policy shall be included in the loss to the
30 extent of any applicable limits. The insured may not be
31 required to pay for betterment required by ordinance or code
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1 except for the applicable deductible, unless specifically
2 excluded or limited by the policy.
3 (2) When a loss requires replacement of items and the
4 replaced items do not match in quality, color, or size, the
5 insurer shall make reasonable repairs or replacement of items
6 in adjoining areas. In determining the extent of the repairs
7 or replacement of items in adjoining areas, the insurer may
8 consider the cost of repairing or replacing the undamaged
9 portions of the property, the degree of uniformity that can be
10 achieved without such cost, the remaining useful life of the
11 undamaged portion, and other relevant factors.
12 (3) This section shall not be construed to make the
13 insurer a warrantor of the repairs made pursuant to this
14 section.
15 (4) Nothing in this section shall be construed to
16 authorize or preclude enforcement of policy provisions
17 relating to settlement disputes.
18 Section 10. Subsections (1) and (2) of section
19 627.0629, Florida Statutes, are amended to read:
20 627.0629 Residential property insurance; rate
21 filings.--
22 (1) Effective June 1, 2002, a rate filing for
23 residential property insurance must include actuarially
24 reasonable discounts, credits, or other rate differentials, or
25 appropriate reductions in deductibles, for properties on which
26 fixtures or construction techniques demonstrated to reduce the
27 amount of loss in a windstorm have been installed or
28 implemented. The fixtures or construction techniques shall
29 include, but not be limited to, fixtures or construction
30 techniques which enhance roof strength, roof covering
31 performance, roof-to-wall strength,
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1 wall-to-floor-to-foundation strength, opening protection, and
2 window, door, and skylight strength. Credits, discounts, or
3 other rate differentials for fixtures and construction
4 techniques which meet the minimum requirements of the Florida
5 Building Code must be included in the rate filing. All
6 insurance companies must make a rate filing which includes the
7 credits, discounts, or other rate differentials by February
8 28, 2003. This subsection does not apply to industrial fire
9 insurance policies as defined in s. 626.729.
10 (2)(a) A rate filing for residential property
11 insurance made on or before the implementation of paragraph
12 (b) may include rate factors that reflect the manner in which
13 building code enforcement in a particular jurisdiction
14 addresses the risk of wind damage; however, such a rate filing
15 must also provide for variations from such rate factors on an
16 individual basis based on an inspection of a particular
17 structure by a licensed home inspector, which inspection may
18 be at the cost of the insured.
19 (b) A rate filing for residential property insurance
20 made more than 150 days after approval by the office of a
21 building code rating factor plan submitted by a statewide
22 rating organization shall include positive and negative rate
23 factors that reflect the manner in which building code
24 enforcement in a particular jurisdiction addresses risk of
25 wind damage. The rate filing shall include variations from
26 standard rate factors on an individual basis based on
27 inspection of a particular structure by a licensed home
28 inspector. If an inspection is requested by the insured, the
29 insurer may require the insured to pay the reasonable cost of
30 the inspection. This paragraph applies to structures
31
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1 constructed or renovated after the implementation of this
2 paragraph.
3 (c) The premium notice shall specify the amount by
4 which the rate has been adjusted as a result of this
5 subsection and shall also specify the maximum possible
6 positive and negative adjustments that are approved for use by
7 the insurer under this subsection.
8 (d) This subsection does not apply to industrial fire
9 insurance policies as defined in s. 626.729.
10 Section 11. Effective July 1, 2004, and applicable to
11 cancellation requests and notices received on or after that
12 date, subsection (3) of section 627.311, Florida Statutes, is
13 amended to read:
14 627.311 Joint underwriters and joint reinsurers;
15 public records and public meetings exemptions.--
16 (3) The office may, after consultation with insurers
17 licensed to write automobile insurance in this state, approve
18 a joint underwriting plan for purposes of equitable
19 apportionment or sharing among insurers of automobile
20 liability insurance and other motor vehicle insurance, as an
21 alternate to the plan required in s. 627.351(1). All insurers
22 authorized to write automobile insurance in this state shall
23 subscribe to the plan and participate therein. The plan shall
24 be subject to continuous review by the office which may at any
25 time disapprove the entire plan or any part thereof if it
26 determines that conditions have changed since prior approval
27 and that in view of the purposes of the plan changes are
28 warranted. Any disapproval by the office shall be subject to
29 the provisions of chapter 120. The Florida Automobile Joint
30 Underwriting Association is created under the plan. The plan
31 and the association:
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1 (a) Must be subject to all provisions of s.
