Senate Bill sb0264c1

    Florida Senate - 2007                            CS for SB 264

    By the Committee on Banking and Insurance; and Senator Geller





    597-2106-07

  1                      A bill to be entitled

  2         An act relating to insurance regulation;

  3         amending s. 20.121, F.S.; providing for the

  4         functions relating to insurance regulation to

  5         be located within the Department of Financial

  6         Services; creating the Division of Insurance

  7         Regulation within the department; abolishing

  8         the Office of Insurance Regulation under the

  9         Financial Services Commission; repealing

10         obsolete provisions; providing an effective

11         date.

12  

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

14  

15         Section 1.  Section 20.121, Florida Statutes, is

16  amended to read:

17         20.121  Department of Financial Services.--There is

18  created a Department of Financial Services.

19         (1)  DEPARTMENT HEAD.--The head of the Department of

20  Financial Services is the Chief Financial Officer who may also

21  be known as the Treasurer.

22         (2)  DIVISIONS.--The Department of Financial Services

23  shall consist of the following divisions:

24         (a)  The Division of Accounting and Auditing, which

25  shall include the following bureau and office:

26         1.  The Bureau of Unclaimed Property.

27         2.  The Office of Fiscal Integrity which shall function

28  as a criminal justice agency for purposes of ss.

29  943.045-943.08 and shall have a separate budget. The office

30  may conduct investigations within or outside this state as the

31  bureau deems necessary to aid in the enforcement of this

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    Florida Senate - 2007                            CS for SB 264
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 1  section. If during an investigation the office has reason to

 2  believe that any criminal law of this state has or may have

 3  been violated, the office shall refer any records tending to

 4  show such violation to state or federal law enforcement or

 5  prosecutorial agencies and shall provide investigative

 6  assistance to those agencies as required.

 7         (b)  The Division of State Fire Marshal.

 8         (c)  The Division of Risk Management.

 9         (d)  The Division of Treasury, which shall include a

10  Bureau of Deferred Compensation responsible for administering

11  the Government Employees Deferred Compensation Plan

12  established under s. 112.215 for state employees.

13         (e)  The Division of Insurance Fraud.

14         (f)  The Division of Rehabilitation and Liquidation.

15         (g)  The Division of Insurance Agents and Agency

16  Services.

17         (h)  The Division of Consumer Services.

18         1.  The Division of Consumer Services shall perform the

19  following functions concerning products or services regulated

20  by the Department of Financial Services or by either office of

21  the Financial Services Commission:

22         a.  Receive inquiries and complaints from consumers.

23         b.  Prepare and disseminate such information as the

24  department deems appropriate to inform or assist consumers.

25         c.  Provide direct assistance and advocacy for

26  consumers who request such assistance or advocacy.

27         d.  With respect to apparent or potential violations of

28  law or applicable rules by a person or entity licensed by the

29  department or by either office of the commission, report such

30  apparent or potential violation to the appropriate division of

31  

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    Florida Senate - 2007                            CS for SB 264
    597-2106-07




 1  the department or office of the commission, which may take

 2  such further action as it deems appropriate.

 3         e.  Designate an employee of the division as primary

 4  contact for consumers on issues relating to sinkholes.

 5         2.  Any person licensed or issued a certificate of

 6  authority by the department or by the Office of Insurance

 7  Regulation shall respond, in writing, to the Division of

 8  Consumer Services within 20 days after receipt of a written

 9  request for information from the division concerning a

10  consumer complaint. The response must address the issues and

11  allegations raised in this complaint. The division may, in its

12  discretion, impose an administrative penalty for failure to

13  comply with this subparagraph in an amount up to $2,500 per

14  violation upon any entity licensed by the department or the

15  Office of Insurance Regulation and $250 for the first

16  violation, $500 for the second violation, and up to $1,000 per

17  violation thereafter upon any individual licensed by the

18  department or the Office of Insurance Regulation.

19         3.  The department may adopt rules to implement the

20  provisions of this paragraph.

