1 | A bill to be entitled |
2 | An act relating to insurance; amending s. 626.321, F.S.; |
3 | including service warranty agreement sales covering |
4 | communications equipment under certain limited licensing |
5 | provisions; providing for additional appointment authority |
6 | for certain licensed branch locations of a communications |
7 | equipment retail vendor; revising certain application, |
8 | appointment, and licensing requirements for certain |
9 | entities; providing for payment of appointment fees; |
10 | providing an exception; requiring renewals of |
11 | appointments; providing for a renewal fee; amending s. |
12 | 626.731, F.S.; revising a qualification for licensure as a |
13 | general lines agent; creating s. 624.1275, F.S.; |
14 | proscribing state agencies and political subdivisions from |
15 | prohibiting or excluding licensed insurance agents from |
16 | competing or negotiating for certain insurance products or |
17 | plans; providing a definition; amending s. 636.044, F.S.; |
18 | authorizing certain persons to engage in the solicitation |
19 | and sale of certain insurance relating to air ambulance |
20 | transportation costs; providing requirements and |
21 | limitations; amending s. 627.64872, F.S.; redefining the |
22 | term "health insurance" for purposes of determining |
23 | assessments under the Florida Health Insurance Plan; |
24 | amending s. 943.135, F.S.; authorizing certain employing |
25 | agencies to require law enforcement officers and |
26 | correctional officers to pass certain physical |
27 | examinations for certain purposes; providing criteria, |
28 | requirements, and limitations; authorizing certain |
29 | employing agencies to set tobacco use standards for law |
30 | enforcement officers and correctional officers employed by |
31 | local governments; amending s. 631.181, F.S.; providing an |
32 | exception to certain requirements for a signed statement |
33 | for certain claims; providing requirements; creating s. |
34 | 631.1915, F.S.; providing requirements for policyholder |
35 | collateral, deductible reimbursements, and other |
36 | policyholder obligations; specifying that certain |
37 | collateral held by an insurer or a receiver to secure |
38 | policyholder obligations under a deductible agreement are |
39 | not an estate asset; requiring use of such collateral to |
40 | secure policyholder obligations under such agreement; |
41 | requiring a receiver to use such collateral to pay |
42 | noncovered claims under certain circumstances; providing |
43 | for certain claims to be claims against an insurer's |
44 | estate under certain circumstances; requiring a receiver |
45 | to allocate collateral among certain obligations and |
46 | administer such collateral; authorizing a receiver to |
47 | continue and enforce certain alternative policyholder |
48 | claim funding contractual agreements; specifying certain |
49 | actions as a bar to certain claims and an extinguishment |
50 | of certain obligations; requiring a guaranty association |
51 | to bill a policyholder for certain reimbursement amounts |
52 | for certain claims; specifying policyholder obligation for |
53 | certain amounts; prohibiting certain defenses; requiring a |
54 | receiver to use certain collateral for certain purposes; |
55 | requiring a receiver to prorate certain funds of an estate |
56 | under certain circumstances; authorizing a guaranty |
57 | association to deduct certain expenses; requiring a |
58 | guaranty association to provide a complete accounting of |
59 | certain billing and collection activities; authorizing a |
60 | guaranty association to contract for certain collections; |
61 | providing for claims against an insolvent insurer's estate |
62 | for certain unreimbursed claims payments; requiring a |
63 | receiver to periodically adjust collateral held pursuant |
64 | to a deductible agreement; specifying jurisdiction of a |
65 | state court to resolve disputes; preserving rights of a |
66 | guaranty association to reimbursement for certain claims; |
67 | providing application to certain orders of liquidation; |
68 | providing definitions; providing for nonapplication to |
69 | certain claims; amending s. 631.54, F.S.; revising a |
70 | definition; amending s. 631.56, F.S.; revising the |
71 | membership of the board of directors of the Florida |
72 | Insurance Guaranty Association, Inc.; amending s. 631.57, |
73 | F.S.; revising requirements and limitations for |
74 | obligations of the association for covered claims; |
75 | authorizing the association to contract with counties and |
76 | municipalities to issue revenue bonds for certain |
77 | purposes; creating s. 631.695, F.S.; providing legislative |
78 | findings and purposes; providing for issuance of revenue |
79 | bonds through counties and municipalities to fund |
80 | assistance programs for paying covered claims for |
81 | hurricane damage; providing procedures, requirements, and |
82 | limitations for counties, municipalities, and the Florida |
83 | Insurance Guaranty Association, Inc., relating to issuance |
84 | and validation of such bonds; providing for payments on |
85 | and retirement of such bonds from certain assessments; |
86 | prohibiting pledging the funds, credit, property, and |
87 | taxing power of the state, counties, and municipalities |
88 | for payment of bonds; specifying authorized uses of bond |
89 | proceeds; limiting the term of bonds; specifying a state |
90 | covenant to protect bondholders from adverse actions |
91 | relating to such bonds; specifying exemptions for bonds, |
92 | notes, and other obligations of counties and |
93 | municipalities from certain taxes or assessments on |
94 | property and revenues; authorizing counties and |
95 | municipalities to create a legal entity to exercise |
96 | certain powers; requiring the association to issue an |
