Florida Senate - 2018                                     SB 784
       By Senator Brandes
       24-00599C-18                                           2018784__
    1                        A bill to be entitled                      
    2         An act relating to insurance; amending s. 624.307,
    3         F.S.; specifying certain persons are not consumers for
    4         purposes of calculating complaint ratios; amending s.
    5         625.151, F.S.; providing an exception from valuation
    6         rules for stocks in subsidiaries for certain foreign
    7         insurers under certain conditions; amending s.
    8         625.325, F.S.; exempting foreign insurers from
    9         investment requirements relating to subsidiaries and
   10         corporations under certain conditions; amending s.
   11         626.914, F.S.; revising the definition of the term
   12         “diligent effort” to decrease the replacement cost
   13         threshold for a residential structure for purposes of
   14         proving rejection of coverage by authorized insurers;
   15         amending s. 626.918, F.S.; increasing the amount of
   16         capital and surplus required for an insurer to waive a
   17         requirement to be an eligible surplus lines insurer;
   18         amending s. 626.932, F.S.; deleting a provision
   19         relating to a surplus lines tax threshold; amending s.
   20         626.9651, F.S.; revising requirements for rules
   21         adopted by the Department of Financial Services and
   22         the Financial Services Commission relating to the
   23         privacy of certain consumer information; amending s.
   24         626.9891, F.S.; authorizing, rather than requiring, an
   25         insurer to report certain data; amending s. 627.4136,
   26         F.S.; providing applicability; amending s. 627.7015,
   27         F.S.; authorizing insurers to participate in
   28         mediations requested by third parties; revising
   29         terminology; revising the definition of the term
   30         “claim” to specify that any material issue of fact
   31         must relate to a loss arising from a declared state of
   32         emergency; amending s. 627.728, F.S.; providing that
   33         an Intelligent Mail barcode or a similar United States
   34         Postal Service tracking method is sufficient proof of
   35         notice for certain motor vehicle insurance notices;
   36         amending s. 627.748, F.S.; revising circumstances in
   37         which insurers may exclude coverage for owners or
   38         operators of transportation network company vehicles;
   39         amending s. 628.8015, F.S.; revising the type of
   40         documents that are confidential; amending s. 636.044,
   41         F.S.; providing an exemption from licensing
   42         requirements for a person who sells certain prepaid
   43         limited health service contracts; providing an
   44         effective date.
   46  Be It Enacted by the Legislature of the State of Florida:
   48         Section 1. Paragraph (e) is added to subsection (10) of
   49  section 624.307, Florida Statutes, to read:
   50         624.307 General powers; duties.—
   51         (10)
   52         (e)For purposes of this subsection, a third-party vendor,
   53  as an assignee of policy benefits, is not a consumer. Inquiries
   54  or complaints from a third-party vendor, as an assignee of
   55  policy benefits, may not be used when calculating a complaint
   56  ratio pursuant to s. 624.313.
   57         Section 2. Paragraph (c) is added to subsection (3) of
   58  section 625.151, Florida Statutes, to read:
   59         625.151 Valuation of other securities.—
   60         (3) Stock of a subsidiary corporation of an insurer may
   61  shall not be valued at an amount in excess of the net value
   62  thereof as based upon those assets only of the subsidiary which
   63  would be eligible under part II for investment of the funds of
   64  the insurer directly.
   65         (c)This subsection does not apply to stock of a subsidiary
   66  corporation or related entities of a foreign insurer that is
   67  permissible under the laws of its state of domicile if the state
   68  of domicile is a member of the National Association of Insurance
   69  Commissioners.
   70         Section 3. Subsection (7) is added to section 625.325,
   71  Florida Statutes, to read:
   72         625.325 Investments in subsidiaries and related
   73  corporations.—
   74         (7)APPLICABILITY.-This section does not apply to a foreign
   75  insurer’s investments in its subsidiaries or related
   76  corporations if:
   77         (a)The foreign insurer is domiciled in a state that is a
   78  member of the National Association of Insurance Commissioners
   79  (NAIC).
   80         (b)Such investments in the foreign insurer’s subsidiaries
   81  or related corporations are:
   82         1.Permitted under the laws of the foreign insurer’s state
   83  of domicile.
   84         2.a.Assigned a rating of 1, 2, or 3 by the NAIC’s
   85  Securities Valuation Office (SVO); or
   86         b.Qualify for the NAIC’s filing exemption rule and
   87  assigned a rating by a nationally recognized statistical rating
   88  organization that would be equivalent to a rating of 1, 2, or 3
   89  by the SVO.
