Florida Senate - 2025 COMMITTEE AMENDMENT
Bill No. SB 1656
Ì586096MÎ586096
LEGISLATIVE ACTION
Senate . House
Comm: RCS .
03/19/2025 .
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The Committee on Banking and Insurance (Collins) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete everything after the enacting clause
4 and insert:
5 Section 1. Subsection (3) of section 48.151, Florida
6 Statutes, is amended to read:
7 48.151 Service on statutory agents for certain persons.—
8 (3) The Chief Financial Officer is the agent for service of
9 process on all insurers applying for authority to transact
10 insurance in this state, all licensed nonresident insurance
11 agents, all nonresident disability insurance agents licensed
12 pursuant to s. 626.835, any unauthorized insurer under s.
13 626.906 or s. 626.937, domestic reciprocal insurers, fraternal
14 benefit societies under chapter 632, warranty associations under
15 chapter 634, prepaid limited health service organizations under
16 chapter 636, health maintenance organizations under chapter 641,
17 and persons required to file statements under s. 628.461. The
18 Department of Financial Services shall create a secure online
19 portal as the sole means to accept service of process on the
20 Chief Financial Officer under this section.
21 Section 2. Subsection (3) of section 252.63, Florida
22 Statutes, is amended to read:
23 252.63 Commissioner of Insurance Regulation; powers in a
24 state of emergency.—
25 (3) The commissioner shall publish in the next available
26 publication of the Florida Administrative Register a notice
27 identifying the date the emergency order was issued and shall
28 include a hyperlink or website address providing direct access
29 to the emergency order copy of the text of any order issued
30 under this section, together with a statement describing the
31 modification or suspension and explaining how the modification
32 or suspension will facilitate recovery from the emergency.
33 Section 3. Paragraph (g) of subsection (1) of section
34 624.4085, Florida Statutes, is amended to read:
35 624.4085 Risk-based capital requirements for insurers.—
36 (1) As used in this section, the term:
37 (g) “Life and health insurer” means an insurer authorized
38 or eligible under the Florida Insurance Code to underwrite life
39 or health insurance. The term includes a property and casualty
40 insurer that writes accident and health insurance only.
41 Effective January 1, 2015, The term also includes a health
42 maintenance organization that is authorized in this state and
43 one or more other states, jurisdictions, or countries and a
44 prepaid limited health service organization that is authorized
45 in this state and one or more other states, jurisdictions, or
46 countries.
47 Section 4. Present subsection (3) of section 624.422,
48 Florida Statutes, is redesignated as subsection (4), and a new
49 subsection (3) is added to that section, to read:
50 624.422 Service of process; appointment of Chief Financial
51 Officer as process agent.—
52 (3) The appointment of the Chief Financial Officer under
53 this section applies to any insurer that withdraws from or
54 ceases operations in this state until the insurer has completed
55 its runoff of, or otherwise extinguished, all liabilities in
56 Florida.
57 Section 5. Subsection (13) of section 624.424, Florida
58 Statutes, is amended to read:
59 624.424 Annual statement and other information.—
60 (13) Each authorized insurer doing business in this state
61 which pays a fee, commission, or other financial consideration
62 or payment to any affiliate directly or indirectly is required
63 upon request to provide to the office any information the office
64 deems necessary. The fee, commission, or other financial
65 consideration or payment to any affiliate must be fair and
66 reasonable. In determining whether the fee, commission, or other
67 financial consideration or payment is fair and reasonable, the
68 office shall consider all of the following:
69 (a) The actual cost of each service provided by an
70 affiliate.
71 (b) The relative financial condition of the insurer and the
72 affiliate.
73 (c) The level of debt and how that debt is serviced.
74 (d) The amount of the dividends paid by the insurer and the
75 affiliates and for what purpose.
76 (e) Whether the terms of the written contract benefit the
77 insurer and are in the best interest of the policyholders or
78 subscribers.
79 (f) Any other such information as the office reasonably
80 requires in making this determination, among other things, the
81 actual cost of the service being provided.
82 Section 6. Subsection (2) of section 624.45, Florida
83 Statutes, is amended to read:
84 624.45 Participation of financial institutions in
85 reinsurance and in insurance exchanges.—Subject to applicable
86 laws relating to financial institutions and to any other
87 applicable provision of the Florida Insurance Code, any
88 financial institution or aggregation of such institutions may:
89 (2) Participate, directly or indirectly, as an underwriting
90 member or as an investor in an underwriting member of any
91 insurance exchange authorized in accordance with s. 629.401,
92 which underwriting member transacts only aggregate or specific
93 excess insurance over underlying self-insurance coverage for
94 self-insurance organizations authorized under the Florida
95 Insurance Code, for multiple-employer welfare arrangements, or
96 for workers’ compensation self-insurance trusts, in addition to
97 any reinsurance the underwriting member may transact.
98
99 Nothing in this section shall be deemed to prohibit a financial
100 institution from engaging in any presently authorized insurance
101 activity.
102 Section 7. Present subsection (15) of section 624.610,
103 Florida Statutes, is redesignated as subsection (16), a new
104 subsection (15) is added to that section, and paragraph (b) of
105 subsection (3), paragraph (b) of subsection (12), and present
106 subsection (16) of that section are amended, to read:
107 624.610 Reinsurance.—
108 (3)
109 (b)1. Credit must be allowed when the reinsurance is ceded
110 to an assuming insurer that is accredited as a reinsurer in this
111 state. An accredited reinsurer is one that:
112 a. Files with the office evidence of its submission to this
113 state’s jurisdiction;
114 b. Submits to this state’s authority to examine its books
115 and records;
116 c. Is licensed or authorized to transact insurance or
117 reinsurance in at least one state or, in the case of a United
118 States branch of an alien assuming insurer, is entered through,
119 licensed, or authorized to transact insurance or reinsurance in
120 at least one state;
121 d. Files annually with the office a copy of its annual
122 statement filed with the insurance department of its state of
123 domicile any quarterly statements if required by its state of
124 domicile or such quarterly statements if specifically requested
125 by the office, and a copy of its most recent audited financial
126 statement; and
127 (I) Maintains a surplus as regards policyholders in an
128 amount not less than $20 million and whose accreditation has not
129 been denied by the office within 90 days after its submission;
130 or
131 (II) Maintains a surplus as regards policyholders in an
132 amount not less than $20 million and whose accreditation has
133 been approved by the office.
134 2. The office may deny or revoke an assuming insurer’s
135 accreditation if the assuming insurer does not submit the
136 required documentation pursuant to subparagraph 1., if the
137 assuming insurer fails to meet all of the standards required of
138 an accredited reinsurer, or if the assuming insurer’s
139 accreditation would be hazardous to the policyholders of this
140 state. In determining whether to deny or revoke accreditation,
141 the office may consider the qualifications of the assuming
142 insurer with respect to all the following subjects:
143 a. Its financial stability;
144 b. The lawfulness and quality of its investments;
145 c. The competency, character, and integrity of its
146 management;
147 d. The competency, character, and integrity of persons who
148 own or have a controlling interest in the assuming insurer; and
149 e. Whether claims under its contracts are promptly and
150 fairly adjusted and are promptly and fairly paid in accordance
151 with the law and the terms of the contracts.
