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.
45
46 Be It Enacted by the Legislature of the State of Florida:
47
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.—
280 (8) TRANSPORTATION NETWORK COMPANY AND INSURER; DISCLOSURE;
281 EXCLUSIONS.—
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.