Florida Senate - 2012 CS for SB 1620
By the Committee on Banking and Insurance; and Senator Richter
597-02859-12 20121620c1
1 A bill to be entitled
2 An act relating to insurance; amending s. 320.27,
3 F.S.; providing that a salvage motor vehicle dealer is
4 not required to carry certain insurance on vehicles
5 that have been issued a certificate of destruction;
6 amending s. 624.501, F.S.; conforming a cross
7 reference; amending s. 624.610, F.S.; revising
8 provisions specifying which insurers are not subject
9 to certain filing requirements relating to
10 reinsurance; amending s. 626.261, F.S.; authorizing
11 the Department of Financial Services to provide
12 examinations in Spanish; amending s. 626.321, F.S.;
13 revising provisions relating to limited licenses for
14 travel insurance; providing that a full-time salaried
15 employee of a licensed general lines agent or a
16 business entity that offers travel planning services
17 may be issued such license under certain
18 circumstances; amending s. 626.753, F.S., relating to
19 the sharing of commissions; prohibiting certain
20 rebates; creating s. 626.8675, F.S.; providing that
21 provisions relating to insurance adjusters do not
22 apply to individuals who conduct data entry into an
23 automated claims adjustment system for portable
24 electronics insurance claims; amending s. 627.351,
25 F.S.; increasing the amount of surplus required for an
26 association to qualify as a limited apportionment
27 company; creating s. 627.6011, F.S.; providing that
28 mandatory health benefits apply only to certain health
29 benefit plans; amending s. 627.7015, F.S.; revising
30 provisions relating to alternative procedures for the
31 resolution of disputed property insurance claims;
32 amending s. 627.7295, F.S.; revising provisions
33 relating to cancellation for nonpayment of premiums
34 for motor vehicle insurance; amending s. 627.736,
35 F.S.; clarifying provisions relating to the amount of
36 interest on overdue payments for personal injury
37 protection benefits; providing effective dates.
38
39 Be It Enacted by the Legislature of the State of Florida:
40
41 Section 1. Subsection (3) of section 320.27, Florida
42 Statutes, is amended to read:
43 320.27 Motor vehicle dealers.—
44 (3) APPLICATION AND FEE.—The application for the license
45 shall be in such form as may be prescribed by the department and
46 shall be subject to such rules with respect thereto as may be so
47 prescribed by it. Such application shall be verified by oath or
48 affirmation and shall contain a full statement of the name and
49 birth date of the person or persons applying therefor; the name
50 of the firm or copartnership, with the names and places of
51 residence of all members thereof, if such applicant is a firm or
52 copartnership; the names and places of residence of the
53 principal officers, if the applicant is a body corporate or
54 other artificial body; the name of the state under whose laws
55 the corporation is organized; the present and former place or
56 places of residence of the applicant; and prior business in
57 which the applicant has been engaged and the location thereof.
58 Such application shall describe the exact location of the place
59 of business and shall state whether the place of business is
60 owned by the applicant and when acquired, or, if leased, a true
61 copy of the lease shall be attached to the application. The
62 applicant shall certify that the location provides an adequately
63 equipped office and is not a residence; that the location
64 affords sufficient unoccupied space upon and within which
65 adequately to store all motor vehicles offered and displayed for
66 sale; and that the location is a suitable place where the
67 applicant can in good faith carry on such business and keep and
68 maintain books, records, and files necessary to conduct such
69 business, which will be available at all reasonable hours to
70 inspection by the department or any of its inspectors or other
71 employees. The applicant shall certify that the business of a
72 motor vehicle dealer is the principal business which shall be
73 conducted at that location. Such application shall contain a
74 statement that the applicant is either franchised by a
75 manufacturer of motor vehicles, in which case the name of each
76 motor vehicle that the applicant is franchised to sell shall be
77 included, or an independent (nonfranchised) motor vehicle
78 dealer. Such application shall contain such other relevant
79 information as may be required by the department, including
80 evidence that the applicant is insured under a garage liability
81 insurance policy or a general liability insurance policy coupled
82 with a business automobile policy, which shall include, at a
83 minimum, $25,000 combined single-limit liability coverage
84 including bodily injury and property damage protection and
85 $10,000 personal injury protection. However, a salvage motor
86 vehicle dealer as defined in subparagraph (1)(c)5. is exempt
87 from the requirements for garage liability insurance and
88 personal injury protection insurance on those vehicles that have
89 been issued a certificate of destruction and cannot be operated
90 legally on state roads, highways, or streets. Franchise dealers
91 must submit a garage liability insurance policy, and all other
92 dealers must submit a garage liability insurance policy or a
93 general liability insurance policy coupled with a business
94 automobile policy. Such policy shall be for the license period,
95 and evidence of a new or continued policy shall be delivered to
96 the department at the beginning of each license period. Upon
97 making initial application, the applicant shall pay to the
98 department a fee of $300 in addition to any other fees now
99 required by law; upon making a subsequent renewal application,
100 the applicant shall pay to the department a fee of $75 in
101 addition to any other fees now required by law. Upon making an
102 application for a change of location, the person shall pay a fee
103 of $50 in addition to any other fees now required by law. The
104 department shall, in the case of every application for initial
105 licensure, verify whether certain facts set forth in the
106 application are true. Each applicant, general partner in the
107 case of a partnership, or corporate officer and director in the
108 case of a corporate applicant, must file a set of fingerprints
109 with the department for the purpose of determining any prior
110 criminal record or any outstanding warrants. The department
111 shall submit the fingerprints to the Department of Law
112 Enforcement for state processing and forwarding to the Federal
113 Bureau of Investigation for federal processing. The actual cost
114 of state and federal processing shall be borne by the applicant
115 and is in addition to the fee for licensure. The department may
116 issue a license to an applicant pending the results of the
117 fingerprint investigation, which license is fully revocable if
118 the department subsequently determines that any facts set forth
119 in the application are not true or correctly represented.