97 | annual report on the status of certain uses of bond |
98 | proceeds; providing report requirements; requiring the |
99 | association to provide a copy of the report to the |
100 | Legislature and Chief Financial Officer; prohibiting |
101 | repeal of certain provisions relating to certain bonds |
102 | under certain circumstances; providing severability; |
103 | providing an effective date. |
104 |
|
105 | Be It Enacted by the Legislature of the State of Florida: |
106 |
|
107 | Section 1. Paragraph (i) of subsection (1) of section |
108 | 626.321, Florida Statutes, is amended to read: |
109 | 626.321 Limited licenses.-- |
110 | (1) The department shall issue to a qualified individual, |
111 | or a qualified individual or entity under paragraphs (c), (d), |
112 | (e), and (i), a license as agent authorized to transact a |
113 | limited class of business in any of the following categories: |
114 | (i) In-transit and storage personal property insurance; |
115 | communications equipment property insurance, or communications |
116 | equipment inland marine insurance, and communications equipment |
117 | service warranty agreement sales.-- |
118 | 1. A license covering only the insurance of personal |
119 | property not held for resale, covering the risks of |
120 | transportation or storage in rented or leased motor vehicles, |
121 | trailers, or self-service storage facilities, as the latter are |
122 | defined in s. 83.803, may be issued, without examination, only |
123 | to employees or authorized representatives of lessors who rent |
124 | or lease motor vehicles, trailers, or self-service storage |
125 | facilities and who are authorized by an insurer to issue |
126 | certificates or other evidences of insurance to lessees of such |
127 | motor vehicles, trailers, or self-service storage facilities |
128 | under an insurance policy issued to the lessor. A person |
129 | licensed under this paragraph shall give a prospective purchaser |
130 | of in-transit or storage personal property insurance written |
131 | notice that his or her homeowner's policy may provide coverage |
132 | for the loss of personal property and that the purchase of such |
133 | insurance is not required under the lease terms. |
134 | 2. A license covering only communications equipment, for |
135 | the loss, theft, mechanical failure, malfunction of or damage |
136 | to, communications equipment. The license may be issued only to: |
137 | a. Employees or authorized representatives of a licensed |
138 | general lines agent; |
139 | b. The lead Each business location of a retail vendor of |
140 | communications equipment and its branch locations; or |
141 | c. Employees, agents, or authorized representatives of a |
142 | retail vendor of communications equipment. |
143 |
|
144 | The license authorizes the sale of such policies, or |
145 | certificates under a group master policy, only with respect to |
146 | the sale of, or provision of communications service for, |
147 | communications equipment. A general lines agent is not required |
148 | to obtain a license under this subparagraph to offer or sell |
149 | communications equipment property insurance or communication |
150 | equipment inland marine insurance. The license also authorizes |
151 | sales of service warranty agreements covering only |
152 | communications equipment to the same extent as if licensed under |
153 | s. 634.419 or s. 634.420. The provisions of this chapter |
154 | requiring submission of fingerprints do not apply to |
155 | communications equipment licenses issued to qualified entities |
156 | under this subparagraph. Licensees offering policies under this |
157 | subparagraph must receive initial training from, and have a |
158 | contractual relationship with, a general lines agent. For the |
159 | purposes of this subparagraph, the term "communications |
160 | equipment" means handsets, pagers, personal digital assistants, |
161 | portable computers, automatic answering devices, and other |
162 | devices or accessories used to originate or receive |
163 | communications signals or service, and includes services related |
164 | to the use of such devices, such as consumer access to a |
165 | wireless network; however, the term does not include |
166 | telecommunications switching equipment, transmission wires, cell |
167 | site transceiver equipment, or other equipment and systems used |
168 | by telecommunications companies to provide telecommunications |
169 | service to consumers. A branch location of a retail vendor of |
170 | communications equipment licensed pursuant to paragraph (2)(b) |
171 | may, in lieu of obtaining an appointment from an insurer or |
172 | warranty association as provided in paragraph (2)(c), obtain a |
173 | single appointment from the associated lead business location |
174 | licensee licensed under paragraph (2)(a) and pay the prescribed |
175 | appointment fee under s. 624.501, provided the lead business |
176 | location has a single appointment from each insurer or warranty |
177 | association represented and such appointment provides that it |
178 | applies to the lead business location and all of its branch |
179 | locations. Any branch location individually appointed by an |
180 | insurer under paragraph (2)(c) prior to January 1, 2006, may |
181 | replace its appointments with an appointment from its lead |
182 | location at no charge. Branch location appointments shall be |
183 | renewed on the first annual anniversary of licensure of the lead |
184 | business location occurring more than 24 months after the |
185 | initial appointment date and every 24 months thereafter. |
186 | Notwithstanding s. 624.501, after July 1, 2006, the renewal fee |
187 | applicable to such branch location appointments shall be $30 per |
188 | appointment. |
189 | Section 2. Paragraph (f) of subsection (1) of section |
