HB 0557

CS

CHAMBER ACTION

2	The Committee on Insurance recommends the following:
3
4	Committee Substitute
5	Remove the entire bill and insert:
6	A bill to be entitled
7	An act relating to insurance; amending s. 20.121, F.S.;
8	requiring the Division of Consumer Services of the
9	Department of Financial Services to designate an employee
10	as primary contract for consumers on issues involving
11	sinkholes; amending s. 501.137, F.S.; requiring an
12	insurer to reinstate, under certain circumstances, an
13	insurance policy that is canceled due to failure of the
14	lender to pay a premium for which sufficient escrow funds
15	are on deposit; requiring that the lender reimburse the
16	property owner for any penalties or fees paid for
17	purposes of reinstating the policy; requiring the lender
18	to pay the increased cost of insurance premiums for a
19	specified period of time under certain conditions;
20	amending s. 624.4622, F.S.; requiring certain local
21	government self-insurance funds to be organized as a
22	commercial self-insurance fund or a group self-insurance
23	fund under certain circumstances; requiring certain local
24	government self-insurance funds to file certain financial
25	statements for a certain period of time; providing
26	statement requirements; amending s. 624.610, F.S.;
27	providing additional investment requirements and
28	authorizations for certain trust funds and trusteed
29	surplus for reinsurers; amending s. 625.081, F.S.;
30	excepting credit disability insurance from certain health
31	insurance reserve requirements; providing an exception;
32	amending s. 625.121, F.S.; providing additional minimum
33	standards for valuation of insurance policies and
34	contracts; providing reserve requirements for credit life
35	and disability policies; amending s. 626.321, F.S.;
36	revising licensure requirements for personal lines agents
37	transacting baggage and motor vehicle excess liability
38	insurance; creating s. 625.9743, F.S.; providing claim
39	settlement practices for motor vehicle insurance;
40	providing requirements, standards, procedures,
41	limitations, and proscriptions; providing alternative
42	loss adjustment or settlement methodologies; providing
43	requirements and criteria; creating s. 626.9744, F.S.;
44	providing claim settlement practices for property
45	insurance; providing requirements and standards to be
46	followed by insurers; providing limitations; amending s.
47	627.351, F.S.; authorizing the motor vehicle insurance
48	risk apportionment plan to require additional proof from
49	insureds of having certain insurance prior to canceling
50	coverage; providing certain notice requirements for
51	bringing certain actions against the plan; providing for
52	future repeal; amending s. 627.4091, F.S.; providing
53	additional disclosure requirements with respect to a
54	refusal to insure; amending s. 627.4133, F.S.; requiring
55	a property insurer to reinstate a policy on property
56	secured by a mortgage canceled due to a lender's failing
57	to timely pay premium; restricting the use of certain
58	claims as a cause for cancellation or nonrenewal;
59	amending s. 627.476, F.S.; providing for the Financial
60	Services Commission to adopt updated mortality tables by
61	rule; creating s. 627.7077, F.S.; providing for a
62	feasibility and cost-benefit study for a proposed Florida
63	Sinkhole Insurance Facility; providing study requirements
64	and criteria; requiring a report to the commission and
65	the Legislature; providing for funding of the study;
66	providing a severability clause; amending s. 627.848,
67	F.S.; revising insurance contract cancellation
68	requirements for premium finance companies; requiring the
69	Legislative Auditing Committee to contract with the
70	Florida State University College of Business' Department
71	of Risk Management and Insurance to analyze factors
72	affecting premium levels and availability of personal
73	lines property and casualty insurance to consumers;
74	specifying applicable factors for analysis; providing for
75	funding of the study; requiring assistance from certain
76	state agencies; amending s. 627.838, F.S.; deleting a
77	filing fee; amending s. 627.849, F.S.; deleting a form
78	filing fee; repealing s. 625.131, F.S., relating to
79	special reserve bases for credit life and disability
80	policies; providing construction to clarify application
81	or effect of the act on civil actions and settlements or
82	adjustments of claims; providing an effective date.
83
84	Be It Enacted by the Legislature of the State of Florida:
85
86	Section 1.  Paragraph (h) of subsection (2) of section
87	20.121, Florida Statutes, is amended to read:
88	20.121  Department of Financial Services.--There is created
89	a Department of Financial Services.
90	(2)  DIVISIONS.--The Department of Financial Services shall
91	consist of the following divisions:
92	(h)  The Division of Consumer Services, which shall include
93	a Bureau of Funeral and Cemetery Services.
94	1.  The Division of Consumer Services shall perform the
95	following functions concerning products or services regulated by
96	the Department of Financial Services or by either office of the
97	Financial Services Commission:
98	a.  Receive inquiries and complaints from consumers.;
99	b.  Prepare and disseminate such information as the
100	department deems appropriate to inform or assist consumers.;
101	c.  Provide direct assistance and advocacy for consumers
102	who request such assistance or advocacy.;
103	d.  With respect to apparent or potential violations of law
104	or applicable rules by a person or entity licensed by the
105	department or by either office of the commission, report such
106	apparent or potential violation to the appropriate division of
107	the department or office of the commission, which may take such
108	further action as it deems appropriate.
109	e.  Designate an employee of the division as primary
110	contact for consumers on issues relating to sinkholes.