120 Section 2. Paragraph (b) of subsection (9) of section
121 624.501, Florida Statutes, is amended to read:
122 624.501 Filing, license, appointment, and miscellaneous
123 fees.—The department, commission, or office, as appropriate,
124 shall collect in advance, and persons so served shall pay to it
125 in advance, fees, licenses, and miscellaneous charges as
126 follows:
127 (9)
128 (b) For all limited appointments as agent, as provided for
129 in s. 626.321(1)(c) and (d) 626.321(1)(d), the agent’s original
130 appointment and biennial renewal or continuation thereof for
131 each insurer is shall be equal to the number of offices, branch
132 offices, or places of business covered by the license multiplied
133 by the fees set forth in paragraph (a).
134 Section 3. Paragraph (c) of subsection (11) of section
135 624.610, Florida Statutes, is amended to read:
136 624.610 Reinsurance.—
137 (11)
138 (c) This subsection applies to cessions of directly written
139 risk or loss. This subsection does not apply to contracts of
140 facultative reinsurance or to any ceding insurer that has a with
141 surplus as to policyholders which that exceeds $100 million as
142 of the immediately preceding December 31. A Additionally, any
143 ceding insurer otherwise subject to this section which had with
144 less than $500,000 in direct premiums written in this state
145 during the preceding calendar year and no more than $250,000 in
146 direct premiums written in this state during the preceding
147 calendar quarter, or which had fewer with less than 1,000
148 policyholders at the end of the preceding calendar year, is
149 exempt from the requirements of this subsection. However, any
150 ceding insurer otherwise subject to this section with more than
151 $250,000 in direct premiums written in this state during the
152 preceding calendar quarter is not exempt from the requirements
153 of this subsection.
154 Section 4. Subsection (5) is added to section 626.261,
155 Florida Statutes, to read:
156 626.261 Conduct of examination.—
157 (5) The department may provide licensure examinations in
158 Spanish. Applicants requesting examination or reexamination in
159 Spanish must bear the full cost of the department’s development,
160 preparation, administration, grading, and evaluation of the
161 Spanish-language examination. When determining whether it is in
162 the public interest to allow the examination to be translated
163 into and administered in Spanish, the department shall consider
164 the percentage of the population who speak Spanish.
165 Section 5. Paragraph (c) of subsection (1) of section
166 626.321, Florida Statutes, is amended to read:
167 626.321 Limited licenses.—
168 (1) The department shall issue to a qualified individual,
169 or a qualified individual or entity under paragraphs (c), (d),
170 (e), and (i), a license as agent authorized to transact a
171 limited class of business in any of the following categories:
172 (c) Travel insurance.—License covering only policies and
173 certificates of travel insurance, which are subject to review by
174 the office under s. 624.605(1)(q). Policies and certificates of
175 travel insurance may provide coverage for risks incidental to
176 travel, planned travel, or accommodations while traveling,
177 including, but not limited to, accidental death and
178 dismemberment of a traveler; trip or event cancellation,
179 interruption, or delay; loss of or damage to personal effects or
180 travel documents; damages to travel accommodations; baggage
181 delay; emergency medical travel or evacuation of a traveler; or
182 medical, surgical, and hospital expenses related to an illness
183 or emergency of a traveler. Any Such policy or certificate may
184 be issued for terms longer than 90 60 days, but each policy or
185 certificate, other than a policy or certificate providing
186 coverage for air ambulatory services only, each policy or
187 certificate must be limited to coverage for travel or use of
188 accommodations of no longer than 90 60 days. The license may be
189 issued only:
190 1. To a full-time salaried employee of a common carrier or
191 a full-time salaried employee or owner of a transportation
192 ticket agency and may authorize the sale of such ticket policies
193 only in connection with the sale of transportation tickets, or
194 to the full-time salaried employee of such an agent. No Such
195 policy may not shall be for a duration of more than 48 hours or
196 more than for the duration of a specified one-way trip or round
197 trip.
198 2. To an entity or individual that is:
199 a. The developer of a timeshare plan that is the subject of
200 an approved public offering statement under chapter 721;
201 b. An exchange company operating an exchange program
202 approved under chapter 721;
203 c. A managing entity operating a timeshare plan approved
204 under chapter 721;
205 d. A seller of travel as defined in chapter 559; or
206 e. A subsidiary or affiliate of any of the entities
207 described in sub-subparagraphs a.-d.
208 3. To a full-time salaried employee of a licensed general
209 lines agent or to a business entity that offers travel planning
210 services if insurance sales activities authorized by the license
211 are in connection with, and incidental to, travel.
212 a. A license issued to a business entity that offers travel
213 planning services must encompass each office, branch office, or
214 place of business making use of the entity’s business name in
215 order to offer, solicit, and sell insurance pursuant to this
216 paragraph.
217 b. The application for licensure must list the name,
218 address, and phone number for each office, branch office, or
219 place of business that is to be covered by the license. The
220 licensee shall notify the department of the name, address, and
221 phone number of any new location that is to be covered by the
222 license before the new office, branch office, or place of
223 business engages in the sale of insurance pursuant to this
224 paragraph. The licensee shall notify the department within 30
225 days after the closing or terminating of an office, branch
226 office, or place of business. Upon receipt of the notice, the
227 department shall delete the office, branch office, or place of
228 business from the license.
229 c. A licensed and appointed entity is directly responsible
230 and accountable for all acts of the licensee’s employees and
231 parties with whom the licensee has entered into a contractual
232 agreement to offer travel insurance.
233
234 A licensee shall require each individual employee who offers
235 policies or certificates under subparagraph 2. or subparagraph
236 3. this subparagraph to receive initial training from a general
237 lines agent or an insurer authorized under chapter 624 to
238 transact insurance within this state. For an entity applying for
239 a license as a travel insurance agent, the fingerprinting
240 requirement of this section applies only to the president,
241 secretary, and treasurer and to any other officer or person who
242 directs or controls the travel insurance operations of the
243 entity.
