Florida Senate - 2022                          SENATOR AMENDMENT
       Bill No. SB 1402
       
       
       
       
       
       
                                Ì906044ÇÎ906044                         
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                                       .                                
                                       .                                
                                       .                                
                Floor: 1/AD/2R         .                                
             03/02/2022 01:00 PM       .                                
       —————————————————————————————————————————————————————————————————




       —————————————————————————————————————————————————————————————————
       Senator Burgess moved the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Section 626.914, Florida Statutes, is amended to
    6  read:
    7         626.914 Definitions.—As used in this Surplus Lines Law, the
    8  term:
    9         (5)(1) “Surplus lines agent” means an individual licensed
   10  as provided in this part to handle the placement of insurance
   11  coverages with unauthorized insurers and to place such coverages
   12  with authorized insurers as to which the licensee is not
   13  licensed as an agent.
   14         (2)“Domestic surplus lines insurer” means a nonadmitted
   15  insurer domiciled in this state that:
   16         (a)Has been deemed eligible and authorized by the office
   17  to write surplus lines insurance; and
   18         (b)May write surplus lines insurance in any jurisdiction,
   19  including this state. The authorization to write surplus lines
   20  insurance is not contingent on the company’s holding of an
   21  existing certificate of authority.
   22  
   23  The term does not include an authorized insurer as defined in s.
   24  624.09.
   25         (3)(2) “Eligible surplus lines insurer” means:
   26         (a) An unauthorized insurer that which has been made
   27  eligible by the office to issue insurance coverage under this
   28  Surplus Lines Law; or
   29         (b)A domestic surplus lines insurer.
   30         (4)(3)“Export” “To export” means to place, in an
   31  unauthorized insurer under this Surplus Lines Law, insurance
   32  covering a subject of insurance resident, located, or to be
   33  performed in this state.
   34         (1)(4) “Diligent effort” means seeking coverage from and
   35  having been rejected by at least three authorized insurers
   36  currently writing this type of coverage and documenting these
   37  rejections. However, if the residential structure has a dwelling
   38  replacement cost of $700,000 or more, the term means seeking
   39  coverage from and having been rejected by at least one
   40  authorized insurer currently writing this type of coverage and
   41  documenting this rejection.
   42         Section 2. Section 626.91805, Florida Statutes, is created
   43  to read:
   44         626.91805Domestic surplus lines insurers.—
   45         (1)As used in this section, the term “nonadmitted insurer”
   46  has the same meaning as provided in the federal Nonadmitted and
   47  Reinsurance Reform Act of 2010.
   48         (2)Notwithstanding any other law, a nonadmitted insurer
   49  possessing a policyholder surplus of at least $15 million may,
   50  under a resolution by its board of directors and with the
   51  written approval of the office, be eligible to transact
   52  insurance as a domestic surplus lines insurer. A domestic
   53  surplus lines insurer must maintain surplus of at least $15
   54  million at all times.
   55         (3)Notwithstanding s. 626.918(2), a domestic surplus lines
   56  insurer shall be deemed an eligible surplus lines insurer and
   57  shall be included in the list of eligible surplus lines insurers
   58  required by s. 626.918(3). Eligible surplus lines insurers
   59  listed in s. 626.918(3) may write any kind of insurance that an
   60  unauthorized insurer not domiciled in this state is eligible to
   61  write.
   62         (4)For purposes of writing surplus lines insurance
   63  pursuant to the Surplus Lines Law, a domestic surplus lines
   64  insurer shall be considered an unauthorized insurer.
   65         (5)For purposes of the federal Nonadmitted and Reinsurance
   66  Reform Act of 2010, a domestic surplus lines insurer shall be
   67  considered a nonadmitted insurer.
   68         (6)A domestic surplus lines insurer may write only surplus
   69  lines insurance in this state which is procured from a surplus
   70  lines agent pursuant to the Surplus Lines Law. Such insurer may
   71  not simultaneously hold any certificate of authority authorizing
   72  it to operate as an admitted insurer.
   73         (7)A domestic surplus lines insurer may write surplus
   74  lines insurance in any jurisdiction if such insurer complies
   75  with the requirements of that jurisdiction.
   76         (8)All requirements imposed by the Florida Insurance Code
   77  on admitted domestic insurers apply to domestic surplus lines
   78  insurers unless otherwise exempted in this section.
   79         (9)A domestic surplus lines insurer is exempt from s.
   80  624.408.
   81         (10)A surplus lines insurance policy issued by a domestic
   82  surplus lines insurer is exempt from all statutory requirements
   83  relating to insurance rating and rating plans; policy forms;
   84  premiums charged to insureds; policy cancellation, nonrenewal,
   85  and renewal; and other statutory requirements in the same manner
   86  and to the same extent as surplus lines policies issued by a
   87  surplus lines insurer domiciled in another state.
   88         (11)Notwithstanding any other law, a policy issued by a
   89  domestic surplus lines insurer is subject to taxes assessed upon
   90  surplus lines policies issued by nonadmitted insurers, including
   91  surplus lines premium taxes, but is not subject to other taxes
   92  levied upon admitted insurers, whether domestic or foreign.
   93         (12)A policy issued by a domestic surplus lines insurer is
   94  not subject to the protections or requirements of the Florida
   95  Insurance Guaranty Association Act, the Florida Life and Health
   96  Insurance Guaranty Association Act, the Florida Workers’
   97  Compensation Insurance Guaranty Association Act, or the Florida
   98  Hurricane Catastrophe Fund.
   99         (13)A domestic surplus lines insurer may not issue a
  100  homeowner’s policy covering a personal residential property
  101  located in this state within 12 months after the effective date
  102  of a nonrenewal or cancellation of a previous policy if the
  103  nonrenewal or cancellation of the previous policy was initiated
  104  by an affiliate of an admitted insurer. This restriction does
  105  not apply to a nonrenewal or cancellation provided at the
  106  insured’s request. A domestic surplus lines insurer may not
  107  issue a policy designed to satisfy the motor vehicle financial
  108  responsibility requirements of this state under chapter 324, the
  109  Workers’ Compensation Law under chapter 440, or any other law of
  110  this state mandating insurance coverage by an admitted insurer.
  111         Section 3. Paragraph (b) of subsection (1) and paragraph
  112  (b) of subsection (2) of section 458.320, Florida Statutes, are
  113  amended to read:
  114         458.320 Financial responsibility.—
  115         (1) As a condition of licensing and maintaining an active
  116  license, and prior to the issuance or renewal of an active
  117  license or reactivation of an inactive license for the practice
  118  of medicine, an applicant must by one of the following methods
  119  demonstrate to the satisfaction of the board and the department
  120  financial responsibility to pay claims and costs ancillary
  121  thereto arising out of the rendering of, or the failure to
  122  render, medical care or services:
  123         (b) Obtaining and maintaining professional liability
  124  coverage in an amount not less than $100,000 per claim, with a
  125  minimum annual aggregate of not less than $300,000, from an
  126  authorized insurer as defined under s. 624.09, from a surplus
  127  lines insurer as defined under s. 626.914 s. 626.914(2), from a
  128  risk retention group as defined under s. 627.942, from the Joint
  129  Underwriting Association established under s. 627.351(4), or
  130  through a plan of self-insurance as provided in s. 627.357. The
  131  required coverage amount set forth in this paragraph may not be
  132  used for litigation costs or attorney’s fees for the defense of
  133  any medical malpractice claim.
