CS/HB 1087

1	A bill to be entitled
2	An act relating to insurance; amending s. 440.12, F.S.;
3	authorizing payment of workers' compensation benefits on a
4	prepaid card under certain circumstances; requiring the
5	keeping and furnishing, upon request, of certain records;
6	providing for the adoption of rules; amending s. 440.20,
7	F.S.; specifying when an insurer's obligation to pay
8	workers' compensation benefits is satisfied if payment is
9	made on a prepaid card; amending s. 440.49, F.S.; revising
10	the dates applicable to calculations of annual assessments
11	upon certain workers' compensation insurers relating to
12	the special disability trust fund; providing application
13	to specified years and rate filings; amending s. 624.402,
14	F.S.; providing an exemption from having to obtain a
15	certificate of authority to insurers that cover only
16	nonresidents of the United States under certain
17	conditions; requiring such insurers to provide certain
18	documentation to the Office of Insurance Regulation;
19	requiring certificates, policies, or contracts issued by
20	such insurers to include a disclaimer relating to the
21	coverage provided; defining a "nonresident" for purposes
22	of applying the exemption provided to such insurers from
23	having to obtain a certificate of authority; providing
24	penalties applicable to alien insurers who transact
25	insurance without complying with certain provisions;
26	deleting procedures and requirements relating to an
27	exemption from obtaining a certificate of authority
28	provided to alien insurers who issue life insurance
29	policies and annuity contracts to certain nonresidents;
30	amending s. 624.424, F.S.; revising the timeframes that
31	limit how frequently an insurer may use the same
32	accountant or partner to prepare an annual audited
33	financial report; amending s. 626.207, F.S.; defining the
34	term "financial services business"; precluding licensure
35	under the Florida Insurance Code of specified persons who
36	commit specified offenses; providing application to
37	convictions and certain pleas, regardless of adjudication;
38	establishing waiting periods relating to other specified
39	offenses during which time an applicant is disqualified
40	for licensure; granting rulemaking authority to the
41	Department of Financial Services relating to specific
42	penalties against licensees; clarifying rulemaking
43	authority relating to penalties against licensees;
44	providing that specified statutory provisions prohibiting
45	prior crimes from being a bar to employment are not
46	applicable to applicants for licensure under the Florida
47	Insurance Code; amending s. 626.7451, F.S.; requiring
48	funds collected for an insurer to be held in a bank
49	insured by the Federal Deposit Insurance Corporation;
50	amending s. 626.8651, F.S.; revising requirements for a
51	public adjuster apprentice license to include additional
52	qualifying designations; amending s. 627.4133, F.S.;
53	changing the designated person or persons who must be
54	notified by an insurer from the "insured" to the "first-
55	named insured" in situations involving the nonrenewal,
56	renewal premium, cancellation, or termination of workers'
57	compensation, employer liability, or certain property and
58	casualty insurance coverage; specifying that the date of
59	cancellation of a workers' compensation or employer's
60	liability policy is the date of the insured's written
61	request to cancel; amending s. 627.4137, F.S.; requiring a
62	claimant's request concerning insurance coverage to be
63	served upon the disclosing entity in a specified manner;
64	amending s. 627.7277, F.S.; making a conforming change
65	that specifies the "first-named insured" as the person who
66	is to receive notification of a renewal premium; amending
67	s. 627.728, F.S.; changing the designated person or
68	persons who must be notified by an insurer from the
69	"insured" to the "first-named insured" in certain
70	situations involving the cancellation or nonrenewal of
71	motor vehicle insurance coverage; making a conforming
72	change that specifies the "first-named insured's insurance
73	agent" as a person who is to receive certain notifications
74	relating to motor vehicle insurance coverage; amending s.
75	627.7281, F.S.; making a conforming change that specifies
76	the "first-named insured" as the person who is to receive
77	notification of cancellation of motor vehicle insurance
78	coverage; amending s. 634.403, F.S.; exempting certain
79	persons providing service warranties relating to consumer
80	products from licensing requirements under certain
81	circumstances; amending s. 627.442, F.S.; limiting the
82	requirement for premium audits of workers' compensation
83	coverage to specified instances; amending s. 627.7295,
84	F.S.; providing application; requiring a certain amount of
85	motor vehicle insurance premium to be paid before the
86	effective date of a policy binder or policy in order to
87	issue the binder or policy; authorizing an insurer to
88	cancel certain motor vehicle insurance policies or binders
89	for nonpayment of premium; removing a restriction
90	requiring payment of the first policy payment of a motor
91	vehicle insurance policy before issuance of a binder or
92	policy when payments are being made in a specified manner;
93	amending s. 626.916, F.S.; revising provisions relating to
94	insurance coverage eligibility for export under the
95	Surplus Lines Law; providing applicability; amending s.
96	817.234, F.S.; revising a cross-reference; providing civil
97	penalties consisting of monetary fines relating to making
98	false and fraudulent insurance claims for the purpose of
99	receiving motor vehicle insurance proceeds; providing
100	escalating monetary fines for repeat offenses; providing a
101	mandatory minimum civil fine relating to certain
102	international motor vehicle accident schemes; allocating
103	fine revenues to a specified trust fund for specified
104	purposes; authorizing certain agreements between a
105	defendant and a state attorney relating to the payment of
106	civil fines for making false and fraudulent insurance
107	claims for the purpose of receiving motor vehicle
108	insurance proceeds; providing effective dates.
109
110	Be It Enacted by the Legislature of the State of Florida:
111
112	Section 1.  Subsection (1) of section 440.12, Florida
113	Statutes, is amended to read:
114	440.12  Time for commencement and limits on weekly rate of
115	compensation.-
116	(1)  No Compensation is not shall be allowed for the first
117	7 days of the disability, except for benefits provided under for
118	in s. 440.13. However, if the injury results in disability of
119	more than 21 days, compensation shall be allowed from the
120	commencement of the disability.
121	(a)  All weekly compensation payments, except for the first
122	payment, shall be paid by check or, if authorized by the
123	employee, on a prepaid card pursuant to paragraph (b) or
124	deposited directly into the employee's account at a financial
125	institution. As used in this subsection, the term "financial
126	institution" means a financial institution as defined in s.
127	655.005(1)(h).