152 3. Credit must not be allowed a ceding insurer if the
153 assuming insurer’s accreditation has been revoked by the office
154 after notice and the opportunity for a hearing.
155 4. The actual costs and expenses incurred by the office to
156 review a reinsurer’s request for accreditation and subsequent
157 reviews must be charged to and collected from the requesting
158 reinsurer. If the reinsurer fails to pay the actual costs and
159 expenses promptly when due, the office may refuse to accredit
160 the reinsurer or may revoke the reinsurer’s accreditation.
161 (12)
162 (b) The summary statement must be signed and attested to by
163 either the chief executive officer or the chief financial
164 officer of the reporting insurer. In addition to the summary
165 statement, the office may require the filing of any supporting
166 information relating to the ceding of such risks as it deems
167 necessary. If the summary statement prepared by the ceding
168 insurer discloses that the net effect of a reinsurance treaty or
169 treaties (or series of treaties with one or more affiliated
170 reinsurers entered into for the purpose of avoiding the
171 following threshold amount) at any time results in an increase
172 of more than 25 percent to the insurer’s surplus as to
173 policyholders, then the insurer shall certify in writing to the
174 office that the relevant reinsurance treaty or treaties comply
175 with the accounting requirements contained in any rule adopted
176 by the commission under subsection (16) (15). If such
177 certificate is filed after the summary statement of such
178 reinsurance treaty or treaties, the insurer shall refile the
179 summary statement with the certificate. In any event, the
180 certificate must state that a copy of the certificate was sent
181 to the reinsurer under the reinsurance treaty.
182 (15) Any application filed with the office to review a
183 reinsurer’s request to operate in this state under this section
184 must be accompanied by a filing fee equal to the application fee
185 charged under s. 624.501(1)(a).
186 (16) This act shall apply to all cessions on or after
187 January 1, 2001, under reinsurance agreements that have an
188 inception, anniversary, or renewal date on or after January 1,
189 2001.
190 Section 8. Section 626.9651, Florida Statutes, is amended
191 to read:
192 626.9651 Security of consumer data Privacy.—
193 (1) The department and commission shall must each adopt
194 rules consistent with other provisions of the Florida Insurance
195 Code to govern the use of a consumer’s nonpublic personal
196 financial and health information. These rules must be based on,
197 consistent with, and not more restrictive than the Privacy of
198 Consumer Financial and Health Information Regulation, adopted
199 September 26, 2000, by the National Association of Insurance
200 Commissioners; however, the rules must permit the use and
201 disclosure of nonpublic personal health information for
202 scientific, medical, or public policy research, in accordance
203 with federal law. In addition, these rules must be consistent
204 with, and not more restrictive than, the standards contained in
205 Title V of the Gramm-Leach-Bliley Act of 1999, Pub. L. No. 106
206 102, as amended in Title LXXV of the Fixing America’s Surface
207 Transportation (FAST) Act, Pub. L. No. 114-94. If the office
208 determines that a health insurer or health maintenance
209 organization is in compliance with, or is actively undertaking
210 compliance with, the consumer privacy protection rules adopted
211 by the United States Department of Health and Human Services, in
212 conformance with the Health Insurance Portability and
213 Affordability Act, that health insurer or health maintenance
214 organization is in compliance with this subsection section.
215 (2) The office and the commission shall adopt rules
216 consistent with state law, including the Florida Insurance Code,
217 to ensure the cybersecurity of a consumer’s nonpublic insurance
218 data. These rules may not be more restrictive than the National
219 Association of Insurance Commissioners Insurance Data Security
220 Model Law, adopted as of October 2017, and subsequent amendments
221 thereto if the methodology remains substantially consistent. The
222 rules must:
223 (a) Apply to all entities acting as insurers, transacting
224 insurance, or otherwise engaging in insurance activities in this
225 state, including entities licensed under chapter 641, and any
226 entity that has been contracted to maintain, store, or process
227 personal information on behalf of a covered entity;
228 (b) Require the development and implementation of an
229 information security program as defined in the model law;
230 (c) Require investigation and notification of a
231 cybersecurity event as required under the model law;
232 (d) Require that each insurer submit to the department or
233 office all or part of the information required to be reported to
234 the department or office in a computer-readable form compatible
235 with the electronic data processing system of the department or
236 office; and
237 (e) Require that the office be copied on any notice
238 provided to the Attorney General under s. 501.171.
239 (3) Upon receiving information under this section, the
240 office shall review the information and may initiate an
241 examination or investigation under s. 624.316, s. 624.3161, or
242 s. 626.8828.
243 (4) This section does not establish a private cause of
244 action.
245 Section 9. Paragraph (a) of subsection (2) of section
246 627.062, Florida Statutes, is amended to read:
247 627.062 Rate standards.—
248 (2) As to all such classes of insurance:
249 (a) Insurers or rating organizations shall establish and
250 use rates, rating schedules, or rating manuals that allow the
251 insurer a reasonable rate of return on the classes of insurance
252 written in this state. A copy of rates, rating schedules, rating
253 manuals, premium credits or discount schedules, and surcharge
254 schedules, and changes thereto, must be filed with the office
255 under one of the following procedures:
256 1. If the filing is made at least 90 days before the
257 proposed effective date and is not implemented during the
258 office’s review of the filing and any proceeding and judicial
259 review, such filing is considered a “file and use” filing. In
260 such case, the office shall finalize its review by issuance of a
261 notice of intent to approve or a notice of intent to disapprove
262 within 90 days after receipt of the filing. If the 90-day period
263 ends on a weekend or a holiday under s. 110.117(1)(a)-(i), it
264 must be extended until the conclusion of the next business day.
265 The notice of intent to approve and the notice of intent to
266 disapprove constitute agency action for purposes of the
267 Administrative Procedure Act. Requests for supporting
268 information, requests for mathematical or mechanical
269 corrections, or notification to the insurer by the office of its
270 preliminary findings does not toll the 90-day period during any
271 such proceedings and subsequent judicial review. The rate shall
272 be deemed approved if the office does not issue a notice of
273 intent to approve or a notice of intent to disapprove within 90
274 days after receipt of the filing.
275 2. If the filing is not made in accordance with
276 subparagraph 1., such filing must be made as soon as
277 practicable, but within 30 days after the effective date, and is
278 considered a “use and file” filing. An insurer making a “use and
279 file” filing is potentially subject to an order by the office to
280 return to policyholders those portions of rates found to be
281 excessive, as provided in paragraph (h). For purposes of this
282 subparagraph, a personal residential property insurer may not
283 submit more than two “use and file” filings affecting
284 policyholders within a single policy period, unless the filings
285 are exclusively related to reinsurance.