111	2.  Any person licensed or issued a certificate of
112	authority by the department or by the Office of Insurance
113	Regulation shall respond, in writing, to the Division of
114	Consumer Services within 20 days after receipt of a written
115	request for information from the division concerning a consumer
116	complaint. The response must address the issues and allegations
117	raised in this complaint. The division may, in its discretion,
118	impose an administrative penalty for failure to comply with this
119	subparagraph in an amount up to $2,500 per violation upon any
120	entity licensed by the department or the Office of Insurance
121	Regulation and $250 for the first violation, $500 for the second
122	violation and up to $1,000 per violation thereafter upon any
123	individual licensed by the department or the Office of Insurance
124	Regulation.
125	3.  The department may adopt rules to implement the
126	provisions of this paragraph.
127	4.  The powers, duties, and responsibilities expressed or
128	granted in this paragraph shall not limit the powers, duties,
129	and responsibilities of the Department of Financial Services,
130	the Financial Services Commission, the Office of Insurance
131	Regulation, or the Office of Financial Regulation set forth
132	elsewhere in the Florida Statutes.
133	Section 2.  Section 501.137, Florida Statutes, is amended
134	to read:
135	501.137  Mortgage lenders; tax and insurance payments from
136	escrow accounts; duties.--
137	(1)  Every lender of money, whether a natural person or an
138	artificial entity, whose loans are secured by a mortgage on real
139	estate located within the state and who receives funds
140	incidental thereto or in connection therewith for the payment of
141	property taxes or hazard insurance premiums when such funds are
142	held in escrow by or on behalf of the lender, shall promptly pay
143	such taxes or insurance premiums when such taxes or premiums
144	become due and adequate escrow funds are deposited, so that the
145	maximum tax discount available may be obtained with regard to
146	the taxable property and so that insurance coverage on the
147	property does not lapse.
148	(2)  If an escrow account for such taxes or insurance
149	premiums is deficient, the lender shall notify the property
150	owner within 15 days after the lender receives the notification
151	of taxes due from the county tax collector or receives the
152	notification from the insurer that a premium is due.
153	(3)(a)  If the lender, as a result of neglect, fails to pay
154	any tax or insurance premium when the tax or premium is due and
155	there are sufficient escrow funds on deposit to pay the tax or
156	premium, and if the property owner suffers a loss as a result of
157	such failure, then the lender is will be liable for such loss,;
158	except, however, that, with respect to any loss which would
159	otherwise have been insured, the extent of such liability shall
160	not exceed the coverage limits of any insurance policy which has
161	lapsed.
162	(b)  If the lender violates paragraph (a) and the premium
163	payment is not more than 90 days overdue, the insurer shall
164	reinstate the insurance policy, retroactive to the date of
165	cancellation, and the lender shall reimburse the property owner
166	for any penalty or fees imposed by the insurer and paid by the
167	property owner for purposes of reinstating the policy.
168	(c)  If the lender violates paragraph (a) and the premium
169	payment is more than 90 days overdue or if the insurer refuses
170	to reinstate the insurance policy, the lender shall pay the
171	difference between the cost of the previous insurance policy and
172	a new, comparable insurance policy for a period of 2 years.
173	(4)  At the expiration of the annual accounting period, the
174	lender shall issue to the property owner an annual statement of
175	the escrow account.
176	Section 3.  Subsections (3) and (4) are added to section
177	624.4622, Florida Statutes, to read:
178	624.4622  Local government self-insurance funds.--
179	(3)  Notwithstanding the provisions of subsection (2), a
180	local government self-insurance fund created under this section
181	after October 1, 2004, shall initially be organized as a
182	commercial self-insurance fund under s. 624.462 or a group self-
183	insurance fund under s. 624.4621 and, for the first 5 years of
184	its existence, shall be subject to all the requirements applied
185	to commercial self-insurance funds or to group self-insurance
186	funds, respectively.
187	(4)(a)  A local government self-insurance fund formed after
188	January 1, 2005, shall, for its first 5 fiscal years, file with
189	the office full and true statements of its financial condition,
190	transactions, and affairs. An annual statement covering the
191	preceding fiscal year shall be filed within 60 days after the
192	end of the fund's fiscal year and quarterly statements shall be
193	filed within 45 days after each such date. The office may, for
194	good cause, grant an extension of time for filing an annual or
195	quarterly statement. The statements shall contain information
196	generally included in insurers' financial statements prepared in
197	accordance with generally accepted insurance accounting
198	principles and practices and in a form generally used by
199	insurers for financial statements, sworn to by at least two
200	executive officers of the self-insurance fund. The form for
201	financial statements shall be the form currently approved by the
202	National Association of Insurance Commissioners for use by
203	property and casualty insurers.
204	(b)  Each annual statement shall contain a statement of
205	opinion on loss and loss adjustment expense reserves made by a
206	member of the American Academy of Actuaries. Workpapers in
207	support of the statement of opinion must be provided to the
208	office upon request.
209	Section 4.  Paragraph (c) of subsection (3) of section
210	624.610, Florida Statutes, is amended to read:
211	624.610  Reinsurance.--
212	(3)
213	(c)1.  Credit must be allowed when the reinsurance is ceded
214	to an assuming insurer that maintains a trust fund in a
215	qualified United States financial institution, as defined in
216	paragraph (5)(b), for the payment of the valid claims of its
217	United States ceding insurers and their assigns and successors
218	in interest. To enable the office to determine the sufficiency
219	of the trust fund, the assuming insurer shall report annually to
220	the office information substantially the same as that required
221	to be reported on the NAIC Annual Statement form by authorized
222	insurers. The assuming insurer shall submit to examination of
223	its books and records by the office and bear the expense of
224	examination.