128	(b)  Upon receipt of authorization by the employee as
129	provided in paragraph (a), a carrier may use a prepaid card to
130	deliver the payment of compensation to an employee if the
131	employee is:
132	1.  Provided with at least one means of accessing his or
133	her entire compensation payment once per week without incurring
134	fees;
135	2.  Provided with the ability to make point-of-sale
136	purchases without incurring fees from the financial institution
137	issuing the prepaid card; and
138	3.  Provided with the terms and conditions of the prepaid
139	card program, including a description of any fees that may be
140	assessed.
141	(c)  Each carrier shall keep a record of all payments made
142	under this subsection, including the time and manner of such
143	payments, and shall furnish these records or a report based on
144	these records to the Division of Insurance Fraud and the
145	Division of Workers' Compensation, upon request.
146	(d)  The department may adopt rules to administer this
147	section.
148	Section 2.  Paragraph (a) of subsection (1) of section
149	440.20, Florida Statutes, is amended to read:
150	440.20  Time for payment of compensation and medical bills;
151	penalties for late payment.-
152	(1)(a)  Unless it denies compensability or entitlement to
153	benefits, the carrier shall pay compensation directly to the
154	employee as required by ss. 440.14, 440.15, and 440.16, in
155	accordance with the obligations set forth in those such
156	sections. Upon receipt of the employee's authorization as
157	provided for in s. 440.12(1)(a) If authorized by the employee,
158	the carrier's obligation to pay compensation directly to the
159	employee is satisfied when the carrier directly deposits, by
160	electronic transfer or other means, compensation into the
161	employee's account at a financial institution or onto a prepaid
162	card in accordance with s. 440.12(1). As used in this paragraph,
163	the term "financial institution" means a financial institution
164	as defined in s. 655.005(1)(h). Compensation by direct deposit
165	or through the use of a prepaid card is considered paid on the
166	date the funds become available for withdrawal by the employee.
167	Section 3.  Paragraph (b) of subsection (9) of section
168	440.49, Florida Statutes, is amended to read:
169	440.49  Limitation of liability for subsequent injury
170	through Special Disability Trust Fund.-
171	(9)  SPECIAL DISABILITY TRUST FUND.-
172	(b)1.  The Special Disability Trust Fund shall be
173	maintained by annual assessments upon the insurance companies
174	writing compensation insurance in the state, the commercial
175	self-insurers under ss. 624.462 and 624.4621, the assessable
176	mutuals as defined in s. 628.6011, and the self-insurers under
177	this chapter, which assessments shall become due and be paid
178	quarterly at the same time and in addition to the assessments
179	provided in s. 440.51. The department shall estimate annually in
180	advance the amount necessary for the administration of this
181	subsection and the maintenance of this fund and shall make such
182	assessment in the manner hereinafter provided.
183	2.  The annual assessment shall be calculated to produce
184	during the next calendar ensuing fiscal year an amount which,
185	when combined with that part of the balance anticipated to be in
186	the fund on December 31 June 30 of the current calendar fiscal
187	year which is in excess of $100,000, is equal to the average of:
188	a.  The sum of disbursements from the fund during the
189	immediate past 3 calendar years, and
190	b.  Two times the disbursements of the most recent calendar
191	year.
192	c.  Such assessment rate shall first apply on a calendar
193	year basis for the period beginning January 1, 2012, and shall
194	be included in workers' compensation rate filings approved by
195	the office which become effective on or after January 1, 2012.
196	The assessment rate effective January 1, 2011, shall also apply
197	to the interim period from July 1, 2011, through December 31,
198	2011, and shall be included in workers' compensation rate
199	filings, whether regular or amended, approved by the office
200	which become effective on or after July 1, 2011. Thereafter, the
201	annual assessment rate shall take effect January 1 of the next
202	calendar year and shall be included in workers' compensation
203	rate filings approved by the office which become effective on or
204	after January 1 of the next calendar year. Assessments shall
205	become due and be paid quarterly.
206
207	Such amount shall be prorated among the insurance companies
208	writing compensation insurance in the state and the self-
209	insurers. Provided however, for those carriers that have
210	excluded ceded reinsurance premiums from their assessments on or
211	before January 1, 2000, no assessments on ceded reinsurance
212	premiums shall be paid by those carriers until such time as the
213	former Division of Workers' Compensation of the Department of
214	Labor and Employment Security or the department advises each of
215	those carriers of the impact that the inclusion of ceded
216	reinsurance premiums has on their assessment. The department may
217	not recover any past underpayments of assessments levied against
218	any carrier that on or before January 1, 2000, excluded ceded
219	reinsurance premiums from their assessment prior to the point
220	that the former Division of Workers' Compensation of the
221	Department of Labor and Employment Security or the department
222	advises of the appropriate assessment that should have been
223	paid.
224	3.  The net premiums written by the companies for workers'
225	compensation in this state and the net premium written
226	applicable to the self-insurers in this state are the basis for
227	computing the amount to be assessed as a percentage of net
228	premiums. Such payments shall be made by each carrier and self-
229	insurer to the department for the Special Disability Trust Fund
230	in accordance with such regulations as the department
231	prescribes.
232	4.  The Chief Financial Officer is authorized to receive
233	and credit to such Special Disability Trust Fund any sum or sums
234	that may at any time be contributed to the state by the United
235	States under any Act of Congress, or otherwise, to which the
236	state may be or become entitled by reason of any payments made
237	out of such fund.
238	Section 4.  Subsection (8) of section 624.402, Florida
239	Statutes, is amended to read:
240	624.402  Exceptions, certificate of authority required.-A
241	certificate of authority shall not be required of an insurer
242	with respect to:
243	(8)(a)  An insurer domiciled outside the United States
244	covering only persons who, at the time of issuance or renewal,
245	are nonresidents of the United States if:
246	1.  The insurer or any affiliated person as defined in s.