286 3. For all property insurance filings made or submitted
287 after January 25, 2007, but before May 1, 2012, an insurer
288 seeking a rate that is greater than the rate most recently
289 approved by the office shall make a “file and use” filing. For
290 purposes of this subparagraph, motor vehicle collision and
291 comprehensive coverages are not considered property coverages.
292
293 The provisions of this subsection do not apply to workers’
294 compensation, employer’s liability insurance, and motor vehicle
295 insurance.
296 Section 10. Present subsection (2) of section 627.0621,
297 Florida Statutes, is redesignated as subsection (3) and amended,
298 and a new subsection (2) is added to that section, to read:
299 627.0621 Transparency in rate regulation.—
300 (2) RATE TRANSPARENCY REPORT.—
301 (a) Beginning October 1, 2025, every rate filing requesting
302 a rate change for residential property coverage from a property
303 insurer must include a rate transparency report for acceptance
304 for use or modification by the office. The office may accept the
305 rate transparency report for filing, or if the office finds that
306 the report fails to provide the required information in concise
307 and plain language which aids consumers in their understanding
308 of insurance, or finds the report to be misleading, the office
309 shall return the rate transparency report to the property
310 insurer for modification. The office’s acceptance for use or
311 modification of the report may not be deemed approval pursuant
312 to s. 627.062. The report shall be compiled in a uniform format
313 prescribed by the commission and must include a graphical
314 representation identifying a percentage breakdown of rating
315 factors anticipated of the company, book, or program affected by
316 the filing.
317 (b) Along with an offer of coverage and upon renewal, an
318 insurer must provide the corresponding copy of the rate
319 transparency report for the consumer’s offered rate to aid
320 consumers in their understanding of insurance. If the report has
321 not been accepted for use or modified by the office, the report
322 must indicate that it is preliminary and subject to modification
323 by the office.
324 (c) The rate transparency report must include the following
325 categories of the book or program at the cumulative level:
326 1. The percentage of the total rate factor associated with
327 the cost of reinsurance.
328 2. The percentage of the total rate factor associated with
329 the cost of claims.
330 3. The percentage of the total rate factor associated with
331 the defense containment and costs.
332 4. The percentage of the total rate factor associated with
333 fees and commissions.
334 5. The percentage of the rate factor associated with profit
335 and contingency of the insurer.
336 6. Any other categories deemed necessary by the office or
337 commission.
338
339 An estimated percentage of the influence of each listed factor
340 must be provided to equal 100 percent.
341 (d) The insurer shall provide the rate transparency report
342 to the office upon the filing of a rate change with the office.
343 (e) The rate transparency report must also include the
344 following information:
345 1. Any major adverse findings by the office for the
346 previous 3 calendar years.
347 2. Whether the insurer uses affiliated entities to perform
348 functions of the insurer.
349 3. Contact information, to include a telephone number,
350 hours of service, and e-mail address for the Division of
351 Consumer Services of the department.
352 4. Contact information for the office.
353 5. Address for the website for public access to rate filing
354 and affiliate information outlined in subsection (3).
355 6. Any changes in the total insured value from the last
356 policy period.
357 (f) The office shall define, in concise and plain language,
358 any terms used with the rate transparency report to aid
359 consumers in their understanding of insurance.
360 (3)(2) WEBSITE FOR PUBLIC ACCESS TO RATE FILING
361 INFORMATION.—
362 (a) The office shall establish and maintain a comprehensive
363 resource center on its website that uses concise and plain
364 language to aid consumers in their understanding of insurance.
365 The website must include substantive information on the current
366 and historical dynamics of the market, data concerning the
367 financial condition and market conduct of insurance companies
368 available to consumers, and choices available to consumers. At a
369 minimum, the website must contain the following:
370 1. Reports, using graphical information wherever possible,
371 which outline information about the state of the market and
372 adverse and positive trends affecting it.
373 2. Tools that aid consumers in finding insurers.
374 3. Tools that aid consumers in selecting the coverages
375 beneficial to them.
376 4. Information about mitigation credits and the My Safe
377 Florida Home Program, as well as other credits insurers may
378 offer beyond wind mitigation.
379 5. Access to the rate transparency report, annual
380 statements, market conduct information, and other information
381 related to each insurer.
382 6. Information on the Citizens Property Insurance
383 Corporation takeout process, the clearinghouse, and general
384 information as reported by the office.
385 7.(a) With respect to any residential property rate filing,
386 the office shall provide the following information on a publicly
387 accessible Internet website:
388 a.1. The overall rate change requested by the insurer.
389 b.2. The rate change approved by the office along with all
390 of the actuary’s assumptions and recommendations forming the
391 basis of the office’s decision.
392 c.3. Certification by the office’s actuary that, based on
393 the actuary’s knowledge, his or her recommendations are
394 consistent with accepted actuarial principles.
395 d. Whether the insurer uses affiliated entities to perform
396 administrative, claims handling, or other functions of the
397 insurer and, if so, the total percentage of direct written
398 premium paid to the affiliated entities by the insurer in the
399 preceding annual calendar year.
400 (b) For any rate filing, regardless of whether or not the
401 filing is subject to a public hearing, the office shall provide
402 on its website a means for any policyholder who may be affected
403 by a proposed rate change to send an e-mail regarding the
404 proposed rate change. Such e-mail must be accessible to the
405 actuary assigned to review the rate filing.
406 (c) The statewide average requested rate change and final
407 approved statewide average rate change within a filing is not a
408 trade secret as defined in s. 688.002 or s. 812.081(1) and is
409 not subject to the public records exemption for trade secrets
410 provided in s. 119.0715 or s. 624.4213.
411 (d) County rating examples submitted to the office through
412 the rate collection system for the purposes of displaying rates
413 on the office website are not a trade secret as defined in s.
414 688.002 or s. 812.081(1) and are not subject to the public
415 records exemption for trade secrets provided in s. 119.0715 or
416 s. 624.4213.
417 Section 11. Paragraph (b) of subsection (3) of section
418 627.0645, Florida Statutes, is amended to read:
419 627.0645 Annual filings.—
420 (3) The filing requirements of this section shall be
421 satisfied by one of the following methods:
422 (b) If no rate change is proposed, a filing which consists
423 of a certification by an actuary that the existing rate level
424 produces rates which are actuarially sound and which are not
425 inadequate, as defined in s. 627.062. However, for residential
426 property and private passenger auto insurers, a full rate filing
427 is required after 2 consecutive years of certification under
428 this paragraph.