225	2.a.  Credit for reinsurance must not be granted under this
226	subsection unless the form of the trust and any amendments to
227	the trust have been approved by:
228	(I)  The insurance regulator of the state in which the
229	trust is domiciled; or
230	(II)  The insurance regulator of another state who,
231	pursuant to the terms of the trust instrument, has accepted
232	principal regulatory oversight of the trust.
233	b.  The form of the trust and any trust amendments must be
234	filed with the insurance regulator of every state in which the
235	ceding insurer beneficiaries of the trust are domiciled. The
236	trust instrument must provide that contested claims are valid
237	and enforceable upon the final order of any court of competent
238	jurisdiction in the United States. The trust must vest legal
239	title to its assets in its trustees for the benefit of the
240	assuming insurer's United States ceding insurers and their
241	assigns and successors in interest. The trust and the assuming
242	insurer are subject to examination as determined by the
243	insurance regulator.
244	c.  The trust remains in effect for as long as the assuming
245	insurer has outstanding obligations due under the reinsurance
246	agreements subject to the trust. No later than February 28 of
247	each year, the trustee of the trust shall report to the
248	insurance regulator in writing the balance of the trust and list
249	the trust's investments at the preceding year end, and shall
250	certify that the trust will not expire prior to the following
251	December 31.
252	3.  The following requirements apply to the following
253	categories of assuming insurer:
254	a.  The trust fund for a single assuming insurer consists
255	of funds in trust in an amount not less than the assuming
256	insurer's liabilities attributable to reinsurance ceded by
257	United States ceding insurers, and, in addition, the assuming
258	insurer shall maintain a trusteed surplus of not less than $20
259	million. Not less than 50 percent of the funds in the trust
260	covering the assuming insurer's liabilities attributable to
261	reinsurance ceded by the United States ceding insurers and
262	trusteed surplus shall consist of assets of a quality
263	substantially similar to that required in part II of chapter
264	625. Clean, irrevocable, unconditional, and evergreen letters of
265	credit, issued or confirmed by a qualified United States
266	financial institution, as defined in paragraph (5)(a), effective
267	no later than December 31 of the year for which the filing is
268	made, and in the possession of the trust on or before the filing
269	date of its annual statement, may be used to fund the remainder
270	of the trust and trusteed surplus.
271	b.(I)  In the case of a group including incorporated and
272	individual unincorporated underwriters:
273	(A)  For reinsurance ceded under reinsurance agreements
274	with an inception, amendment, or renewal date on or after August
275	1, 1995, the trust consists of a trusteed account in an amount
276	not less than the group's several liabilities attributable to
277	business ceded by United States domiciled ceding insurers to any
278	member of the group;
279	(B)  For reinsurance ceded under reinsurance agreements
280	with an inception date on or before July 31, 1995, and not
281	amended or renewed after that date, notwithstanding the other
282	provisions of this section, the trust consists of a trusteed
283	account in an amount not less than the group's several insurance
284	and reinsurance liabilities attributable to business written in
285	the United States; and
286	(C)  In addition to these trusts, the group shall maintain
287	in trust a trusteed surplus of which $100 million must be held
288	jointly for the benefit of the United States domiciled ceding
289	insurers of any member of the group for all years of account.
290	(II)  The incorporated members of the group must not be
291	engaged in any business other than underwriting of a member of
292	the group, and are subject to the same level of regulation and
293	solvency control by the group's domiciliary regulator as the
294	unincorporated members.
295	(III)  Within 90 days after its financial statements are
296	due to be filed with the group's domiciliary regulator, the
297	group shall provide to the insurance regulator an annual
298	certification by the group's domiciliary regulator of the
299	solvency of each underwriter member or, if a certification is
300	unavailable, financial statements, prepared by independent
301	public accountants, of each underwriter member of the group.
302	Section 5.  Section 625.081, Florida Statutes, is amended
303	to read:
304	625.081  Reserve for health insurance.--For all health
305	insurance policies, the insurer shall maintain an active life
306	reserve which places a sound value on the insurer's liabilities
307	under such policies; is not less than the reserve according to
308	appropriate standards set forth in rules issued by the
309	commission; and, with the exception of credit disability
310	insurance, in no event, is less in the aggregate than the pro
311	rata gross unearned premiums for such policies.
312	Section 6.  Paragraphs (a), (e), and (f) of subsection (5)
313	and subsection (13) of section 625.121, Florida Statutes, are
314	amended, and paragraphs (k) and (l) are added to subsection (5)
315	of said section, to read:
316	625.121  Standard Valuation Law; life insurance.--
317	(5)  MINIMUM STANDARD FOR VALUATION OF POLICIES AND
318	CONTRACTS ISSUED ON OR AFTER OPERATIVE DATE OF STANDARD
319	NONFORFEITURE LAW.--Except as otherwise provided in paragraph
320	(h) and subsections (6), (11), and (14), the minimum standard
321	for the valuation of all such policies and contracts issued on
322	or after the operative date of s. 627.476 (Standard
323	Nonforfeiture Law for Life Insurance) shall be the
324	commissioners' reserve valuation method defined in subsections
325	(7), (11), and (14); 5 percent interest for group annuity and
326	pure endowment contracts and 3.5 percent interest for all other
327	such policies and contracts, or in the case of life insurance
328	policies and contracts, other than annuity and pure endowment
329	contracts, issued on or after July 1, 1973, 4 percent interest
330	for such policies issued prior to October 1, 1979, and 4.5
331	percent interest for such policies issued on or after October 1,
332	1979; and the following tables:
333	(a)  For all ordinary policies of life insurance issued on
334	the standard basis, excluding any disability and accidental
335	death benefits in such policies:
336	1.  For policies issued prior to the operative date of s.