244 Section 6. Present subsection (4) of section 626.753,
245 Florida Statutes, is renumbered as subsection (6), and new
246 subsections (4) and (5) are added to that section to read:
247 626.753 Sharing commissions; penalty.—
248 (4) Any patronage dividend or other payment, discount, or
249 credit provided to a member of a production credit association
250 or federal land bank association which is directly or indirectly
251 calculated on the basis of the premium charged to that member
252 for crop hail or multiple-peril crop insurance is an unlawful
253 rebate in violation of ss. 626.572 and 626.9541(1)(h).
254 (5) An agent who engages in commission sharing with a
255 production credit association or federal land bank association,
256 and who has knowledge that the association provides patronage
257 dividends or other payments, discounts, or credits that
258 constitute unlawful rebates as described in subsection (4), is
259 participating in a violation of this section.
260 Section 7. Section 626.8675, Florida Statutes, is created
261 to read:
262 626.8675 Portable electronics insurance claims employee
263 exemption.—
264 (1) This part does not apply to individuals who collect
265 claims information from, or furnish claims information to,
266 insureds or claimants, and who conduct data entry, including
267 entering data into an automated claims adjudication system, if
268 such individuals are employees of a business entity licensed
269 under this chapter, or its affiliate, where up to 25 such
270 individuals are under the supervision of a licensed independent
271 adjuster or licensed agent who is exempt from licensure pursuant
272 to s. 626.862. For purposes of this section, “automated claims
273 adjudication system” means a preprogrammed computer system
274 designed for the collection, data entry, calculation, and final
275 resolution of portable electronics insurance claims that:
276 (a) May be used only by a licensed independent adjuster,
277 licensed agent, or supervised individual operating pursuant to
278 this section;
279 (b) Must comply with all claims payment requirements of the
280 insurance code; and
281 (c) Must be certified as compliant with this section by a
282 licensed independent adjuster who is an officer of a licensed
283 business entity under this chapter.
284 (2) Notwithstanding any other provision of law, a resident
285 of Canada may not be licensed as a nonresident independent
286 adjuster for purposes of adjusting portable electronics
287 insurance claims unless that person has successfully obtained an
288 adjuster license in another state.
289 Section 8. Paragraph (b) of subsection (2) of section
290 627.351, Florida Statutes, is amended to read:
291 627.351 Insurance risk apportionment plans.—
292 (2) WINDSTORM INSURANCE RISK APPORTIONMENT.—
293 (b) The department shall require all insurers holding a
294 certificate of authority to transact property insurance on a
295 direct basis in this state, other than joint underwriting
296 associations and other entities formed pursuant to this section,
297 to provide windstorm coverage to applicants from areas
298 determined to be eligible pursuant to paragraph (c) who in good
299 faith are entitled to, but are unable to procure, such coverage
300 through ordinary means; or it shall adopt a reasonable plan or
301 plans for the equitable apportionment or sharing among such
302 insurers of windstorm coverage, which may include formation of
303 an association for this purpose. As used in this subsection, the
304 term “property insurance” means insurance on real or personal
305 property, as defined in s. 624.604, including insurance for
306 fire, industrial fire, allied lines, farmowners multiperil,
307 homeowners’ multiperil, commercial multiperil, and mobile homes,
308 and including liability coverages on all such insurance, but
309 excluding inland marine as defined in s. 624.607(3) and
310 excluding vehicle insurance as defined in s. 624.605(1)(a) other
311 than insurance on mobile homes used as permanent dwellings. The
312 department shall adopt rules that provide a formula for the
313 recovery and repayment of any deferred assessments.
314 1. For the purpose of this section, properties eligible for
315 such windstorm coverage are defined as dwellings, buildings, and
316 other structures, including mobile homes which are used as
317 dwellings and which are tied down in compliance with mobile home
318 tie-down requirements prescribed by the Department of Highway
319 Safety and Motor Vehicles pursuant to s. 320.8325, and the
320 contents of all such properties. An applicant or policyholder is
321 eligible for coverage only if an offer of coverage cannot be
322 obtained by or for the applicant or policyholder from an
323 admitted insurer at approved rates.
324 2.a.(I) All insurers required to be members of such
325 association shall participate in its writings, expenses, and
326 losses. Surplus of the association shall be retained for the
327 payment of claims and shall not be distributed to the member
328 insurers. Such participation by member insurers shall be in the
329 proportion that the net direct premiums of each member insurer
330 written for property insurance in this state during the
331 preceding calendar year bear to the aggregate net direct
332 premiums for property insurance of all member insurers, as
333 reduced by any credits for voluntary writings, in this state
334 during the preceding calendar year. For the purposes of this
335 subsection, the term “net direct premiums” means direct written
336 premiums for property insurance, reduced by premium for
337 liability coverage and for the following if included in allied
338 lines: rain and hail on growing crops; livestock; association
339 direct premiums booked; National Flood Insurance Program direct
340 premiums; and similar deductions specifically authorized by the
341 plan of operation and approved by the department. A member’s
342 participation shall begin on the first day of the calendar year
343 following the year in which it is issued a certificate of
344 authority to transact property insurance in the state and shall
345 terminate 1 year after the end of the calendar year during which
346 it no longer holds a certificate of authority to transact
347 property insurance in the state. The commissioner, after review
348 of annual statements, other reports, and any other statistics
349 that the commissioner deems necessary, shall certify to the
350 association the aggregate direct premiums written for property
351 insurance in this state by all member insurers.