429 Section 12. Paragraph (b) of subsection (1) of section
430 627.0651, Florida Statutes, is amended to read:
431 627.0651 Making and use of rates for motor vehicle
432 insurance.—
433 (1) Insurers shall establish and use rates, rating
434 schedules, or rating manuals to allow the insurer a reasonable
435 rate of return on motor vehicle insurance written in this state.
436 A copy of rates, rating schedules, and rating manuals, and
437 changes therein, shall be filed with the office under one of the
438 following procedures:
439 (b) If the filing is not made in accordance with the
440 provisions of paragraph (a), such filing shall be made as soon
441 as practicable, but no later than 30 days after the effective
442 date, and shall be considered a “use and file” filing. An
443 insurer making a “use and file” filing is potentially subject to
444 an order by the office to return to policyholders portions of
445 rates found to be excessive, as provided in subsection (11). For
446 purposes of this paragraph, an insurer may not submit more than
447 two “use and file” filings impacting policyholders within a
448 single policy period.
449 Section 13. Effective upon this act becoming a law,
450 paragraph (a) of subsection (5) of section 627.4554, Florida
451 Statutes, is amended to read:
452 627.4554 Suitability in annuity transactions.—
453 (5) DUTIES OF INSURERS AND AGENTS.—
454 (a) An agent, when making a recommendation of an annuity,
455 shall act in the best interest of the consumer under the
456 circumstances known at the time the recommendation is made,
457 without placing the financial interest of the agent or insurer
458 ahead of the consumer’s interest. An agent has acted in the best
459 interest of the consumer if the agent has satisfied the
460 following obligations regarding care, disclosure, conflict of
461 interest, and documentation:
462 1.a. The agent, in making a recommendation, shall exercise
463 reasonable diligence, care, and skill to:
464 (I) Know the financial situation, insurance needs, and
465 financial objectives of the customer.
466 (II) Understand the available options after making a
467 reasonable inquiry into options available to the agent.
468 (III) Have a reasonable basis to believe the recommended
469 option effectively addresses the consumer’s financial situation,
470 insurance needs, and financial objectives over the life of the
471 product, as evaluated in light of the consumer profile
472 information.
473 (IV) Communicate the reason or reasons for the
474 recommendation.
475 b. The requirements of sub-subparagraph a. include:
476 (I) Making reasonable efforts to obtain consumer profile
477 information from the consumer before the recommendation of an
478 annuity.
479 (II) Requiring an agent to consider the types of products
480 the agent is authorized and licensed to recommend or sell which
481 address the consumer’s financial situation, insurance needs, and
482 financial objectives. This does not require analysis or
483 consideration of any products outside the authority and license
484 of the agent or other possible alternative products or
485 strategies available in the market at the time of the
486 recommendation. Agents shall be held to standards applicable to
487 agents with similar authority and licensure.
488 (III) Having a reasonable basis to believe the consumer
489 would benefit from certain features of the annuity, such as
490 annuitization, death or living benefit, or other insurance
491 related features.
492 c. The requirements of this subsection do not create a
493 fiduciary obligation or relationship and only create a
494 regulatory obligation as provided in this section.
495 d. The consumer profile information; characteristics of the
496 insurer; and product costs, rates, benefits, and features are
497 those factors generally relevant in making a determination
498 whether an annuity effectively addresses the consumer’s
499 financial situation, insurance needs, and financial objectives,
500 but the level of importance of each factor under the care
501 obligation of this paragraph may vary depending on the facts and
502 circumstances of a particular case. However, each factor may not
503 be considered in isolation.
504 e. The requirements under sub-subparagraph a. apply to the
505 particular annuity as a whole and the underlying subaccounts to
506 which funds are allocated at the time of purchase or exchange of
507 an annuity, and riders and similar product enhancements, if any.
508 f. Sub-subparagraph a. does not require that the annuity
509 with the lowest one-time occurrence compensation structure or
510 multiple occurrence compensation structure shall necessarily be
511 recommended.
512 g. Sub-subparagraph a. does not require the agent to have
513 ongoing monitoring obligations under the care obligation,
514 although such an obligation may be separately owed under the
515 terms of a fiduciary, consulting, investment, advising, or
516 financial planning agreement between the consumer and the agent.
517 h. In the case of an exchange or replacement of an annuity,
518 the agent shall consider the whole transaction, which includes
519 taking into consideration whether:
520 (I) The consumer will incur a surrender charge; be subject
521 to the commencement of a new surrender period; lose existing
522 benefits, such as death, living, or other contractual benefits;
523 or be subject to increased fees, investment advisory fees, or
524 charges for riders and similar product enhancements.
525 (II) The replacing product would substantially benefit the
526 consumer in comparison to the replaced product over the life of
527 the product.
528 (III) The consumer has had another annuity exchange or
529 replacement and, in particular, an exchange or replacement
530 within the preceding 60 months.
531 i. This section does not require an agent to obtain any
532 license other than an agent license with the appropriate line of
533 authority to sell, solicit, or negotiate insurance in this
534 state, including, but not limited to, any securities license, in
535 order to fulfill the duties and obligations contained in this
536 section; provided, the agent does not give advice or provide
537 services that are otherwise subject to securities laws or engage
538 in any other activity requiring other professional licenses.
539 2.a. Before the recommendation or sale of an annuity, the
540 agent shall prominently disclose to the consumer, on a form
541 substantially similar to that posted on the department office
542 website as Appendix A, related to an insurance agent disclosure
543 for annuities:
544 (I) A description of the scope and terms of the
545 relationship with the consumer and the role of the agent in the
546 transaction.
547 (II) An affirmative statement on whether the agent is
548 licensed and authorized to sell the following products:
549 (A) Fixed annuities.
550 (B) Fixed indexed annuities.
551 (C) Variable annuities.
552 (D) Life insurance.
553 (E) Mutual funds.
554 (F) Stocks and bonds.
555 (G) Certificates of deposit.
556 (III) An affirmative statement describing the insurers for
557 which the agent is authorized, contracted, or appointed, or
558 otherwise able to sell insurance products, using the following
559 descriptions:
560 (A) From one insurer;
561 (B) From two or more insurers; or
562 (C) From two or more insurers, although primarily
563 contracted with one insurer.
564 (IV) A description of the sources and types of cash
565 compensation and noncash compensation to be received by the
566 agent, including whether the agent is to be compensated for the
567 sale of a recommended annuity by commission as part of premium
568 or other remuneration received from the insurer, intermediary,
569 or other agent, or by fee as a result of a contract for advice
570 or consulting services.
571 (V) A notice of the consumer’s right to request additional
572 information regarding cash compensation described in sub
573 subparagraph b.
574 b. Upon request of the consumer or the consumer’s
575 designated representative, the agent shall disclose:
576 (I) A reasonable estimate of the amount of cash
577 compensation to be received by the agent, which may be stated as
578 a range of amounts or percentages.