337	627.476(9), the commissioners' 1958 Standard Ordinary Mortality
338	Table; except that, for any category of such policies issued on
339	female risks, modified net premiums and present values, referred
340	to in subsection (7), may be calculated according to an age not
341	more than 6 years younger than the actual age of the insured.;
342	and
343	2.  For policies issued on or after the operative date of
344	s. 627.476(9), the commissioners' 1980 Standard Ordinary
345	Mortality Table or, at the election of the insurer for any one
346	or more specified plans of life insurance, the commissioners'
347	1980 Standard Ordinary Mortality Table with Ten-Year Select
348	Mortality Factors.
349	3.  For policies issued on or after July 1, 2004, ordinary
350	mortality tables adopted after 1980 by the National Association
351	of Insurance Commissioners, adopted by rule by the commission
352	for use in determining the minimum standard of valuation for
353	such policies.
354	(e)  For total and permanent disability benefits in or
355	supplementary to ordinary policies or contracts:
356	1.  For policies or contracts issued on or after January 1,
357	1966, the tables of period 2 disablement rates and the 1930 to
358	1950 termination rates of the 1952 disability study of the
359	Society of Actuaries, with due regard to the type of benefit.;
360	2.  For policies or contracts issued on or after January 1,
361	1961, and prior to January 1, 1966, either those tables or, at
362	the option of the insurer, the class three disability table
363	(1926).; and
364	3.  For policies issued prior to January 1, 1961, the class
365	three disability table (1926).
366	4.  For policies or contracts issued on or after July 1,
367	2004, tables of disablement rates and termination rates adopted
368	after 1980 by the National Association of Insurance
369	Commissioners, adopted by rule by the commission for use in
370	determining the minimum standard of valuation for those policies
371	or contracts.
372
373	Any such table for active lives shall be combined with a
374	mortality table permitted for calculating the reserves for life
375	insurance policies.
376	(f)  For accidental death benefits in or supplementary to
377	policies:
378	1.  For policies issued on or after January 1, 1966, the
379	1959 Accidental Death Benefits Table.;
380	2.  For policies issued on or after January 1, 1961, and
381	prior to January 1, 1966, either that table or, at the option of
382	the insurer, the Intercompany Double Indemnity Mortality Table.;
383	and
384	3.  For policies issued prior to January 1, 1961, the
385	Intercompany Double Indemnity Mortality Table.
386	4.  For policies issued on or after July 1, 2004, tables of
387	accidental death benefits adopted after 1980 by the National
388	Association of Insurance Commissioners, adopted by rule by the
389	commission for use in determining the minimum standard of
390	valuation for those policies.
391
392	Either table shall be combined with a mortality table permitted
393	for calculating the reserves for life insurance policies.
394	(k)  For individual annuity and pure endowment contracts
395	issued on or after July 1, 2004, excluding any disability and
396	accidental death benefits purchased under those contracts,
397	individual annuity mortality tables adopted after 1980 by the
398	National Association of Insurance Commissioners, adopted by rule
399	by the commission for use in determining the minimum standard of
400	valuation for those contracts.
401	(l)  For all annuities and pure endowments purchased on or
402	after July 1, 2004, under group annuity and pure endowment
403	contracts, excluding any disability and accidental death
404	benefits purchased under those contracts, group annuity
405	mortality tables adopted after 1980 by the National Association
406	of Insurance Commissioners, adopted by rule by the commission
407	for use in determining the minimum standard of valuation for
408	those contracts.
409	(13)  APPLICABILITY TO CREDIT LIFE AND DISABILITY INSURANCE
410	POLICIES.--
411	(a)  For policies issued prior to January 1, 2004:
412	1.  The minimum reserve for single-premium credit
413	disability insurance, monthly premium credit life insurance, and
414	monthly premium credit disability insurance shall be the
415	unearned gross premium.
416	2.  As to single-premium credit life insurance policies,
417	the insurer shall establish and maintain reserves which are not
418	less than the value, at the valuation date, of the risk for the
419	unexpired portion of the period for which the premium has been
420	paid as computed on the basis of the commissioners' 1980
421	Standard Ordinary Mortality Table plus 3.5 percent interest. At
422	the discretion of the office, the insurer may make a reasonable
423	assumption as to the ages at which net premiums are to be
424	determined. In lieu of such basis, reserves based upon unearned
425	gross premiums may be used at the option of the insurer.
426	(b)  For policies issued on or after January 1, 2004:
427	1.  The minimum reserve for single-premium credit
428	disability insurance shall be:
429	a.  The unearned gross premium; or
430	b.  Based upon a morbidity table that is adopted by the
431	National Association of Insurance Commissioners and is specified
432	in a rule the commission shall adopt pursuant to s. 625.121(14).
433	2.  The minimum reserve for monthly premium credit
434	disability insurance shall be the unearned gross premium.