  134         (2) Physicians who perform surgery in an ambulatory
  135  surgical center licensed under chapter 395 and, as a continuing
  136  condition of hospital staff privileges, physicians who have
  137  staff privileges must also establish financial responsibility by
  138  one of the following methods:
  139         (b) Obtaining and maintaining professional liability
  140  coverage in an amount not less than $250,000 per claim, with a
  141  minimum annual aggregate of not less than $750,000 from an
  142  authorized insurer as defined under s. 624.09, from a surplus
  143  lines insurer as defined under s. 626.914 s. 626.914(2), from a
  144  risk retention group as defined under s. 627.942, from the Joint
  145  Underwriting Association established under s. 627.351(4),
  146  through a plan of self-insurance as provided in s. 627.357, or
  147  through a plan of self-insurance which meets the conditions
  148  specified for satisfying financial responsibility in s. 766.110.
  149  The required coverage amount set forth in this paragraph may not
  150  be used for litigation costs or attorney attorney’s fees for the
  151  defense of any medical malpractice claim.
  152  
  153  This subsection shall be inclusive of the coverage in subsection
  154  (1).
  155         Section 4. Paragraph (b) of subsection (1) and paragraph
  156  (b) of subsection (2) of section 459.0085, Florida Statutes, are
  157  amended to read:
  158         459.0085 Financial responsibility.—
  159         (1) As a condition of licensing and maintaining an active
  160  license, and prior to the issuance or renewal of an active
  161  license or reactivation of an inactive license for the practice
  162  of osteopathic medicine, an applicant must by one of the
  163  following methods demonstrate to the satisfaction of the board
  164  and the department financial responsibility to pay claims and
  165  costs ancillary thereto arising out of the rendering of, or the
  166  failure to render, medical care or services:
  167         (b) Obtaining and maintaining professional liability
  168  coverage in an amount not less than $100,000 per claim, with a
  169  minimum annual aggregate of not less than $300,000, from an
  170  authorized insurer as defined under s. 624.09, from a surplus
  171  lines insurer as defined under s. 626.914 s. 626.914(2), from a
  172  risk retention group as defined under s. 627.942, from the Joint
  173  Underwriting Association established under s. 627.351(4), or
  174  through a plan of self-insurance as provided in s. 627.357. The
  175  required coverage amount set forth in this paragraph may not be
  176  used for litigation costs or attorney’s fees for the defense of
  177  any medical malpractice claim.
  178         (2) Osteopathic physicians who perform surgery in an
  179  ambulatory surgical center licensed under chapter 395 and, as a
  180  continuing condition of hospital staff privileges, osteopathic
  181  physicians who have staff privileges must also establish
  182  financial responsibility by one of the following methods:
  183         (b) Obtaining and maintaining professional liability
  184  coverage in an amount not less than $250,000 per claim, with a
  185  minimum annual aggregate of not less than $750,000 from an
  186  authorized insurer as defined under s. 624.09, from a surplus
  187  lines insurer as defined under s. 626.914 s. 626.914(2), from a
  188  risk retention group as defined under s. 627.942, from the Joint
  189  Underwriting Association established under s. 627.351(4),
  190  through a plan of self-insurance as provided in s. 627.357, or
  191  through a plan of self-insurance that meets the conditions
  192  specified for satisfying financial responsibility in s. 766.110.
  193  The required coverage amount set forth in this paragraph may not
  194  be used for litigation costs or attorney’s fees for the defense
  195  of any medical malpractice claim.
  196  
  197  This subsection shall be inclusive of the coverage in subsection
  198  (1).
  199         Section 5. Paragraph (a) of subsection (2) of section
  200  464.0123, Florida Statutes, is amended to read:
  201         464.0123 Autonomous practice by an advanced practice
  202  registered nurse.—
  203         (2) FINANCIAL RESPONSIBILITY.—
  204         (a) An advanced practice registered nurse registered under
  205  this section must, by one of the following methods, demonstrate
  206  to the satisfaction of the board and the department financial
  207  responsibility to pay claims and costs ancillary thereto arising
  208  out of the rendering of, or the failure to render, nursing care,
  209  treatment, or services:
  210         1. Obtaining and maintaining professional liability
  211  coverage in an amount not less than $100,000 per claim, with a
  212  minimum annual aggregate of not less than $300,000, from an
  213  authorized insurer as defined in s. 624.09, from a surplus lines
  214  insurer as defined in s. 626.914(3) s. 626.914(2), from a risk
  215  retention group as defined in s. 627.942, from the Joint
  216  Underwriting Association established under s. 627.351(4), or
  217  through a plan of self-insurance as provided in s. 627.357; or
  218         2. Obtaining and maintaining an unexpired, irrevocable
  219  letter of credit, established pursuant to chapter 675, in an
  220  amount of not less than $100,000 per claim, with a minimum
  221  aggregate availability of credit of not less than $300,000. The
  222  letter of credit must be payable to the advanced practice
  223  registered nurse as beneficiary upon presentment of a final
  224  judgment indicating liability and awarding damages to be paid by
  225  the advanced practice registered nurse or upon presentment of a
  226  settlement agreement signed by all parties to such agreement
  227  when such final judgment or settlement is a result of a claim
  228  arising out of the rendering of, or the failure to render,
  229  nursing care and services.
  230         Section 6. Paragraph (b) of subsection (6) of section
  231  629.401, Florida Statutes, is amended to read:
  232         629.401 Insurance exchange.—
  233         (6)
  234         (b) In addition to the insurance laws specified in
  235  paragraph (a), the office shall regulate the exchange pursuant
  236  to the following powers, rights, and duties:
  237         1. General examination powers.—The office shall examine the
  238  affairs, transactions, accounts, records, and assets of any
  239  security fund, exchange, members, and associate brokers as often
  240  as it deems advisable. The examination may be conducted by the
  241  accredited examiners of the office at the offices of the entity
  242  or person being examined. The office shall examine in like
  243  manner each prospective member or associate broker applying for
  244  membership in an exchange.
  245         2. Office approval and applications of underwriting
  246  members.—No underwriting member shall commence operation without
  247  the approval of the office. Before commencing operation, an
  248  underwriting member shall provide a written application
  249  containing:
  250         a. Name, type, and purpose of the underwriting member.
  251         b. Name, residence address, business background, and
  252  qualifications of each person associated or to be associated in
  253  the formation or financing of the underwriting member.
  254         c. Full disclosure of the terms of all understandings and
  255  agreements existing or proposed among persons so associated
  256  relative to the underwriting member, or the formation or
  257  financing thereof, accompanied by a copy of each such agreement
  258  or understanding.
  259         d. Full disclosure of the terms of all understandings and
  260  agreements existing or proposed for management or exclusive
  261  agency contracts.
  262         3. Investigation of underwriting member applications.—In
  263  connection with any proposal to establish an underwriting
  264  member, the office shall make an investigation of:
  265         a. The character, reputation, financial standing, and
  266  motives of the organizers, incorporators, or subscribers
  267  organizing the proposed underwriting member.
  268         b. The character, financial responsibility, insurance
  269  experience, and business qualifications of its proposed
  270  officers.
  271         c. The character, financial responsibility, business
  272  experience, and standing of the proposed stockholders and
  273  directors, or owners.
