Florida Senate - 2015                       CS for CS for SB 252
       By the Committees on Judiciary; and Banking and Insurance; and
       Senator Smith
       590-03270-15                                           2015252c2
    1                        A bill to be entitled                      
    2         An act relating to insurance; amending s. 624.425,
    3         F.S.; providing that the absence of a countersignature
    4         does not affect the validity of a policy or contract
    5         of insurance; amending s. 626.916, F.S.; revising the
    6         required conditions for the export of insurance
    7         coverage to delete a provision specifying how
    8         reasonableness shall be assessed under certain
    9         circumstances; amending s. 626.931, F.S.; deleting
   10         provisions that require surplus lines agents to file a
   11         quarterly affidavit with the Florida Surplus Lines
   12         Office; amending s. 627.971, F.S.; providing that the
   13         term “financial guaranty insurance” does not include
   14         guarantees of higher education loans unless written by
   15         a financial guaranty insurance corporation; amending
   16         ss. 626.932, 626.935, and 626.936, F.S.; conforming
   17         provisions to changes made by the act; providing an
   18         effective date.
   20  Be It Enacted by the Legislature of the State of Florida:
   22         Section 1. Subsection (6) is added to section 624.425,
   23  Florida Statutes, to read:
   24         624.425 Agent countersignature required, property,
   25  casualty, surety insurance.—
   26         (6)The absence of a countersignature required under this
   27  section does not affect the validity of a policy or contract of
   28  insurance.
   29         Section 2. Paragraph (a) of subsection (1) of section
   30  626.916, Florida Statutes, is amended to read:
   31         626.916 Eligibility for export.—
   32         (1) No insurance coverage shall be eligible for export
   33  unless it meets all of the following conditions:
   34         (a) The full amount of insurance required must not be
   35  procurable, after a diligent effort has been made by the
   36  producing agent to do so, from among the insurers authorized to
   37  transact and actually writing that kind and class of insurance
   38  in this state, and the amount of insurance exported shall be
   39  only the excess over the amount so procurable from authorized
   40  insurers. Surplus lines agents must verify that a diligent
   41  effort has been made by requiring a properly documented
   42  statement of diligent effort from the retail or producing agent.
   43  However, to be in compliance with the diligent effort
   44  requirement, the surplus lines agent’s reliance must be
   45  reasonable under the particular circumstances surrounding the
   46  export of that particular risk. Reasonableness shall be assessed
   47  by taking into account factors which include, but are not
   48  limited to, a regularly conducted program of verification of the
   49  information provided by the retail or producing agent.
   50  Declinations must be documented on a risk-by-risk basis. If it
   51  is not possible to obtain the full amount of insurance required
   52  by layering the risk, it is permissible to export the full
   53  amount.
   54         Section 3. Section 626.931, Florida Statutes, is amended to
   55  read:
   56         626.931 Agent affidavit and Insurer reporting
   57  requirements.—
   58         (1) Each surplus lines agent shall on or before the 45th
   59  day following each calendar quarter file with the Florida
   60  Surplus Lines Service Office an affidavit, on forms as
   61  prescribed and furnished by the Florida Surplus Lines Service
   62  Office, stating that all surplus lines insurance transacted by
   63  him or her during such calendar quarter has been submitted to
   64  the Florida Surplus Lines Service Office as required.
   65         (2) The affidavit of the surplus lines agent shall include
   66  efforts made to place coverages with authorized insurers and the
   67  results thereof.
   68         (1)(3) Each foreign insurer accepting premiums shall, on or
   69  before the end of the month following each calendar quarter,
   70  file with the Florida Surplus Lines Service Office a verified
   71  report of all surplus lines insurance transacted by such insurer
   72  for insurance risks located in this state during such calendar
   73  quarter.
   74         (2)(4) Each alien insurer accepting premiums shall, on or
   75  before June 30 of each year, file with the Florida Surplus Lines
   76  Service Office a verified report of all surplus lines insurance
   77  transacted by such insurer for insurance risks located in this
   78  state during the preceding calendar year.
   79         (3)(5) The department may waive the filing requirements
   80  described in subsections (1) and (2) (3) and (4).
   81         (4)(6) Each insurer’s report and supporting information
   82  shall be in a computer-readable format as determined by the
   83  Florida Surplus Lines Service Office or shall be submitted on
   84  forms prescribed by the Florida Surplus Lines Service Office and
   85  shall show for each applicable agent:
   86         (a) A listing of all policies, certificates, cover notes,
   87  or other forms of confirmation of insurance coverage or any
   88  substitutions thereof or endorsements thereto and the
   89  identifying number; and
   90         (b) Any additional information required by the department
   91  or Florida Surplus Lines Service Office.
