Florida Senate - 2024                                    SB 1556
       
       
        
       By Senator Davis
       
       
       
       
       
       5-01705-24                                            20241556__
    1                        A bill to be entitled                      
    2         An act relating to insurance; creating s. 11.91, F.S.;
    3         creating the Property Insurance Commission; providing
    4         membership of the commission; providing powers and
    5         duties of the commission; amending s. 20.121, F.S.;
    6         providing for the election of the Commissioner of
    7         Insurance Regulation; providing for the commissioner’s
    8         term of office; conforming provisions to changes made
    9         by the act; creating s. 112.3134, F.S.; prohibiting
   10         the commissioner from engaging in certain activities
   11         or employment for a specified period after leaving
   12         office; providing sanctions for violations;
   13         authorizing specified entities to collect penalties;
   14         amending s. 494.0026, F.S.; requiring that interest
   15         earned on insurance proceeds received by mortgagees
   16         and assignees be paid to insureds; making a technical
   17         change; amending s. 624.401, F.S.; prohibiting
   18         property insurers from claiming insolvency under
   19         specified circumstances; authorizing persons who
   20         engage in property insurance activities in other
   21         states to engage in insurance activities in this state
   22         under certain circumstances; amending s. 627.0629,
   23         F.S.; requiring residential property insurers to
   24         release specified information to insureds upon
   25         request; amending s. 627.701, F.S.; prohibiting
   26         property insurers from using specified factors as a
   27         defense for denial of a claim; amending s. 627.715,
   28         F.S.; requiring insurance agents to advise insurance
   29         applicants of flood risk; creating s. 627.71555, F.S.;
   30         providing duties of the Office of Insurance
   31         Regulation; requiring the Department of Financial
   32         Services to adopt rules regarding allegations of
   33         insurance fraud made by insurers or their employees or
   34         contractors; providing requirements for such rules;
   35         providing fines; requiring the Office of Program
   36         Policy Analysis and Government Accountability to
   37         conduct a study of the effectiveness of the property
   38         insurance mediation program; providing requirements
   39         for the study; requiring a report to the Legislature;
   40         amending ch. 2022-268, Laws of Florida; increasing an
   41         appropriation to the My Safe Florida Home Program;
   42         providing an effective date.
   43          
   44  Be It Enacted by the Legislature of the State of Florida:
   45  
   46         Section 1. Section 11.91, Florida Statutes, is created to
   47  read:
   48         11.91Property Insurance Commission.—
   49         (1)(a)There is created the Property Insurance Commission,
   50  which shall be composed of the following six members:
   51         1.Two members appointed by the President of the Senate.
   52         2.One member appointed by the Minority Leader of the
   53  Senate.
   54         3.Two members appointed by the Speaker of the House of
   55  Representatives.
   56         4.One member appointed by the Minority Leader of the House
   57  of Representatives.
   58         (b)Each member shall serve at the pleasure of the officer
   59  who appointed the member. A vacancy on the commission must be
   60  filled in the same manner as the original appointment. From
   61  November of each odd-numbered year through October of each even
   62  numbered year, the chair of the commission must be appointed by
   63  the President of the Senate, and the vice chair of the
   64  commission must be appointed by the Speaker of the House of
   65  Representatives. From November of each even-numbered year
   66  through October of each odd-numbered year, the chair of the
   67  commission must be appointed by the Speaker of the House of
   68  Representatives, and the vice chair of the commission must be
   69  appointed by the President of the Senate. The terms of members
   70  must be for 2 years and run from the organization of one
   71  Legislature to the organization of the next Legislature.
   72         (2)The commission is governed by joint rules of the Senate
   73  and the House of Representatives, which must remain in effect
   74  until repealed or amended by concurrent resolution.
   75         (3)The commission may conduct its meetings through
   76  teleconferences or other similar means.
   77         (4)The commission must be staffed by legislative staff
   78  members, as assigned by the President of the Senate and the
   79  Speaker of the House of Representatives.
   80         (5)The commission has the power and duty to do all of the
   81  following:
   82         (a)Review and evaluate the insurance marketplace and
   83  studies of the various insurance markets.
   84         (b)Review and comment on market data produced by the
   85  Office of Insurance Regulation.
   86         (c)Review and comment on the setting of reserve
   87  requirements for insurers.
   88         (d)Exercise all other powers and perform any other duties
   89  prescribed by the Legislature.