247	624.04 under common ownership or control with the insurer does
248	not solicit, sell, or accept application for any insurance
249	policy or contract to be delivered or issued for delivery to any
250	person in any state;
251	2.  The insurer registers with the office via a letter of
252	notification upon commencing business from this state;
253	3.  The insurer provides the following information, in
254	English, to the office annually by March 1:
255	a.  The name of the insurer, the country of domicile, the
256	address of the insurer's principal office and office in this
257	state, the names of the owners of the insurer and their
258	percentage of ownership, the names of the officers and directors
259	of the insurer, the name, e-mail, and telephone number of a
260	contact person for the insurer, and the number of individuals
261	who are employed by the insurer or its affiliates in this state;
262	b.  The lines of insurance and types of products offered by
263	the insurer;
264	c.  A statement from the applicable regulatory body of the
265	insurer's domicile certifying that the insurer is licensed or
266	registered for those lines of insurance and types of products in
267	that domicile; and
268	d.  A copy of the filings required by the applicable
269	regulatory body of the insurer's country of domicile in that
270	country's official language or in English, if available;
271	4.  All certificates, policies, or contracts issued in this
272	state showing coverage under the insurer's policy include the
273	following statement in a contrasting color and at least 10-point
274	type: "The policy providing your coverage and the insurer
275	providing this policy have not been approved by the Florida
276	Office of Insurance Regulation"; and
277	5.  In the event the insurer ceases to do business from
278	this state, the insurer will provide written notification to the
279	office within 30 days after cessation.
280	(b)  For purposes of this subsection, "nonresident" means a
281	person who resides in and maintains a physical place of domicile
282	in a country other than the United States, which he or she
283	recognizes as and intends to maintain as his or her permanent
284	home. A nonresident does not include an unauthorized immigrant
285	present in the United States. Notwithstanding any other
286	provision of law, it is conclusively presumed, for purposes of
287	this subsection, that a person is a resident of the United
288	States if such person has:
289	1.  Had his or her principal place of domicile in the
290	United States for 180 days or more in the 365 days prior to
291	issuance or renewal of the policy;
292	2.  Registered to vote in any state;
293	3.  Made a statement of domicile in any state; or
294	4.  Filed for homestead tax exemption on property in any
295	state.
296	(c)  Subject to the limitations provided in this
297	subsection, services, including those listed in s. 624.10, may
298	be provided by the insurer or an affiliated person as defined in
299	s. 624.04 under common ownership or control with the insurer.
300	(d)  An alien insurer transacting insurance in this state
301	without complying with this subsection shall be in violation of
302	this chapter and subject to the penalties provided in s. 624.15.
303	(a)  Life insurance policies or annuity contracts issued by
304	an insurer domiciled outside the United States covering only
305	persons who, at the time of issuance, are not residents of the
306	United States and are not nonresidents illegally residing in the
307	United States, provided:
308	1.  The insurer must currently be an authorized insurer in
309	its country of domicile as to the kind or kinds of insurance
310	proposed to be offered and must have been such an insurer for
311	not fewer than the immediately preceding 3 years, or must be the
312	wholly owned subsidiary of such authorized insurer or must be
313	the wholly owned subsidiary of an already eligible authorized
314	insurer as to the kind or kinds of insurance proposed for a
315	period of not fewer than the immediately preceding 3 years.
316	However, the office may waive the 3-year requirement if the
317	insurer has operated successfully for a period of at least the
318	immediately preceding year and has capital and surplus of not
319	less than $25 million.
320	2.  Before the office may grant eligibility, the requesting
321	insurer shall furnish the office with a duly authenticated copy
322	of its current annual financial statement, in English, and with
323	all monetary values therein expressed in United States dollars,
324	at an exchange rate then-current and shown in the statement, in
325	the case of statements originally made in the currencies of
326	other countries, and with such additional information relative
327	to the insurer as the office may request.
328	3.  The insurer must have and maintain surplus as to
329	policyholders of not less than $15 million. Any such surplus as
330	to policyholders shall be represented by investments consisting
331	of eligible investments for like funds of like domestic insurers
332	under part II of chapter 625; however, any such surplus as to
333	policyholders may be represented by investments permitted by the
334	domestic regulator of such alien insurance company if such
335	investments are substantially similar in terms of quality,
336	liquidity, and security to eligible investments for like funds
337	of like domestic insurers under part II of chapter 625.
338	4.  The insurer must be of good reputation as to the
339	providing of service to its policyholders and the payment of
340	losses and claims.
341	5.  To maintain eligibility, the insurer shall furnish the
342	office within the time period specified in s. 624.424(1)(a) a
343	duly authenticated copy of its current annual and quarterly
344	financial statements, in English, and with all monetary values
345	therein expressed in United States dollars, at an exchange rate
346	then-current and shown in the statement, in the case of
347	statements originally made in the currencies of other countries,
348	and with such additional information relative to the insurer as
349	the office may request.
350	6.  An insurer receiving eligibility under this subsection
351	shall agree to make its books and records pertaining to its
352	operations in this state available for inspection during normal
353	business hours upon request of the office.
354	7.  The insurer shall provide to the applicant for the
355	policy or contract a copy of the most recent quarterly financial
356	statements of the insurer providing, in clear and conspicuous
357	language:
358	a.  The date of organization of the insurer.
359	b.  The identity of and rating assigned by each recognized
360	insurance company rating organization that has rated the insurer
361	or, if applicable, that the insurer is unrated.
362	c.  That the insurer does not hold a certificate of
363	authority issued in this state and that the office does not
364	exercise regulatory oversight over the insurer.
365	d.  The identity and address of the regulatory authority
366	exercising oversight of the insurer.
367
368	This paragraph does not impose upon the office any duty or
369	responsibility to determine the actual financial condition or
370	claims practices of any unauthorized insurer, and the status of
371	eligibility, if granted by the office, indicates only that the
372	insurer appears to be financially sound and to have satisfactory
373	claims practices and that the office has no credible evidence to
374	the contrary.
375	(b)  If at any time the office has reason to believe that
376	an insurer issuing policies or contracts pursuant to this
377	subsection is insolvent or is in unsound financial condition,
378	does not make reasonable prompt payment of benefits, or is no
379	longer eligible under the conditions specified in this
380	subsection, the office may conduct an examination or
381	investigation in accordance with s. 624.316, s. 624.3161, or s.
382	624.320 and, if the findings of such examination or
383	investigation warrant, may withdraw the eligibility of the
384	insurer to issue policies or contracts pursuant to this
385	subsection without having a certificate of authority issued by
386	the office.