435	3.  The minimum reserve for monthly premium credit life
436	insurance shall be the unearned gross premium.
437	4.  As to single-premium credit life insurance policies,
438	the insurer shall establish and maintain reserves which are not
439	less than the value, at the valuation date, of the risk for the
440	unexpired portion of the period for which the premium has been
441	paid as computed on the basis of the commissioners' 1980
442	Standard Ordinary Mortality Table or any ordinary mortality
443	table adopted after 1980 by the National Association of
444	Insurance Commissioners, that is approved by rule adopted by the
445	commission for use in determining the minimum standard of
446	valuation for such policies and an interest rate determined in
447	accordance with s. 625.121(6). At the discretion of the office,
448	the insurer may make a reasonable assumption as to the ages at
449	which net premiums are to be determined. In lieu of such basis,
450	reserves based upon unearned gross premiums may be used at the
451	option of the insurer. This section does not apply as to those
452	credit life insurance policies for which reserves are computed
453	and maintained as required under s. 625.131.
454	Section 7.  Paragraph (d) of subsection (1) of section
455	626.321, Florida Statutes, is amended to read:
456	626.321  Limited licenses.--
457	(1)  The department shall issue to a qualified individual,
458	or a qualified individual or entity under paragraphs (c), (d),
459	(e), and (i), a license as agent authorized to transact a
460	limited class of business in any of the following categories:
461	(d)  Baggage and motor vehicle excess liability
462	insurance.--
463	1.  License covering only insurance of personal effects
464	except as provided in subparagraph 2. The license may be issued
465	only:
466	a.  To a full-time salaried employee of a common carrier or
467	a full-time salaried employee or owner of a transportation
468	ticket agency, which person is engaged in the sale or handling
469	of transportation of baggage and personal effects of travelers,
470	and may authorize the sale of such insurance only in connection
471	with such transportation; or
472	b.  To the full-time salaried employee of a licensed
473	general lines agent, a full-time salaried employee of a business
474	which offers motor vehicles for rent or lease, or to a business
475	entity that office of a business which offers motor vehicles for
476	rent or lease if insurance sales activities authorized by the
477	license are in connection with and incidental to the rental of a
478	motor vehicle limited to full-time salaried employees. An entity
479	applying for a license under this paragraph:
480	(I)  Is required to submit only one application for a
481	license under s. 626.171. The requirements of s. 626.171(5)
482	shall apply only to the officers and directors of the entity
483	submitting the application.
484	(II)  Is required to obtain a license for each office,
485	branch office, or place of business making use of the entity's
486	business name by applying to the department for the license on a
487	simplified application form developed by rule of the department
488	for this purpose.
489	(III)  Is required to pay the applicable fees for a license
490	as prescribed in s. 624.501, be appointed under s. 626.112, and
491	pay the prescribed appointment fee under s. 624.501. A licensed
492	and appointed entity shall be directly responsible and
493	accountable for all acts of the licensee's employees.
494
495	The purchaser of baggage insurance shall be provided written
496	information disclosing that the insured's homeowner's policy may
497	provide coverage for loss of personal effects and that the
498	purchase of such insurance is not required in connection with
499	the purchase of tickets or in connection with the lease or
500	rental of a motor vehicle.
501	2.  A business entity that office licensed pursuant to
502	subparagraph 1., or a person licensed pursuant to subparagraph
503	1. who is a full-time salaried employee of a business which
504	offers motor vehicles for rent or lease, may include lessees
505	under a master contract providing coverage to the lessor or may
506	transact excess motor vehicle liability insurance providing
507	coverage in excess of the standard liability limits provided by
508	the lessor in its lease to a person renting or leasing a motor
509	vehicle from the licensee's employer for liability arising in
510	connection with the negligent operation of the leased or rented
511	motor vehicle, provided that the lease or rental agreement is
512	for not more than 30 days; that the lessee is not provided
513	coverage for more than 30 consecutive days per lease period,
514	and, if the lease is extended beyond 30 days, the coverage may
515	be extended one time only for a period not to exceed an
516	additional 30 days; that the lessee is given written notice that
517	his or her personal insurance policy providing coverage on an
518	owned motor vehicle may provide additional excess coverage; and
519	that the purchase of the insurance is not required in connection
520	with the lease or rental of a motor vehicle. The excess
521	liability insurance may be provided to the lessee as an
522	additional insured on a policy issued to the licensee's
523	employer.
524	3.  A business entity that office licensed pursuant to
525	subparagraph 1., or a person licensed pursuant to subparagraph
526	1. who is a full-time salaried employee of a business which
527	offers motor vehicles for rent or lease, may, as an agent of an
528	insurer, transact insurance that provides coverage for the
529	liability of the lessee to the lessor for damage to the leased
530	or rented motor vehicle if:
531	a.  The lease or rental agreement is for not more than 30
532	days; or the lessee is not provided coverage for more than 30
533	consecutive days per lease period, but, if the lease is extended
534	beyond 30 days, the coverage may be extended one time only for a
535	period not to exceed an additional 30 days;
536	b.  The lessee is given written notice that his or her
537	personal insurance policy that provides coverage on an owned
538	motor vehicle may provide such coverage with or without a
539	deductible; and
540	c.  The purchase of the insurance is not required in
541	connection with the lease or rental of a motor vehicle.