352 (II) Effective July 1, 2002, the association shall operate
353 subject to the supervision and approval of a board of governors
354 who are the same individuals that have been appointed by the
355 Treasurer to serve on the board of governors of the Citizens
356 Property Insurance Corporation.
357 (III) The plan of operation shall provide a formula whereby
358 a company voluntarily providing windstorm coverage in affected
359 areas will be relieved wholly or partially from apportionment of
360 a regular assessment pursuant to sub-sub-subparagraph d.(I) or
361 sub-sub-subparagraph d.(II).
362 (IV) A company which is a member of a group of companies
363 under common management may elect to have its credits applied on
364 a group basis, and any company or group may elect to have its
365 credits applied to any other company or group.
366 (V) There shall be no credits or relief from apportionment
367 to a company for emergency assessments collected from its
368 policyholders under sub-sub-subparagraph d.(III).
369 (VI) The plan of operation may also provide for the award
370 of credits, for a period not to exceed 3 years, from a regular
371 assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub
372 subparagraph d.(II) as an incentive for taking policies out of
373 the Residential Property and Casualty Joint Underwriting
374 Association. In order to qualify for the exemption under this
375 sub-sub-subparagraph, the take-out plan must provide that at
376 least 40 percent of the policies removed from the Residential
377 Property and Casualty Joint Underwriting Association cover risks
378 located in Miami-Dade, Broward, and Palm Beach Counties or at
379 least 30 percent of the policies so removed cover risks located
380 in Miami-Dade, Broward, and Palm Beach Counties and an
381 additional 50 percent of the policies so removed cover risks
382 located in other coastal counties, and must also provide that no
383 more than 15 percent of the policies so removed may exclude
384 windstorm coverage. With the approval of the department, the
385 association may waive these geographic criteria for a take-out
386 plan that removes at least the lesser of 100,000 Residential
387 Property and Casualty Joint Underwriting Association policies or
388 15 percent of the total number of Residential Property and
389 Casualty Joint Underwriting Association policies, provided the
390 governing board of the Residential Property and Casualty Joint
391 Underwriting Association certifies that the take-out plan will
392 materially reduce the Residential Property and Casualty Joint
393 Underwriting Association’s 100-year probable maximum loss from
394 hurricanes. With the approval of the department, the board may
395 extend such credits for an additional year if the insurer
396 guarantees an additional year of renewability for all policies
397 removed from the Residential Property and Casualty Joint
398 Underwriting Association, or for 2 additional years if the
399 insurer guarantees 2 additional years of renewability for all
400 policies removed from the Residential Property and Casualty
401 Joint Underwriting Association.
402 b. Assessments to pay deficits in the association under
403 this subparagraph shall be included as an appropriate factor in
404 the making of rates as provided in s. 627.3512.
405 c. The Legislature finds that the potential for unlimited
406 deficit assessments under this subparagraph may induce insurers
407 to attempt to reduce their writings in the voluntary market, and
408 that such actions would worsen the availability problems that
409 the association was created to remedy. It is the intent of the
410 Legislature that insurers remain fully responsible for paying
411 regular assessments and collecting emergency assessments for any
412 deficits of the association; however, it is also the intent of
413 the Legislature to provide a means by which assessment
414 liabilities may be amortized over a period of years.
415 d.(I) When the deficit incurred in a particular calendar
416 year is 10 percent or less of the aggregate statewide direct
417 written premium for property insurance for the prior calendar
418 year for all member insurers, the association shall levy an
419 assessment on member insurers in an amount equal to the deficit.
420 (II) When the deficit incurred in a particular calendar
421 year exceeds 10 percent of the aggregate statewide direct
422 written premium for property insurance for the prior calendar
423 year for all member insurers, the association shall levy an
424 assessment on member insurers in an amount equal to the greater
425 of 10 percent of the deficit or 10 percent of the aggregate
426 statewide direct written premium for property insurance for the
427 prior calendar year for member insurers. Any remaining deficit
428 shall be recovered through emergency assessments under sub-sub
429 subparagraph (III).
430 (III) Upon a determination by the board of directors that a
431 deficit exceeds the amount that will be recovered through
432 regular assessments on member insurers, pursuant to sub-sub
433 subparagraph (I) or sub-sub-subparagraph (II), the board shall
434 levy, after verification by the department, emergency
435 assessments to be collected by member insurers and by
436 underwriting associations created pursuant to this section which
437 write property insurance, upon issuance or renewal of property
438 insurance policies other than National Flood Insurance policies
439 in the year or years following levy of the regular assessments.
440 The amount of the emergency assessment collected in a particular
441 year shall be a uniform percentage of that year’s direct written
442 premium for property insurance for all member insurers and
443 underwriting associations, excluding National Flood Insurance
444 policy premiums, as annually determined by the board and
445 verified by the department. The department shall verify the
446 arithmetic calculations involved in the board’s determination
447 within 30 days after receipt of the information on which the
448 determination was based. Notwithstanding any other provision of
449 law, each member insurer and each underwriting association
450 created pursuant to this section shall collect emergency
451 assessments from its policyholders without such obligation being
452 affected by any credit, limitation, exemption, or deferment. The
453 emergency assessments so collected shall be transferred directly
454 to the association on a periodic basis as determined by the
455 association. The aggregate amount of emergency assessments
456 levied under this sub-sub-subparagraph in any calendar year may
457 not exceed the greater of 10 percent of the amount needed to
458 cover the original deficit, plus interest, fees, commissions,
459 required reserves, and other costs associated with financing of
460 the original deficit, or 10 percent of the aggregate statewide
461 direct written premium for property insurance written by member
462 insurers and underwriting associations for the prior year, plus
463 interest, fees, commissions, required reserves, and other costs
464 associated with financing the original deficit. The board may
465 pledge the proceeds of the emergency assessments under this sub
466 sub-subparagraph as the source of revenue for bonds, to retire
467 any other debt incurred as a result of the deficit or events
468 giving rise to the deficit, or in any other way that the board
469 determines will efficiently recover the deficit. The emergency
470 assessments under this sub-sub-subparagraph shall continue as
471 long as any bonds issued or other indebtedness incurred with
472 respect to a deficit for which the assessment was imposed remain
473 outstanding, unless adequate provision has been made for the
474 payment of such bonds or other indebtedness pursuant to the
475 document governing such bonds or other indebtedness. Emergency
476 assessments collected under this sub-sub-subparagraph are not
477 part of an insurer’s rates, are not premium, and are not subject
478 to premium tax, fees, or commissions; however, failure to pay
479 the emergency assessment shall be treated as failure to pay
480 premium.