190 | 626.731, Florida Statutes, is amended to read: |
191 | 626.731 Qualifications for general lines agent's |
192 | license.-- |
193 | (1) The department shall not grant or issue a license as |
194 | general lines agent to any individual found by it to be |
195 | untrustworthy or incompetent or who does not meet each of the |
196 | following qualifications: |
197 | (f) The applicant is not a service representative, a |
198 | managing general agent licensed in this state, or a special |
199 | agent or similar service representative of a health insurer |
200 | which also transacts property, casualty, or surety insurance; |
201 | except that the president, vice president, secretary, or |
202 | treasurer, including a member of the board of directors, of a |
203 | corporate insurer, if otherwise qualified under and meeting the |
204 | requirements of this part, may be licensed and appointed as a |
205 | local resident agent. |
206 | Section 3. Section 624.1275, Florida Statutes, is created |
207 | to read: |
208 | 624.1275 Insurance agents; prohibited exclusion from |
209 | public bidding and negotiations.--A licensed insurance agent may |
210 | not be prohibited or excluded from competing or negotiating for |
211 | any insurance product or plan purchased, provided, or endorsed |
212 | by a state agency or any political subdivision of this state on |
213 | the basis of the compensation or contractual or employment |
214 | arrangement granted to the agent by an employer, insurer, or |
215 | licensed agency. The term "political subdivision" has the same |
216 | meaning set forth in s. 1.01. |
217 | Section 4. Subsection (5) is added to section 636.044, |
218 | Florida Statutes, to read: |
219 | 636.044 Agent licensing.-- |
220 | (5) Notwithstanding the provisions of this section, a |
221 | person registered in accordance with part XI of chapter 559 as a |
222 | seller of travel may engage in the solicitation and sale of |
223 | insurance covering the cost of transportation by air ambulance, |
224 | as defined in s. 401.23(4), that is provided by an air ambulance |
225 | service licensed pursuant to s. 401.251. The insurance policy |
226 | providing this coverage is subject to all applicable provisions |
227 | of this chapter. A seller of travel may solicit and sell such |
228 | insurance only in connection with the sale of transportation |
229 | tickets. No such policy shall be in effect for a duration of |
230 | more than 48 hours or for the duration of a specified one-way or |
231 | round-trip travel event. |
232 | Section 5. Paragraph (b) of subsection (20) of section |
233 | 627.64872, Florida Statutes, is amended to read: |
234 | 627.64872 Florida Health Insurance Plan.-- |
235 | (20) COMBINING MEMBERSHIP OF THE FLORIDA COMPREHENSIVE |
236 | HEALTH ASSOCIATION; ASSESSMENT.-- |
237 | (b)1. As a condition of doing business in this state, an |
238 | insurer shall pay an assessment to the board in the amount |
239 | prescribed by this section. For operating losses incurred on or |
240 | after July 1, 2004, by persons enrolled in the Florida |
241 | Comprehensive Health Association, each insurer shall annually be |
242 | assessed by the board in the following calendar year a portion |
243 | of such incurred operating losses of the plan. Such portion |
244 | shall be determined by multiplying such operating losses by a |
245 | fraction, the numerator of which equals the insurer's earned |
246 | premium pertaining to direct writings of health insurance in the |
247 | state during the calendar year preceding that for which the |
248 | assessment is levied, and the denominator of which equals the |
249 | total of all such premiums earned by insurers in the state |
250 | during such calendar year. |
251 | 2. The total of all assessments under this paragraph upon |
252 | an insurer shall not exceed 1 percent of such insurer's health |
253 | insurance premium earned in this state during the calendar year |
254 | preceding the year for which the assessments were levied. |
255 | 3. For the purposes of determining assessments under this |
256 | subsection, the term "health insurance" means any hospital and |
257 | medical expense incurred policy, minimum premium plan, stop-loss |
258 | coverage, health maintenance organization contract, prepaid |
259 | health clinic contract, multiple-employer welfare arrangement |
260 | contract, or fraternal benefit society health benefits contract, |
261 | whether sold as an individual or group policy or contract. The |
262 | term does not include a policy covering medical payment coverage |
263 | or personal injury protection coverage in a motor vehicle |
264 | policy, coverage issued as a supplement to liability insurance, |
265 | or workers' compensation. |
266 | 4.3. All rights, title, and interest in the assessment |
267 | funds collected under this paragraph shall vest in this state. |
268 | However, all of such funds and interest earned shall be used by |
269 | the plan to pay claims and administrative expenses. |
270 | Section 6. Subsections (5) and (6) are added to section |
271 | 943.135, Florida Statutes, to read: |
272 | 943.135 Requirements for continued employment.-- |
273 | (5) An employing agency as defined in s. 943.10(4) may |
274 | require a law enforcement officer and correctional officer as |
275 | defined in s. 943.10(1), (2), or (3) to successfully pass a |
276 | physical examination in order to be eligible for the presumption |
277 | set forth in s. 112.18. The employing agency shall have the |
278 | physical examination performed prior to or immediately upon |
279 | employment of the officer. This provision shall not affect the |
280 | applicability of the presumption set forth in s. 112.18 for law |
281 | enforcement officers or correctional officers who are currently |
282 | employed by an employing agency. |