  274         4. Notice of management changes.—An underwriting member
  275  shall promptly give the office written notice of any change
  276  among the directors or principal officers of the underwriting
  277  member within 30 days after such change. The office shall
  278  investigate the new directors or principal officers of the
  279  underwriting member. The office’s investigation shall include an
  280  investigation of the character, financial responsibility,
  281  insurance experience, and business qualifications of any new
  282  directors or principal officers. As a result of the
  283  investigation, the office may require the underwriting member to
  284  replace any new directors or principal officers.
  285         5. Alternate financial statement.—In lieu of any financial
  286  examination, the office may accept an audited financial
  287  statement.
  288         6. Correction and reconstruction of records.—If the office
  289  finds any accounts or records to be inadequate, or inadequately
  290  kept or posted, it may employ experts to reconstruct, rewrite,
  291  post, or balance them at the expense of the person or entity
  292  being examined if such person or entity has failed to maintain,
  293  complete, or correct such records or accounts after the office
  294  has given him or her or it notice and reasonable opportunity to
  295  do so.
  296         7. Obstruction of examinations.—Any person or entity who or
  297  which willfully obstructs the office or its examiner in an
  298  examination is guilty of a misdemeanor of the second degree,
  299  punishable as provided in s. 775.082 or s. 775.083.
  300         8. Filing of annual statement.—Each underwriting member
  301  shall file with the office a full and true statement of its
  302  financial condition, transactions, and affairs. The statement
  303  shall be filed on or before March 1 of each year, or within such
  304  extension of time as the office for good cause grants, and shall
  305  be for the preceding calendar year. The statement shall contain
  306  information generally included in insurer financial statements
  307  prepared in accordance with generally accepted insurance
  308  accounting principles and practices and in a form generally
  309  utilized by insurers for financial statements, sworn to by at
  310  least two executive officers of the underwriting member. The
  311  form of the financial statements shall be the approved form of
  312  the National Association of Insurance Commissioners or its
  313  successor organization. The commission may by rule require each
  314  insurer to submit any part of the information contained in the
  315  financial statement in a computer-readable form compatible with
  316  the office’s electronic data processing system. In addition to
  317  information furnished in connection with its annual statement,
  318  an underwriting member must furnish to the office as soon as
  319  reasonably possible such information about its transactions or
  320  affairs as the office requests in writing. All information
  321  furnished pursuant to the office’s request must be verified by
  322  the oath of two executive officers of the underwriting member.
  323         9. Record maintenance.—Each underwriting member shall have
  324  and maintain its principal place of business in this state and
  325  shall keep therein complete records of its assets, transactions,
  326  and affairs in accordance with such methods and systems as are
  327  customary for or suitable to the kind or kinds of insurance
  328  transacted.
  329         10. Examination of agents.—If the department has reason to
  330  believe that any agent, as defined in s. 626.015 or s.
  331  626.914(5) s. 626.914, has violated or is violating any
  332  provision of the insurance law, or upon receipt of a written
  333  complaint signed by any interested person indicating that any
  334  such violation may exist, the department shall conduct such
  335  examination as it deems necessary of the accounts, records,
  336  documents, and transactions pertaining to or affecting the
  337  insurance affairs of such agent.
  338         11. Written reports of office.—The office or its examiner
  339  shall make a full and true written report of any examination.
  340  The report shall contain only information obtained from
  341  examination of the records, accounts, files, and documents of or
  342  relative to the person or entity examined or from testimony of
  343  individuals under oath, together with relevant conclusions and
  344  recommendations of the examiner based thereon. The office shall
  345  furnish a copy of the report to the person or entity examined
  346  not less than 30 days prior to filing the report in its office.
  347  If such person or entity so requests in writing within such 30
  348  day period, the office shall grant a hearing with respect to the
  349  report and shall not file the report until after the hearing and
  350  after such modifications have been made therein as the office
  351  deems proper.
  352         12. Admissibility of reports.—The report of an examination
  353  when filed shall be admissible in evidence in any action or
  354  proceeding brought by the office against the person or entity
  355  examined, or against his or her or its officers, employees, or
  356  agents. The office or its examiners may at any time testify and
  357  offer other proper evidence as to information secured or matters
  358  discovered during the course of an examination, whether or not a
  359  written report of the examination has been either made,
  360  furnished, or filed in the office.
  361         13. Publication of reports.—After an examination report has
  362  been filed, the office may publish the results of any such
  363  examination in one or more newspapers published in this state
  364  whenever it deems it to be in the public interest.
  365         14. Consideration of examination reports by entity
  366  examined.—After the examination report of an underwriting member
  367  has been filed, an affidavit shall be filed with the office, not
  368  more than 30 days after the report has been filed, on a form
  369  furnished by the office and signed by the person or a
  370  representative of any entity examined, stating that the report
  371  has been read and that the recommendations made in the report
  372  will be considered within a reasonable time.
  373         15. Examination costs.—Each person or entity examined by
  374  the office shall pay to the office the expenses incurred in such
  375  examination.
  376         16. Exchange costs.—An exchange shall reimburse the office
  377  for any expenses incurred by it relating to the regulation of
  378  the exchange and its members, except as specified in
  379  subparagraph 15.
  380         17. Powers of examiners.—Any examiner appointed by the
  381  office, as to the subject of any examination, investigation, or
  382  hearing being conducted by him or her, may administer oaths,
  383  examine and cross-examine witnesses, and receive oral and
  384  documentary evidence, and shall have the power to subpoena
  385  witnesses, compel their attendance and testimony, and require by
  386  subpoena the production of books, papers, records, files,
  387  correspondence, documents, or other evidence which the examiner
  388  deems relevant to the inquiry. If any person refuses to comply
  389  with any such subpoena or to testify as to any matter concerning
  390  which he or she may be lawfully interrogated, the Circuit Court
  391  of Leon County or the circuit court of the county wherein such
  392  examination, investigation, or hearing is being conducted, or of
  393  the county wherein such person resides, on the office’s
  394  application may issue an order requiring such person to comply
  395  with the subpoena and to testify; and any failure to obey such
  396  an order of the court may be punished by the court as a contempt
  397  thereof. Subpoenas shall be served, and proof of such service
  398  made, in the same manner as if issued by a circuit court.
  399  Witness fees and mileage, if claimed, shall be allowed the same
  400  as for testimony in a circuit court.
  401         18. False testimony.—Any person willfully testifying
  402  falsely under oath as to any matter material to any examination,
  403  investigation, or hearing shall upon conviction thereof be
  404  guilty of perjury and shall be punished accordingly.
  405         19. Self-incrimination.—
  406         a. If any person asks to be excused from attending or
  407  testifying or from producing any books, papers, records,
  408  contracts, documents, or other evidence in connection with any
  409  examination, hearing, or investigation being conducted by the
  410  office or its examiner, on the ground that the testimony or
  411  evidence required of the person may tend to incriminate him or
  412  her or subject him or her to a penalty or forfeiture, and the
  413  person notwithstanding is directed to give such testimony or
  414  produce such evidence, he or she shall, if so directed by the
  415  office and the Department of Legal Affairs, nonetheless comply
  416  with such direction; but the person shall not thereafter be
  417  prosecuted or subjected to any penalty or forfeiture for or on
  418  account of any transaction, matter, or thing concerning which he
  419  or she may have so testified or produced evidence, and no
  420  testimony so given or evidence so produced shall be received
  421  against him or her upon any criminal action, investigation, or
  422  proceeding; except that no such person so testifying shall be
  423  exempt from prosecution or punishment for any perjury committed
  424  by him or her in such testimony, and the testimony or evidence
  425  so given or produced shall be admissible against him or her upon
  426  any criminal action, investigation, or proceeding concerning
  427  such perjury, nor shall he or she be exempt from the refusal,
  428  suspension, or revocation of any license, permission, or
  429  authority conferred, or to be conferred, pursuant to the
  430  insurance law.