579 (II) Whether the cash compensation is a one-time or
580 multiple occurrence amount; and if a multiple occurrence amount,
581 the frequency and amount of the occurrence, which may be stated
582 as a range of amounts or percentages.
583 c. Before or at the time of the recommendation or sale of
584 an annuity, the agent shall have a reasonable basis to believe
585 the consumer has been informed of various features of the
586 annuity, such as the potential surrender period and surrender
587 charge; potential tax penalty if the consumer sells, exchanges,
588 surrenders, or annuitizes the annuity; mortality and expense
589 fees; any annual fees; investment advisory fees; potential
590 charges for and features of riders or other options of the
591 annuity; limitations on interest returns; potential changes in
592 nonguaranteed elements of the annuity; insurance and investment
593 components; and market risk.
594 3. An agent shall identify and avoid or reasonably manage
595 and disclose material conflicts of interest, including material
596 conflicts of interest related to an ownership interest.
597 4. An agent shall at the time of the recommendation or
598 sale:
599 a. Make a written record of any recommendation and the
600 basis for the recommendation, subject to this section.
601 b. Obtain a consumer-signed statement on a form
602 substantially similar to that posted on the department office
603 website as Appendix B, related to a consumer’s refusal to
604 provide information, documenting:
605 (I) A customer’s refusal to provide the consumer profile
606 information, if any.
607 (II) A customer’s understanding of the ramifications of not
608 providing his or her consumer profile information or providing
609 insufficient consumer profile information.
610 c. Obtain a consumer-signed statement on a form
611 substantially similar to that posted on the department office
612 website as Appendix C, related to a consumer’s decision to
613 purchase an annuity not based on a recommendation, acknowledging
614 the annuity transaction is not recommended if a customer decides
615 to enter into an annuity transaction that is not based on the
616 agent’s recommendation.
617 5. Any requirement applicable to an agent under this
618 subsection applies to every agent who has exercised material
619 control or influence in the making of a recommendation and has
620 received direct compensation as a result of the recommendation
621 or sale, regardless of whether the agent has had any direct
622 contact with the consumer. Activities such as providing or
623 delivering marketing or education materials, product wholesaling
624 or other back office product support, and general supervision of
625 an agent do not, in and of themselves, constitute material
626 control or influence.
627 Section 14. Paragraphs (b), (p), (q), and (s) of subsection
628 (3), paragraph (d) of subsection (9), paragraphs (b) and (c) of
629 subsection (10), and subsection (11) of section 627.6699,
630 Florida Statutes, are amended to read:
631 627.6699 Employee Health Care Access Act.—
632 (3) DEFINITIONS.—As used in this section, the term:
633 (b) “Board” means the board of directors of the program.
634 (p) “Plan of operation” means the plan of operation of the
635 program, including articles, bylaws, and operating rules,
636 adopted by the board under subsection (11).
637 (q) “Program” means the Florida Small Employer Carrier
638 Reinsurance Program created under subsection (11).
639 (p)(s) “Reinsuring carrier” means a small employer carrier
640 that elects to comply with reinsurance the requirements set
641 forth in subsection (11).
642 (9) SMALL EMPLOYER CARRIER’S ELECTION TO BECOME A RISK
643 ASSUMING CARRIER OR A REINSURING CARRIER.—
644 (d) A small employer carrier that elects to cease
645 participating as a reinsuring carrier and to become a risk
646 assuming carrier is prohibited from reinsuring or continuing to
647 reinsure any small employer health benefits plan under
648 subsection (11) as soon as the carrier becomes a risk-assuming
649 carrier and must pay a prorated assessment based upon business
650 issued as a reinsuring carrier for any portion of the year that
651 the business was reinsured. A small employer carrier that elects
652 to cease participating as a risk-assuming carrier and to become
653 a reinsuring carrier is permitted to reinsure small employer
654 health benefit plans under the terms set forth in subsection
655 (11) and must pay a prorated assessment based upon business
656 issued as a reinsuring carrier for any portion of the year that
657 the business was reinsured.
658 (10) ELECTION PROCESS TO BECOME A RISK-ASSUMING CARRIER.—
659 (b) In determining whether to approve an application by a
660 small employer carrier to become a risk-assuming carrier, the
661 office shall consider:
662 1. The carrier’s financial ability to support the
663 assumption of the risk of small employer groups.
664 2. The carrier’s history of rating and underwriting small
665 employer groups.
666 3. The carrier’s commitment to market fairly to all small
667 employers in the state or its service area, as applicable.
668 4. The carrier’s ability to assume and manage the risk of
669 enrolling small employer groups without the protection of the
670 reinsurance program provided in subsection (11).
671 (c) A small employer carrier that becomes a risk-assuming
672 carrier pursuant to this subsection is not subject to
673 reinsurance the assessment provisions of subsection (11).
674 (11) SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.—
675 (a) There is created a nonprofit entity to be known as the
676 “Florida Small Employer Health Reinsurance Program.”
677 (b)1. The program shall operate subject to the supervision
678 and control of the board.
679 2. Effective upon this act becoming a law, the board shall
680 consist of the director of the office or his or her designee,
681 who shall serve as the chairperson, and 13 additional members
682 who are representatives of carriers and insurance agents and are
683 appointed by the director of the office and serve as follows:
684 a. Five members shall be representatives of health insurers
685 licensed under chapter 624 or chapter 641. Two members shall be
686 agents who are actively engaged in the sale of health insurance.
687 Four members shall be employers or representatives of employers.
688 One member shall be a person covered under an individual health
689 insurance policy issued by a licensed insurer in this state. One
690 member shall represent the Agency for Health Care Administration
691 and shall be recommended by the Secretary of Health Care
692 Administration.
693 b. A member appointed under this subparagraph shall serve a
694 term of 4 years and shall continue in office until the member’s
695 successor takes office, except that, in order to provide for
696 staggered terms, the director of the office shall designate two
697 of the initial appointees under this subparagraph to serve terms
698 of 2 years and shall designate three of the initial appointees
699 under this subparagraph to serve terms of 3 years.
700 3. The director of the office may remove a member for
701 cause.
702 4. Vacancies on the board shall be filled in the same
703 manner as the original appointment for the unexpired portion of
704 the term.
705 (c)1. The board shall submit to the office a plan of
706 operation to assure the fair, reasonable, and equitable
707 administration of the program. The board may at any time submit
708 to the office any amendments to the plan that the board finds to
709 be necessary or suitable.
710 2. The office shall, after notice and hearing, approve the
711 plan of operation if it determines that the plan submitted by
712 the board is suitable to assure the fair, reasonable, and
713 equitable administration of the program and provides for the
714 sharing of program gains and losses equitably and
715 proportionately in accordance with paragraph (j).
716 3. The plan of operation, or any amendment thereto, becomes
717 effective upon written approval of the office.