481 (IV) Each member insurer’s share of the total regular
482 assessments under sub-sub-subparagraph (I) or sub-sub
483 subparagraph (II) shall be in the proportion that the insurer’s
484 net direct premium for property insurance in this state, for the
485 year preceding the assessment bears to the aggregate statewide
486 net direct premium for property insurance of all member
487 insurers, as reduced by any credits for voluntary writings for
488 that year.
489 (V) If regular deficit assessments are made under sub-sub
490 subparagraph (I) or sub-sub-subparagraph (II), or by the
491 Residential Property and Casualty Joint Underwriting Association
492 under sub-subparagraph (6)(b)3.a. or sub-subparagraph
493 (6)(b)3.b., the association shall levy upon the association’s
494 policyholders, as part of its next rate filing, or by a separate
495 rate filing solely for this purpose, a market equalization
496 surcharge in a percentage equal to the total amount of such
497 regular assessments divided by the aggregate statewide direct
498 written premium for property insurance for member insurers for
499 the prior calendar year. Market equalization surcharges under
500 this sub-sub-subparagraph are not considered premium and are not
501 subject to commissions, fees, or premium taxes; however, failure
502 to pay a market equalization surcharge shall be treated as
503 failure to pay premium.
504 e. The governing body of any unit of local government, any
505 residents of which are insured under the plan, may issue bonds
506 as defined in s. 125.013 or s. 166.101 to fund an assistance
507 program, in conjunction with the association, for the purpose of
508 defraying deficits of the association. In order to avoid
509 needless and indiscriminate proliferation, duplication, and
510 fragmentation of such assistance programs, any unit of local
511 government, any residents of which are insured by the
512 association, may provide for the payment of losses, regardless
513 of whether or not the losses occurred within or outside of the
514 territorial jurisdiction of the local government. Revenue bonds
515 may not be issued until validated pursuant to chapter 75, unless
516 a state of emergency is declared by executive order or
517 proclamation of the Governor pursuant to s. 252.36 making such
518 findings as are necessary to determine that it is in the best
519 interests of, and necessary for, the protection of the public
520 health, safety, and general welfare of residents of this state
521 and the protection and preservation of the economic stability of
522 insurers operating in this state, and declaring it an essential
523 public purpose to permit certain municipalities or counties to
524 issue bonds as will provide relief to claimants and
525 policyholders of the association and insurers responsible for
526 apportionment of plan losses. Any such unit of local government
527 may enter into such contracts with the association and with any
528 other entity created pursuant to this subsection as are
529 necessary to carry out this paragraph. Any bonds issued under
530 this sub-subparagraph shall be payable from and secured by
531 moneys received by the association from assessments under this
532 subparagraph, and assigned and pledged to or on behalf of the
533 unit of local government for the benefit of the holders of such
534 bonds. The funds, credit, property, and taxing power of the
535 state or of the unit of local government shall not be pledged
536 for the payment of such bonds. If any of the bonds remain unsold
537 60 days after issuance, the department shall require all
538 insurers subject to assessment to purchase the bonds, which
539 shall be treated as admitted assets; each insurer shall be
540 required to purchase that percentage of the unsold portion of
541 the bond issue that equals the insurer’s relative share of
542 assessment liability under this subsection. An insurer shall not
543 be required to purchase the bonds to the extent that the
544 department determines that the purchase would endanger or impair
545 the solvency of the insurer. The authority granted by this sub
546 subparagraph is additional to any bonding authority granted by
547 subparagraph 6.
548 3. The plan shall also provide that any member with a
549 surplus as to policyholders of $25 $20 million or less writing
550 25 percent or more of its total countrywide property insurance
551 premiums in this state may petition the department, within the
552 first 90 days of each calendar year, to qualify as a limited
553 apportionment company. The apportionment of such a member
554 company in any calendar year for which it is qualified shall not
555 exceed its gross participation, which shall not be affected by
556 the formula for voluntary writings. In no event shall a limited
557 apportionment company be required to participate in any
558 apportionment of losses pursuant to sub-sub-subparagraph 2.d.(I)
559 or sub-sub-subparagraph 2.d.(II) in the aggregate which exceeds
560 $50 million after payment of available plan funds in any
561 calendar year. However, a limited apportionment company shall
562 collect from its policyholders any emergency assessment imposed
563 under sub-sub-subparagraph 2.d.(III). The plan shall provide
564 that, if the department determines that any regular assessment
565 will result in an impairment of the surplus of a limited
566 apportionment company, the department may direct that all or
567 part of such assessment be deferred. However, there shall be no
568 limitation or deferment of an emergency assessment to be
569 collected from policyholders under sub-sub-subparagraph
570 2.d.(III).
571 4. The plan shall provide for the deferment, in whole or in
572 part, of a regular assessment of a member insurer under sub-sub
573 subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II), but not
574 for an emergency assessment collected from policyholders under
575 sub-sub-subparagraph 2.d.(III), if, in the opinion of the
576 commissioner, payment of such regular assessment would endanger
577 or impair the solvency of the member insurer. In the event a
578 regular assessment against a member insurer is deferred in whole
579 or in part, the amount by which such assessment is deferred may
580 be assessed against the other member insurers in a manner
581 consistent with the basis for assessments set forth in sub-sub
582 subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II).