  431         b. Any such individual may execute, acknowledge, and file
  432  with the office a statement expressly waiving such immunity or
  433  privilege in respect to any transaction, matter, or thing
  434  specified in such statement, and thereupon the testimony of such
  435  individual or such evidence in relation to such transaction,
  436  matter, or thing may be received or produced before any judge or
  437  justice, court, tribunal, grand jury, or otherwise; and if such
  438  testimony or evidence is so received or produced, such
  439  individual shall not be entitled to any immunity or privileges
  440  on account of any testimony so given or evidence so produced.
  441         20. Penalty for failure to testify.—Any person who refuses
  442  or fails, without lawful cause, to testify relative to the
  443  affairs of any member, associate broker, or other person when
  444  subpoenaed and requested by the office to so testify, as
  445  provided in subparagraph 17., shall, in addition to the penalty
  446  provided in subparagraph 17., be guilty of a misdemeanor of the
  447  second degree, punishable as provided in s. 775.082 or s.
  448  775.083.
  449         21. Name selection.—No underwriting member shall be formed
  450  or authorized to transact insurance in this state under a name
  451  which is the same as that of any authorized insurer or is so
  452  nearly similar thereto as to cause or tend to cause confusion or
  453  under a name which would tend to mislead as to the type of
  454  organization of the insurer. Before incorporating under or using
  455  any name, the underwriting syndicate or proposed underwriting
  456  syndicate shall submit its name or proposed name to the office
  457  for the approval of the office.
  458         22. Capitalization.—An underwriting member approved on or
  459  after July 2, 1987, shall provide an initial paid-in capital and
  460  surplus of $3 million and thereafter shall maintain a minimum
  461  policyholder surplus of $2 million in order to be permitted to
  462  write insurance. Underwriting members approved prior to July 2,
  463  1987, shall maintain a minimum policyholder surplus of $1
  464  million. After June 29, 1988, underwriting members approved
  465  prior to July 2, 1987, must maintain a minimum policyholder
  466  surplus of $1.5 million to write insurance. After June 29, 1989,
  467  underwriting members approved prior to July 2, 1987, must
  468  maintain a minimum policyholder surplus of $1.75 million to
  469  write insurance. After December 30, 1989, all underwriting
  470  members, regardless of the date they were approved, must
  471  maintain a minimum policyholder surplus of $2 million to write
  472  insurance. Except for that portion of the paid-in capital and
  473  surplus which shall be maintained in a security fund of an
  474  exchange, the paid-in capital and surplus shall be invested by
  475  an underwriting member in a manner consistent with ss. 625.301
  476  625.340. The portion of the paid-in capital and surplus in any
  477  security fund of an exchange shall be invested in a manner
  478  limited to investments for life insurance companies under the
  479  Florida insurance laws.
  480         23. Limitations on coverage written.—
  481         a. Limit of risk.—No underwriting member shall expose
  482  itself to any loss on any one risk in an amount exceeding 10
  483  percent of its surplus to policyholders. Any risk or portion of
  484  any risk which shall have been reinsured in an assuming
  485  reinsurer authorized or approved to do such business in this
  486  state shall be deducted in determining the limitation of risk
  487  prescribed in this section.
  488         b. Restrictions on premiums written.—If the office has
  489  reason to believe that the underwriting member’s ratio of actual
  490  or projected annual gross written premiums to policyholder
  491  surplus exceeds 8 to 1 or the underwriting member’s ratio of
  492  actual or projected annual net premiums to policyholder surplus
  493  exceeds 4 to 1, the office may establish maximum gross or net
  494  annual premiums to be written by the underwriting member
  495  consistent with maintaining the ratios specified in this sub
  496  subparagraph.
  497         (I) Projected annual net or gross premiums shall be based
  498  on the actual writings to date for the underwriting member’s
  499  current calendar year, its writings for the previous calendar
  500  year, or both. Ratios shall be computed on an annualized basis.
  501         (II) For purposes of this sub-subparagraph, the term “gross
  502  written premiums” means direct premiums written and reinsurance
  503  assumed.
  504         c. Surplus as to policyholders.—For the purpose of
  505  determining the limitation on coverage written, surplus as to
  506  policyholders shall be deemed to include any voluntary reserves,
  507  or any part thereof, which are not required by or pursuant to
  508  law and shall be determined from the last sworn statement of
  509  such underwriting member with the office, or by the last report
  510  or examination filed by the office, whichever is more recent at
  511  the time of assumption of such risk.
  512         24. Unearned premium reserves.—An underwriting member must
  513  at all times maintain an unearned premium reserve equal to 50
  514  percent of the net written premiums of the subscribers on
  515  policies having 1 year or less to run, and pro rata on those for
  516  longer periods, except that all premiums on any marine or
  517  transportation insurance trip risk shall be deemed unearned
  518  until the trip is terminated. For the purpose of this
  519  subparagraph, the term “net written premiums” means the premium
  520  payments made by subscribers plus the premiums due from
  521  subscribers, after deducting the amounts specifically provided
  522  in the subscribers’ agreements for expenses, including
  523  reinsurance costs and fees paid to the attorney in fact,
  524  provided that the power of attorney agreement contains an
  525  explicit provision requiring the attorney in fact to refund any
  526  unearned subscribers fees on a pro-rata basis for canceled
  527  policies. If there is no such provision, the unearned premium
  528  reserve shall be calculated without any adjustment for fees paid
  529  to the attorney in fact. If the unearned premium reserves at any
  530  time do not amount to $100,000, there shall be maintained on
  531  deposit at the exchange at all times additional funds in cash or
  532  eligible securities which, together with the unearned premium
  533  reserves, equal $100,000. In calculating the foregoing reserves,
  534  the amount of the attorney’s bond, as filed with the office and
  535  as required by s. 629.121, shall be included in such reserves.
  536  If at any time the unearned premium reserves are less than the
  537  foregoing requirements, the subscribers, or the attorney in
  538  fact, shall advance funds to make up the deficiency. Such
  539  advances shall only be repaid out of the surplus of the exchange
  540  and only after receiving written approval from the office.
  541         25. Loss reserves.—All underwriting members of an exchange
  542  shall maintain loss reserves, including a reserve for incurred
  543  but not reported claims. The reserves shall be subject to review
  544  by the office, and, if loss experience shows that an
  545  underwriting member’s loss reserves are inadequate, the office
  546  shall require the underwriting member to maintain loss reserves
  547  in such additional amount as is needed to make them adequate.