718 (d) The plan of operation must, among other things:
719 1. Establish procedures for handling and accounting for
720 program assets and moneys and for an annual fiscal reporting to
721 the office.
722 2. Establish procedures for selecting an administering
723 carrier and set forth the powers and duties of the administering
724 carrier.
725 3. Establish procedures for reinsuring risks.
726 4. Establish procedures for collecting assessments from
727 participating carriers to provide for claims reinsured by the
728 program and for administrative expenses, other than amounts
729 payable to the administrative carrier, incurred or estimated to
730 be incurred during the period for which the assessment is made.
731 5. Provide for any additional matters at the discretion of
732 the board.
733 (e) The board shall recommend to the office market conduct
734 requirements and other requirements for carriers and agents,
735 including requirements relating to:
736 1. Registration by each carrier with the office of its
737 intention to be a small employer carrier under this section;
738 2. Publication by the office of a list of all small
739 employer carriers, including a requirement applicable to agents
740 and carriers that a health benefit plan may not be sold by a
741 carrier that is not identified as a small employer carrier;
742 3. The availability of a broadly publicized, toll-free
743 telephone number for access by small employers to information
744 concerning this section;
745 4. Periodic reports by carriers and agents concerning
746 health benefit plans issued; and
747 5. Methods concerning periodic demonstration by small
748 employer carriers and agents that they are marketing or issuing
749 health benefit plans to small employers.
750 (f) The program has the general powers and authority
751 granted under the laws of this state to insurance companies and
752 health maintenance organizations licensed to transact business,
753 except the power to issue health benefit plans directly to
754 groups or individuals. In addition thereto, the program has
755 specific authority to:
756 1. Enter into contracts as necessary or proper to carry out
757 the provisions and purposes of this act, including the authority
758 to enter into contracts with similar programs of other states
759 for the joint performance of common functions or with persons or
760 other organizations for the performance of administrative
761 functions.
762 2. Sue or be sued, including taking any legal action
763 necessary or proper for recovering any assessments and penalties
764 for, on behalf of, or against the program or any carrier.
765 3. Take any legal action necessary to avoid the payment of
766 improper claims against the program.
767 4. Issue reinsurance policies, in accordance with the
768 requirements of this act.
769 5. Establish rules, conditions, and procedures for
770 reinsurance risks under the program participation.
771 6. Establish actuarial functions as appropriate for the
772 operation of the program.
773 7. Assess participating carriers in accordance with
774 paragraph (j), and make advance interim assessments as may be
775 reasonable and necessary for organizational and interim
776 operating expenses. Interim assessments shall be credited as
777 offsets against any regular assessments due following the close
778 of the calendar year.
779 8. Appoint appropriate legal, actuarial, and other
780 committees as necessary to provide technical assistance in the
781 operation of the program, and in any other function within the
782 authority of the program.
783 9. Borrow money to effect the purposes of the program. Any
784 notes or other evidences of indebtedness of the program which
785 are not in default constitute legal investments for carriers and
786 may be carried as admitted assets.
787 10. To the extent necessary, increase the $5,000 deductible
788 reinsurance requirement to adjust for the effects of inflation.
789 (g) A reinsuring carrier may reinsure with the program
790 coverage of an eligible employee of a small employer, or any
791 dependent of such an employee, subject to each of the following
792 provisions:
793 1. Except in the case of a late enrollee, a reinsuring
794 carrier may reinsure an eligible employee or dependent within 60
795 days after the commencement of the coverage of the small
796 employer. A newly employed eligible employee or dependent of a
797 small employer may be reinsured within 60 days after the
798 commencement of his or her coverage.
799 2. A small employer carrier may reinsure an entire employer
800 group within 60 days after the commencement of the group’s
801 coverage under the plan.
802 3. The program may not reimburse a participating carrier
803 with respect to the claims of a reinsured employee or dependent
804 until the carrier has paid incurred claims of at least $5,000 in
805 a calendar year for benefits covered by the program. In
806 addition, the reinsuring carrier shall be responsible for 10
807 percent of the next $50,000 and 5 percent of the next $100,000
808 of incurred claims during a calendar year and the program shall
809 reinsure the remainder.
810 4. The board annually shall adjust the initial level of
811 claims and the maximum limit to be retained by the carrier to
812 reflect increases in costs and utilization within the standard
813 market for health benefit plans within the state. The adjustment
814 shall not be less than the annual change in the medical
815 component of the “Consumer Price Index for All Urban Consumers”
816 of the Bureau of Labor Statistics of the Department of Labor,
817 unless the board proposes and the office approves a lower
818 adjustment factor.
819 5. A small employer carrier may terminate reinsurance for
820 all reinsured employees or dependents on any plan anniversary.
821 6. The premium rate charged for reinsurance by the program
822 to a health maintenance organization that is approved by the
823 Secretary of Health and Human Services as a federally qualified
824 health maintenance organization pursuant to 42 U.S.C. s.
825 300e(c)(2)(A) and that, as such, is subject to requirements that
826 limit the amount of risk that may be ceded to the program, which
827 requirements are more restrictive than subparagraph 3., shall be
828 reduced by an amount equal to that portion of the risk, if any,
829 which exceeds the amount set forth in subparagraph 3. which may
830 not be ceded to the program.
831 7. The board may consider adjustments to the premium rates
832 charged for reinsurance by the program for carriers that use
833 effective cost containment measures, including high-cost case
834 management, as defined by the board.
835 8. A reinsuring carrier shall apply its case-management and
836 claims-handling techniques, including, but not limited to,
837 utilization review, individual case management, preferred
838 provider provisions, other managed care provisions or methods of
839 operation, consistently with both reinsured business and
840 nonreinsured business.
841 (h)1. The board, as part of the plan of operation, shall
842 establish a methodology for determining premium rates to be
843 charged by the program for reinsuring small employers and
844 individuals pursuant to this section. The methodology shall
845 include a system for classification of small employers that
846 reflects the types of case characteristics commonly used by
847 small employer carriers in the state. The methodology shall
848 provide for the development of basic reinsurance premium rates,
849 which shall be multiplied by the factors set for them in this
850 paragraph to determine the premium rates for the program. The
851 basic reinsurance premium rates shall be established by the
852 board, subject to the approval of the office. The premium rates
853 set by the board may vary by geographical area, as determined
854 under this section, to reflect differences in cost. The
855 multiplying factors must be established as follows:
856 a. The entire group may be reinsured for a rate that is 1.5
857 times the rate established by the board.
858 b. An eligible employee or dependent may be reinsured for a
859 rate that is 5 times the rate established by the board.
860 2. The board periodically shall review the methodology
861 established, including the system of classification and any
862 rating factors, to assure that it reasonably reflects the claims
863 experience of the program. The board may propose changes to the
864 rates which shall be subject to the approval of the office.