387	(c)  This subsection does not provide an exception to the
388	agent licensure requirements of chapter 626. Any insurer issuing
389	policies or contracts pursuant to this subsection shall appoint
390	the agents that the insurer uses to sell such policies or
391	contracts as provided in chapter 626.
392	(d)  An insurer issuing policies or contracts pursuant to
393	this subsection is subject to part IX of chapter 626, Unfair
394	Insurance Trade Practices, and the office may take such actions
395	against the insurer for a violation as are provided in that
396	part.
397	(e)  Policies and contracts issued pursuant to this
398	subsection are not subject to the premium tax specified in s.
399	624.509.
400	(f)  Applications for life insurance coverage offered under
401	this subsection must contain, in contrasting color and not less
402	than 12-point type, the following statement on the same page as
403	the applicant's signature:
404
405	This policy is primarily governed by the laws of a
406	foreign country. As a result, all of the rating and
407	underwriting laws applicable to policies filed in this
408	state do not apply to this coverage, which may result
409	in your premiums being higher than would be
410	permissible under a Florida-approved policy. Any
411	purchase of individual life insurance should be
412	considered carefully, as future medical conditions may
413	make it impossible to qualify for another individual
414	life policy. If the insurer issuing your policy
415	becomes insolvent, this policy is not covered by the
416	Florida Life and Health Insurance Guaranty
417	Association. For information concerning individual
418	life coverage under a Florida-approved policy, consult
419	your agent or the Florida Department of Financial
420	Services.
421
422	(g)  All life insurance policies and annuity contracts
423	issued pursuant to this subsection must contain on the first
424	page of the policy or contract, in contrasting color and not
425	less than 10-point type, the following statement:
426
427	The benefits of the policy providing your coverage are
428	governed primarily by the law of a country other than
429	the United States.
430
431	(h)  All single-premium life insurance policies and single-
432	premium annuity contracts issued to persons who are not
433	residents of the United States and are not nonresidents
434	illegally residing in the United States pursuant to this
435	subsection shall be subject to the provisions of chapter 896.
436	Section 5.  Paragraph (d) of subsection (8) of section
437	624.424, Florida Statutes, is amended to read:
438	624.424  Annual statement and other information.-
439	(8)
440	(d)  An insurer may not use the same accountant or partner
441	of an accounting firm responsible for preparing the report
442	required by this subsection for more than 5 7 consecutive years.
443	Following this period, the insurer may not use such accountant
444	or partner for a period of 5 2 years, but may use another
445	accountant or partner of the same firm. An insurer may request
446	the office to waive this prohibition based upon an unusual
447	hardship to the insurer and a determination that the accountant
448	is exercising independent judgment that is not unduly influenced
449	by the insurer considering such factors as the number of
450	partners, expertise of the partners or the number of insurance
451	clients of the accounting firm; the premium volume of the
452	insurer; and the number of jurisdictions in which the insurer
453	transacts business.
454	Section 6.  Effective upon this act becoming a law, section
455	626.207, Florida Statutes, is amended to read:
456	626.207  Disqualification of applicants and licensees;
457	penalties against licensees; rulemaking authority Department
458	rulemaking authority; waiting periods for applicants; penalties
459	against licensees.-
460	(1)  For purposes of this section, the term "financial
461	services business" means any financial activity regulated by the
462	Department of Financial Services, the Office of Insurance
463	Regulation, or the Office of Financial Regulation. The
464	department shall adopt rules establishing specific waiting
465	periods for applicants to become eligible for licensure
466	following denial, suspension, or revocation pursuant to s.
467	626.611, s. 626.621, s. 626.8437, s. 626.844, s. 626.935, s.
468	634.181, s. 634.191, s. 634.320, s. 634.321, s. 634.422, s.
469	634.423, s. 642.041, or s. 642.043. The purpose of the waiting
470	periods is to provide sufficient time to demonstrate reformation
471	of character and rehabilitation. The waiting periods shall vary
472	based on the type of conduct and the length of time since the
473	conduct occurred and shall also be based on the probability that
474	the propensity to commit illegal conduct has been overcome. The
475	waiting periods may be adjusted based on aggravating and
476	mitigating factors established by rule and consistent with this
477	purpose.
478	(2)  For purposes of this section, the terms "felony of the
479	first degree" and "capital felony" include all felonies
480	designated as such by the Florida Statutes, as well as any
481	felony so designated in the jurisdiction in which the plea is
482	entered or judgment is rendered.
483	(3)  An applicant who commits a felony of the first degree,
484	a capital felony, a felony involving money laundering, fraud, or
485	embezzlement, or a felony directly related to the financial
486	services business is permanently barred from applying for a
487	license under this part. This bar applies to convictions, guilty
488	pleas, or nolo contendere pleas, regardless of adjudication, by
489	any applicant, officer, director, majority owner, partner,
490	manager, or other person who manages or controls any applicant.
491	(4)  For all other crimes not included in subsection (3),
492	the department shall adopt rules establishing the process and
493	application of disqualifying periods that include:
494	(a)  A 15-year disqualifying period for all felonies
495	involving moral turpitude that are not specifically included in
496	the permanent bar contained in subsection (3).
497	(b)  A 7-year disqualifying period for all felonies to
498	which neither the permanent bar in subsection (3) nor the 15-
499	year disqualifying period in paragraph (a) applies.
500	(c)  A 7-year disqualifying period for all misdemeanors
501	directly related to the financial services business.
502	(5)  The department shall adopt rules providing for
503	additional disqualifying periods due to the commitment of
504	multiple crimes and other factors reasonably related to the
505	applicant's criminal history. The rules shall provide for
506	mitigating and aggravating factors. However, mitigation may not
507	result in a period of disqualification of less than 7 years and
508	may not mitigate the disqualifying periods in paragraphs (4)(b)
509	and (c).
510	(6)  For purposes of this section, the disqualifying
511	periods begin upon the applicant's final release from
512	supervision or upon completion of the applicant's criminal
513	sentence, including payment of fines, restitution, and court
514	costs for the crime for which the disqualifying period applies.