  548         26. Distribution of profits.—An underwriting member shall
  549  not distribute any profits in the form of cash or other assets
  550  to owners except out of that part of its available and
  551  accumulated surplus funds which is derived from realized net
  552  operating profits on its business and realized capital gains. In
  553  any one year such payments to owners shall not exceed 30 percent
  554  of such surplus as of December 31 of the immediately preceding
  555  year, unless otherwise approved by the office. No distribution
  556  of profits shall be made that would render an underwriting
  557  member either impaired or insolvent.
  558         27. Stock dividends.—A stock dividend may be paid by an
  559  underwriting member out of any available surplus funds in excess
  560  of the aggregate amount of surplus advanced to the underwriting
  561  member under subparagraph 29.
  562         28. Dividends from earned surplus.—A dividend otherwise
  563  lawful may be payable out of an underwriting member’s earned
  564  surplus even though the total surplus of the underwriting member
  565  is then less than the aggregate of its past contributed surplus
  566  resulting from issuance of its capital stock at a price in
  567  excess of the par value thereof.
  568         29. Borrowing of money by underwriting members.—
  569         a. An underwriting member may borrow money to defray the
  570  expenses of its organization, provide it with surplus funds, or
  571  for any purpose of its business, upon a written agreement that
  572  such money is required to be repaid only out of the underwriting
  573  member’s surplus in excess of that stipulated in such agreement.
  574  The agreement may provide for interest not exceeding 15 percent
  575  simple interest per annum. The interest shall or shall not
  576  constitute a liability of the underwriting member as to its
  577  funds other than such excess of surplus, as stipulated in the
  578  agreement. No commission or promotion expense shall be paid in
  579  connection with any such loan. The use of any surplus note and
  580  any repayments thereof shall be subject to the approval of the
  581  office.
  582         b. Money so borrowed, together with any interest thereon if
  583  so stipulated in the agreement, shall not form a part of the
  584  underwriting member’s legal liabilities except as to its surplus
  585  in excess of the amount thereof stipulated in the agreement, nor
  586  be the basis of any setoff; but until repayment, financial
  587  statements filed or published by an underwriting member shall
  588  show as a footnote thereto the amount thereof then unpaid,
  589  together with any interest thereon accrued but unpaid.
  590         30. Liquidation, rehabilitation, and restrictions.—The
  591  office, upon a showing that a member or associate broker of an
  592  exchange has met one or more of the grounds contained in part I
  593  of chapter 631, may restrict sales by type of risk, policy or
  594  contract limits, premium levels, or policy or contract
  595  provisions; increase surplus or capital requirements of
  596  underwriting members; issue cease and desist orders; suspend or
  597  restrict a member’s or associate broker’s right to transact
  598  business; place an underwriting member under conservatorship or
  599  rehabilitation; or seek an order of liquidation as authorized by
  600  part I of chapter 631.
  601         31. Prohibited conduct.—The following acts by a member,
  602  associate broker, or affiliated person shall constitute
  603  prohibited conduct:
  604         a. Fraud.
  605         b. Fraudulent or dishonest acts committed by a member or
  606  associate broker prior to admission to an exchange, if the facts
  607  and circumstances were not disclosed to the office upon
  608  application to become a member or associate broker.
  609         c. Conduct detrimental to the welfare of an exchange.
  610         d. Unethical or improper practices or conduct, inconsistent
  611  with just and equitable principles of trade as set forth in, but
  612  not limited to, ss. 626.951-626.9641 and 626.973.
  613         e. Failure to use due diligence to ascertain the insurance
  614  needs of a client or a principal.
  615         f. Misstatements made under oath or upon an application for
  616  membership on an exchange.
  617         g. Failure to testify or produce documents when requested
  618  by the office.
  619         h. Willful violation of any law of this state.
  620         i. Failure of an officer or principal to testify under oath
  621  concerning a member, associate broker, or other person’s affairs
  622  as they relate to the operation of an exchange.
  623         j. Violation of the constitution and bylaws of the
  624  exchange.
  625         32. Penalties for participating in prohibited conduct.—
  626         a. The office may order the suspension of further
  627  transaction of business on the exchange of any member or
  628  associate broker found to have engaged in prohibited conduct. In
  629  addition, any member or associate broker found to have engaged
  630  in prohibited conduct may be subject to reprimand, censure,
  631  and/or a fine not exceeding $25,000 imposed by the office.
  632         b. Any member which has an affiliated person who is found
  633  to have engaged in prohibited conduct shall be subject to
  634  involuntary withdrawal or in addition thereto may be subject to
  635  suspension, reprimand, censure, and/or a fine not exceeding
  636  $25,000.
  637         33. Reduction of penalties.—Any suspension, reprimand,
  638  censure, or fine may be remitted or reduced by the office on
  639  such terms and conditions as are deemed fair and equitable.
  640         34. Other offenses.—Any member or associate broker that is
  641  suspended shall be deprived, during the period of suspension, of
  642  all rights and privileges of a member or of an associate broker
  643  and may be proceeded against by the office for any offense
  644  committed either before or after the date of suspension.
  645         35. Reinstatement.—Any member or associate broker that is
  646  suspended may be reinstated at any time on such terms and
  647  conditions as the office may specify.
  648         36. Remittance of fines.—Fines imposed under this section
  649  shall be remitted to the office and shall be paid into the
  650  Insurance Regulatory Trust Fund.
  651         37. Failure to pay fines.—When a member or associate broker
  652  has failed to pay a fine for 15 days after it becomes payable,
  653  such member or associate broker shall be suspended, unless the
  654  office has granted an extension of time to pay such fine.
  655         38. Changes in ownership or assets.—In the event of a major
  656  change in the ownership or a major change in the assets of an
  657  underwriting member, the underwriting member shall report such
  658  change in writing to the office within 30 days of the effective
  659  date thereof. The report shall set forth the details of the
  660  change. Any change in ownership or assets of more than 5 percent
  661  shall be considered a major change.
  662         39. Retaliation.—
  663         a. When by or pursuant to the laws of any other state or
  664  foreign country any taxes, licenses, or other fees, in the
  665  aggregate, and any fines, penalties, deposit requirements, or
  666  other material obligations, prohibitions, or restrictions are or
  667  would be imposed upon an exchange or upon the agents or
  668  representatives of such exchange which are in excess of such
  669  taxes, licenses, and other fees, in the aggregate, or which are
  670  in excess of such fines, penalties, deposit requirements, or
  671  other obligations, prohibitions, or restrictions directly
  672  imposed upon similar exchanges or upon the agents or
  673  representatives of such exchanges of such other state or country
  674  under the statutes of this state, so long as such laws of such
  675  other state or country continue in force or are so applied, the
  676  same taxes, licenses, and other fees, in the aggregate, or
  677  fines, penalties, deposit requirements, or other material
  678  obligations, prohibitions, or restrictions of whatever kind
  679  shall be imposed by the office upon the exchanges, or upon the
  680  agents or representatives of such exchanges, of such other state
  681  or country doing business or seeking to do business in this
  682  state.
  683         b. Any tax, license, or other obligation imposed by any
  684  city, county, or other political subdivision or agency of a
  685  state, jurisdiction, or foreign country on an exchange, or on
  686  the agents or representatives on an exchange, shall be deemed to
  687  be imposed by such state, jurisdiction, or foreign country
  688  within the meaning of sub-subparagraph a.