283 | (6) An employing agency as defined in s. 943.10(4) may set |
284 | tobacco use standards for law enforcement officers and |
285 | correctional officers as defined in s. 943.10(1), (2), or (3) |
286 | employed by a municipality, county, or political subdivision of |
287 | the state or any agent of the political subdivision who has |
288 | constitutional authority or statutory authority to employ or |
289 | appoint an officer. |
290 | Section 7. Paragraph (f) is added to subsection (2) of |
291 | section 631.181, Florida Statutes, to read: |
292 | 631.181 Filing and proof of claim.-- |
293 | (2) |
294 | (f) The signed statement required by this section shall |
295 | not be required on claims for which adequate claims file |
296 | documentation exists within the records of the insolvent |
297 | insurer. Claims for payment of unearned premium shall not be |
298 | required to use the signed statement required by this section if |
299 | the receiver certifies to the guaranty fund that the records of |
300 | the insolvent insurer are sufficient to determine the amount of |
301 | unearned premium owed to each policyholder of the insurer and |
302 | such information is remitted to the guaranty fund by the |
303 | receiver in electronic or other mutually agreed upon format. |
304 | Section 8. Section 631.1915, Florida Statutes, is created |
305 | to read: |
306 | 631.1915 Policyholder collateral; deductible |
307 | reimbursements; other policyholder obligations.-- |
308 | (1) Any collateral held by or for the benefit of, or |
309 | assigned to, the insurer or subsequently the receiver in order |
310 | to secure the obligations of a policyholder under a deductible |
311 | agreement shall not be considered an asset of the estate and |
312 | shall be maintained and administered by the receiver as provided |
313 | in this section, notwithstanding any other provision of law or |
314 | contract to the contrary. |
315 | (2) If the collateral is being held by or for the benefit |
316 | of, or assigned to, the insurer or subsequently the receiver to |
317 | secure obligations under a deductible agreement with a |
318 | policyholder subject to the provisions of this section, the |
319 | collateral shall be used to secure the policyholder's obligation |
320 | to fund or reimburse claims payments within the agreed |
321 | deductible amount. |
322 | (3) If a claim is subject to a deductible agreement and |
323 | secured by collateral and is not covered by any guaranty |
324 | association, the receiver shall adjust and pay the noncovered |
325 | claim using the collateral, but only to the extent of the |
326 | available collateral. A claim against the collateral by a third- |
327 | party claimant is not a claim against the insolvent insurer's |
328 | estate for purposes of s. 631.193. If the collateral is |
329 | exhausted and the insured is not able to provide funds to pay |
330 | the remaining claims within the deductible, the remaining claims |
331 | shall be claims against the insurer's estate subject to |
332 | complying with other provisions in this part for the filing and |
333 | allowance of such claims. |
334 | (4) To the extent the receiver is holding collateral |
335 | provided by a policyholder that was obtained to secure a |
336 | deductible agreement and to secure other obligations of the |
337 | policyholder, the receiver shall equitably allocate the |
338 | collateral among such obligations and administer the collateral |
339 | allocated to the deductible agreement pursuant to this section. |
340 | The receiver shall inform the guaranty associations of the |
341 | method and details of all the foregoing allocations. |
342 | (5) Regardless of whether there is collateral, if the |
343 | insurer has contractually agreed to allow the policyholder to |
344 | fund its own claims within the deductible amount pursuant to a |
345 | deductible agreement, through the policyholder's own |
346 | administration of its claims or through the policyholder |
347 | providing funds directly to a third-party administrator who |
348 | administers the claims, the receiver may allow such funding |
349 | arrangement to continue and, where applicable, shall enforce |
350 | such arrangements. The funding of such claims by the |
351 | policyholder within the deductible amount acts as a bar to any |
352 | claim for such amount in the liquidation proceeding, including, |
353 | but not limited to, any such claim by the policyholder or the |
354 | third-party claimant. The funding extinguishes both the |
355 | obligation, if any, of any guaranty association to pay such |
356 | claims within the deductible amount and the obligations, if any, |
357 | of the policyholder or third-party administrator to reimburse |
358 | the guaranty association. No charge of any kind shall be made |
359 | against any guaranty association on the basis of the |
360 | policyholder's funding of claims payment made pursuant to the |
361 | mechanism set forth in this subsection. |
362 | (6) If the insurer has not contractually agreed to allow |
363 | the policyholder to fund the policyholder's own claims within |
364 | the deductible amount, to the extent a guaranty association is |
365 | required by applicable state law to pay any claims for which the |
366 | insurer would have been entitled to reimbursement from the |
367 | policyholder under the terms of the deductible agreement and to |
368 | the extent the claims have not been paid by a policyholder or |
369 | third party, the guaranty association shall bill the |
370 | policyholder for such reimbursement and the policyholder is |
371 | obligated to pay such amount to the guaranty association for the |
372 | benefit of the guaranty associations who paid such claims. |
373 | Neither the insolvency of the insurer nor its inability to |
374 | perform any of its obligations under the deductible agreement |