583 5.a. The plan of operation may include deductibles and
584 rules for classification of risks and rate modifications
585 consistent with the objective of providing and maintaining funds
586 sufficient to pay catastrophe losses.
587 b. It is the intent of the Legislature that the rates for
588 coverage provided by the association be actuarially sound and
589 not competitive with approved rates charged in the admitted
590 voluntary market such that the association functions as a
591 residual market mechanism to provide insurance only when the
592 insurance cannot be procured in the voluntary market. The plan
593 of operation shall provide a mechanism to assure that, beginning
594 no later than January 1, 1999, the rates charged by the
595 association for each line of business are reflective of approved
596 rates in the voluntary market for hurricane coverage for each
597 line of business in the various areas eligible for association
598 coverage.
599 c. The association shall provide for windstorm coverage on
600 residential properties in limits up to $10 million for
601 commercial lines residential risks and up to $1 million for
602 personal lines residential risks. If coverage with the
603 association is sought for a residential risk valued in excess of
604 these limits, coverage shall be available to the risk up to the
605 replacement cost or actual cash value of the property, at the
606 option of the insured, if coverage for the risk cannot be
607 located in the authorized market. The association must accept a
608 commercial lines residential risk with limits above $10 million
609 or a personal lines residential risk with limits above $1
610 million if coverage is not available in the authorized market.
611 The association may write coverage above the limits specified in
612 this subparagraph with or without facultative or other
613 reinsurance coverage, as the association determines appropriate.
614 d. The plan of operation must provide objective criteria
615 and procedures, approved by the department, to be uniformly
616 applied for all applicants in determining whether an individual
617 risk is so hazardous as to be uninsurable. In making this
618 determination and in establishing the criteria and procedures,
619 the following shall be considered:
620 (I) Whether the likelihood of a loss for the individual
621 risk is substantially higher than for other risks of the same
622 class; and
623 (II) Whether the uncertainty associated with the individual
624 risk is such that an appropriate premium cannot be determined.
625
626 The acceptance or rejection of a risk by the association
627 pursuant to such criteria and procedures must be construed as
628 the private placement of insurance, and the provisions of
629 chapter 120 do not apply.
630 e. If the risk accepts an offer of coverage through the
631 market assistance program or through a mechanism established by
632 the association, either before the policy is issued by the
633 association or during the first 30 days of coverage by the
634 association, and the producing agent who submitted the
635 application to the association is not currently appointed by the
636 insurer, the insurer shall:
637 (I) Pay to the producing agent of record of the policy, for
638 the first year, an amount that is the greater of the insurer’s
639 usual and customary commission for the type of policy written or
640 a fee equal to the usual and customary commission of the
641 association; or
642 (II) Offer to allow the producing agent of record of the
643 policy to continue servicing the policy for a period of not less
644 than 1 year and offer to pay the agent the greater of the
645 insurer’s or the association’s usual and customary commission
646 for the type of policy written.
647
648 If the producing agent is unwilling or unable to accept
649 appointment, the new insurer shall pay the agent in accordance
650 with sub-sub-subparagraph (I). Subject to the provisions of s.
651 627.3517, the policies issued by the association must provide
652 that if the association obtains an offer from an authorized
653 insurer to cover the risk at its approved rates under either a
654 standard policy including wind coverage or, if consistent with
655 the insurer’s underwriting rules as filed with the department, a
656 basic policy including wind coverage, the risk is no longer
657 eligible for coverage through the association. Upon termination
658 of eligibility, the association shall provide written notice to
659 the policyholder and agent of record stating that the
660 association policy must be canceled as of 60 days after the date
661 of the notice because of the offer of coverage from an
662 authorized insurer. Other provisions of the insurance code
663 relating to cancellation and notice of cancellation do not apply
664 to actions under this sub-subparagraph.
665 f. When the association enters into a contractual agreement
666 for a take-out plan, the producing agent of record of the
667 association policy is entitled to retain any unearned commission
668 on the policy, and the insurer shall:
669 (I) Pay to the producing agent of record of the association
670 policy, for the first year, an amount that is the greater of the
671 insurer’s usual and customary commission for the type of policy
672 written or a fee equal to the usual and customary commission of
673 the association; or
674 (II) Offer to allow the producing agent of record of the
675 association policy to continue servicing the policy for a period
676 of not less than 1 year and offer to pay the agent the greater
677 of the insurer’s or the association’s usual and customary
678 commission for the type of policy written.
679
680 If the producing agent is unwilling or unable to accept
681 appointment, the new insurer shall pay the agent in accordance
682 with sub-sub-subparagraph (I).
683 6.a. The plan of operation may authorize the formation of a
684 private nonprofit corporation, a private nonprofit
685 unincorporated association, a partnership, a trust, a limited
686 liability company, or a nonprofit mutual company which may be
687 empowered, among other things, to borrow money by issuing bonds
688 or by incurring other indebtedness and to accumulate reserves or
689 funds to be used for the payment of insured catastrophe losses.
690 The plan may authorize all actions necessary to facilitate the
691 issuance of bonds, including the pledging of assessments or
692 other revenues.