865 (i) If a health benefit plan for a small employer issued in
866 accordance with this subsection is entirely or partially
867 reinsured with the program, the premium charged to the small
868 employer for any rating period for the coverage issued must be
869 consistent with the requirements relating to premium rates set
870 forth in this section.
871 (j)1. Before July 1 of each calendar year, the board shall
872 determine and report to the office the program net loss for the
873 previous year, including administrative expenses for that year,
874 and the incurred losses for the year, taking into account
875 investment income and other appropriate gains and losses.
876 2. Any net loss for the year shall be recouped by
877 assessment of the carriers, as follows:
878 a. The operating losses of the program shall be assessed in
879 the following order subject to the specified limitations. The
880 first tier of assessments shall be made against reinsuring
881 carriers in an amount which shall not exceed 5 percent of each
882 reinsuring carrier’s premiums from health benefit plans covering
883 small employers. If such assessments have been collected and
884 additional moneys are needed, the board shall make a second tier
885 of assessments in an amount which shall not exceed 0.5 percent
886 of each carrier’s health benefit plan premiums. Except as
887 provided in paragraph (m), risk-assuming carriers are exempt
888 from all assessments authorized pursuant to this section. The
889 amount paid by a reinsuring carrier for the first tier of
890 assessments shall be credited against any additional assessments
891 made.
892 b. The board shall equitably assess carriers for operating
893 losses of the plan based on market share. The board shall
894 annually assess each carrier a portion of the operating losses
895 of the plan. The first tier of assessments shall be determined
896 by multiplying the operating losses by a fraction, the numerator
897 of which equals the reinsuring carrier’s earned premium
898 pertaining to direct writings of small employer health benefit
899 plans in the state during the calendar year for which the
900 assessment is levied, and the denominator of which equals the
901 total of all such premiums earned by reinsuring carriers in the
902 state during that calendar year. The second tier of assessments
903 shall be based on the premiums that all carriers, except risk
904 assuming carriers, earned on all health benefit plans written in
905 this state. The board may levy interim assessments against
906 carriers to ensure the financial ability of the plan to cover
907 claims expenses and administrative expenses paid or estimated to
908 be paid in the operation of the plan for the calendar year prior
909 to the association’s anticipated receipt of annual assessments
910 for that calendar year. Any interim assessment is due and
911 payable within 30 days after receipt by a carrier of the interim
912 assessment notice. Interim assessment payments shall be credited
913 against the carrier’s annual assessment. Health benefit plan
914 premiums and benefits paid by a carrier that are less than an
915 amount determined by the board to justify the cost of collection
916 may not be considered for purposes of determining assessments.
917 c. Subject to the approval of the office, the board shall
918 make an adjustment to the assessment formula for reinsuring
919 carriers that are approved as federally qualified health
920 maintenance organizations by the Secretary of Health and Human
921 Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the extent,
922 if any, that restrictions are placed on them that are not
923 imposed on other small employer carriers.
924 3. Before July 1 of each year, the board shall determine
925 and file with the office an estimate of the assessments needed
926 to fund the losses incurred by the program in the previous
927 calendar year.
928 4. If the board determines that the assessments needed to
929 fund the losses incurred by the program in the previous calendar
930 year will exceed the amount specified in subparagraph 2., the
931 board shall evaluate the operation of the program and report its
932 findings, including any recommendations for changes to the plan
933 of operation, to the office within 180 days following the end of
934 the calendar year in which the losses were incurred. The
935 evaluation shall include an estimate of future assessments, the
936 administrative costs of the program, the appropriateness of the
937 premiums charged and the level of carrier retention under the
938 program, and the costs of coverage for small employers. If the
939 board fails to file a report with the office within 180 days
940 following the end of the applicable calendar year, the office
941 may evaluate the operations of the program and implement such
942 amendments to the plan of operation the office deems necessary
943 to reduce future losses and assessments.
944 5. If assessments exceed the amount of the actual losses
945 and administrative expenses of the program, the excess shall be
946 held as interest and used by the board to offset future losses
947 or to reduce program premiums. As used in this paragraph, the
948 term “future losses” includes reserves for incurred but not
949 reported claims.
950 6. Each carrier’s proportion of the assessment shall be
951 determined annually by the board, based on annual statements and
952 other reports considered necessary by the board and filed by the
953 carriers with the board.
954 7. Provision shall be made in the plan of operation for the
955 imposition of an interest penalty for late payment of an
956 assessment.
957 8. A carrier may seek, from the office, a deferment, in
958 whole or in part, from any assessment made by the board. The
959 office may defer, in whole or in part, the assessment of a
960 carrier if, in the opinion of the office, the payment of the
961 assessment would place the carrier in a financially impaired
962 condition. If an assessment against a carrier is deferred, in
963 whole or in part, the amount by which the assessment is deferred
964 may be assessed against the other carriers in a manner
965 consistent with the basis for assessment set forth in this
966 section. The carrier receiving such deferment remains liable to
967 the program for the amount deferred and is prohibited from
968 reinsuring any individuals or groups in the program if it fails
969 to pay assessments.
970 (k) Neither the participation in the program as reinsuring
971 carriers, the establishment of rates, forms, or procedures, nor
972 any other joint or collective action required by this act, may
973 be the basis of any legal action, criminal or civil liability,
974 or penalty against the program or any of its carriers either
975 jointly or separately.
976 (l) The board shall monitor compliance with this section,
977 including the market conduct of small employer carriers, and
978 shall report to the office any unfair trade practices and
979 misleading or unfair conduct by a small employer carrier that
980 has been reported to the board by agents, consumers, or any
981 other person. The office shall investigate all reports and, upon
982 a finding of noncompliance with this section or of unfair or
983 misleading practices, shall take action against the small
984 employer carrier as permitted under the insurance code or
985 chapter 641. The board is not given investigatory or regulatory
986 powers, but must forward all reports of cases or abuse or
987 misrepresentation to the office.
988 (m) Notwithstanding paragraph (j), the administrative
989 expenses of the program shall be recouped by assessment of risk
990 assuming carriers and reinsuring carriers and such amounts shall
991 not be considered part of the operating losses of the plan for
992 the purposes of this paragraph. Each carrier’s portion of such
993 administrative expenses shall be determined by multiplying the
994 total of such administrative expenses by a fraction, the
995 numerator of which equals the carrier’s earned premium
996 pertaining to direct writing of small employer health benefit
997 plans in the state during the calendar year for which the
998 assessment is levied, and the denominator of which equals the
999 total of such premiums earned by all carriers in the state
1000 during such calendar year.
1001 (n) The board shall advise the office, the Agency for
1002 Health Care Administration, the department, other executive
1003 departments, and the Legislature on health insurance issues.
1004 Specifically, the board shall:
1005 1. Provide a forum for stakeholders, consisting of
1006 insurers, employers, agents, consumers, and regulators, in the
1007 private health insurance market in this state.