   90         Section 2. Paragraphs (a) and (d) of subsection (3) of
   91  section 20.121, Florida Statutes, are amended to read:
   92         20.121 Department of Financial Services.—There is created a
   93  Department of Financial Services.
   94         (3) FINANCIAL SERVICES COMMISSION.—Effective January 7,
   95  2003, there is created within the Department of Financial
   96  Services the Financial Services Commission, composed of the
   97  Governor, the Attorney General, the Chief Financial Officer, and
   98  the Commissioner of Agriculture, which shall for purposes of
   99  this section be referred to as the commission. Commission
  100  members shall serve as agency head of the Financial Services
  101  Commission. The commission shall be a separate budget entity and
  102  shall be exempt from the provisions of s. 20.052. Commission
  103  action shall be by majority vote consisting of at least three
  104  affirmative votes. The commission shall not be subject to
  105  control, supervision, or direction by the Department of
  106  Financial Services in any manner, including purchasing,
  107  transactions involving real or personal property, personnel, or
  108  budgetary matters.
  109         (a) Structure.—The major structural unit of the commission
  110  is the office. Each office shall be headed by a director. The
  111  following offices are established:
  112         1. The Office of Insurance Regulation, which shall be
  113  responsible for all activities concerning insurers and other
  114  risk bearing entities, including licensing, rates, policy forms,
  115  market conduct, claims, issuance of certificates of authority,
  116  solvency, viatical settlements, premium financing, and
  117  administrative supervision, as provided under the insurance code
  118  or chapter 636. The head of the Office of Insurance Regulation
  119  is the Director of the Office of Insurance Regulation, who may
  120  also be known as the Commissioner of Insurance Regulation.
  121  Beginning with the general election in 2026, the Commissioner of
  122  Insurance Regulation shall be elected. The commissioner elected
  123  in 2026 shall serve a term of 2 years; thereafter, the
  124  commissioner shall serve a term of 4 years.
  125         2. The Office of Financial Regulation, which shall be
  126  responsible for all activities of the Financial Services
  127  Commission relating to the regulation of banks, credit unions,
  128  other financial institutions, finance companies, and the
  129  securities industry. The head of the office is the Director of
  130  the Office of Financial Regulation, who may also be known as the
  131  Commissioner of Financial Regulation. The Office of Financial
  132  Regulation shall include a Bureau of Financial Investigations,
  133  which shall function as a criminal justice agency for purposes
  134  of ss. 943.045-943.08 and shall have a separate budget. The
  135  bureau may conduct investigations within or outside this state
  136  as the bureau deems necessary to aid in the enforcement of this
  137  section. If, during an investigation, the office has reason to
  138  believe that any criminal law of this state has or may have been
  139  violated, the office shall refer any records tending to show
  140  such violation to state or federal law enforcement or
  141  prosecutorial agencies and shall provide investigative
  142  assistance to those agencies as required.
  143         (d) Appointment and qualification qualifications of the
  144  Director of the Office of Financial Regulation directors.—The
  145  commission shall appoint or remove the each Director of the
  146  Office of Financial Regulation by a majority vote consisting of
  147  at least three affirmative votes, with both the Governor and the
  148  Chief Financial Officer on the prevailing side. The minimum
  149  qualifications of the directors are as follows:
  150         1.Prior to appointment as director, the Director of the
  151  Office of Insurance Regulation must have had, within the
  152  previous 10 years, at least 5 years of responsible private
  153  sector experience working full time in areas within the scope of
  154  the subject matter jurisdiction of the Office of Insurance
  155  Regulation or at least 5 years of experience as a senior
  156  examiner or other senior employee of a state or federal agency
  157  having regulatory responsibility over insurers or insurance
  158  agencies.
  159         2.Before his or her Prior to appointment as director, the
  160  Director of the Office of Financial Regulation must have had,
  161  within the previous 10 years, at least 5 years of responsible
  162  private sector experience working full time in areas within the
  163  subject matter jurisdiction of the Office of Financial
  164  Regulation or at least 5 years of experience as a senior
  165  examiner or other senior employee of a state or federal agency
  166  having regulatory responsibility over financial institutions,
  167  finance companies, or securities companies.
  168         Section 3. Section 112.3134, Florida Statutes, is created
  169  to read:
  170         112.3134Commissioner of Insurance Regulation; Office of
  171  Insurance Regulation.—
  172         (1)A person who has served as Commissioner of Insurance
  173  Regulation may not, for a period of 7 years after vacating that
  174  office, do either of the following:
  175         (a)Personally represent another person or entity for
  176  compensation before the Office of Insurance Regulation.