  689         40. Agents.—
  690         a. Agents as defined in ss. 626.015 and 626.914(5) 626.914
  691  who are broker members or associate broker members of an
  692  exchange shall be allowed only to place on an exchange the same
  693  kind or kinds of business that the agent is licensed to place
  694  pursuant to Florida law. Direct Florida business as defined in
  695  s. 626.916 or s. 626.917 shall be written through a broker
  696  member who is a surplus lines agent as defined in s. 626.914.
  697  The activities of each broker member or associate broker with
  698  regard to an exchange shall be subject to all applicable
  699  provisions of the insurance laws of this state, and all such
  700  activities shall constitute transactions under his or her
  701  license as an insurance agent for purposes of the Florida
  702  insurance law.
  703         b. Premium payments and other requirements.—If an
  704  underwriting member has assumed the risk as to a surplus lines
  705  coverage and if the premium therefor has been received by the
  706  surplus lines agent who placed such insurance, then in all
  707  questions thereafter arising under the coverage as between the
  708  underwriting member and the insured, the underwriting member
  709  shall be deemed to have received the premium due to it for such
  710  coverage; and the underwriting member shall be liable to the
  711  insured as to losses covered by such insurance, and for unearned
  712  premiums which may become payable to the insured upon
  713  cancellation of such insurance, whether or not in fact the
  714  surplus lines agent is indebted to the underwriting member with
  715  respect to such insurance or for any other cause.
  716         41. Improperly issued contracts, riders, and endorsements.—
  717         a. Any insurance policy, rider, or endorsement issued by an
  718  underwriting member and otherwise valid which contains any
  719  condition or provision not in compliance with the requirements
  720  of this section shall not be thereby rendered invalid, except as
  721  provided in s. 627.415, but shall be construed and applied in
  722  accordance with such conditions and provisions as would have
  723  applied had such policy, rider, or endorsement been in full
  724  compliance with this section. In the event an underwriting
  725  member issues or delivers any policy for an amount which exceeds
  726  any limitations otherwise provided in this section, the
  727  underwriting member shall be liable to the insured or his or her
  728  beneficiary for the full amount stated in the policy in addition
  729  to any other penalties that may be imposed.
  730         b. Any insurance contract delivered or issued for delivery
  731  in this state governing a subject or subjects of insurance
  732  resident, located, or to be performed in this state which,
  733  pursuant to the provisions of this section, the underwriting
  734  member may not lawfully insure under such a contract shall be
  735  cancelable at any time by the underwriting member, any provision
  736  of the contract to the contrary notwithstanding; and the
  737  underwriting member shall promptly cancel the contract in
  738  accordance with the request of the office therefor. No such
  739  illegality or cancellation shall be deemed to relieve the
  740  underwriting syndicate of any liability incurred by it under the
  741  contract while in force or to prohibit the underwriting
  742  syndicate from retaining the pro rata earned premium thereon.
  743  This provision does not relieve the underwriting syndicate from
  744  any penalty otherwise incurred by the underwriting syndicate.
  745         42. Satisfaction of judgments.—
  746         a. Every judgment or decree for the recovery of money
  747  heretofore or hereafter entered in any court of competent
  748  jurisdiction against any underwriting member shall be fully
  749  satisfied within 60 days from and after the entry thereof or, in
  750  the case of an appeal from such judgment or decree, within 60
  751  days from and after the affirmance of the judgment or decree by
  752  the appellate court.
  753         b. If the judgment or decree is not satisfied as required
  754  under sub-subparagraph a., and proof of such failure to satisfy
  755  is made by filing with the office a certified transcript of the
  756  docket of the judgment or the decree together with a certificate
  757  by the clerk of the court wherein the judgment or decree remains
  758  unsatisfied, in whole or in part, after the time provided in
  759  sub-subparagraph a., the office shall forthwith prohibit the
  760  underwriting member from transacting business. The office shall
  761  not permit such underwriting member to write any new business
  762  until the judgment or decree is wholly paid and satisfied and
  763  proof thereof is filed with the office under the official
  764  certificate of the clerk of the court wherein the judgment was
  765  recovered, showing that the judgment or decree is satisfied of
  766  record, and until the expenses and fees incurred in the case are
  767  also paid by the underwriting syndicate.
  768         43. Tender and exchange offers.—No person shall conclude a
  769  tender offer or an exchange offer or otherwise acquire 5 percent
  770  or more of the outstanding voting securities of an underwriting
  771  member or controlling company or purchase 5 percent or more of
  772  the ownership of an underwriting member or controlling company
  773  unless such person has filed with, and obtained the approval of,
  774  the office and sent to such underwriting member a statement
  775  setting forth:
  776         a. The identity of, and background information on, each
  777  person by whom, or on whose behalf, the acquisition is to be
  778  made; and, if the acquisition is to be made by or on behalf of a
  779  corporation, association, or trust, the identity of and
  780  background information on each director, officer, trustee, or
  781  other natural person performing duties similar to those of a
  782  director, officer, or trustee for the corporation, association,
  783  or trust.
  784         b. The source and amount of the funds or other
  785  consideration used, or to be used, in making the acquisition.
  786         c. Any plans or proposals which such person may have to
  787  liquidate such member, to sell its assets, or to merge or
  788  consolidate it.
  789         d. The percentage of ownership which such person proposes
  790  to acquire and the terms of the offer or exchange, as the case
  791  may be.
  792         e. Information as to any contracts, arrangements, or
  793  understandings with any party with respect to any securities of
  794  such member or controlling company, including, but not limited
  795  to, information relating to the transfer of any securities,
  796  option arrangements, or puts or calls or the giving or
  797  withholding of proxies, naming the party with whom such
  798  contract, arrangements, or understandings have been entered and
  799  giving the details thereof.
  800         f. The office may disapprove any acquisition subject to the
  801  provisions of this subparagraph by any person or any affiliated
  802  person of such person who:
  803         (I) Willfully violates this subparagraph;
  804         (II) In violation of an order of the office issued pursuant
  805  to sub-subparagraph j., fails to divest himself or herself of
  806  any stock obtained in violation of this subparagraph, or fails
  807  to divest himself or herself of any direct or indirect control
  808  of such stock, within 25 days after such order; or
  809         (III) In violation of an order issued by the office
  810  pursuant to sub-subparagraph j., acquires additional stock of
  811  the underwriting member or controlling company, or direct or
  812  indirect control of such stock, without complying with this
  813  subparagraph.