   92         Section 4. Paragraph (b) of subsection (1) of section
   93  627.971, Florida Statutes, is amended to read
   94         627.971 Definitions.—As used in this part:
   95         (1)
   96         (b) However, “financial guaranty insurance” does not
   97  include:
   98         1. Insurance of a loss resulting from an event described in
   99  paragraph (a), if the loss is payable only upon the occurrence
  100  of any of the following, as specified in a surety bond,
  101  insurance policy, or indemnity contract:
  102         a. A fortuitous physical event;
  103         b. A failure of or deficiency in the operation of
  104  equipment; or
  105         c. An inability to extract or recover a natural resource;
  106         2. An individual or schedule public official bond;
  107         3. A court bond required in connection with judicial,
  108  probate, bankruptcy, or equity proceedings, including a waiver,
  109  probate, open estate, or life tenant bond;
  110         4. A bond running to a federal, state, county, municipal
  111  government, or other political subdivision, as a condition
  112  precedent to the granting of a license to engage in a particular
  113  business or of a permit to exercise a particular privilege;
  114         5. A loss security bond or utility payment indemnity bond
  115  running to a governmental unit, railroad, or charitable
  116  organization;
  117         6. A lease, purchase and sale, or concessionaire surety
  118  bond;
  119         7. Credit unemployment insurance on a debtor in connection
  120  with a specific loan or other credit transaction, to provide
  121  payments to a creditor in the event of unemployment of the
  122  debtor for the installments or other periodic payments becoming
  123  due while a debtor is unemployed;
  124         8. Credit insurance indemnifying a manufacturer, merchant,
  125  or educational institution which extends credit against loss or
  126  damage resulting from nonpayment of debts owed to her or him for
  127  goods or services provided in the normal course of her or his
  128  business;
  129         9. Guaranteed investment contracts that are issued by life
  130  insurance companies and that provide that the life insurer will
  131  make specified payments in exchange for specific premiums or
  132  contributions;
  133         10. Mortgage guaranty insurance as defined in s. 635.011(1)
  134  or s. 635.021;
  135         11. Indemnity contracts or similar guaranties, to the
  136  extent that they are not otherwise limited or proscribed by this
  137  part, in which a life insurer guarantees:
  138         a. Its obligations or indebtedness or the obligations or
  139  indebtedness of a subsidiary of which it owns more than 50
  140  percent, other than a financial guaranty insurance corporation,
  141  if:
  142         (I) For any such obligations or indebtedness that are
  143  backed by specific assets, such assets are at all times owned by
  144  the insurer or the subsidiary; and
  145         (II) For the obligations or indebtedness of the subsidiary
  146  that are not backed by specific assets of the life insurer, the
  147  guaranty terminates once the subsidiary ceases to be a
  148  subsidiary; or
  149         b. The obligations or indebtedness, including the
  150  obligation to substitute assets where appropriate, with respect
  151  to specific assets acquired by a life insurer in the course of
  152  normal investment activities and not for the purpose of resale
  153  with credit enhancement, or guarantees obligations or
  154  indebtedness acquired by its subsidiary, provided that the
  155  assets so acquired have been:
  156         (I) Acquired by a special purpose entity where the sole
  157  purpose is to acquire specific assets of the life insurer or the
  158  subsidiary and issue securities or participation certificates
  159  backed by such assets; or
  160         (II) Sold to an independent third party; or
  161         c. The obligations or indebtedness of an employee or agent
  162  of the life insurer;
  163         12. Any form of surety insurance as defined in s. 624.606;
  164         13. Guarantees of higher education loans, unless written by
  165  a financial guaranty insurance corporation; or
  166         14.13. Any other form of insurance covering risks which the
  167  office determines to be substantially similar to any of the
  168  foregoing.
  169         Section 5. Paragraph (a) of subsection (2) of section
  170  626.932, Florida Statutes, is amended to read:
  171         626.932 Surplus lines tax.—
  172         (2)(a) The surplus lines agent shall make payable to the
  173  department the tax related to each calendar quarter’s business
  174  as reported to the Florida Surplus Lines Service Office, and
  175  remit the tax to the Florida Surplus Lines Service Office on or
  176  before the 45th day following each calendar quarter at the same
  177  time as provided for the filing of the quarterly affidavit,
  178  under s. 626.931. The Florida Surplus Lines Service Office shall
  179  forward to the department the taxes and any interest collected
  180  pursuant to paragraph (b), within 10 days of receipt.
  181         Section 6. Paragraph (d) of subsection (1) of section
  182  626.935, Florida Statutes, is amended to read:
  183         626.935 Suspension, revocation, or refusal of surplus lines
  184  agent’s license.—
  185         (1) The department shall deny an application for, suspend,
  186  revoke, or refuse to renew the appointment of a surplus lines
  187  agent and all other licenses and appointments held by the
  188  licensee under this code, on any of the following grounds:
  189         (d) Failure to make and file his or her affidavit or
  190  reports when due as required by s. 626.931.
  191         Section 7. Subsection (1) of section 626.936, Florida
  192  Statutes, is amended to read:
  193         626.936 Failure to file reports or pay tax or service fee;
  194  administrative penalty.—
  195         (1) Any licensed surplus lines agent who neglects to file a
  196  report or an affidavit in the form and within the time required
  197  or provided for in the Surplus Lines Law may be fined up to $50
  198  per day for each day the neglect continues, beginning the day
  199  after the report or affidavit was due until the date the report
  200  or affidavit is received. All sums collected under this section
  201  shall be deposited into the Insurance Regulatory Trust Fund.
  202         Section 8. This act shall take effect July 1, 2015.