   90         Section 4. Subsection (4) of section 626.914, Florida
   91  Statutes, is amended to read:
   92         626.914 Definitions.—As used in this Surplus Lines Law, the
   93  term:
   94         (4) “Diligent effort” means seeking coverage from and
   95  having been rejected by at least three authorized insurers
   96  currently writing this type of coverage and documenting these
   97  rejections. However, if the residential structure has a dwelling
   98  replacement cost of $750,000 $1 million or more, the term means
   99  seeking coverage from and having been rejected by at least one
  100  authorized insurer currently writing this type of coverage and
  101  documenting this rejection.
  102         Section 5. Paragraph (b) of subsection (2) of section
  103  626.918, Florida Statutes, is amended to read:
  104         626.918 Eligible surplus lines insurers.—
  105         (2) An unauthorized insurer may not be or become an
  106  eligible surplus lines insurer unless made eligible by the
  107  office in accordance with the following conditions:
  108         (b) The insurer must be currently an authorized insurer in
  109  the state or country of its domicile as to the kind or kinds of
  110  insurance proposed to be so placed and must have been such an
  111  insurer for not less than the 3 years next preceding or must be
  112  the wholly owned subsidiary of such authorized insurer or must
  113  be the wholly owned subsidiary of an already eligible surplus
  114  lines insurer as to the kind or kinds of insurance proposed for
  115  a period of not less than the 3 years next preceding. However,
  116  the office may waive the 3-year requirement if the insurer
  117  provides a product or service not readily available to the
  118  consumers of this state or has operated successfully for a
  119  period of at least 1 year next preceding and has capital and
  120  surplus of not less than $30 $25 million.
  121         Section 6. Subsection (3) of section 626.932, Florida
  122  Statutes, is amended to read:
  123         626.932 Surplus lines tax.—
  124         (3) If a surplus lines policy covers risks or exposures
  125  only partially in this state and the state is the home state as
  126  defined in the federal Nonadmitted and Reinsurance Reform Act of
  127  2010 (NRRA), the tax payable must shall be computed on the gross
  128  premium. The tax must not exceed the tax rate where the risk or
  129  exposure is located.
  130         Section 7. Section 626.9651, Florida Statutes, is amended
  131  to read:
  132         626.9651 Privacy.—The department and commission must shall
  133  each adopt rules consistent with other provisions of the Florida
  134  Insurance Code to govern the use of a consumer’s nonpublic
  135  personal financial and health information. These rules must be
  136  based on, consistent with, and not more restrictive than the
  137  Privacy of Consumer Financial and Health Information Regulation,
  138  adopted September 26, 2000, by the National Association of
  139  Insurance Commissioners; however, the rules must permit the use
  140  and disclosure of nonpublic personal health information for
  141  scientific, medical, or public policy research, in accordance
  142  with federal law. In addition, these rules must be consistent
  143  with, and not more restrictive than, the standards contained in
  144  Title V of the Gramm-Leach-Bliley Act of 1999, Pub. L. No. 106
  145  102, as amended in Title LXXV of the Fixing America’s Surface
  146  Transportation (FAST) Act, Pub. L. No. 114-94. If the office
  147  determines that a health insurer or health maintenance
  148  organization is in compliance with, or is actively undertaking
  149  compliance with, the consumer privacy protection rules adopted
  150  by the United States Department of Health and Human Services, in
  151  conformance with the Health Insurance Portability and
  152  Affordability Act, that health insurer or health maintenance
  153  organization is in compliance with this section.
  154         Section 8. Subsection (5) of section 626.9891, Florida
  155  Statutes, is amended to read:
  156         626.9891 Insurer anti-fraud investigative units; reporting
  157  requirements; penalties for noncompliance.—
  158         (5) Each insurer is required to report data related to
  159  fraud for each identified line of business written by the
  160  insurer during the prior calendar year. The data must shall be
  161  reported to the department by March 1, 2019, and annually
  162  thereafter, and may must include, at a minimum:
  163         (a) The number of policies in effect;
  164         (b) The amount of premiums written for policies;
  165         (c) The number of claims received;
  166         (d) The number of claims referred to the anti-fraud
  167  investigative unit;
  168         (e) The number of other insurance fraud matters referred to
  169  the anti-fraud investigative unit that were not claim related;
  170         (f) The number of claims investigated or accepted by the
  171  anti-fraud investigative unit;
  172         (g) The number of other insurance fraud matters
  173  investigated or accepted by the anti-fraud investigative unit
  174  that were not claim related;
  175         (h) The number of cases referred to the Division of
  176  Investigative and Forensic Services;
  177         (i) The number of cases referred to other law enforcement
  178  agencies;
  179         (j) The number of cases referred to other entities; and
  180         (k) The estimated dollar amount or range of damages on
  181  cases referred to the Division of Investigative and Forensic
  182  Services or other agencies.
  183         Section 9. Subsection (5) is added to section 627.4136,
  184  Florida Statutes, to read:
  185         627.4136 Nonjoinder of insurers.—
  186         (5)This section applies to surplus lines liability
  187  insurers.