2 627.351(1), except apportionment of applicants.
3 (b) May provide for one or more designated insurers,
4 able and willing to provide policy and claims service, to act
5 on behalf of all other insurers to provide insurance for
6 applicants who are in good faith entitled to, but unable to,
7 procure insurance through the voluntary insurance market at
8 standard rates.
9 (c) Must provide that designated insurers will issue
10 policies of insurance and provide policyholder and claims
11 service on behalf of all insurers for the joint underwriting
12 association.
13 (d) Must provide for the equitable apportionment among
14 insurers of losses and expenses incurred.
15 (e) Must provide that the joint underwriting
16 association will operate subject to the supervision and
17 approval of a board of governors consisting of 11 individuals,
18 including 1 who will be elected as chair. Five members of the
19 board must be appointed by the Chief Financial Officer. Two of
20 the Chief Financial Officer's appointees must be chosen from
21 the insurance industry. Any board member appointed by the
22 Chief Financial Officer may be removed and replaced by her or
23 him at any time without cause. Six members of the board must
24 be appointed by the participating insurers, two of whom must
25 be from the insurance agents' associations. All board members,
26 including the chair, must be appointed to serve for 2-year
27 terms beginning annually on a date designated by the plan.
28 (f) Must provide that an agent appointed to a
29 servicing carrier must be a licensed general lines agent of an
30 insurer which is authorized to write automobile liability and
31 physical damage insurance in the state and which is actively
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1 writing such coverage in the county in which the agent is
2 located, or the immediately adjoining counties, or an agent
3 who places a volume of other property and casualty insurance
4 in an amount equal to the premium volume placed with the
5 Florida Joint Underwriting Association. The office may,
6 however, determine that an agent may be appointed to a
7 servicing carrier if, after public hearing, the office finds
8 that consumers in the agent's operating area would not have
9 adequate and reasonable access to the purchase of automobile
10 insurance if the agent were not appointed to a servicing
11 carrier.
12 (g) Must make available noncancelable coverage as
13 provided in s. 627.7275(2).
14 (h) Must provide for the furnishing of a list of
15 insureds and their mailing addresses upon the request of a
16 member of the association or an insurance agent licensed to
17 place business with an association member. The list must
18 indicate whether the insured is currently receiving a good
19 driver discount from the association. The plan may charge a
20 reasonable fee to cover the cost incurred in providing the
21 list.
22 (i) Must not provide a renewal credit or discount or
23 any other inducement designed to retain a risk.
24 (j) Must not provide any other good driver credit or
25 discount that is not actuarially sound. In addition to other
26 criteria that the plan may specify, to be eligible for a good
27 driver credit, an insured must not have any criminal traffic
28 violations within the most recent 36-month period preceding
29 the date the discount is received.
30 (k)1. Shall have no liability, and no cause of action
31 of any nature shall arise against any member insurer or its
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1 agents or employees, agents or employees of the association,
2 members of the board of governors of the association, the
3 Chief Financial Officer, or the office or its representatives
4 for any action taken by them in the performance of their
5 duties or responsibilities under this subsection. Such
6 immunity does not apply to actions for or arising out of
7 breach of any contract or agreement pertaining to insurance,
8 or any willful tort.
9 2. Notwithstanding the requirements of s.
10 624.155(3)(a), as a condition precedent to bringing an action
11 against the plan under s. 624.155, the department and the plan
12 must have been given 90 days' written notice of the violation.