515	(7)  After the disqualifying period has been met, the
516	burden is on the applicant to demonstrate that the applicant has
517	been rehabilitated, does not pose a risk to the insurance-buying
518	public, is fit and trustworthy to engage in the business of
519	insurance pursuant to s. 626.611(7), and is otherwise qualified
520	for licensure.
521	(8)(2)  The department shall adopt rules establishing
522	specific penalties against licensees in accordance with ss.
523	626.641 and 626.651 for violations of s. 626.611, s. 626.621, s.
524	626.8437, s. 626.844, s. 626.935, s. 634.181, s. 634.191, s.
525	634.320, s. 634.321, s. 634.422, s. 634.423, s. 642.041, or s.
526	642.043. The purpose of the revocation or suspension is to
527	provide a sufficient penalty to deter future violations of the
528	Florida Insurance Code. The imposition of a revocation or the
529	length of suspension shall be based on the type of conduct and
530	the probability that the propensity to commit further illegal
531	conduct has been overcome at the time of eligibility for
532	relicensure. The revocation or the length of suspension may be
533	adjusted based on aggravating or mitigating factors, established
534	by rule and consistent with this purpose.
535	(9)  Section 112.011 does not apply to any applicants for
536	licensure under the Florida Insurance Code, including, but not
537	limited to, agents, agencies, adjusters, adjusting firms,
538	customer representatives, or managing general agents.
539	Section 7.  Subsection (3) of section 626.7451, Florida
540	Statutes, is amended to read:
541	626.7451  Managing general agents; required contract
542	provisions.-No person acting in the capacity of a managing
543	general agent shall place business with an insurer unless there
544	is in force a written contract between the parties which sets
545	forth the responsibility for a particular function, specifies
546	the division of responsibilities, and contains the following
547	minimum provisions:
548	(3)  All funds collected for the account of the insurer
549	shall be held by the managing general agent in a fiduciary
550	capacity in a bank which is insured by the Federal Deposit
551	Insurance Corporation a member of the Federal Reserve System.
552	The This account shall be used for all payment as directed by
553	the insurer. The managing general agent may retain up to no more
554	than 60 days of estimated claims payments and allocated loss
555	adjustment expenses.
556
557	For the purposes of this section and ss. 626.7453 and 626.7454,
558	the term "controlling person" or "controlling" has the meaning
559	set forth in s. 625.012(5)(b)1., and the term "controlled
560	person" or "controlled" has the meaning set forth in s.
561	625.012(5)(b)2.
562	Section 8.  Subsection (4) of section 626.8651, Florida
563	Statutes, is amended to read:
564	626.8651  Public adjuster apprentice license;
565	qualifications.-
566	(4)  An applicant must have received designation as an
567	Accredited Claims Adjuster (ACA), as a Certified Adjuster (CA),
568	or as a Certified Claims Adjuster (CCA) after completion of
569	training that qualifies the applicant to engage in the business
570	of a public adjuster apprentice fairly and without injury to the
571	public. Such training and instruction must address adjusting
572	damages and losses under insurance contracts, the terms and
573	effects of insurance contracts, and knowledge of the laws of
574	this state relating to insurance contracts.
575	Section 9.  Paragraphs (a) and (b) of subsection (1),
576	paragraphs (a) and (b) of subsection (2), and subsection (4) of
577	section 627.4133, Florida Statutes, are amended to read:
578	627.4133  Notice of cancellation, nonrenewal, or renewal
579	premium.-
580	(1)  Except as provided in subsection (2):
581	(a)  An insurer issuing a policy providing coverage for
582	workers' compensation and employer's liability insurance,
583	property, casualty, except mortgage guaranty, surety, or marine
584	insurance, other than motor vehicle insurance subject to s.
585	627.728, shall give the first-named named insured at least 45
586	days' advance written notice of nonrenewal or of the renewal
587	premium. If the policy is not to be renewed, the written notice
588	shall state the reason or reasons as to why the policy is not to
589	be renewed. This requirement applies only if the insured has
590	furnished all of the necessary information so as to enable the
591	insurer to develop the renewal premium prior to the expiration
592	date of the policy to be renewed.
593	(b)  An insurer issuing a policy providing coverage for
594	property, casualty, except mortgage guaranty, surety, or marine
595	insurance, other than motor vehicle insurance subject to s.
596	627.728 or s. 627.7281, shall give the first-named named insured
597	written notice of cancellation or termination other than
598	nonrenewal at least 45 days prior to the effective date of the
599	cancellation or termination, including in the written notice the
600	reason or reasons for the cancellation or termination, except
601	that:
602	1.  When cancellation is for nonpayment of premium, at
603	least 10 days' written notice of cancellation accompanied by the
604	reason therefor shall be given. As used in this subparagraph and
605	s. 440.42(3), the term "nonpayment of premium" means failure of
606	the named insured to discharge when due any of her or his
607	obligations in connection with the payment of premiums on a
608	policy or any installment of such premium, whether the premium
609	is payable directly to the insurer or its agent or indirectly
610	under any premium finance plan or extension of credit, or
611	failure to maintain membership in an organization if such
612	membership is a condition precedent to insurance coverage.
613	"Nonpayment of premium" also means the failure of a financial
614	institution to honor an insurance applicant's check after
615	delivery to a licensed agent for payment of a premium, even if
616	the agent has previously delivered or transferred the premium to
617	the insurer. If a dishonored check represents the initial
618	premium payment, the contract and all contractual obligations
619	shall be void ab initio unless the nonpayment is cured within
620	the earlier of 5 days after actual notice by certified mail is
621	received by the applicant or 15 days after notice is sent to the
622	applicant by certified mail or registered mail, and if the
623	contract is void, any premium received by the insurer from a
624	third party shall be refunded to that party in full; and
625	2.  When such cancellation or termination occurs during the
626	first 90 days during which the insurance is in force and the
627	insurance is canceled or terminated for reasons other than
628	nonpayment of premium, at least 20 days' written notice of
629	cancellation or termination accompanied by the reason therefor
630	shall be given except where there has been a material
631	misstatement or misrepresentation or failure to comply with the
632	underwriting requirements established by the insurer.