21         4.  The powers, duties, and responsibilities expressed

22  or granted in this paragraph shall not limit the powers,

23  duties, and responsibilities of the Department of Financial

24  Services, the Financial Services Commission, the Office of

25  Insurance Regulation, or the Office of Financial Regulation

26  set forth elsewhere in the Florida Statutes.

27         (i)  The Division of Workers' Compensation.

28         (j)  The Division of Administration.

29         (k)  The Division of Legal Services.

30         (l)  The Division of Information Systems.

31         (m)  The Office of Insurance Consumer Advocate.

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    Florida Senate - 2007                            CS for SB 264
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 1         (n)  The Division of Funeral, Cemetery, and Consumer

 2  Services.

 3         (o)  The Division of Insurance Regulation, which is

 4  responsible for all activities concerning insurers and other

 5  risk-bearing entities, including licensing, rates, policy

 6  forms, market conduct, claims, issuance of certificates of

 7  authority, solvency, viatical settlements, premium financing,

 8  and administrative supervision, as provided under the

 9  insurance code or chapter 636.

10         (3)  FINANCIAL SERVICES COMMISSION.--Effective January

11  7, 2003, there is created within the Department of Financial

12  Services the Financial Services Commission, composed of the

13  Governor, the Attorney General, the Chief Financial Officer,

14  and the Commissioner of Agriculture, which shall for purposes

15  of this section be referred to as the commission. Commission

16  members shall serve as agency head of the Financial Services

17  Commission. The commission shall be a separate budget entity

18  and shall be exempt from the provisions of s. 20.052.

19  Commission action shall be by majority vote consisting of at

20  least three affirmative votes. The commission shall not be

21  subject to control, supervision, or direction by the

22  Department of Financial Services in any manner, including

23  purchasing, transactions involving real or personal property,

24  personnel, or budgetary matters.

25         (a)  Structure.--The major structural unit of the

26  commission is the Office of Financial Regulation. Each office

27  shall be headed by a director. The following offices are

28  established:

29         1.  The Office of Insurance Regulation, which shall be

30  responsible for all activities concerning insurers and other

31  risk bearing entities, including licensing, rates, policy

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    Florida Senate - 2007                            CS for SB 264
    597-2106-07




 1  forms, market conduct, claims, issuance of certificates of

 2  authority, solvency, viatical settlements, premium financing,

 3  and administrative supervision, as provided under the

 4  insurance code or chapter 636. The head of the Office of

 5  Insurance Regulation is the Director of the Office of

 6  Insurance Regulation, who may also be known as the

 7  Commissioner of Insurance Regulation.

 8         2.  The Office of Financial Regulation is, which shall

 9  be responsible for all activities of the Financial Services

10  Commission relating to the regulation of banks, credit unions,

11  other financial institutions, finance companies, and the

12  securities industry. The head of the office is the Director of

13  the Office of Financial Regulation, who may also be known as

14  the Commissioner of Financial Regulation. The Office of

15  Financial Regulation shall include a Bureau of Financial

16  Investigations, which shall function as a criminal justice

17  agency for purposes of ss. 943.045-943.08 and shall have a

18  separate budget. The bureau may conduct investigations within

19  or outside this state as the bureau deems necessary to aid in

20  the enforcement of this section. If, during an investigation,

21  the office has reason to believe that any criminal law of this

22  state has or may have been violated, the office shall refer

23  any records tending to show such violation to state or federal

24  law enforcement or prosecutorial agencies and shall provide

25  investigative assistance to those agencies as required.

26         (b)  Organization.--The commission shall establish by

27  rule any additional organizational structure of the Office of

28  Financial Regulation offices. It is the intent of the

29  Legislature to provide the commission with the flexibility to

30  organize the office offices in any manner they determine

31  appropriate to promote both efficiency and accountability.

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    Florida Senate - 2007                            CS for SB 264
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 1         (c)  Powers.--Commission members shall serve as the

 2  agency head for purposes of rulemaking under ss.