13 If the department returns a notice for lack of specificity,
14 the 90-day time period shall not begin until a proper notice
15 is filed. This notice must comply with the information
16 requirements of s. 624.155(3)(b). Effective October 1, 2007,
17 this subparagraph shall expire unless reenacted by the
18 Legislature prior to that date.
19 (l) May require from the insured proof that he or she
20 has obtained the mandatory types and amounts of insurance from
21 another admitted carrier prior to the cancellation of a policy
22 the insured obtained from the plan and prior to the return of
23 any unearned premium the insured paid for such coverage from
24 the plan. This paragraph does not apply to any person who
25 provides proof of sale or inoperability of the vehicle covered
26 under the policy purchased from the plan or relocation outside
27 the state.
28 Section 12. Subsection (5) is added to section
29 627.4091, Florida Statutes, to read:
30 627.4091 Specific reasons for denial, cancellation, or
31 nonrenewal.--
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1 (5) When an insurer refuses to provide coverage to an
2 applicant due to adverse underwriting information, the insurer
3 shall:
4 (a) Provide to the applicant specific information
5 regarding the reasons for the refusal to insure.
6 (b) If the reason for the refusal to insure is based
7 on a loss underwriting history or report from a consumer
8 reporting agency, to the extent applicable identify the loss
9 underwriting history and notify the applicant of his or her
10 right under the federal Fair and Accurate Credit Transactions
11 Act to obtain a copy of the report from the consumer reporting
12 agency.
13 Section 13. Effective upon this act becoming a law,
14 subsections (4) and (5) are added to section 627.4133, Florida
15 Statutes, to read:
16 627.4133 Notice of cancellation, nonrenewal, or
17 renewal premium.--
18 (4) An insurer that cancels a property insurance
19 policy on property secured by a mortgage due to the failure of
20 the lender to timely pay the premium when due shall reinstate
21 the policy as required by s. 501.137.
22 (5) A single claim on a property insurance policy
23 which is the result of water damage may not be used as the
24 sole cause for cancellation or nonrenewal unless the insurer
25 can demonstrate that the insured has failed to take action
26 reasonably requested by the insurer to prevent a future
27 similar occurrence of damage to the insured property.
28 Section 14. Paragraph (h) of subsection (9) of section
29 627.476, Florida Statutes, is amended to read:
30 627.476 Standard Nonforfeiture Law for Life
31 Insurance.--
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1 (9) CALCULATION OF ADJUSTED PREMIUMS AND PRESENT
2 VALUES FOR POLICIES ISSUED AFTER OPERATIVE DATE OF THIS
3 SUBSECTION.--
4 (h) All adjusted premiums and present values referred
5 to in this section shall for all policies of ordinary
6 insurance be calculated on the basis of the Commissioners'
7 1980 Standard Ordinary Mortality Table or, at the election of
8 the insurer for any one or more specified plans of life
9 insurance, the Commissioners' 1980 Standard Ordinary Mortality
10 Table with Ten-Year Select Mortality Factors; shall for all
11 policies of industrial insurance be calculated on the basis of
12 the Commissioners' 1961 Standard Industrial Mortality Table;
13 and shall for all policies issued in a particular calendar
14 year be calculated on the basis of a rate of interest not
15 exceeding the nonforfeiture interest rate as defined in this
16 subsection for policies issued in that calendar year. However:
17 1. At the option of the insurer, calculations for all
18 policies issued in a particular calendar year may be made on
19 the basis of a rate of interest not exceeding the
20 nonforfeiture interest rate, as defined in this subsection,
21 for policies issued in the immediately preceding calendar
22 year.
23 2. Under any paid-up nonforfeiture benefit, including
24 any paid-up dividend additions, any cash surrender value
25 available, whether or not required by subsection (2), shall be
26 calculated on the basis of the mortality table and rate of
27 interest used in determining the amount of such paid-up
28 nonforfeiture benefit and paid-up dividend additions, if any.
29 3. An insurer may calculate the amount of any
30 guaranteed paid-up nonforfeiture benefit, including any
31 paid-up additions under the policy, on the basis of an
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1 interest rate no lower than that specified in the policy for
2 calculating cash surrender values.