375 | shall be a defense to the policyholder's reimbursement |
376 | obligation under the deductible agreement. If the policyholder |
377 | fails to pay the amounts due within 60 days after the bill for |
378 | such reimbursements is due, the receiver shall use the |
379 | collateral to the extent necessary to reimburse the guaranty |
380 | association and, at the same time, the guaranty association may |
381 | pursue other collection efforts against the policyholder. If |
382 | more than one guaranty association has a claim against the same |
383 | collateral and the available collateral, after allocation under |
384 | subsection (4), together with billing and collection efforts, |
385 | are together insufficient to pay each guaranty association in |
386 | full, the receiver shall prorate payments to each guaranty |
387 | association based upon the relationship the amount of claims |
388 | each guaranty association has paid bears to the total of all |
389 | claims paid by such guaranty associations. |
390 | (7)(a) The guaranty association is entitled to deduct from |
391 | collateral to be returned to a policyholder reasonable actual |
392 | expenses incurred in fulfilling the responsibilities under this |
393 | provision. |
394 | (b) With respect to claims payments made by any guaranty |
395 | association, the guaranty association shall provide any other |
396 | guaranty associations and the receiver with a complete |
397 | accounting of the guaranty association's deductible billing and |
398 | collection activities, including copies of the policyholder |
399 | billings when rendered and the reimbursements collected. The |
400 | cost of reports required pursuant to this subsection shall be |
401 | considered part of the expenses of the guaranty association. |
402 | (c) The guaranty association may contract with the |
403 | receiver for the direct collection from the policyholders on the |
404 | same basis as the guaranty association and with the same rights |
405 | and remedies. If so assigned, the receiver shall report any |
406 | amounts so collected from each policyholder to the guaranty |
407 | association. |
408 | (d) To the extent that guaranty associations pay claims |
409 | within the deductible amount but are not reimbursed by the |
410 | receiver under this section or by policyholder payments from the |
411 | guaranty associations' own collection efforts, the guaranty |
412 | association shall have a claim on the insolvent insurer's estate |
413 | for such unreimbursed claims payments. The priority of such |
414 | claim shall depend upon the nature of the payment that should |
415 | have been reimbursed. |
416 | (e) Periodically, but not more than annually, the receiver |
417 | shall adjust the collateral being held pursuant to the |
418 | deductible agreement. The receiver shall maintain adequate |
419 | collateral to secure 110 percent of the entire estimated |
420 | obligation of the policyholder. The receiver shall provide a |
421 | copy of its collateral review to any obligated guaranty |
422 | association. Once all claims covered by the collateral have been |
423 | paid and the receiver is satisfied that no new claims can be |
424 | presented, the receiver may release any remaining collateral. |
425 | (8) The state court that has jurisdiction over the |
426 | liquidation proceedings shall have jurisdiction to resolve |
427 | disputes arising under this section. |
428 | (9) Nothing in this section limits or adversely affects |
429 | any right the guaranty associations may have under applicable |
430 | state law to obtain reimbursement from certain classes of |
431 | policyholders for claims payments made by such guaranty |
432 | associations under policies of the insolvent insurer or for |
433 | related expenses the guaranty associations incur. |
434 | (10) This section applies to all liquidations for which an |
435 | order is entered after July 1, 2005. |
436 | (11) For purposes of this section, the term: |
437 | (a) "Deductible agreement" means any combination of one or |
438 | more policies, endorsements, contracts, or security agreements |
439 | that provide for the policyholder to bear the risk of loss |
440 | within a specified amount per claim or occurrence covered under |
441 | a policy of insurance and that may be subject to aggregate limit |
442 | of policyholder reimbursement obligations. |
443 | (b) "Noncovered claim" means a claim that is subject to a |
444 | deductible agreement, may be secured by collateral, and is not |
445 | covered by a guaranty association. |
446 | (12) This section does not apply to first-party claims. |
447 | Section 9. Subsection (3) of section 631.54, Florida |
448 | Statutes, is amended to read: |
449 | 631.54 Definitions.--As used in this part: |
450 | (3) "Covered claim" means an unpaid claim, including one |
451 | of unearned premiums, which arises out of, and is within the |
452 | coverage, and not in excess of, the applicable limits of an |
453 | insurance policy to which this part applies, issued by an |
454 | insurer, if such insurer becomes an insolvent insurer and the |
455 | claimant or insured is a resident of this state at the time of |
456 | the insured event or the property from which the claim arises is |
457 | permanently located in this state. For entities other than |
458 | individuals, the residence of a claimant, insured, or |
459 | policyholder is the state in which the entity's principal place |
460 | of business is located at the time of the insured event. |
461 | "Covered claim" shall not include: |
462 | (a) Any amount due any reinsurer, insurer, insurance pool, |
463 | or underwriting association, sought directly or indirectly |
464 | through a third party, as subrogation, contribution, |
465 | indemnification, or otherwise; or |