  188         Section 10. Subsections (1), (3), (6), and (9) of section
  189  627.7015, Florida Statutes, are amended to read:
  190         627.7015 Alternative procedure for resolution of disputed
  191  property insurance claims.—
  192         (1) This section sets forth a nonadversarial alternative
  193  dispute resolution procedure for a mediated claim resolution
  194  conference prompted by the need for effective, fair, and timely
  195  handling of property insurance claims. There is a particular
  196  need for an informal, nonthreatening forum for helping parties
  197  who elect this procedure to resolve their claims disputes
  198  because most homeowner and commercial residential insurance
  199  policies obligate policyholders to participate in a potentially
  200  expensive and time-consuming adversarial appraisal process
  201  before litigation. The procedure set forth in this section is
  202  designed to bring the parties together for a mediated claims
  203  settlement conference without any of the trappings or drawbacks
  204  of an adversarial process. Before resorting to these procedures,
  205  policyholders and insurers are encouraged to resolve claims as
  206  quickly and fairly as possible. This section is available with
  207  respect to claims under personal lines and commercial
  208  residential policies before commencing the appraisal process, or
  209  before commencing litigation. Mediation may be requested only by
  210  the policyholder, as a first-party claimant, or the insurer. An
  211  insurer may, but is not required to, participate in mediation
  212  requested by a third party, as an assignee of policy benefits.
  213  If requested by the policyholder, participation by legal counsel
  214  is permitted. Mediation under this section is also available to
  215  litigants referred to the department by a county court or
  216  circuit court. This section does not apply to commercial
  217  coverages, to private passenger motor vehicle insurance
  218  coverages, or to disputes relating to liability coverages in
  219  policies of property insurance.
  220         (3) The costs of mediation must shall be reasonable, and
  221  the insurer must shall bear all of the cost of conducting
  222  mediation conferences, except as otherwise provided in this
  223  section. If a policyholder an insured fails to appear at the
  224  conference, the conference must shall be rescheduled upon the
  225  policyholder’s insured’s payment of the costs of a rescheduled
  226  conference. If the insurer fails to appear at the conference,
  227  the insurer must shall pay the policyholder’s insured’s actual
  228  cash expenses incurred in attending the conference if the
  229  insurer’s failure to attend was not due to a good cause
  230  acceptable to the department. An insurer will be deemed to have
  231  failed to appear if the insurer’s representative lacks authority
  232  to settle the full value of the claim. The insurer shall incur
  233  an additional fee for a rescheduled conference necessitated by
  234  the insurer’s failure to appear at a scheduled conference. The
  235  fees assessed by the administrator must shall include a charge
  236  necessary to defray the expenses of the department related to
  237  its duties under this section and must shall be deposited in the
  238  Insurance Regulatory Trust Fund.
  239         (6) Mediation is nonbinding; however, if a written
  240  settlement is reached, the policyholder insured has 3 business
  241  days within which the policyholder insured may rescind the
  242  settlement unless the policyholder insured has cashed or
  243  deposited any check or draft disbursed to the policyholder
  244  insured for the disputed matters as a result of the conference.
  245  If a settlement agreement is reached and is not rescinded, it is
  246  shall be binding and acts act as a release of all specific
  247  claims that were presented in that mediation conference.
  248         (9) For purposes of this section, the term “claim” refers
  249  to any dispute between an insurer and a policyholder relating to
  250  a material issue of fact other than a dispute:
  251         (a) With respect to which the insurer has a reasonable
  252  basis to suspect fraud;
  253         (b) When Where, based on agreed-upon facts as to the cause
  254  of loss, there is no coverage under the policy;
  255         (c) With respect to which the insurer has a reasonable
  256  basis to believe that the policyholder has intentionally made a
  257  material misrepresentation of fact which is relevant to the
  258  claim, and the entire request for payment of a loss has been
  259  denied on the basis of the material misrepresentation;
  260         (d) With respect to which the amount in controversy is less
  261  than $500, unless the parties agree to mediate a dispute
  262  involving a lesser amount; or
  263         (e) With respect to a windstorm or hurricane loss that does
  264  not comply with s. 627.70132.