633
634	After the policy has been in effect for 90 days, no such policy
635	shall be canceled by the insurer except when there has been a
636	material misstatement, a nonpayment of premium, a failure to
637	comply with underwriting requirements established by the insurer
638	within 90 days of the date of effectuation of coverage, or a
639	substantial change in the risk covered by the policy or when the
640	cancellation is for all insureds under such policies for a given
641	class of insureds. This subsection does not apply to
642	individually rated risks having a policy term of less than 90
643	days.
644	(2)  With respect to any personal lines or commercial
645	residential property insurance policy, including, but not
646	limited to, any homeowner's, mobile home owner's, farmowner's,
647	condominium association, condominium unit owner's, apartment
648	building, or other policy covering a residential structure or
649	its contents:
650	(a)  The insurer shall give the first-named named insured
651	at least 45 days' advance written notice of the renewal premium.
652	(b)  The insurer shall give the first-named named insured
653	written notice of nonrenewal, cancellation, or termination at
654	least 100 days prior to the effective date of the nonrenewal,
655	cancellation, or termination. However, the insurer shall give at
656	least 100 days' written notice, or written notice by June 1,
657	whichever is earlier, for any nonrenewal, cancellation, or
658	termination that would be effective between June 1 and November
659	30. The notice must include the reason or reasons for the
660	nonrenewal, cancellation, or termination, except that:
661	1.  The insurer shall give the first-named named insured
662	written notice of nonrenewal, cancellation, or termination at
663	least 180 days prior to the effective date of the nonrenewal,
664	cancellation, or termination for a first-named named insured
665	whose residential structure has been insured by that insurer or
666	an affiliated insurer for at least a 5-year period immediately
667	prior to the date of the written notice.
668	2.  When cancellation is for nonpayment of premium, at
669	least 10 days' written notice of cancellation accompanied by the
670	reason therefor shall be given. As used in this subparagraph,
671	the term "nonpayment of premium" means failure of the named
672	insured to discharge when due any of her or his obligations in
673	connection with the payment of premiums on a policy or any
674	installment of such premium, whether the premium is payable
675	directly to the insurer or its agent or indirectly under any
676	premium finance plan or extension of credit, or failure to
677	maintain membership in an organization if such membership is a
678	condition precedent to insurance coverage. "Nonpayment of
679	premium" also means the failure of a financial institution to
680	honor an insurance applicant's check after delivery to a
681	licensed agent for payment of a premium, even if the agent has
682	previously delivered or transferred the premium to the insurer.
683	If a dishonored check represents the initial premium payment,
684	the contract and all contractual obligations shall be void ab
685	initio unless the nonpayment is cured within the earlier of 5
686	days after actual notice by certified mail is received by the
687	applicant or 15 days after notice is sent to the applicant by
688	certified mail or registered mail, and if the contract is void,
689	any premium received by the insurer from a third party shall be
690	refunded to that party in full.
691	3.  When such cancellation or termination occurs during the
692	first 90 days during which the insurance is in force and the
693	insurance is canceled or terminated for reasons other than
694	nonpayment of premium, at least 20 days' written notice of
695	cancellation or termination accompanied by the reason therefor
696	shall be given except where there has been a material
697	misstatement or misrepresentation or failure to comply with the
698	underwriting requirements established by the insurer.
699	4.  The requirement for providing written notice of
700	nonrenewal by June 1 of any nonrenewal that would be effective
701	between June 1 and November 30 does not apply to the following
702	situations, but the insurer remains subject to the requirement
703	to provide such notice at least 100 days prior to the effective
704	date of nonrenewal:
705	a.  A policy that is nonrenewed due to a revision in the
706	coverage for sinkhole losses and catastrophic ground cover
707	collapse pursuant to s. 627.706, as amended by s. 30, chapter
708	2007-1, Laws of Florida.
709	b.  A policy that is nonrenewed by Citizens Property
710	Insurance Corporation, pursuant to s. 627.351(6), for a policy
711	that has been assumed by an authorized insurer offering
712	replacement or renewal coverage to the policyholder.
713
714	After the policy has been in effect for 90 days, the policy
715	shall not be canceled by the insurer except when there has been
716	a material misstatement, a nonpayment of premium, a failure to
717	comply with underwriting requirements established by the insurer
718	within 90 days of the date of effectuation of coverage, or a
719	substantial change in the risk covered by the policy or when the
720	cancellation is for all insureds under such policies for a given
721	class of insureds. This paragraph does not apply to individually
722	rated risks having a policy term of less than 90 days.
723	(4)  Notwithstanding the provisions of s. 440.42(3), if
724	cancellation of a policy providing coverage for workers'
725	compensation and employer's liability insurance is requested in
726	writing by the insured, such cancellation shall be effective on
727	the date requested by the insured or, if no date is specified by
728	the insured, cancellation shall be effective on the date of the
729	written request. The carrier is not required to send notice of
730	cancellation to the insured if the cancellation is requested in
731	writing by the insured the carrier sends the notice of
732	cancellation to the insured. Any retroactive assumption of
733	coverage and liabilities under a policy providing workers'
734	compensation and employer's liability insurance may not exceed
735	21 days.
736	Section 10.  Subsection (3) is added to section 627.4137,
737	Florida Statutes, to read:
738	627.4137  Disclosure of certain information required.-
739	(3)  Any request made to a self-insured corporation
740	pursuant to this section shall be sent by certified mail to the
741	registered agent of the disclosing entity.
742	Section 11.  Subsection (2) of section 627.7277, Florida
743	Statutes, is amended to read:
744	627.7277  Notice of renewal premium.-
745	(2)  An insurer shall mail or deliver to the first-named
746	insured its policyholder at least 30 days' advance written
747	notice of the renewal premium for the policy.
748	Section 12.  Paragraph (a) of subsection (3), paragraphs
749	(a) and (d) of subsection (4), and subsections (5) and (6) of
750	section 627.728, Florida Statutes, are amended to read:
751	627.728  Cancellations; nonrenewals.-
752	(3)(a)  No notice of cancellation of a policy to which this
753	section applies shall be effective unless mailed or delivered by
754	the insurer to the first-named named insured and to the first-
755	named named insured's insurance agent at least 45 days prior to
756	the effective date of cancellation, except that, when
757	cancellation is for nonpayment of premium, at least 10 days'
758	notice of cancellation accompanied by the reason therefor shall
759	be given. No notice of cancellation of a policy to which this
760	section applies shall be effective unless the reason or reasons
761	for cancellation accompany the notice of cancellation.