542	Section 8.  Section 626.9743, Florida Statutes, is created
543	to read:
544	626.9743  Claim settlement practices relating to motor
545	vehicle insurance.--
546	(1)  This section shall apply to the adjustment and
547	settlement of personal and commercial motor vehicle insurance
548	claims.
549	(2)  An insurer may not, when liability and damages owed
550	under the policy are reasonably clear, recommend that a third-
551	party claimant make a claim under his or her own policy solely
552	to avoid paying the claim under the policy issued by that
553	insurer.
554	(3)  An insurer that elects to repair a motor vehicle and
555	requires a specific repair shop for vehicle repairs shall cause
556	the damaged vehicle to be restored to its physical condition as
557	to performance and appearance prior to the loss at no additional
558	cost to the insured or third-party claimant other than as stated
559	in the policy.
560	(4)  An insurer may not require the use of replacement
561	parts in the repair of a motor vehicle which are not at least
562	equivalent in kind and quality to the damaged parts prior to the
563	loss in terms of fit, appearance, and performance.
564	(5)  When the insurance policy provides for the adjustment
565	and settlement of first-party motor vehicle total losses on the
566	basis of actual cash value or replacement with another of like
567	kind and quality, the insurer shall use one of the following
568	methods:
569	(a)  The insurer may elect a cash settlement based upon the
570	actual cost to purchase a comparable motor vehicle, including
571	sales tax, if applicable pursuant to the provisions of
572	subsection (9). Such cost may be derived from:
573	1.  When comparable motor vehicles are available in the
574	local market area, the cost of two or more such comparable motor
575	vehicles available within the preceding 90 days;
576	2.  The retail cost as determined from a generally
577	recognized source such as a guidebook or electronic database
578	that is generally available to the public; or
579	3.  The retail cost using two or more quotations obtained
580	by the insurer from two or more licensed dealers in the local
581	market area; or
582	(b)  The insurer may elect to offer a replacement motor
583	vehicle that is a specified comparable motor vehicle available
584	to the insured, including sales tax, if applicable pursuant to
585	subsection (9), paid for by the insurer at no cost other than
586	any deductible provided in the policy and betterment as provided
587	in subsection (6). The offer must be documented with the
588	insurer's claim file. For purposes of this subsection, a
589	comparable motor vehicle is one that is made by the same
590	manufacturer, of the same or newer model year, and of similar
591	body type and has similar options and mileage as the insured
592	vehicle. Additionally, a comparable motor vehicle must be in as
593	good or better overall condition as was the insured vehicle and
594	must be available for inspection within a reasonable distance of
595	the insured's residence;
596	(c)  When a motor vehicle total loss is adjusted or settled
597	on a basis that varies from the methods described in paragraph
598	(a) or paragraph (b), the determination of value must be
599	supported by documentation, and any deductions from value must
600	be itemized and specified in appropriate dollar amounts. The
601	basis for such settlement shall be explained to the claimant in
602	writing, if requested, and a copy of the explanation shall be
603	retained with the insurer's claim file; or
604	(d)  Any other method agreed to by the claimant.
605	(6)  When the amount offered in settlement reflects a
606	reduction by the insurer because of betterment or depreciation,
607	information pertaining to the reduction shall be maintained with
608	the insurer's claim file. Deductions shall be itemized and
609	specific as to dollar amount and shall accurately reflect the
610	value assigned to the betterment or depreciation. The basis for
611	any deduction shall be explained to the claimant in writing, if
612	requested, and a copy of the explanation shall be maintained
613	with the insurer's claim file.
614	(7)  Every insurer shall, if partial losses are settled on
615	the basis of a written estimate prepared by or for the insurer,
616	supply the insured a copy of the estimate upon which the
617	settlement is based.
618	(8)  Every insurer shall provide notice to an insured
619	before termination of payment for previously authorized storage
620	charges, and the notice shall provide 72 hours for the insured
621	to remove the motor vehicle from storage before terminating
622	payment of the storage charges.
623	(9)  If sales tax will necessarily be incurred by a
624	claimant upon replacement of a total loss or upon repair of a
625	partial loss, the insurer may defer payment of the sales tax
626	unless and until the obligation has actually been incurred.
627	(10)  Nothing in this section shall be construed to
628	preclude enforcement of policy provisions relating to disputes
629	pertaining to settlement of claims.
630	Section 9.  Section 626.9744, Florida Statutes, is created
631	to read:
632	626.9744  Claim settlement practices relating to property
633	insurance.--Unless otherwise provided by the policy, when a
634	homeowner's insurance policy provides for the adjustment and
635	settlement of first-party losses based on repair or replacement
636	cost, the following requirements apply:
637	(1)  When a loss requires repair or replacement of an item
638	or part, any physical damage incurred in making such repair or
639	replacement which is covered and not otherwise limited or
640	excluded by the policy shall be included in the loss to the
641	extent of any applicable limits. The insured may not be required
642	to pay for betterment required by ordinance or code except for
643	the applicable deductible, unless specifically excluded or
644	limited by the policy.
645	(2)  When a loss requires replacement of items and the
646	replaced items do not match in quality, color, or size, the
647	insurer shall make reasonable repairs or replacement of items in
648	adjoining areas in the interest of uniformity of appearance. In
649	determining the extent of the repairs or replacement of items in
650	adjoining areas, the insurer may consider the cost of repairing
651	or replacing the undamaged portions of the property, the degree
652	of uniformity that can be achieved without such cost, the
653	remaining useful life of the undamaged portion, and other
654	relevant factors.