3 4. In calculating the present value of any paid-up
4 term insurance with accompanying pure endowment, if any,
5 offered as a nonforfeiture benefit, the rates of mortality
6 assumed may be not more than those shown in the Commissioners'
7 1980 Extended Term Insurance Table for policies of ordinary
8 insurance and not more than the Commissioners' 1961 Industrial
9 Extended Term Insurance Table for policies of industrial
10 insurance.
11 5. In lieu of the mortality tables specified in this
12 section, at the option of the insurance company and subject to
13 rules adopted by the commission, the insurance company may
14 substitute:
15 a. The 1958 CSO or CET Smoker and Nonsmoker Mortality
16 Tables, whichever is applicable, for policies issued on or
17 after the operative date of this subsection and before January
18 1, 1989;
19 b. The 1980 CSO or CET Smoker and Nonsmoker Mortality
20 Tables, whichever is applicable, for policies issued on or
21 after the operative date of this subsection;
22 c. A mortality table that is a blend of the
23 sex-distinct 1980 CSO or CET mortality table standard,
24 whichever is applicable, or a mortality table that is a blend
25 of the sex-distinct 1980 CSO or CET smoker and nonsmoker
26 mortality table standards, whichever is applicable, for
27 policies that are subject to the United States Supreme Court
28 decision in Arizona Governing Committee v. Norris to prevent
29 unfair discrimination in employment situations.
30 6. Ordinary mortality tables, adopted after 1980 by
31 the National Association of Insurance Commissioners, adopted
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1 by rule by the commission for use in determining the minimum
2 nonforfeiture standard may be substituted for the
3 Commissioners' 1980 Standard Ordinary Mortality Table with or
4 without Ten-Year Select Mortality Factors or for the
5 Commissioners' 1980 Extended Term Insurance Table.
6 7.6. For insurance issued on a substandard basis, the
7 calculation of any such adjusted premiums and present values
8 may be based on appropriate modifications of the
9 aforementioned tables.
10 Section 15. Section 627.7077, Florida Statutes, is
11 created to read:
12 627.7077 Florida Sinkhole Insurance Facility and other
13 matters related to affordability and availability of sinkhole
14 insurance; feasibility study.--
15 (1) The Florida State University College of Business
16 Department of Risk Management and Insurance shall, under the
17 direction of the office, conduct a feasibility and
18 cost-benefit study of a potential Florida Sinkhole Insurance
19 Facility and of other matters related to affordability and
20 availability of sinkhole insurance. The study shall be
21 conducted in consultation with the State Board of
22 Administration and the Florida Geological Survey. The
23 university shall provide a preliminary report of its analysis,
24 findings, and recommendations to the Financial Services
25 Commission and the presiding officers of the Legislature no
26 later than February 1, 2005, and shall provide a final report
27 no later than April 1, 2005.
28 (2) The potential functions of the facility to be
29 analyzed include:
30 (a) Serving as the direct insurer or the reinsurer for
31 all or some sinkhole losses.
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1 (b) Providing training, communication, and other
2 educational services to the public, engineers, the
3 construction industry, insurance professionals, or others.
4 (c) Providing uniform standards for use by insurers in
5 evaluating sinkhole loss claims.
6 (d) Providing consulting services for insurers.
7 (e) Maintaining a public database of all confirmed
8 sinkholes and paid sinkhole loss claims, for use by consumers
9 and by the insurance, building construction, banking, and real
10 estate industries.
11 (3) The feasibility study shall, at a minimum, address
12 the following issues:
13 (a) Where the facility should be housed, including,
14 but not limited to, the options of creating a separate
15 facility or using the Citizens Property Insurance Corporation
16 or the Florida Hurricane Catastrophe Fund.
17 (b) Federal income taxation implications.
18 (c) Funding options and costs associated with
19 operating the facility, including means of funding sinkhole
20 insurance through premiums that are adequate to fund covered
21 losses.