762	(4)(a)  No insurer shall fail to renew a policy unless it
763	mails or delivers to the first-named named insured, at the
764	address shown in the policy, and to the first-named named
765	insured's insurance agent at her or his business address, at
766	least 45 days' advance notice of its intention not to renew; and
767	the reasons for refusal to renew must accompany such notice.
768	This subsection does not apply:
769	1.  If the insurer has manifested its willingness to renew;
770	or
771	2.  In case of nonpayment of premium.
772
773	Notwithstanding the failure of an insurer to comply with this
774	subsection, the policy shall terminate on the effective date of
775	any other automobile liability insurance policy procured by the
776	insured with respect to any automobile designated in both
777	policies. Unless a written explanation for refusal to renew
778	accompanies the notice of intention not to renew, the policy
779	shall remain in full force and effect.
780	(d)  Instead of canceling or nonrenewing a policy, an
781	insurer may, upon expiration of the policy term, transfer a
782	policy to another insurer under the same ownership or management
783	as the transferring insurer, by giving the first-named named
784	insured at least 45 days' advance notice of its intent to
785	transfer the policy and of the premium and the specific reasons
786	for any increase in the premium.
787	(5)  United States postal proof of mailing or certified or
788	registered mailing of notice of cancellation, of intention not
789	to renew, or of reasons for cancellation, or of the intention of
790	the insurer to issue a policy by an insurer under the same
791	ownership or management, to the first-named named insured at the
792	address shown in the policy shall be sufficient proof of notice.
793	(6)  When a policy is canceled, other than for nonpayment
794	of premium, or in the event of failure to renew a policy to
795	which subsection (4) applies, the insurer shall notify the
796	first-named named insured of her or his possible eligibility for
797	insurance through the Automobile Joint Underwriting Association.
798	Such notice shall accompany or be included in the notice of
799	cancellation or the notice of intent not to renew and shall
800	state that such notice of availability of the Automobile Joint
801	Underwriting Association is given pursuant to this section.
802	Section 13.  Section 627.7281, Florida Statutes, is amended
803	to read:
804	627.7281  Cancellation notice.-An insurer issuing a policy
805	of motor vehicle insurance not covered under the cancellation
806	provisions of s. 627.728 shall give the first-named named
807	insured notice of cancellation at least 45 days prior to the
808	effective date of cancellation, except that, when cancellation
809	is for nonpayment of premium, at least 10 days' notice of
810	cancellation accompanied by the reason therefor shall be given.
811	As used in this section, "policy" does not include a binder as
812	defined in s. 627.420 unless the duration of the binder period
813	exceeds 60 days.
814	Section 14.  Section 634.403, Florida Statutes, is amended
815	to read:
816	634.403  License required; exemptions.-
817	(1)  No person in this state shall provide or offer to
818	provide service warranties to residents of this state unless
819	authorized therefor under a subsisting license issued by the
820	office. The service warranty association shall pay to the office
821	a license fee of $200 for such license for each license year, or
822	part thereof, the license is in force.
823	(2)  An insurer, while authorized to transact property or
824	casualty insurance in this state, may also transact a service
825	warranty business without additional qualifications or
826	authority, but shall be otherwise subject to the applicable
827	provisions of this part.
828	(3)  The office may, pursuant to s. 120.569, in its
829	discretion and without advance notice and hearing, issue an
830	immediate final order to cease and desist to any person or
831	entity which violates this section. The Legislature finds that a
832	violation of this section constitutes an imminent and immediate
833	threat to the public health, safety, and welfare of the
834	residents of this state.
835	(4)  Any person that is an affiliate of a domestic insurer
836	as defined in chapter 624 is exempt from application of this
837	part if the person does not issue, or market or cause to be
838	marketed, service warranties to residents of this state and does
839	not administer service warranties that were originally issued to
840	residents of this state. The domestic insurer or its wholly
841	owned Florida licensed insurer must be the direct obligor of all
842	service warranties issued by such affiliate or must issue a
843	contractual liability insurance policy to such affiliate that
844	meets the conditions described in s. 634.406(3). If the Office
845	of Insurance Regulation determines, after notice and opportunity
846	for a hearing, that a person's intentional business practices do
847	not comply with any of the exemption requirements of this
848	subsection, the person shall be subject to this part.
849	(5)  A person is exempt from the license requirement in
850	this section if the person complies with the following:
851	(a)  The service warranties are only sold to nonresidents
852	of this state and the person does not issue, market, or cause to
853	be marketed service warranties to residents of this state.
854	(b)  The person submits a letter of notification that
855	provides the following information to the office upon the start
856	of business from this state and annually thereafter by March 1:
857	1.  The type of products offered and a statement certifying
858	that the products are not regulated in the state in which the
859	person is transacting business or that the person is licensed in
860	the state in which the person is transacting business.
861	2.  The name of the person, the state of domicile, the home
862	address and address in this state of the person, the names of
863	the owners and their percentage of ownership, the names of the
864	officers and directors, the name, e-mail, and telephone number
865	of a contact person, the states in which the person is
866	transacting business, and how many individuals are employed in
867	this state.
868	(c)  If the person ceases to do business from this state,
869	the person shall provide written notification to the office
870	within 30 days after cessation of business.
871	(6)(5)  Any person who provides, offers to provide, or
872	holds oneself out as providing or offering to provide a service
873	warranty to residents of in this state or from this state
874	without holding a subsisting license commits, in addition to any
875	other violation, a misdemeanor of the first degree, punishable
876	as provided in s. 775.082 or s. 775.083.
877	Section 15.  Section 627.442, Florida Statutes, is amended
878	to read:
879	627.442  Insurance contracts.-
880	(1)  A person who requires a workers' compensation
881	insurance policy pursuant to a construction contract may not
882	reject a workers' compensation insurance policy issued by a
883	self-insurance fund that is subject to part V of chapter 631
884	based upon the self-insurance fund not being rated by a
885	nationally recognized insurance rating service.
886	(2)  Notwithstanding s. 440.381(3), premium audits are not
887	required for workers' compensation coverage, other than an audit
888	required by the insurance policy or an order of the office, or
889	at least once each policy period, if requested by the insured.