655	(3)  This section shall not be construed to make the
656	insurer a warrantor of the repairs made pursuant to this
657	section.
658	(4)  Nothing in this section shall be construed to preclude
659	enforcement of policy provisions relating to disputes pertaining
660	to settlement of claims.
661	Section 10.  Subsection (1) of section 627.351, Florida
662	Statutes, is amended to read:
663	627.351  Insurance risk apportionment plans.--
664	(1)  MOTOR VEHICLE INSURANCE RISK
665	APPORTIONMENT.--Agreements may be made among casualty and surety
666	Agreements may be made among casualty and surety insurers with
667	respect to the equitable apportionment among them of insurance
668	which may be afforded applicants who are in good faith entitled
669	to, but are unable to, procure such insurance through ordinary
670	methods, and such insurers may agree among themselves on the use
671	of reasonable rate modifications for such insurance. Such
672	agreements and rate modifications shall be subject to the
673	approval of the office. The office shall, after consultation
674	with the insurers licensed to write automobile liability
675	insurance in this state, adopt a reasonable plan or plans for
676	the equitable apportionment among such insurers of applicants
677	for such insurance who are in good faith entitled to, but are
678	unable to, procure such insurance through ordinary methods, and,
679	when such plan has been adopted, all such insurers shall
680	subscribe thereto and shall participate therein. Such plan or
681	plans shall include rules for classification of risks and rates
682	therefor. The plan or plans shall make available noncancelable
683	coverage as provided in s. 627.7275(2). Any insured placed with
684	the plan shall be notified of the fact that insurance coverage
685	is being afforded through the plan and not through the private
686	market, and such notification shall be given in writing within
687	10 days of such placement. To assure that plan rates are made
688	adequate to pay claims and expenses, insurers shall develop a
689	means of obtaining loss and expense experience at least
690	annually, and the plan shall file such experience, when
691	available, with the office in sufficient detail to make a
692	determination of rate adequacy. Prior to the filing of such
693	experience with the office, the plan shall poll each member
694	insurer as to the need for an actuary who is a member of the
695	Casualty Actuarial Society and who is not affiliated with the
696	plan's statistical agent to certify the plan's rate adequacy. If
697	a majority of those insurers responding indicate a need for such
698	certification, the plan shall include the certification as part
699	of its experience filing. Such experience shall be filed with
700	the office not more than 9 months following the end of the
701	annual statistical period under review, together with a rate
702	filing based on said experience. The office shall initiate
703	proceedings to disapprove the rate and so notify the plan or
704	shall finalize its review within 60 days of receipt of the
705	filing. Notification to the plan by the office of its
706	preliminary findings, which include a point of entry to the plan
707	pursuant to chapter 120, shall toll the 60-day period during any
708	such proceedings and subsequent judicial review. The rate shall
709	be deemed approved if the office does not issue notice to the
710	plan of its preliminary findings within 60 days of the filing.
711	In addition to provisions for claims and expenses, the
712	ratemaking formula shall include a factor for projected claims
713	trending and 5 percent for contingencies. In no instance shall
714	the formula include a renewal discount for plan insureds.
715	However, the plan shall reunderwrite each insured on an annual
716	basis, based upon all applicable rating factors approved by the
717	office. Trend factors shall not be found to be inappropriate if
718	not in excess of trend factors normally used in the development
719	of residual market rates by the appropriate licensed rating
720	organization. Each application for coverage in the plan shall
721	include, in boldfaced 12-point type immediately preceding the
722	applicant's signature, the following statement:
723
724	"THIS INSURANCE IS BEING AFFORDED THROUGH THE FLORIDA JOINT
725	UNDERWRITING ASSOCIATION AND NOT THROUGH THE PRIVATE MARKET.
726	PLEASE BE ADVISED THAT COVERAGE WITH A PRIVATE INSURER MAY BE
727	AVAILABLE FROM ANOTHER AGENT AT A LOWER COST. AGENT AND COMPANY
728	LISTINGS ARE AVAILABLE IN THE LOCAL YELLOW PAGES."
729
730	The plan shall annually report to the office the number and
731	percentage of plan insureds who are not surcharged due to their
732	driving record.
733	(a)  The plan may require from the insured proof that he or
734	she has obtained the mandatory types and amounts of insurance
735	from another admitted carrier prior to the cancellation of a
736	policy the insured obtained from the plan and prior to the
737	return of any unearned premium the insured paid for such
738	coverage from the plan. This paragraph shall not apply to any
739	person that provides proof of sale or inoperability of the
740	vehicle covered under the policy purchased from the plan or
741	relocation outside this state.
742	(b)  Notwithstanding the requirements of s. 624.155(3)(a),
743	as a condition precedent to bringing an action against the plan
744	under s. 624.155, the department and the plan must have been
745	given 90 days' written notice of the violation. If the
746	department returns a notice for lack of specificity, the 90-day
747	time period shall not begin until a proper notice is filed. This
748	notice must comply with the information requirements of s.
749	624.155(3)(b). Effective October 1, 2007, this paragraph is
750	repealed unless reenacted by the Legislature prior to such date.
751	Section 11.  Subsection (5) is added to section 627.4091,
752	Florida Statutes, to read:
753	627.4091  Specific reasons for denial, cancellation, or
754	nonrenewal.--
755	(5)  When an insurer refuses to provide coverage to an
756	applicant due to adverse underwriting information, the insurer
757	shall:
758	(a)  Provide to the applicant specific information
759	regarding the reasons for the refusal to insure.
