Florida Senate - 2024                                    SB 1724
       
       
        
       By Senator Grall
       
       
       
       
       
       29-01352-24                                           20241724__
    1                        A bill to be entitled                      
    2         An act relating to the financial strength of property
    3         insurers; amending s. 624.315, F.S.; defining the
    4         terms “financial strength rating” and “independent
    5         ratings agency”; revising the requirements of a
    6         certain report prepared by the Office of Insurance
    7         Regulation of the Financial Services Commission;
    8         requiring the office to maintain certain information
    9         relating to the financial strength ratings of property
   10         insurers transacting business in this state and to
   11         make such information available upon request;
   12         providing an effective date.
   13          
   14  Be It Enacted by the Legislature of the State of Florida:
   15  
   16         Section 1. Present subsections (1) through (5) of section
   17  624.315, Florida Statutes, are redesignated as subsections (2)
   18  through (6), respectively, a new subsection (1) is added to that
   19  section, paragraph (p) is added to present subsection (2) of
   20  that section, and paragraph (c) of present subsection (1) and
   21  present subsection (5) of that section are amended, to read:
   22         624.315 Annual reports; quarterly reports.—
   23         (1) As used in this section, the term:
   24         (a) “Financial strength rating” means an objective
   25  evaluation of the assets, liabilities, net worth, financial
   26  health, performance, and risk of a property insurer as
   27  determined by an independent ratings agency.
   28         (b) “Independent ratings agency” means an entity that meets
   29  all of the following requirements:
   30         1. Issues financial strength ratings of insurers based on
   31  an objective analysis of an insurer’s financial health,
   32  performance, risk, and other factors.
   33         2. Issues unbiased and objective financial strength ratings
   34  of insurers without the consent of the insurer.
   35         3. Is not paid for ratings by the rated insurers, either
   36  directly or indirectly, whether in cash or other forms of
   37  payment.
   38         4. Does not permit any rated insurer to influence the rated
   39  insurer’s own ratings.
   40         5. Is independent and free from outside control or
   41  influence and is able to issue ratings objectively without fear
   42  of reprisal or loss of business.
   43         6. Is empowered to begin, suspend, or end rating an insurer
   44  at its discretion.
   45         7. Is not owned or controlled, in whole or in part, by any
   46  insurer and does not enter into or maintain any potentially
   47  related business relationships with rated insurers.
   48         (2)(1) As early as reasonably possible, the office, with
   49  such assistance from the department as requested, shall annually
   50  prepare a report to the Speaker and Minority Leader of the House
   51  of Representatives, the President and Minority Leader of the
   52  Senate, the chairs of the legislative committees with
   53  jurisdiction over matters of insurance, and the Governor
   54  showing, with respect to the preceding calendar year:
   55         (c) Names of insurers against which delinquency or similar
   56  proceedings were instituted. For property insurers for which the
   57  delinquency or similar proceedings were instituted, the annual
   58  report must also include the date that each insurer was deemed
   59  impaired of capital or surplus, as the terms impairment of
   60  capital and impairment of surplus are defined in s. 631.011, or
   61  insolvent, as the term insolvency is defined in s. 631.011; the
   62  financial strength ratings of each insurer issued by an
   63  independent ratings agency for each of the previous 8 fiscal
   64  quarters before the delinquency or similar proceedings; a
   65  concise statement of the circumstances that led to each
   66  insurer’s delinquency; a summary of the actions taken by the
   67  insurer and the office to avoid delinquency; and the results or
   68  status of each such proceeding.
   69         (3)(2) The office shall maintain the following information
   70  and make such information available upon request:
   71         (p) The financial strength rating, issued by an independent
   72  ratings agency, of each property insurer transacting insurance
   73  in this state for each calendar quarter during the reporting
   74  period, including changes in companies’ assigned ratings from
   75  quarter to quarter, the number and identity of companies whose
   76  financial strength ratings were downgraded during the reporting
   77  period, the number and identity of companies whose financial
   78  strength ratings were previously downgraded which experienced a
   79  ratings upgrade during the reporting period, and the number and
   80  identity of companies with downgraded financial strength ratings
   81  which were subject to delinquency or similar proceedings.
   82         (6)(5) When aggregate information includes information
   83  asserted as trade secret information, the office may include the
   84  trade secret information in the report required under subsection
   85  (2) (1) or may make the trade secret information available under
   86  subsection (3) (2) unless the trade secret information can be
   87  individually extrapolated, in which case the trade secret
   88  information remains protected as provided under s. 624.4213.
   89         Section 2. This act shall take effect July 1, 2024.