693 b. Any entity created under this subsection, or any entity
694 formed for the purposes of this subsection, may sue and be sued,
695 may borrow money; issue bonds, notes, or debt instruments;
696 pledge or sell assessments, market equalization surcharges and
697 other surcharges, rights, premiums, contractual rights,
698 projected recoveries from the Florida Hurricane Catastrophe
699 Fund, other reinsurance recoverables, and other assets as
700 security for such bonds, notes, or debt instruments; enter into
701 any contracts or agreements necessary or proper to accomplish
702 such borrowings; and take other actions necessary to carry out
703 the purposes of this subsection. The association may issue bonds
704 or incur other indebtedness, or have bonds issued on its behalf
705 by a unit of local government pursuant to subparagraph (6)(q)2.,
706 in the absence of a hurricane or other weather-related event,
707 upon a determination by the association subject to approval by
708 the department that such action would enable it to efficiently
709 meet the financial obligations of the association and that such
710 financings are reasonably necessary to effectuate the
711 requirements of this subsection. Any such entity may accumulate
712 reserves and retain surpluses as of the end of any association
713 year to provide for the payment of losses incurred by the
714 association during that year or any future year. The association
715 shall incorporate and continue the plan of operation and
716 articles of agreement in effect on the effective date of chapter
717 76-96, Laws of Florida, to the extent that it is not
718 inconsistent with chapter 76-96, and as subsequently modified
719 consistent with chapter 76-96. The board of directors and
720 officers currently serving shall continue to serve until their
721 successors are duly qualified as provided under the plan. The
722 assets and obligations of the plan in effect immediately prior
723 to the effective date of chapter 76-96 shall be construed to be
724 the assets and obligations of the successor plan created herein.
725 c. In recognition of s. 10, Art. I of the State
726 Constitution, prohibiting the impairment of obligations of
727 contracts, it is the intent of the Legislature that no action be
728 taken whose purpose is to impair any bond indenture or financing
729 agreement or any revenue source committed by contract to such
730 bond or other indebtedness issued or incurred by the association
731 or any other entity created under this subsection.
732 7. On such coverage, an agent’s remuneration shall be that
733 amount of money payable to the agent by the terms of his or her
734 contract with the company with which the business is placed.
735 However, no commission will be paid on that portion of the
736 premium which is in excess of the standard premium of that
737 company.
738 8. Subject to approval by the department, the association
739 may establish different eligibility requirements and operational
740 procedures for any line or type of coverage for any specified
741 eligible area or portion of an eligible area if the board
742 determines that such changes to the eligibility requirements and
743 operational procedures are justified due to the voluntary market
744 being sufficiently stable and competitive in such area or for
745 such line or type of coverage and that consumers who, in good
746 faith, are unable to obtain insurance through the voluntary
747 market through ordinary methods would continue to have access to
748 coverage from the association. When coverage is sought in
749 connection with a real property transfer, such requirements and
750 procedures shall not provide for an effective date of coverage
751 later than the date of the closing of the transfer as
752 established by the transferor, the transferee, and, if
753 applicable, the lender.
754 9. Notwithstanding any other provision of law:
755 a. The pledge or sale of, the lien upon, and the security
756 interest in any rights, revenues, or other assets of the
757 association created or purported to be created pursuant to any
758 financing documents to secure any bonds or other indebtedness of
759 the association shall be and remain valid and enforceable,
760 notwithstanding the commencement of and during the continuation
761 of, and after, any rehabilitation, insolvency, liquidation,
762 bankruptcy, receivership, conservatorship, reorganization, or
763 similar proceeding against the association under the laws of
764 this state or any other applicable laws.
765 b. No such proceeding shall relieve the association of its
766 obligation, or otherwise affect its ability to perform its
767 obligation, to continue to collect, or levy and collect,
768 assessments, market equalization or other surcharges, projected
769 recoveries from the Florida Hurricane Catastrophe Fund,
770 reinsurance recoverables, or any other rights, revenues, or
771 other assets of the association pledged.
772 c. Each such pledge or sale of, lien upon, and security
773 interest in, including the priority of such pledge, lien, or
774 security interest, any such assessments, emergency assessments,
775 market equalization or renewal surcharges, projected recoveries
776 from the Florida Hurricane Catastrophe Fund, reinsurance
777 recoverables, or other rights, revenues, or other assets which
778 are collected, or levied and collected, after the commencement
779 of and during the pendency of or after any such proceeding shall
780 continue unaffected by such proceeding.
781 d. As used in this subsection, the term “financing
782 documents” means any agreement, instrument, or other document
783 now existing or hereafter created evidencing any bonds or other
784 indebtedness of the association or pursuant to which any such
785 bonds or other indebtedness has been or may be issued and
786 pursuant to which any rights, revenues, or other assets of the
787 association are pledged or sold to secure the repayment of such
788 bonds or indebtedness, together with the payment of interest on
789 such bonds or such indebtedness, or the payment of any other
790 obligation of the association related to such bonds or
791 indebtedness.
792 e. Any such pledge or sale of assessments, revenues,
793 contract rights or other rights or assets of the association
794 shall constitute a lien and security interest, or sale, as the
795 case may be, that is immediately effective and attaches to such
796 assessments, revenues, contract, or other rights or assets,
797 whether or not imposed or collected at the time the pledge or
798 sale is made. Any such pledge or sale is effective, valid,
799 binding, and enforceable against the association or other entity
800 making such pledge or sale, and valid and binding against and
801 superior to any competing claims or obligations owed to any
802 other person or entity, including policyholders in this state,
803 asserting rights in any such assessments, revenues, contract, or
804 other rights or assets to the extent set forth in and in
805 accordance with the terms of the pledge or sale contained in the
806 applicable financing documents, whether or not any such person
807 or entity has notice of such pledge or sale and without the need
808 for any physical delivery, recordation, filing, or other action.
809 f. There shall be no liability on the part of, and no cause
810 of action of any nature shall arise against, any member insurer
811 or its agents or employees, agents or employees of the
812 association, members of the board of directors of the
813 association, or the department or its representatives, for any
814 action taken by them in the performance of their duties or
815 responsibilities under this subsection. Such immunity does not
816 apply to actions for breach of any contract or agreement
817 pertaining to insurance, or any willful tort.
818 Section 9. Section 627.6011, Florida Statutes, is created
819 to read:
820 627.6011 Mandated coverages.—Mandatory health benefits
821 regulated under this chapter which must be covered by an insurer
822 are intended to apply only to the type of health benefit plan
823 defined in s. 627.6699(3), issued in any market, unless
824 specifically designated otherwise. For purposes of this section,
825 the term “mandatory health benefits” means those benefits set
826 forth in ss. 627.6401-627.64193 and any cross-references to
827 these sections, and any other mandatory treatment or health
828 coverages or benefits enacted on or after July 1, 2012.