890	Section 16.  Subsections (4) and (7) of section 627.7295,
891	Florida Statutes, are amended to read:
892	627.7295  Motor vehicle insurance contracts.-
893	(4)  If subsection (7) does not apply, the insurer may
894	cancel the policy in accordance with this code except that,
895	notwithstanding s. 627.728, an insurer may not cancel a new
896	policy or binder during the first 60 days immediately following
897	the effective date of the policy or binder except for nonpayment
898	of premium unless the reason for the cancellation is the
899	issuance of a check for the premium that is dishonored for any
900	reason.
901	(7)  A policy of private passenger motor vehicle insurance
902	or a binder for such a policy may be initially issued in this
903	state only if, before the effective date of such binder or
904	policy, the insurer or agent has collected from the insured an
905	amount equal to 2 months' premium. An insurer, agent, or premium
906	finance company may not, directly or indirectly, take any action
907	resulting in the insured having paid from the insured's own
908	funds an amount less than the 2 months' premium required by this
909	subsection. This subsection applies without regard to whether
910	the premium is financed by a premium finance company or is paid
911	pursuant to a periodic payment plan of an insurer or an
912	insurance agent. This subsection does not apply if an insured or
913	member of the insured's family is renewing or replacing a policy
914	or a binder for such policy written by the same insurer or a
915	member of the same insurer group. This subsection does not apply
916	to an insurer that issues private passenger motor vehicle
917	coverage primarily to active duty or former military personnel
918	or their dependents. This subsection does not apply if all
919	policy payments are paid pursuant to a payroll deduction plan or
920	an automatic electronic funds transfer payment plan from the
921	policyholder, provided that the first policy payment is made by
922	cash, cashier's check, check, or a money order. This subsection
923	and subsection (4) do not apply if all policy payments to an
924	insurer are paid pursuant to an automatic electronic funds
925	transfer payment plan from an agent, a managing general agent,
926	or a premium finance company and if the policy includes, at a
927	minimum, personal injury protection pursuant to ss. 627.730-
928	627.7405; motor vehicle property damage liability pursuant to s.
929	627.7275; and bodily injury liability in at least the amount of
930	$10,000 because of bodily injury to, or death of, one person in
931	any one accident and in the amount of $20,000 because of bodily
932	injury to, or death of, two or more persons in any one accident.
933	This subsection and subsection (4) do not apply if an insured
934	has had a policy in effect for at least 6 months, the insured's
935	agent is terminated by the insurer that issued the policy, and
936	the insured obtains coverage on the policy's renewal date with a
937	new company through the terminated agent.
938	Section 17.  Subsection (3) of section 626.916, Florida
939	Statutes, is amended to read:
940	626.916  Eligibility for export.-
941	(3)(a)  Subsection (1) does not apply to wet marine and
942	transportation or aviation risks which are subject to s.
943	626.917.
944	(b)  Paragraphs (1)(a)-(d) do not apply to classes of
945	insurance which are subject to s. 627.062(3)(d)1. These classes
946	may be exportable under the following conditions:
947	1.  The insurance must be placed only by or through a
948	surplus lines agent licensed in this state;
949	2.  The insurer must be made eligible under s. 626.918; and
950	3.  The insured must sign a disclosure that substantially
951	provides the following: "You are agreeing to place coverage in
952	the surplus lines market. Superior coverage may be available in
953	the admitted market and at a lesser cost. Persons insured by
954	surplus lines carriers are not protected under the Florida
955	Insurance Guaranty Act with respect to any right of recovery for
956	the obligation of an insolvent unlicensed insurer." If the
957	notice is signed by the insured, the insured is presumed to have
958	been informed and to know that other coverage may be available,
959	and, with respect to the diligent-effort requirement under
960	subsection (1), there is no liability on the part of, and no
961	cause of action arises against, the retail agent presenting the
962	form.
963	Section 18.  The amendments to s. 626.207, Florida
964	Statutes, made by this act do not apply retroactively and apply
965	only to applicants whose applications are pending or submitted
966	on or after the date that the amendments to s. 626.207, Florida
967	Statutes, made by this act become law. This section shall take
968	effect upon this act becoming a law.
969	Section 19.  Paragraph (c) of subsection (7) of section
970	817.234, Florida Statutes, is amended, present subsection (12)
971	of that section is renumbered as subsection (13), and a new
972	subsection (12) is added to that section, to read:
973	817.234  False and fraudulent insurance claims.-
974	(7)
975	(c)  An insurer, or any person acting at the direction of
976	or on behalf of an insurer, may not change an opinion in a
977	mental or physical report prepared under s. 627.736(8)(7) or
978	direct the physician preparing the report to change such
979	opinion; however, this provision does not preclude the insurer
980	from calling to the attention of the physician errors of fact in
981	the report based upon information in the claim file. Any person
982	who violates this paragraph commits a felony of the third
983	degree, punishable as provided in s. 775.082, s. 775.083, or s.
984	775.084.
985	(12)  In addition to any criminal liability, a person
986	convicted of violating any provision of this section for the
987	purpose of receiving insurance proceeds from a motor vehicle
988	insurance contract is subject to a civil penalty.
989	(a)  Except for a violation of subsection (9), the civil
990	penalty shall be:
991	1.  A fine up to $5,000 for a first offense.
992	2.  A fine greater than $5,000, but not to exceed $10,000,
993	for a second offense.
994	3.  A fine greater than $10,000, but not to exceed $15,000,
995	for a third or subsequent offense.
996	(b)  The civil penalty for a violation of subsection (9)
997	must be at least $15,000 but may not exceed $50,000.
998	(c)  The civil penalty shall be paid to the Insurance
999	Regulatory Trust Fund within the Department of Financial
1000	Services and used by the department for the investigation and
1001	prosecution of insurance fraud.
1002	(d)  This subsection does not prohibit a state attorney
1003	from entering into a written agreement in which the person
1004	charged with the violation does not admit to or deny the charges
1005	but consents to payment of the civil penalty.
1006	Section 20.  Except as otherwise expressly provided in this
1007	act and except for this section, which shall take effect upon
1008	this act becoming a law, this act shall take effect July 1,
1009	2011.

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