760	(b)  If the reason for the refusal to insure is based on a
761	loss underwriting history or report from a consumer reporting
762	agency, to the extent applicable, identify the loss underwriting
763	history and notify the applicant of his or her right under the
764	federal Fair and Accurate Credit Transactions Act to obtain a
765	copy of the report from the consumer reporting agency.
766	Section 12.  Subsections (4) and (5) are added to section
767	627.4133, Florida Statutes, to read:
768	627.4133  Notice of cancellation, nonrenewal, or renewal
769	premium.--
770	(4)  An insurer that cancels a property insurance policy on
771	property secured by a mortgage due to the failure of the lender
772	to timely pay the premium when due shall reinstate the policy as
773	required by s. 501.137.
774	(5)  A single claim on a personal lines residential
775	property insurance policy which is the result of water damage
776	may not be used as the sole cause for cancellation or nonrenewal
777	unless the insurer can demonstrate that the insured has failed
778	to take action as requested by the insurer to prevent a future
779	similar occurrence of damage to the insured property.
780	Section 13.  Paragraph (h) of subsection (9) of section
781	627.476, Florida Statutes, is amended to read:
782	627.476  Standard Nonforfeiture Law for Life Insurance.--
783	(9)  CALCULATION OF ADJUSTED PREMIUMS AND PRESENT VALUES
784	FOR POLICIES ISSUED AFTER OPERATIVE DATE OF THIS SUBSECTION.--
785	(h)  All adjusted premiums and present values referred to
786	in this section shall for all policies of ordinary insurance be
787	calculated on the basis of the Commissioners' 1980 Standard
788	Ordinary Mortality Table or, at the election of the insurer for
789	any one or more specified plans of life insurance, the
790	Commissioners' 1980 Standard Ordinary Mortality Table with Ten-
791	Year Select Mortality Factors; shall for all policies of
792	industrial insurance be calculated on the basis of the
793	Commissioners' 1961 Standard Industrial Mortality Table; and
794	shall for all policies issued in a particular calendar year be
795	calculated on the basis of a rate of interest not exceeding the
796	nonforfeiture interest rate as defined in this subsection for
797	policies issued in that calendar year. However:
798	1.  At the option of the insurer, calculations for all
799	policies issued in a particular calendar year may be made on the
800	basis of a rate of interest not exceeding the nonforfeiture
801	interest rate, as defined in this subsection, for policies
802	issued in the immediately preceding calendar year.
803	2.  Under any paid-up nonforfeiture benefit, including any
804	paid-up dividend additions, any cash surrender value available,
805	whether or not required by subsection (2), shall be calculated
806	on the basis of the mortality table and rate of interest used in
807	determining the amount of such paid-up nonforfeiture benefit and
808	paid-up dividend additions, if any.
809	3.  An insurer may calculate the amount of any guaranteed
810	paid-up nonforfeiture benefit, including any paid-up additions
811	under the policy, on the basis of an interest rate no lower than
812	that specified in the policy for calculating cash surrender
813	values.
814	4.  In calculating the present value of any paid-up term
815	insurance with accompanying pure endowment, if any, offered as a
816	nonforfeiture benefit, the rates of mortality assumed may be not
817	more than those shown in the Commissioners' 1980 Extended Term
818	Insurance Table for policies of ordinary insurance and not more
819	than the Commissioners' 1961 Industrial Extended Term Insurance
820	Table for policies of industrial insurance.
821	5.  In lieu of the mortality tables specified in this
822	section, at the option of the insurance company and subject to
823	rules adopted by the commission, the insurance company may
824	substitute:
825	a.  The 1958 CSO or CET Smoker and Nonsmoker Mortality
826	Tables, whichever is applicable, for policies issued on or after
827	the operative date of this subsection and before January 1,
828	1989;
829	b.  The 1980 CSO or CET Smoker and Nonsmoker Mortality
830	Tables, whichever is applicable, for policies issued on or after
831	the operative date of this subsection;
832	c.  A mortality table that is a blend of the sex-distinct
833	1980 CSO or CET mortality table standard, whichever is
834	applicable, or a mortality table that is a blend of the sex-
835	distinct 1980 CSO or CET smoker and nonsmoker mortality table
836	standards, whichever is applicable, for policies that are
837	subject to the United States Supreme Court decision in Arizona
838	Governing Committee v. Norris to prevent unfair discrimination
839	in employment situations.
840	6.  Ordinary mortality tables adopted after 1980 by the
841	National Association of Insurance Commissioners, adopted by rule
842	by the commission for use in determining the minimum
843	nonforfeiture standard, may be substituted for the
844	commissioners' 1980 Standard Ordinary Mortality Table with or
845	without Ten-Year Select Mortality Factors or for the
846	commissioners' 1980 Extended Term Insurance Table.
847	7.6.  For insurance issued on a substandard basis, the
848	calculation of any such adjusted premiums and present values may
849	be based on appropriate modifications of the aforementioned
850	tables.
851	Section 14.  Section 627.7077, Florida Statutes, is created
852	to read:
853	627.7077  Florida Sinkhole Insurance Facility; matters
854	related to affordability and availability of sinkhole insurance;
855	feasibility study.--
856	(1)  The Florida State University College of Business'

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