 3  120.536-120.565 by the commission and the Office of Financial

 4  Regulation all subunits of the commission. The Each director

 5  is agency head for purposes of final agency action under

 6  chapter 120 for all areas within the regulatory authority

 7  delegated to the director's office.

 8         (d)  Appointment and qualifications of director

 9  directors.--The commission shall appoint or remove the each

10  director by a majority vote consisting of at least three

11  affirmative votes, with both the Governor and the Chief

12  Financial Officer on the prevailing side. The minimum

13  qualifications of the directors are as follows:

14         1.  Prior to appointment as director, the Director of

15  the Office of Insurance Regulation must have had, within the

16  previous 10 years, at least 5 years of responsible private

17  sector experience working full time in areas within the scope

18  of the subject matter jurisdiction of the Office of Insurance

19  Regulation or at least 5 years of experience as a senior

20  examiner or other senior employee of a state or federal agency

21  having regulatory responsibility over insurers or insurance

22  agencies.

23         2.  Prior to appointment as director, the Director of

24  the Office of Financial Regulation must have had, within the

25  previous 10 years, at least 5 years of responsible private

26  sector experience working full time in areas within the

27  subject matter jurisdiction of the Office of Financial

28  Regulation or at least 5 years of experience as a senior

29  examiner or other senior employee of a state or federal agency

30  having regulatory responsibility over financial institutions,

31  finance companies, or securities companies.

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    Florida Senate - 2007                            CS for SB 264
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 1         (e)  Administrative support.--The office offices shall

 2  have a sufficient number of attorneys, examiners,

 3  investigators, other professional personnel to carry out its

 4  their responsibilities and administrative personnel as

 5  determined annually in the appropriations process. The

 6  Department of Financial Services shall provide administrative

 7  and information systems support to the office offices.

 8         (f)  Records retention schedules.--The commission and

 9  the office offices may destroy general correspondence files

10  and also any other records that they deem no longer necessary

11  to preserve in accordance with retention schedules and

12  destruction notices established under rules of the Division of

13  Library and Information Services, records and information

14  management program, of the Department of State. Such schedules

15  and notices relating to financial records of the commission

16  and office offices shall be subject to the approval of the

17  Auditor General.

18         (g)  Records storage.--The commission and office

19  offices may photograph, microphotograph, or reproduce on film

20  such documents and records as they may select, in such manner

21  that each page will be exposed in exact conformity with the

22  original. After reproduction and filing, original documents

23  and records may be destroyed in accordance with the provisions

24  of paragraph (f).

25         (4)  BOARD OF FUNERAL, CEMETERY, AND CONSUMER

26  SERVICES.--The Board of Funeral, Cemetery, and Consumer

27  Services is created within the Division of Funeral, Cemetery,

28  and Consumer Services of the Department of Financial Services.

29         (5)  TRANSITIONAL RULES.--Effective January 7, 2003,

30  the rules of the Department of Banking and Finance and of the

31  Department of Insurance that were in effect on January 6,

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    Florida Senate - 2007                            CS for SB 264
    597-2106-07




 1  2003, shall become rules of the Department of Financial

 2  Services or the Financial Services Commission as is

 3  appropriate to the corresponding regulatory or constitutional

 4  function and shall remain in effect until specifically amended

 5  or repealed in the manner provided by law.

 6         Section 2.  This act shall take effect January 1, 2009.

 7  

 8          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 9                         Senate Bill 264

10                                 

11  The Committee Substitute provides the following changes:

12  1.   Deletes the bill's provisions that create a Department of
         Insurance.
13  
    2.   Creates a Division of Insurance Regulation to be located
14       within the Department of Financial Services which will be
         responsible for licensure of insurers, approval of
15       insurance rates and policy forms, and all other duties
         related to insurance regulation.
16  
    3.   Abolishes the Office of Insurance Regulation (Office)
17       under the Financial Services Commission (Commission), and
         deletes the authority of the Commission relative to this
18       Office.

19  4.   Repeals obsolete provisions.

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