  265         Section 11. Subsection (5) of section 627.728, Florida
  266  Statutes, is amended to read:
  267         627.728 Cancellations; nonrenewals.—
  268         (5) United States postal proof of mailing, or certified or
  269  registered mailing, or other mailing using the Intelligent Mail
  270  barcode or other similar tracking method used or approved by the
  271  United States Postal Service of notice of cancellation, of
  272  intention not to renew, or of reasons for cancellation, or of
  273  the intention of the insurer to issue a policy by an insurer
  274  under the same ownership or management, to the first-named
  275  insured at the address shown in the policy is shall be
  276  sufficient proof of notice.
  277         Section 12. Paragraph (b) of subsection (8) of section
  278  627.748, Florida Statutes, is amended to read:
  279         627.748 Transportation network companies.—
  282         (b)1. An insurer that provides an automobile liability
  283  insurance policy under this part may exclude any and all
  284  coverage afforded under the policy issued to an owner or
  285  operator of a TNC vehicle while driving that vehicle for any
  286  loss or injury that occurs while a TNC driver is logged on to a
  287  digital network and driving a motor vehicle, or when while a TNC
  288  driver provides a prearranged ride. Exclusions imposed under
  289  this subsection are limited to coverage while a TNC driver is
  290  logged on to a digital network or while a TNC driver provides a
  291  prearranged ride. This right to exclude all coverage may apply
  292  to any coverage included in an automobile insurance policy,
  293  including, but not limited to:
  294         a. Liability coverage for bodily injury and property
  295  damage;
  296         b. Uninsured and underinsured motorist coverage;
  297         c. Medical payments coverage;
  298         d. Comprehensive physical damage coverage;
  299         e. Collision physical damage coverage; and
  300         f. Personal injury protection.
  301         2. The exclusions described in subparagraph 1. apply
  302  notwithstanding any requirement under chapter 324. These
  303  exclusions do not affect or diminish coverage otherwise
  304  available for permissive drivers or resident relatives under the
  305  personal automobile insurance policy of the TNC driver or owner
  306  of the TNC vehicle who are not occupying the TNC vehicle at the
  307  time of loss. This section does not require that a personal
  308  automobile insurance policy provide coverage while the TNC
  309  driver is logged on to a digital network, while the TNC driver
  310  is engaged in a prearranged ride, or while the TNC driver
  311  otherwise uses a vehicle to transport riders for compensation.
  312         3. This section must not be construed to require an insurer
  313  to use any particular policy language or reference to this
  314  section in order to exclude any and all coverage for any loss or
  315  injury that occurs while a TNC driver is logged on to a digital
  316  network or while a TNC driver provides a prearranged ride.
  317         4. This section does not preclude an insurer from providing
  318  primary or excess coverage for the TNC driver’s vehicle by
  319  contract or endorsement.
  320         Section 13. Subsection (4) of section 628.8015, Florida
  321  Statutes, is amended to read:
  322         628.8015 Own-risk and solvency assessment; corporate
  323  governance annual disclosure.—
  324         (4) CONFIDENTIALITY.—The required filings and related
  325  documents submitted pursuant to subsections (2) and (3) are
  326  privileged such that they may not be produced in response to a
  327  subpoena or other discovery directed to the office, and any such
  328  filings and related documents, if obtained from the office, are
  329  not admissible in evidence in any private civil action. However,
  330  the department or office may use these filings and related
  331  documents in the furtherance of any regulatory or legal action
  332  brought against an insurer as part of the official duties of the
  333  department or office. A waiver of any applicable claim of
  334  privilege in these filings and related documents may not occur
  335  because of a disclosure to the office under this section,
  336  because of any other provision of the Insurance Code, or because
  337  of sharing under s. 624.4212. The office or a person receiving
  338  these filings and related documents, while acting under the
  339  authority of the office, or with whom such filings and related
  340  documents are shared pursuant to s. 624.4212, is not permitted
  341  or required to testify in any private civil action concerning
  342  any such filings or related documents.
  343         Section 14. Subsection (5) of section 636.044, Florida
  344  Statutes, is amended to read:
  345         636.044 Agent licensing.—
  346         (5) A person who sells registered as a seller of travel
  347  under s. 559.928 is not required to be licensed under this
  348  section in order to sell prepaid limited health service
  349  contracts that only cover the cost of transportation provided by
  350  an air ambulance service licensed pursuant to s. 401.251 is not
  351  required to be licensed under this section. The prepaid limited
  352  health service contract for such coverage is, however, subject
  353  to all applicable provisions of this chapter.
  354         Section 15. This act shall take effect upon becoming a law.