829 Section 10. Subsections (1), (2), (7), and (9) of section
830 627.7015, Florida Statutes, are amended to read:
831 627.7015 Alternative procedure for resolution of disputed
832 property insurance claims.—
833 (1) PURPOSE AND SCOPE.—This section sets forth a
834 nonadversarial alternative dispute resolution procedure for a
835 mediated claim resolution conference prompted by the need for
836 effective, fair, and timely handling of property insurance
837 claims. There is a particular need for an informal,
838 nonthreatening forum for helping parties who elect this
839 procedure to resolve their claims disputes because most
840 homeowner’s and commercial residential insurance policies
841 obligate policyholders insureds to participate in a potentially
842 expensive and time-consuming adversarial appraisal process
843 before prior to litigation. The procedure set forth in this
844 section is designed to bring the parties together for a mediated
845 claims settlement conference without any of the trappings or
846 drawbacks of an adversarial process. Before resorting to these
847 procedures, policyholders insureds and insurers are encouraged
848 to resolve claims as quickly and fairly as possible. This
849 section is available with respect to claims under personal lines
850 and commercial residential policies before for all claimants and
851 insurers prior to commencing the appraisal process, or before
852 commencing litigation. Mediation may be requested only by the
853 policyholder, as a first-party claimant, or the insurer. If
854 requested by the policyholder insured, participation by legal
855 counsel or any other person having relevant information is shall
856 be permitted. Mediation under this section is also available to
857 litigants referred to the department by a county court or
858 circuit court. This section does not apply to commercial
859 coverages, to private passenger motor vehicle insurance
860 coverages, or to disputes relating to liability coverages in
861 policies of property insurance.
862 (2) At the time a first-party claim within the scope of
863 this section is filed by the policyholder, the insurer shall
864 notify the policyholder all first-party claimants of its their
865 right to participate in the mediation program under this
866 section. The department shall prepare a consumer information
867 pamphlet for distribution to persons participating in mediation
868 under this section.
869 (7) If the insurer fails to comply with subsection (2) by
870 failing to notify a policyholder first-party claimant of its
871 right to participate in the mediation program under this section
872 or if the insurer requests the mediation, and the mediation
873 results are rejected by either party, the policyholder is
874 insured shall not be required to submit to or participate in any
875 contractual loss appraisal process of the property loss damage
876 as a precondition to legal action for breach of contract against
877 the insurer for its failure to pay the policyholder’s claims
878 covered by the policy.
879 (9) For purposes of this section, the term “claim” refers
880 to any dispute between an insurer and a policyholder an insured
881 relating to a material issue of fact other than a dispute:
882 (a) With respect to which the insurer has a reasonable
883 basis to suspect fraud;
884 (b) Where, based on agreed-upon facts as to the cause of
885 loss, there is no coverage under the policy;
886 (c) With respect to which the insurer has a reasonable
887 basis to believe that the policyholder claimant has
888 intentionally made a material misrepresentation of fact which is
889 relevant to the claim, and the entire request for payment of a
890 loss has been denied on the basis of the material
891 misrepresentation; or
892 (d) With respect to which the amount in controversy is less
893 than $500, unless the parties agree to mediate a dispute
894 involving a lesser amount; or.
895 (e) Where the notice of loss is reported to the insurer
896 more than 36 months after the declaration of a state of
897 emergency by the Governor in response to a hurricane that makes
898 landfall in this state.
899 Section 11. Effective upon this act becoming a law,
900 subsection (4) of section 627.7295, Florida Statutes, is amended
901 to read:
902 627.7295 Motor vehicle insurance contracts.—
903 (4) If subsection (7) does not apply, The insurer may
904 cancel the policy in accordance with this code except that,
905 notwithstanding s. 627.728, an insurer may not cancel a new
906 policy or binder during the first 60 days immediately following
907 the effective date of the policy or binder except for nonpayment
908 of premium unless the reason for the cancellation is the
909 issuance of a check for the premium that is dishonored for any
910 reason or any other type of premium payment that was
911 subsequently determined to be rejected or invalid.
912 Section 12. Effective upon this act becoming a law,
913 paragraph (d) of subsection (4) of section 627.736, Florida
914 Statutes, is amended to read:
915 627.736 Required personal injury protection benefits;
916 exclusions; priority; claims.—
917 (4) BENEFITS; WHEN DUE.—Benefits due from an insurer under
918 ss. 627.730-627.7405 shall be primary, except that benefits
919 received under any workers’ compensation law shall be credited
920 against the benefits provided by subsection (1) and shall be due
921 and payable as loss accrues, upon receipt of reasonable proof of
922 such loss and the amount of expenses and loss incurred which are
923 covered by the policy issued under ss. 627.730-627.7405. When
924 the Agency for Health Care Administration provides, pays, or
925 becomes liable for medical assistance under the Medicaid program
926 related to injury, sickness, disease, or death arising out of
927 the ownership, maintenance, or use of a motor vehicle, benefits
928 under ss. 627.730-627.7405 shall be subject to the provisions of
929 the Medicaid program.
930 (d) All overdue payments shall bear simple interest fixed
931 at the rate established under s. 55.03 or the rate established
932 in the insurance contract, whichever is greater, in effect on
933 the date for the year in which the payment became overdue,
934 calculated from the date the insurer was furnished with written
935 notice of the amount of covered loss. Interest is shall be due
936 at the time payment of the overdue claim is made.
937 Section 13. Except as otherwise expressly provided in this
938 act and except for this section, which shall take effect upon
939 this act becoming a law, this act shall take effect July 1,
940 2012.