466 | (b) Any claim that would otherwise be a covered claim |
467 | under this part that has been rejected by any other state |
468 | guaranty fund on the grounds that an insured's net worth is |
469 | greater than that allowed under that state's guaranty law. |
470 | Member insurers shall have no right of subrogation, |
471 | contribution, indemnification, or otherwise, sought directly or |
472 | indirectly through a third party, against the insured of any |
473 | insolvent member. |
474 | Section 10. Subsection (1) of section 631.56, Florida |
475 | Statutes, is amended to read: |
476 | 631.56 Board of directors.-- |
477 | (1) The board of directors of the association shall |
478 | consist of not less than six five or more than ten nine persons |
479 | serving terms as established in the plan of operation. The |
480 | department shall approve and appoint to the board up to nine |
481 | persons recommended by the member insurers. The department shall |
482 | select one Florida-licensed insurance agent to serve as a |
483 | nonvoting member. In the event the department finds that any |
484 | recommended person does not meet the qualifications for service |
485 | on the board, the department shall request the member insurers |
486 | to recommend another person. Each member shall serve for a 4- |
487 | year term and may be reappointed. Vacancies on the board shall |
488 | be filled for the remaining period of the term in the same |
489 | manner as initial appointments. |
490 | Section 11. Paragraph (a) of subsection (1), paragraph (d) |
491 | of subsection (2), and paragraph (a) of subsection (3) of |
492 | section 631.57, Florida Statutes, are amended to read: |
493 | 631.57 Powers and duties of the association.-- |
494 | (1) The association shall: |
495 | (a)1. Be obligated to the extent of the covered claims |
496 | existing: |
497 | a. Prior to adjudication of insolvency and arising within |
498 | 30 days after the determination of insolvency; |
499 | b. Before the policy expiration date if less than 30 days |
500 | after the determination; or |
501 | c. Before the insured replaces the policy or causes its |
502 | cancellation, if she or he does so within 30 days of the |
503 | determination. |
504 | 2.a. The obligation under subparagraph 1. shall include |
505 | only that amount of each covered claim which is in excess of |
506 | $100 and is less than $300,000, except with respect to policies |
507 | covering condominium associations or homeowners' associations, |
508 | which associations have a responsibility to provide insurance |
509 | coverage on residential units within the association, the |
510 | obligation shall include that amount of each covered property |
511 | insurance claim which is less than $100,000 multiplied by the |
512 | number of condominium units or other residential units; however, |
513 | as to homeowners' associations, this sub-subparagraph |
514 | subparagraph applies only to claims for damage or loss to |
515 | residential units and structures attached to residential units. |
516 | b. Notwithstanding sub-subparagraph a., the association |
517 | has no obligation to pay covered claims that are to be paid from |
518 | the proceeds of bonds issued under s. 631.695. However, the |
519 | association shall assign and pledge the first available moneys |
520 | from all or part of the assessments to be made under paragraph |
521 | (3)(a) to or on behalf of the issuer of such bonds for the |
522 | benefit of the holders of such bonds. The association shall |
523 | administer any such covered claims and present valid covered |
524 | claims for payment in accordance with the provisions of the |
525 | assistance program in connection with which such bonds have been |
526 | issued. |
527 | 3. In no event shall the association be obligated to a |
528 | policyholder or claimant in an amount in excess of the |
529 | obligation of the insolvent insurer under the policy from which |
530 | the claim arises. |
531 | (2) The association may: |
532 | (d) Negotiate and become a party to such contracts as are |
533 | necessary to carry out the purpose of this part. Additionally, |
534 | the association may enter into such contracts with a |
535 | municipality or county or such legal entity created pursuant to |
536 | s. 163.01(7)(g) as are necessary in order for the municipality |
537 | or county or such legal entity to issue bonds under s. 631.695. |
538 | In connection with the issuance of any such bonds and the |
539 | entering into of any such necessary contracts, the association |
540 | may agree to such terms and conditions as the association deems |
541 | necessary and proper. |
542 | (3)(a) To the extent necessary to secure the funds for the |
543 | respective accounts for the payment of covered claims, and also |
544 | to pay the reasonable costs to administer the same, and to the |
545 | extent necessary to secure the funds for the account specified |
546 | in s. 631.55(2)(c), or to retire indebtedness, including, |
547 | without limitation, the principal, redemption premium, if any, |
548 | and interest on, and related costs of issuance of, bonds issued |
549 | under s. 631.695, and the funding of any reserves and other |
550 | payments required under the bond resolution or trust indenture |
551 | pursuant to which such bonds have been issued, the office, upon |
552 | certification of the board of directors, shall levy assessments |
553 | in the proportion that each insurer's net direct written |
554 | premiums in this state in the classes protected by the account |
555 | bears to the total of said net direct written premiums received |
556 | in this state by all such insurers for the preceding calendar |
557 | year for the kinds of insurance included within such account. |
558 | Assessments shall be remitted to and administered by the board |
559 | of directors in the manner specified by the approved plan. Each |