  177         (b)Serve as an employee or contractor of an entity
  178  regulated by the Office of Insurance Regulation
  179         (2)A person who violates subsection (1) may be punished by
  180  any of the following:
  181         (a)Public censure and reprimand.
  182         (b)A civil penalty not to exceed $10,000.
  183         (c)Forfeiture of any pecuniary benefits received for
  184  conduct that violates this section. The amount of the pecuniary
  185  benefits must be paid to the General Revenue Fund.
  186         (3)The Attorney General and Chief Financial Officer are
  187  independently authorized to collect any penalty imposed under
  188  this section.
  189         Section 4. Subsection (2) of section 494.0026, Florida
  190  Statutes, is amended to read:
  191         494.0026 Disposition of insurance proceeds.—The following
  192  provisions apply to mortgage loans held by a mortgagee or
  193  assignee that is subject to part II or part III of this chapter.
  194         (2)(a) Insurance proceeds received by a mortgagee or
  195  assignee which that relate to compensation for damage to
  196  property or contents insurance coverage in which the mortgagee
  197  or assignee has a security interest must be promptly deposited
  198  into a segregated account of a federally insured financial
  199  institution.
  200         (b)Any interest earned on insurance proceeds received by a
  201  mortgagee or assignee which relate to compensation for damage to
  202  property or contents insurance coverage in which the mortgagee
  203  or assignee has a security interest must be paid to the insured.
  204  
  205  This section may not be construed to prevent an insurance
  206  company from paying the insured directly for additional living
  207  expenses or paying the insured directly for contents insurance
  208  coverage if the mortgagee or assignee does not have a security
  209  interest in the contents.
  210         Section 5. Subsection (5) is added to section 624.401,
  211  Florida Statutes, to read:
  212         624.401 Certificate of authority required.—
  213         (5)(a)A property insurer may not claim insolvency in this
  214  state if it still as an insurer, transacts insurance, or
  215  otherwise engages in insurance activities in any state other
  216  than this state, regardless of whether such insurance activities
  217  are property insurance activities.
  218         (b)Effective January 1, 2025, any person who acts as a
  219  property insurer, transacts property insurance, or otherwise
  220  engages in property insurance activities in any state other than
  221  this state may act as an insurer, transact insurance, or
  222  otherwise engage in insurance activities in this state only if
  223  that person does not exclude property insurance from the
  224  person’s insurance transactions or activities.
  225         Section 6. Subsection (10) is added to section 627.0629,
  226  Florida Statutes, to read:
  227         627.0629 Residential property insurance; rate filings.—
  228         (10)An insurer shall release to an insured all information
  229  relating to an inspection or underwriting report upon the
  230  insured’s request.
  231         Section 7. Subsection (11) is added to section 627.701,
  232  Florida Statutes, to read:
  233         627.701 Liability of insureds; coinsurance; deductibles;
  234  prohibited denials of claims.—
  235         (11)A property insurer that issues or renews an insurance
  236  policy or contract covering real property in this state on or
  237  after January 1, 2025, may not use a property’s preexisting
  238  condition, a date of loss that predates the date of a claim, or
  239  faulty installation or workmanship as a defense for denial of a
  240  claim.
  241         Section 8. Subsection (8) of section 627.715, Florida
  242  Statutes, is amended to read:
  243         627.715 Flood insurance.—An authorized insurer may issue an
  244  insurance policy, contract, or endorsement providing personal
  245  lines residential coverage for the peril of flood or excess
  246  coverage for the peril of flood on any structure or the contents
  247  of personal property contained therein, subject to this section.
  248  This section does not apply to commercial lines residential or
  249  commercial lines nonresidential coverage for the peril of flood.
  250  An insurer may issue flood insurance policies, contracts,
  251  endorsements, or excess coverage on a standard, preferred,
  252  customized, flexible, or supplemental basis.
  253         (8)(a) An agent must provide a written notice to be signed
  254  by every the applicant advising the applicant of flood risk.
  255         (b)If before the agent places flood insurance coverage
  256  with an admitted or surplus lines insurer for a property
  257  receiving flood insurance under the National Flood Insurance
  258  Program, the agent must also provide to the applicant, before
  259  placing new flood coverage for the property, a written. the
  260  notice notifying must notify the applicant that, if the
  261  applicant discontinues coverage under the National Flood
  262  Insurance Program which is provided at a subsidized rate, the
  263  full risk rate for flood insurance may apply to the property if
  264  the applicant later seeks to reinstate coverage under the
  265  program.