22 (d) Applicability of the experience of similar
23 facilities of other states.
24 (e) Other economic impact considerations pertinent to
25 a facility.
26 (f) Alternative dispute resolution mechanisms.
27 (g) The impact of all present requirements in the
28 Florida Insurance Code on affordability and availability of
29 sinkhole insurance and recommendations to address such
30 impacts.
31
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1 (4) The study shall be funded from a budget of no more
2 than $300,000, which will be funded by assessments on insurers
3 issuing property insurance in this state. Such assessments
4 shall be collected by the office and shall be prorated among
5 such insurers according to a formula whereby each insurer
6 shall pay a fraction of such budget, the numerator of which
7 shall be such insurer's direct earned premiums for property
8 insurance in this state and the denominator of which shall be
9 the total direct earned premiums for property insurance in
10 this state for calendar year 2003.
11 Section 16. Section 627.838, Florida Statutes, is
12 amended to read:
13 627.838 Filing and approval of forms; service
14 charges.--
15 (1) No premium finance agreement form or related form
16 shall be used in this state by a premium finance company
17 unless it has been filed with and approved by the office.
18 Every filing shall be made within 30 days of issuance or use.
19 (2) Each premium finance company shall file with the
20 office the service charge and interest rate plan, including
21 all modifications thereto, for informational purposes only.
22 Every filing shall be made within 30 days of its effective
23 date.
24 (3) Each filing shall be accompanied by the filing fee
25 specified in s. 627.849.
26 Section 17. Paragraph (e) of subsection (1) of section
27 627.848, Florida Statutes, is amended to read:
28 627.848 Cancellation of insurance contract upon
29 default.--
30 (1) When a premium finance agreement contains a power
31 of attorney or other authority enabling the premium finance
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1 company to cancel any insurance contract listed in the
2 agreement, the insurance contract shall not be canceled unless
3 cancellation is in accordance with the following provisions:
4 (e) Whenever a financed an insurance contract is
5 canceled in accordance with this section, the insurer shall,
6 within 30 days of the cancellation date, promptly return the
7 unpaid balance due under the finance contract, up to the gross
8 amount available upon the cancellation of the policy, to the
9 premium finance company and any remaining unearned premium to
10 the agent or the insured, or both, for the benefit of the
11 insured or insureds. The insurer shall, within 30 days of the
12 cancellation date, notify the insured and the agent of the
13 amount of unearned premium returned to the premium finance
14 company and the amount of unearned commission held by the
15 agent. The premium finance company shall, within 15 days after
16 the account has been overpaid, either refund to the insured
17 for the insured's benefit any refund due on his or her account
18 or, if the refund is sent or credited to the agent, return or
19 credit to the agent the amount of the overpayment and notify
20 the insured of the refunded amount. The premium finance
21 company within 15 days shall notify the insured and the agent
22 of the amount of unearned premium. Within 15 days of receipt
23 of notification from the premium finance company, the agent
24 shall return such amount including any unearned commission to
25 the insured or with the written approval of the insured apply
26 such amount to the purchase of other insurance products
27 regulated by the office. The commission may adopt rules
28 necessary to implement the provisions of this subsection.
29 Section 18. Subsection (1) of section 627.849, Florida
30 Statutes, is amended to read:
31 627.849 Fees.--
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1 (1) The office shall collect in advance, and the
2 persons so served shall pay to it in advance, the following
3 fees:
4 (a) Annual license fee............................$250
5 (b) Investigation fee..............................100
6 (c) Annual report filing fee........................25
7 (d) Form filing fee.................................10
8 Section 19. Analysis of factors affecting premium
9 levels and availability of personal lines property and
10 casualty insurance to consumers in Florida.--
11 (1) The Legislative Auditing Committee shall enter
12 into a contract with the Florida State University College of
13 Business Department of Risk Management and Insurance to
14 provide, no later than February 1, 2005, a detailed analysis
15 of factors affecting costs and potential assessments on
16 consumers, and availability, of personal lines property and
17 casualty insurance in Florida generally and in those areas in
18 which coverage is underwritten by the Citizens Property and
19 Casualty Insurance Company. The analysis shall include an
20 evaluation of such factors and recommendations appropriate to
21 moderate or enhance their impact on premiums potential
22 assessments and availability of such insurance. Such factors
23 shall include, but are not limited to:
24 (a) The factors affecting the level of competition and
25 premium levels specifically, including the impact of rate
26 regulation and possible rating law reforms, and including
27 reforms that have succeeded or failed in other states.