560 | insurer so assessed shall have at least 30 days' written notice |
561 | as to the date the assessment is due and payable. Every |
562 | assessment shall be made as a uniform percentage applicable to |
563 | the net direct written premiums of each insurer in the kinds of |
564 | insurance included within the account in which the assessment is |
565 | made. The assessments levied against any insurer shall not |
566 | exceed in any one year more than 2 percent of that insurer's net |
567 | direct written premiums in this state for the kinds of insurance |
568 | included within such account during the calendar year next |
569 | preceding the date of such assessments. |
570 | Section 12. Section 631.695, Florida Statutes, is created |
571 | to read: |
572 | 631.695 Revenue bond issuance through counties or |
573 | municipalities.-- |
574 | (1) The Legislature finds: |
575 | (a) The potential for widespread and massive damage to |
576 | persons and property caused by hurricanes making landfall in |
577 | this state can generate insurance claims of such a number as to |
578 | render numerous insurers operating within this state insolvent |
579 | and therefore unable to satisfy covered claims. |
580 | (b) The inability of insureds within this state to receive |
581 | payment of covered claims or to timely receive such payment |
582 | creates financial and other hardships for such insureds and |
583 | places undue burdens on the state, the affected units of local |
584 | government, and the community at large. |
585 | (c) In addition, the failure of insurers to pay covered |
586 | claims or to timely pay such claims due to the insolvency of |
587 | such insurers can undermine the public's confidence in insurers |
588 | operating within this state, thereby adversely affecting the |
589 | stability of the insurance industry in this state. |
590 | (d) The state has previously taken action to address these |
591 | problems by adopting the Florida Insurance Guaranty Association |
592 | Act, which, among other things, provides a mechanism for the |
593 | payment of covered claims under certain insurance policies to |
594 | avoid excessive delay in payment and to avoid financial loss to |
595 | claimants or policyholders because of the insolvency of an |
596 | insurer. |
597 | (e) In the wake of the unprecedented destruction caused by |
598 | various hurricanes that have made landfall in this state, the |
599 | resultant covered claims, and the number of insurers rendered |
600 | insolvent thereby, it is evident that alternative programs must |
601 | be developed to allow the Florida Insurance Guaranty |
602 | Association, Inc., to more expeditiously and effectively provide |
603 | for the payment of covered claims. |
604 | (f) It is therefore determined to be in the best interests |
605 | of, and necessary for, the protection of the public health, |
606 | safety, and general welfare of the residents of this state, and |
607 | for the protection and preservation of the economic stability of |
608 | insurers operating in this state, and it is declared to be an |
609 | essential public purpose, to permit certain municipalities and |
610 | counties to take such actions as will provide relief to |
611 | claimants and policyholders having covered claims against |
612 | insolvent insurers operating in this state by expediting the |
613 | handling and payment of covered claims. |
614 | (g) To achieve the foregoing purposes, it is proper to |
615 | authorize municipalities and counties of this state |
616 | substantially affected by the landfall of a category 1 or |
617 | greater hurricane to issue bonds to assist the Florida Insurance |
618 | Guaranty Association, Inc., in expediting the handling and |
619 | payment of covered claims of insolvent insurers. |
620 | (h) In order to avoid the needless and indiscriminate |
621 | proliferation, duplication, and fragmentation of such assistance |
622 | programs, it is in the best interests of the residents of this |
623 | state to authorize municipalities and counties severely affected |
624 | by a category 1 or greater hurricane to provide for the payment |
625 | of covered claims beyond their territorial limits in the |
626 | implementation of such programs. |
627 | (i) It is a paramount public purpose for municipalities |
628 | and counties substantially affected by the landfall of a |
629 | category 1 or greater hurricane to be able to issue bonds for |
630 | the purposes described in this section. Such issuance shall |
631 | provide assistance to residents of those municipalities and |
632 | counties as well as to other residents of this state. |
633 | (2) The governing body of any municipality or county the |
634 | residents of which have been substantially affected by a |
635 | category 1 or greater hurricane may issue bonds to fund an |
636 | assistance program in conjunction with, and with the consent of, |
637 | the Florida Insurance Guaranty Association, Inc., for the |
638 | purpose of paying claimants' or policyholders' covered claims as |
639 | defined in s. 631.54 arising through the insolvency of an |
640 | insurer, which insolvency is determined by the Florida Insurance |
641 | Guaranty Association, Inc., to have been a result of a category |
642 | 1 or greater hurricane, regardless of whether such claimants or |
643 | policyholders are residents of such municipality or county or |
644 | the property to which such claim relates is located within or |
645 | outside the territorial jurisdiction of such municipality or |
646 | county. The power of a municipality or county to issue bonds as |
647 | described in this section is in addition to any powers granted |
648 | by law and may not be abrogated or restricted by any provisions |
649 | in such municipality's or county's charter. A municipality or |
