Senate Bill sb1662c1

CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2005                           CS for SB 1662

    By the Committee on Judiciary; and Senators Fasano and Atwater





    590-1855-05

  1                      A bill to be entitled

  2         An act relating to insurance; amending s.

  3         626.901, F.S.; revising an exception from the

  4         prohibition against representing or aiding

  5         unauthorized insurers; providing for immediate

  6         cease-and-desist orders for violations of the

  7         prohibition; providing legislative findings;

  8         authorizing investigations of activities that

  9         may constitute violations of the prohibition;

10         amending s. 626.902, F.S.; providing an

11         exception from penalty provisions for a person

12         who cooperates with the office to administer

13         the Unauthorized Insurers Process Law; amending

14         s. 626.908, F.S.; providing conditions on

15         defenses of certain actions against

16         unauthorized insurers and persons representing

17         or aiding them; prescribing a time limit on

18         motions to quash or set aside service of

19         process in actions against such unauthorized

20         insurers and other persons; providing an

21         effective date.

22  

23  Be It Enacted by the Legislature of the State of Florida:

24  

25         Section 1.  Subsection (4) of section 626.901, Florida

26  Statutes, is amended, and subsections (5) and (6) are added to

27  that section, to read:

28         626.901  Representing or aiding unauthorized insurer

29  prohibited.--

30         (4)  This section does not apply to:

31  

                                  1

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






    Florida Senate - 2005                           CS for SB 1662
    590-1855-05




 1         (a)  Matters authorized to be done by the office under

 2  the Unauthorized Insurers Process Law, ss. 626.904-626.912.

 3         (b)  Surplus lines insurance when written pursuant to

 4  the Surplus Lines Law, ss. 626.913-626.937.

 5         (c)  Transactions as to which a certificate of

 6  authority is not required of an insurer, as stated in s.

 7  624.402.

 8         (d)  Independently procured coverage written pursuant

 9  to s. 626.938 which is not solicited, marketed, negotiated, or

10  sold in this state.

11         (5)  The office or department may, pursuant to s.

12  120.569 and in its discretion and without advance notice or

13  hearing, issue an immediate final order to cease and desist to

14  any person or entity that violates this section. The

15  Legislature finds that a violation of this section constitutes

16  an imminent and immediate threat to the health, safety, and

17  welfare of the residents of this state.

18         (6)  The office may investigate the accounts, records,

19  documents, and transactions pertaining to the activities of

20  any unauthorized insurer or person, as defined in s. 624.04,

21  which is or may be aiding or representing an unauthorized

22  insurer.

23         Section 2.  Subsection (3) is added to section 626.902,

24  Florida Statutes, to read:

25         626.902  Penalty for representing unauthorized

26  insurer.--

27         (3)  This section does not apply to actions of a person

28  who is assisting the office at its direction in the

29  administration of its responsibilities under ss.

30  626.904-626.912, the Unauthorized Insurers Process Law.

31  

                                  2

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






    Florida Senate - 2005                           CS for SB 1662
    590-1855-05




 1         Section 3.  Subsections (1) and (3) of section 626.908,

 2  Florida Statutes, are amended to read:

 3         626.908  Defense of action by unauthorized insurer or

 4  person representing or aiding such insurer; damages and

 5  attorney fee.--

 6         (1)  Before an unauthorized insurer or person

 7  representing or aiding such insurer files or causes to be

 8  filed any pleading in any action or proceeding instituted

 9  against it under s. ss. 626.906, s. and 626.907, or s. 626.909

10  or a suit instituted by the office or the department enforcing

11  agency action against unauthorized insurers under s. 120.69,

12  an unauthorized insurer or person representing or aiding such

13  insurer shall:

14         (a)  Procure a certificate of authority to transact

15  insurance in this state, or

16         (b)  Deposit with the clerk of the court in which such

17  action or proceeding is pending cash or securities or file

18  with such clerk a bond with good and sufficient sureties, to

19  be approved by the court, in an amount to be fixed by the

20  court sufficient to secure the payment of any final judgment

21  which may be rendered in such action.  The court may in its

22  discretion make an order dispensing with such deposit or bond

23  where the insurer makes a showing satisfactory to the court

24  that it maintains in a state of the United States funds or

25  securities, in trust or otherwise, sufficient and available to

26  satisfy any final judgment which may be entered in such action

27  or proceeding, and that the insurer or person representing or

28  aiding such insurer will pay any final judgment entered

29  therein without requiring suit to be brought on such judgment

30  in the state where such funds or securities are located, and

31  that if, nevertheless, such suit is brought on such final

                                  3

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






    Florida Senate - 2005                           CS for SB 1662
    590-1855-05




 1  judgment the insurer or person representing or aiding such

 2  insurer shall waive all defenses thereto.

 3         (c)  Any proof, evidence, or testimony in support of

 4  such motion shall be taken in the jurisdiction of the court in

 5  which the action or proceeding is pending.

 6         (d)  If the unauthorized insurer or person representing

 7  or aiding such insurer seeks to take discovery or de bene esse

 8  depositions of witnesses beyond the jurisdiction of the court

 9  in which the action is pending, upon seasonable application by

10  the plaintiff, the court by appropriate order shall require

11  the unauthorized insurer or person representing or aiding such

12  insurer, before such depositions are taken, to make similar

13  deposit as described in paragraph (b), in sufficient amount to

14  pay the reasonable expenses of the plaintiff and his or her

15  attorney in attending the taking of such depositions,

16  including reasonable attorney's fees to be fixed by the court.

17         (3)  Nothing in subsection (1) is to be construed to

18  prevent an unauthorized insurer or person representing or

19  aiding such insurer from filing, within 30 days after service,

20  a motion to quash or to set aside the service of any process

21  made in the manner provided in s. 626.907 hereof on the ground

22  either:

23         (a)  That such unauthorized insurer or person

24  representing or aiding such insurer has not done any of the

25  acts enumerated in s. 626.906; or

26         (b)  That the person on whom service was made pursuant

27  to s. 626.907(2) was not doing any of the acts therein

28  enumerated.

29         Section 4.  This act shall take effect July 1, 2005.

30  

31  

                                  4

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






    Florida Senate - 2005                           CS for SB 1662
    590-1855-05




 1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 2                         Senate Bill 1662

 3                                 

 4  The committee substitute clarifies the exception provided in
    the bill from penalties for representing unauthorized
 5  insurers.  The committee substitute specifies that the
    penalties do not apply to actions of persons who assist the
 6  Office of Insurance Regulation in the administration of its
    duties under the Unauthorized Insurers Process Law (ss.
 7  626.904-626.912, F.S.).

 8  

 9  

10  

11  

12  

13  

14  

15  

16  

17  

18  

19  

20  

21  

22  

23  

24  

25  

26  

27  

28  

29  

30  

31  

                                  5

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