  814         g. The person or persons filing the statement required by
  815  this subparagraph have the burden of proof. The office shall
  816  approve any such acquisition if it finds, on the basis of the
  817  record made during any proceeding or on the basis of the filed
  818  statement if no proceeding is conducted, that:
  819         (I) Upon completion of the acquisition, the underwriting
  820  member will be able to satisfy the requirements for the approval
  821  to write the line or lines of insurance for which it is
  822  presently approved;
  823         (II) The financial condition of the acquiring person or
  824  persons will not jeopardize the financial stability of the
  825  underwriting member or prejudice the interests of its
  826  policyholders or the public;
  827         (III) Any plan or proposal which the acquiring person has,
  828  or acquiring persons have, made:
  829         (A) To liquidate the insurer, sell its assets, or merge or
  830  consolidate it with any person, or to make any other major
  831  change in its business or corporate structure or management; or
  832         (B) To liquidate any controlling company, sell its assets,
  833  or merge or consolidate it with any person, or to make any major
  834  change in its business or corporate structure or management
  835  which would have an effect upon the underwriting member
  836  
  837  is fair and free of prejudice to the policyholders of the
  838  underwriting member or to the public;
  839         (IV) The competence, experience, and integrity of those
  840  persons who will control directly or indirectly the operation of
  841  the underwriting member indicate that the acquisition is in the
  842  best interest of the policyholders of the underwriting member
  843  and in the public interest;
  844         (V) The natural persons for whom background information is
  845  required to be furnished pursuant to this subparagraph have such
  846  backgrounds as to indicate that it is in the best interests of
  847  the policyholders of the underwriting member, and in the public
  848  interest, to permit such persons to exercise control over such
  849  underwriting member;
  850         (VI) The officers and directors to be employed after the
  851  acquisition have sufficient insurance experience and ability to
  852  assure reasonable promise of successful operation;
  853         (VII) The management of the underwriting member after the
  854  acquisition will be competent and trustworthy and will possess
  855  sufficient managerial experience so as to make the proposed
  856  operation of the underwriting member not hazardous to the
  857  insurance-buying public;
  858         (VIII) The management of the underwriting member after the
  859  acquisition will not include any person who has directly or
  860  indirectly through ownership, control, reinsurance transactions,
  861  or other insurance or business relations unlawfully manipulated
  862  the assets, accounts, finances, or books of any insurer or
  863  underwriting member or otherwise acted in bad faith with respect
  864  thereto;
  865         (IX) The acquisition is not likely to be hazardous or
  866  prejudicial to the underwriting member’s policyholders or the
  867  public; and
  868         (X) The effect of the acquisition of control would not
  869  substantially lessen competition in insurance in this state or
  870  would not tend to create a monopoly therein.
  871         h. No vote by the stockholder of record, or by any other
  872  person, of any security acquired in contravention of the
  873  provisions of this subparagraph is valid. Any acquisition of any
  874  security contrary to the provisions of this subparagraph is
  875  void. Upon the petition of the underwriting member or
  876  controlling company, the circuit court for the county in which
  877  the principal office of such underwriting member is located may,
  878  without limiting the generality of its authority, order the
  879  issuance or entry of an injunction or other order to enforce the
  880  provisions of this subparagraph. There shall be a private right
  881  of action in favor of the underwriting member or controlling
  882  company to enforce the provisions of this subparagraph. No
  883  demand upon the office that it perform its functions shall be
  884  required as a prerequisite to any suit by the underwriting
  885  member or controlling company against any other person, and in
  886  no case shall the office be deemed a necessary party to any
  887  action by such underwriting member or controlling company to
  888  enforce the provisions of this subparagraph. Any person who
  889  makes or proposes an acquisition requiring the filing of a
  890  statement pursuant to this subparagraph, or who files such a
  891  statement, shall be deemed to have thereby designated the Chief
  892  Financial Officer as such person’s agent for service of process
  893  under this subparagraph and shall thereby be deemed to have
  894  submitted himself or herself to the administrative jurisdiction
  895  of the office and to the jurisdiction of the circuit court.
  896         i. Any approval by the office under this subparagraph does
  897  not constitute a recommendation by the office for an
  898  acquisition, tender offer, or exchange offer. It is unlawful for
  899  a person to represent that the office’s approval constitutes a
  900  recommendation. A person who violates the provisions of this
  901  sub-subparagraph is guilty of a felony of the third degree,
  902  punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
  903  The statute-of-limitations period for the prosecution of an
  904  offense committed under this sub-subparagraph is 5 years.
  905         j. Upon notification to the office by the underwriting
  906  member or a controlling company that any person or any
  907  affiliated person of such person has acquired 5 percent or more
  908  of the outstanding voting securities of the underwriting member
  909  or controlling company without complying with the provisions of
  910  this subparagraph, the office shall order that the person and
  911  any affiliated person of such person cease acquisition of any
  912  further securities of the underwriting member or controlling
  913  company; however, the person or any affiliated person of such
  914  person may request a proceeding, which proceeding shall be
  915  convened within 7 days after the rendering of the order for the
  916  sole purpose of determining whether the person, individually or
  917  in connection with any affiliated person of such person, has
  918  acquired 5 percent or more of the outstanding voting securities
  919  of an underwriting member or controlling company. Upon the
  920  failure of the person or affiliated person to request a hearing
  921  within 7 days, or upon a determination at a hearing convened
  922  pursuant to this sub-subparagraph that the person or affiliated
  923  person has acquired voting securities of an underwriting member
  924  or controlling company in violation of this subparagraph, the
  925  office may order the person and affiliated person to divest
  926  themselves of any voting securities so acquired.
  927         k.(I) The office shall, if necessary to protect the public
  928  interest, suspend or revoke the certificate of authority of any
  929  underwriting member or controlling company:
  930         (A) The control of which is acquired in violation of this
  931  subparagraph;
  932         (B) That is controlled, directly or indirectly, by any
  933  person or any affiliated person of such person who, in violation
  934  of this subparagraph, has obtained control of an underwriting
  935  member or controlling company; or
  936         (C) That is controlled, directly or indirectly, by any
  937  person who, directly or indirectly, controls any other person
  938  who, in violation of this subparagraph, acquires control of an
  939  underwriting member or controlling company.
  940         (II) If any underwriting member is subject to suspension or
  941  revocation pursuant to sub-sub-subparagraph (I), the
  942  underwriting member shall be deemed to be in such condition, or
  943  to be using or to have been subject to such methods or practices
  944  in the conduct of its business, as to render its further
  945  transaction of insurance presently or prospectively hazardous to
  946  its policyholders, creditors, or stockholders or to the public.
  947         l.(I) For the purpose of this sub-sub-subparagraph, the
  948  term “affiliated person” of another person means:
  949         (A) The spouse of such other person;
  950         (B) The parents of such other person and their lineal
  951  descendants and the parents of such other person’s spouse and
  952  their lineal descendants;
  953         (C) Any person who directly or indirectly owns or controls,
  954  or holds with power to vote, 5 percent or more of the
  955  outstanding voting securities of such other person;
  956         (D) Any person 5 percent or more of the outstanding voting
  957  securities of which are directly or indirectly owned or
  958  controlled, or held with power to vote, by such other person;
  959         (E) Any person or group of persons who directly or
  960  indirectly control, are controlled by, or are under common
  961  control with such other person; or any officer, director,
  962  partner, copartner, or employee of such other person;
  963         (F) If such other person is an investment company, any
  964  investment adviser of such company or any member of an advisory
  965  board of such company;
  966         (G) If such other person is an unincorporated investment
  967  company not having a board of directors, the depositor of such
  968  company; or
  969         (H) Any person who has entered into an agreement, written
  970  or unwritten, to act in concert with such other person in
  971  acquiring or limiting the disposition of securities of an
  972  underwriting member or controlling company.
  973         (II) For the purposes of this section, the term
  974  “controlling company” means any corporation, trust, or
  975  association owning, directly or indirectly, 25 percent or more
  976  of the voting securities of one or more underwriting members.
  977         m. The commission may adopt, amend, or repeal rules that
  978  are necessary to implement the provisions of this subparagraph,
  979  pursuant to chapter 120.
  980         44. Background information.—The information as to the
  981  background and identity of each person about whom information is
  982  required to be furnished pursuant to sub-subparagraph 43.a.