  266         Section 9. Section 627.71555, Florida Statutes, is created
  267  to read:
  268         627.71555Office rulemaking.—By January 1, 2025, the office
  269  must adopt rules:
  270         (1)Requiring that, each time legislation creating or
  271  amending law to reform property insurance takes effect, property
  272  insurers must offer mandatory premium rate reduction for their
  273  insureds.
  274         (2)Ensuring that insurance fraud committed by any person
  275  can be easily reported, investigated, and, if necessary,
  276  prosecuted.
  277         (3)Redetermining flood zones statewide for use when
  278  assigning flood risks.
  279         Section 10. The Department of Financial Services shall, no
  280  later than October 1, 2025, adopt rules regarding any allegation
  281  made by an insurer or an employee or contractor thereof of
  282  insurance fraud in violation of s. 626.9892(2), Florida
  283  Statutes. Such rules must include requirements that:
  284         (1)Insurers notify the Division of Investigative and
  285  Forensic Services within the Department of Financial Services of
  286  any such allegation.
  287         (2)The department promptly investigate such allegations.
  288         (3)If the department determines that there was no fraud,
  289  the insurer alleging such fraud may be appropriately sanctioned
  290  by a fine of up to $100,000.
  291         (4)All documents relating to such sanctions are public
  292  records.
  293         Section 11. (1)The Office of Program Policy Analysis and
  294  Government Accountability (OPPAGA) shall conduct a study to
  295  evaluate the effectiveness of the property insurance mediation
  296  program provided under s. 627.7015, Florida Statutes. The
  297  study’s scope must include, but need not be limited to:
  298         (a)Improving public awareness of the program and the
  299  advantages of participation.
  300         (b)The need for additional resources for the program.
  301         (2)The study must include recommendations for any changes
  302  needed to improve the efficiency of the program to maximize its
  303  usefulness as an alternative to litigation.
  304         (3)In conducting the study, OPPAGA shall consult with the
  305  Department of Financial Services, insurers, and organizations
  306  representing insurance consumers.
  307         (4)OPPAGA shall submit a report on its findings to the
  308  President of the Senate and the Speaker of the House of
  309  Representatives by December 1, 2025.
  310         Section 12. Section 4 of chapter 2022-268, Laws of Florida,
  311  is amended to read:
  312         Section 4. (1) For the 2024-2025 2022-2023 fiscal year, the
  313  sum of $300 $150 million in nonrecurring funds is appropriated
  314  from the General Revenue Fund to the Department of Financial
  315  Services for the My Safe Florida Home Program. The funds shall
  316  be placed in reserve. The department shall submit budget
  317  amendments requesting release of the funds held in reserve
  318  pursuant to chapter 216, Florida Statutes. The budget amendments
  319  shall include a detailed spending plan.
  320         (2) The funds shall be allocated as follows:
  321         (a) Fifty Twenty-five million dollars for hurricane
  322  mitigation inspections.
  323         (b) Two hundred thirty One hundred fifteen million dollars
  324  for mitigation grants.
  325         (c) Eight Four million dollars for education and consumer
  326  awareness.
  327         (d) Two One million dollars for public outreach for
  328  contractors and real estate brokers and sales associates.
  329         (e)Ten Five million dollars for administrative costs.
  330         (3) Any unexpended balance of funds from this appropriation
  331  remaining on June 30, 2025 2023, shall revert and is
  332  appropriated to the Department of Financial Services for the
  333  2025-2026 2023-2024 fiscal year for the same purpose.
  334         (4) The department may adopt emergency rules pursuant to s.
  335  120.54, Florida Statutes, at any time, as are necessary to
  336  implement this section and s. 215.5586, Florida Statutes, as
  337  amended by this act. The Legislature finds that such emergency
  338  rulemaking authority is necessary to address a critical need in
  339  the state’s problematic property insurance market. The
  340  Legislature further finds that the uniquely short timeframe
  341  needed to effectively implement this section for the 2024-2025
  342  2022-2023 fiscal year requires that the department adopt rules
  343  as quickly as practicable. Therefore, in adopting such emergency
  344  rules, the department need not make the findings required by s.
  345  120.54(4)(a), Florida Statutes. Emergency rules adopted under
  346  this section are exempt from s. 120.54(4)(c), Florida Statutes,
  347  and shall remain in effect until replaced by rules adopted under
  348  the nonemergency rulemaking procedures of chapter 120, Florida
  349  Statutes, which must occur no later than July 1, 2025 2023.
  350         (5) This section shall expire on October 1, 2026 2024.
  351         Section 13. This act shall take effect July 1, 2024.