28 (b) The cost and benefits of required coverages and of
29 restrictions on optional coverages that could otherwise be
30 made available to consumers.
31
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1 (c) Such other information as may be useful to the
2 Legislature in determining how to increase availability and,
3 over the short and long term, to moderate costs and potential
4 consumer assessments.
5 (2) The study shall be funded from a budget of no more
6 than $250,000, which shall be funded by assessments on
7 insurers issuing personal lines property and casualty
8 insurance in the state. Such assessments shall be collected by
9 the Office of Insurance Regulation and shall be prorated among
10 such insurers according to a formula whereby each insurer
11 shall pay a fraction of such budget, the numerator of which
12 shall be such insurer's direct earned premiums for personal
13 lines property and casualty insurance in the state and the
14 denominator of which shall be the total direct earned premiums
15 for personal lines property and casualty insurance in the
16 state for calendar year 2003.
17 (3) The Department of Financial Services, the Office
18 of Insurance Regulation, and insurers shall cooperate with the
19 Florida State University College of Business Department of
20 Risk Management and Insurance conducting the analysis and
21 shall provide such information as the Florida State University
22 College of Business Department of Risk Management and
23 Insurance may request in the format requested by the
24 university.
25 Section 20. Section 625.131, Florida Statutes, is
26 repealed.
27 Section 21. Nothing in this act shall be construed to
28 create or be the basis of a civil action. Nothing in this act
29 shall be construed as limiting settlement or adjustment of
30 claims by methods that are otherwise permissible under Florida
31 law.
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1 Section 22. Except as otherwise expressly provided in
2 this act and except for this section, which shall take effect
3 upon becoming a law, this act shall take effect July 1, 2004.
4
5 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
6 CS/SB 2038
7
8 The committee substitute:
9 -- Removes a provision which specified that an arbitration
clause in an insurance policy cannot preclude the insured
10 from using certain mediation provisions in law.
11 -- Removes a provision which specified that a local
government self-insurance fund created for the purpose of
12 providing workers' compensation benefits initially has to
be organized as a commercial self-insurance fund or a
13 group self-insurance fund.
14 -- Provides that industrial fire insurance policies are
exempt from the requirement that a residential property
15 insurance rate filing must include actuarially reasonable
discounts, credits, or other rate differentials for
16 properties on which fixtures or construction techniques
that reduce windstorm loss have been installed or
17 implemented.
18 -- Authorizes a study by the Florida State University
Department of Risk Management and Insurance on factors
19 affecting costs and potential assessments on consumers of
personal lines property and casualty insurance in this
20 state.
21 -- Revises a reinsurance statute to specify that a single
assuming insurer may use letters of credit to fund up to
22 half of the trust fund and trusteed surplus required to
be maintained under current law.
23
-- Specifies that a premium finance company shall, within 15
24 days after an account has been overpaid, refund to the
insured any refund due on the account or, if the refund
25 is sent or credited to the agent, return or credit to the
agent the amount of the overpayment and notify the
26 insured of the refund amount.
27 -- Specifies that, for an action to be brought against a
automobile joint underwriting plan (i.e., the Florida
28 Automobile Joint Underwriting Association), the
Department of Financial Services and the plan must have
29 been given 90 days' written notice of the violation, and
provides that the joint underwriting plan may require
30 from the insured proof that he or she has obtained the
mandatory types and amounts of insurance from another
31 admitted carrier prior to the cancellation of a policy
the insured obtained from the plan.
37
CODING: Words stricken are deletions; words underlined are additions.