  983  shall include, but shall not be limited to:
  984         a. Such person’s occupations, positions of employment, and
  985  offices held during the past 10 years.
  986         b. The principal business and address of any business,
  987  corporation, or other organization in which each such office was
  988  held or in which such occupation or position of employment was
  989  carried on.
  990         c. Whether, at any time during such 10-year period, such
  991  person was convicted of any crime other than a traffic
  992  violation.
  993         d. Whether, during such 10-year period, such person has
  994  been the subject of any proceeding for the revocation of any
  995  license and, if so, the nature of such proceeding and the
  996  disposition thereof.
  997         e. Whether, during such 10-year period, such person has
  998  been the subject of any proceeding under the federal Bankruptcy
  999  Act or whether, during such 10-year period, any corporation,
 1000  partnership, firm, trust, or association in which such person
 1001  was a director, officer, trustee, partner, or other official has
 1002  been subject to any such proceeding, either during the time in
 1003  which such person was a director, officer, trustee, partner, or
 1004  other official, or within 12 months thereafter.
 1005         f. Whether, during such 10-year period, such person has
 1006  been enjoined, either temporarily or permanently, by a court of
 1007  competent jurisdiction from violating any federal or state law
 1008  regulating the business of insurance, securities, or banking, or
 1009  from carrying out any particular practice or practices in the
 1010  course of the business of insurance, securities, or banking,
 1011  together with details of any such event.
 1012         45. Security fund.—All underwriting members shall be
 1013  members of the security fund of any exchange.
 1014         46. Underwriting member defined.—Whenever the term
 1015  “underwriting member” is used in this subsection, it shall be
 1016  construed to mean “underwriting syndicate.”
 1017         47. Offsets.—Any action, requirement, or constraint imposed
 1018  by the office shall reduce or offset similar actions,
 1019  requirements, or constraints of any exchange.
 1020         48. Restriction on member ownership.—
 1021         a. Investments existing prior to July 2, 1987.—The
 1022  investment in any member by brokers, agents, and intermediaries
 1023  transacting business on the exchange, and the investment in any
 1024  such broker, agent, or intermediary by any member, directly or
 1025  indirectly, shall in each case be limited in the aggregate to
 1026  less than 20 percent of the total investment in such member,
 1027  broker, agent, or intermediary, as the case may be. After
 1028  December 31, 1987, the aggregate percent of the total investment
 1029  in such member by any broker, agent, or intermediary and the
 1030  aggregate percent of the total investment in any such broker,
 1031  agent, or intermediary by any member, directly or indirectly,
 1032  shall not exceed 15 percent. After June 30, 1988, such aggregate
 1033  percent shall not exceed 10 percent and after December 31, 1988,
 1034  such aggregate percent shall not exceed 5 percent.
 1035         b. Investments arising on or after July 2, 1987.—The
 1036  investment in any underwriting member by brokers, agents, or
 1037  intermediaries transacting business on the exchange, and the
 1038  investment in any such broker, agent, or intermediary by any
 1039  underwriting member, directly or indirectly, shall in each case
 1040  be limited in the aggregate to less than 5 percent of the total
 1041  investment in such underwriting member, broker, agent, or
 1042  intermediary.
 1043         49. “Underwriting manager” defined.—“Underwriting manager”
 1044  as used in this subparagraph includes any person, partnership,
 1045  corporation, or organization providing any of the following
 1046  services to underwriting members of the exchange:
 1047         a. Office management and allied services, including
 1048  correspondence and secretarial services.
 1049         b. Accounting services, including bookkeeping and financial
 1050  report preparation.
 1051         c. Investment and banking consultations and services.
 1052         d. Underwriting functions and services including the
 1053  acceptance, rejection, placement, and marketing of risk.
 1054         50. Prohibition of underwriting manager investment.—Any
 1055  direct or indirect investment in any underwriting manager by a
 1056  broker member or any affiliated person of a broker member or any
 1057  direct or indirect investment in a broker member by an
 1058  underwriting manager or any affiliated person of an underwriting
 1059  manager is prohibited. “Affiliated person” for purposes of this
 1060  subparagraph is defined in subparagraph 43.
 1061         51. An underwriting member may not accept reinsurance on an
 1062  assumed basis from an affiliate or a controlling company, nor
 1063  may a broker member or management company place reinsurance from
 1064  an affiliate or controlling company of theirs with an
 1065  underwriting member. “Affiliate and controlling company” for
 1066  purposes of this subparagraph is defined in subparagraph 43.
 1067         52. Premium defined.—“Premium” is the consideration for
 1068  insurance, by whatever name called. Any “assessment” or any
 1069  “membership,” “policy,” “survey,” “inspection,” “service” fee or
 1070  charge or similar fee or charge in consideration for an
 1071  insurance contract is deemed part of the premium.
 1072         53. Rules.—The commission shall adopt rules necessary for
 1073  or as an aid to the effectuation of any provision of this
 1074  section.
 1075         Section 7. This act shall take effect July 1, 2022.
 1076  
 1077  ================= T I T L E  A M E N D M E N T ================
 1078  And the title is amended as follows:
 1079         Delete everything before the enacting clause
 1080  and insert:
 1081                        A bill to be entitled                      
 1082         An act relating to domestic surplus lines insurers;
 1083         amending s. 626.914, F.S.; defining the term “domestic
 1084         surplus lines insurer”; revising the definition of the
 1085         term “eligible surplus lines insurer” to include
 1086         domestic surplus lines insurers; creating s.
 1087         626.91805, F.S.; defining the term “nonadmitted
 1088         insurer”; authorizing specified nonadmitted insurers
 1089         to transact insurance as domestic surplus lines
 1090         insurers under certain circumstances; requiring
 1091         domestic surplus lines insurers to maintain a minimum
 1092         surplus amount; requiring such insurers to be deemed
 1093         eligible surplus lines insurers and to be included in
 1094         the list of eligible surplus lines insurers;
 1095         authorizing such insurers to write certain kinds of
 1096         insurance; requiring such insurers to be considered
 1097         unauthorized insurers for specified purposes;
 1098         requiring such insurers to be considered nonadmitted
 1099         insurers for specified purposes; authorizing domestic
 1100         surplus lines insurers to write only surplus lines
 1101         insurance under a specified circumstance; prohibiting
 1102         such insurers from simultaneously holding any
 1103         certificate of authority to operate as admitted
 1104         insurers; authorizing such insurers to write surplus
 1105         lines insurance in any jurisdiction if specified
 1106         requirements are met; providing applicability of
 1107         specified requirements of the Florida Insurance Code
 1108         to such insurers; providing an exception; providing an
 1109         exemption from a specified law for such insurers;
 1110         providing exemptions from specified requirements for
 1111         surplus lines insurance policies issued by such
 1112         insurers; providing that such policies are subject to
 1113         specified taxes but are not subject to certain other
 1114         taxes; providing that such policies are not subject to
 1115         the protections and requirements of specified acts and
 1116         a specified fund; prohibiting such insurers from
 1117         issuing certain homeowners’ policies under a specified
 1118         circumstance; providing nonapplicability; prohibiting
 1119         such insurers from issuing certain policies to satisfy
 1120         specified laws; amending ss. 458.320, 459.0085, and
 1121         464.0123, F.S.; conforming cross-references; amending
 1122         s. 629.401, F.S.; specifying cross-references;
 1123         providing an effective date.