650 | county issuing bonds for this purpose shall enter into such |
651 | contracts with the Florida Insurance Guaranty Association, Inc., |
652 | or any entity acting on behalf of the Florida Insurance Guaranty |
653 | Association, Inc., as are necessary to implement the assistance |
654 | program. Any bonds issued by a municipality or county or |
655 | combination thereof under this subsection shall be payable from |
656 | and secured by moneys received by or on behalf of the |
657 | municipality or county from assessments levied under s. |
658 | 631.57(3)(a) and assigned and pledged to or on behalf of the |
659 | municipality or county for the benefit of the holders of such |
660 | bonds in connection with such assistance program. The funds, |
661 | credit, property, and taxing power of the state or any |
662 | municipality or county shall not be pledged for the payment of |
663 | such bonds. |
664 | (3) Bonds may be validated by such municipality or county |
665 | pursuant to chapter 75. The proceeds of such bonds may be used |
666 | to pay covered claims of insolvent insurers; to refinance or |
667 | replace previously existing borrowings or financial |
668 | arrangements; to pay interest on bonds; to fund reserves for the |
669 | bonds; to pay expenses incident to the issuance or sale of any |
670 | bond issued under this section, including costs of validating, |
671 | printing, and delivering the bonds, costs of printing the |
672 | official statement, costs of publishing notices of sale of the |
673 | bonds, costs of obtaining credit enhancement or liquidity |
674 | support, and related administrative expenses; or for such other |
675 | purposes related to the financial obligations of the fund as the |
676 | association may determine. The term of the bonds may not exceed |
677 | 30 years. |
678 | (4) The state covenants with holders of bonds of the |
679 | assistance program that the state will not take any action which |
680 | will have a material adverse affect on such holders and will not |
681 | repeal or abrogate the power of the board of directors of the |
682 | association to direct the Office of Insurance Regulation to levy |
683 | the assessments and to collect the proceeds of the revenues |
684 | pledged to the payment of such bonds as long as any such bonds |
685 | remain outstanding unless adequate provision has been made for |
686 | the payment of such bonds pursuant to the documents authorizing |
687 | the issuance of such bonds. |
688 | (5) The accomplishment of the authorized purposes of such |
689 | municipality or county under this section is in all respects for |
690 | the benefit of the people of the state, for the increase of |
691 | their commerce and prosperity, and for the improvement of their |
692 | health and living conditions. Such municipality or county, in |
693 | performing essential governmental functions in accomplishing its |
694 | purposes, is not required to pay any taxes or assessments of any |
695 | kind whatsoever upon any property acquired or used by the county |
696 | or municipality for such purposes or upon any revenues at any |
697 | time received by the county or municipality. The bonds, notes, |
698 | and other obligations of such municipality or county, and the |
699 | transfer of and income from such bonds, notes, and other |
700 | obligations, including any profits made on the sale of such |
701 | bonds, notes, and other obligations, are exempt from taxation of |
702 | any kind by the state or by any political subdivision or other |
703 | agency or instrumentality of the state. The exemption granted in |
704 | this subsection is not applicable to any tax imposed by chapter |
705 | 220 on interest, income, or profits on debt obligations owned by |
706 | corporations. |
707 | (6) Two or more municipalities or counties the residents |
708 | of which have been substantially affected by a category 1 or |
709 | greater hurricane may create a legal entity pursuant to s. |
710 | 163.01(7)(g) to exercise the powers described in this section as |
711 | well as those powers granted in s. 163.01(7)(g). Reference in |
712 | this section to a municipality or county includes such legal |
713 | entity. |
714 | (7) The association shall issue an annual report on the |
715 | status of the use of bond proceeds as related to insolvencies |
716 | caused by hurricanes. The report must contain the number and |
717 | amount of claims paid. The association shall also include an |
718 | analysis of the revenue generated from the assessment levied |
719 | under s. 631.57(3)(a) to pay such bonds. The association shall |
720 | submit a copy of the report to the President of the Senate, the |
721 | Speaker of the House of Representatives, and the Chief Financial |
722 | Officer within 90 days after the end of each calendar year in |
723 | which bonds were outstanding. |
724 | Section 13. No provision of s. 631.57 or s. 631.695, |
725 | Florida Statutes, shall be repealed until such time as the |
726 | principal, redemption premium, if any, and interest on all bonds |
727 | issued under s. 631.695, Florida Statutes, payable and secured |
728 | from assessments levied under s. 631.57(3)(a), Florida Statutes, |
729 | have been paid in full or adequate provision for such payment |
730 | has been made in accordance with the bond resolution or trust |
731 | indenture pursuant to which such bonds were issued. |
732 | Section 14. If any provision of this act or the |
733 | application thereof to any person or circumstance is held |
734 | invalid, the invalidity shall not affect other provisions or |
735 | applications of the act which can be given effect without the |
736 | invalid provision or application, and to this end the provisions |
737 | of this act are declared severable. |
738 | Section 15. This act shall take effect upon becoming a |
739 | law. |