1008 2. Review and recommend strategies to improve the
1009 functioning of the health insurance markets in this state with a
1010 specific focus on market stability, access, and pricing.
1011 3. Make recommendations to the office for legislation
1012 addressing health insurance market issues and provide comments
1013 on health insurance legislation proposed by the office.
1014 4. Meet at least three times each year. One meeting shall
1015 be held to hear reports and to secure public comment on the
1016 health insurance market, to develop any legislation needed to
1017 address health insurance market issues, and to provide comments
1018 on health insurance legislation proposed by the office.
1019 5. Issue a report to the office on the state of the health
1020 insurance market by September 1 each year. The report shall
1021 include recommendations for changes in the health insurance
1022 market, results from implementation of previous recommendations,
1023 and information on health insurance markets.
1024 Section 15. Paragraphs (c), (d), and (e) are added to
1025 subsection (2) of section 627.711, Florida Statutes, to read:
1026 627.711 Notice of premium discounts for hurricane loss
1027 mitigation; uniform mitigation verification inspection form.—
1028 (2)
1029 (c) The office shall contract with a state university to
1030 design, operate, upgrade, and maintain a statewide database for
1031 uniform mitigation verification inspection forms. This database
1032 must be managed by the office to collect and evaluate mitigation
1033 features of residential properties within the state.
1034 (d) Beginning January 1, 2026, each insurer shall
1035 electronically file a copy of uniform mitigation inspection
1036 forms submitted by policyholders in the database created
1037 pursuant to paragraph (c) within 15 business days after receipt
1038 using the electronic format prescribed by the office.
1039 (e) The Financial Services Commission shall adopt rules to
1040 implement this subsection.
1041 Section 16. Effective upon this act becoming a law,
1042 subsection (12) of section 627.7152, Florida Statutes, is
1043 amended to read:
1044 627.7152 Assignment agreements.—
1045 (12) The office shall require each insurer to report by
1046 January 30, 2022, and each year thereafter data on each
1047 residential and commercial property insurance claim paid in the
1048 prior calendar year under an assignment agreement. The Financial
1049 Services Commission shall adopt by rule a list of the data
1050 required, which must include specific data about claims
1051 adjustment and settlement timeframes and trends, grouped by
1052 whether litigated or not litigated and by loss adjustment
1053 expenses.
1054 Section 17. Section 627.9145, Florida Statutes, is created
1055 to read:
1056 627.9145 Reports by residential property insurers.
1057 Beginning March 1, 2026, and by March 1 every year thereafter,
1058 each authorized insurer and surplus lines insurer transacting
1059 residential property insurance in this state shall file with the
1060 office a report addressing the following areas:
1061 (1) Policy types, perils covered, statuses, and premiums.
1062 (2) Location and limits of writings in this state.
1063 (3) Coverages, deductibles, and exclusions.
1064 (4) Mitigation discounts.
1065 (5) Claims reporting requirements.
1066 (6) Any other information deemed necessary by the
1067 commission to provide the office with the ability to track
1068 mitigation and resiliency trends occurring in the residential
1069 property market.
1070
1071 The commission shall adopt rules specifying the information
1072 required to be reported under this section and the format
1073 required for the reports.
1074 Section 18. Subsections (2) and (5) of section 627.915,
1075 Florida Statutes, are amended, and a new subsection (2) is added
1076 to that section, to read:
1077 627.915 Insurer experience reporting.—
1078 (2) Beginning January 1, 2026, each insurer transacting
1079 private passenger automobile insurance in this state shall file
1080 monthly with the office a report addressing the following areas:
1081 (a) Policy coverage categories, including policies in force
1082 and total direct premiums earned and written.
1083 (b) Type, location, and limits of writings in this state.
1084 (c) Claims reporting requirements.
1085 (d) Any other information deemed necessary by the
1086 commission to provide the office with the ability to track
1087 trends occurring in the private passenger automobile insurance
1088 market.
1089
1090 The commission shall adopt rules specifying the information
1091 required to be reported under this subsection and the format
1092 required for the reports.
1093 (2) Each insurer transacting fire, homeowner’s multiple
1094 peril, commercial multiple peril, medical malpractice, products
1095 liability, workers’ compensation, private passenger automobile
1096 liability, commercial automobile liability, private passenger
1097 automobile physical damage, commercial automobile physical
1098 damage, officers’ and directors’ liability insurance, or other
1099 liability insurance shall report, for each such line of
1100 insurance, the information specified in this subsection to the
1101 office. The information shall be reported for direct Florida
1102 business only and shall be reported on a calendar-year basis
1103 annually by April 1 for the preceding calendar year:
1104 (a) Direct premiums written.
1105 (b) Direct premiums earned.
1106 (c) Loss reserves for all known claims:
1107 1. At beginning of the year.
1108 2. At end of the year.
1109 (d) Reserves for losses incurred but not reported:
1110 1. At beginning of the year.
1111 2. At end of the year.
1112 (e) Allocated loss adjustment expense:
1113 1. Reserve at beginning of the year.
1114 2. Reserve at end of the year.
1115 3. Paid during the year.
1116 (f) Unallocated loss adjustment expense:
1117 1. Reserve at beginning of the year.
1118 2. Reserve at end of the year.
1119 3. Paid during the year.
1120 (g) Direct losses paid.
1121 (h) Underwriting income or loss.
1122 (i) Commissions and brokerage fees.
1123 (j) Taxes, licenses, and fees.
1124 (k) Other acquisition costs.
1125 (l) General expenses.
1126 (m) Policyholder dividends.
1127 (n) Net investment gain or loss and other income gain or
1128 loss allocated pro rata by earned premium to Florida business
1129 utilizing the investment allocation formula contained in the
1130 National Association of Insurance Commissioner’s Profitability
1131 Report by line by state.
1132 (5) Any insurer or insurer group which does not write at
1133 least 0.5 percent of the Florida market based on premiums
1134 written shall not have to file any report required by subsection
1135 (2) other than a report indicating its percentage of the market
1136 share. That percentage shall be calculated by dividing the
1137 current premiums written by the preceding year’s total premiums
1138 written in the state for that line of insurance.
1139 Section 19. Effective upon this act becoming a law,
1140 subsection (2) of section 628.081, Florida Statutes, is amended
1141 to read:
1142 628.081 Incorporation of domestic insurer.—
1143 (2) The incorporators shall execute articles of
1144 incorporation in triplicate. At least three of them shall
1145 acknowledge execution before an officer authorized to take
1146 acknowledgments.
1147 Section 20. Effective upon this act becoming a law,
1148 subsections (2), (3), and (4) of section 628.091, Florida
1149 Statutes, are amended to read:
1150 628.091 Filing, approval of articles of incorporation.—
1151 (2) The incorporators shall file the triplicate originals
1152 of the articles of incorporation with the office, accompanied by
1153 the filing fee specified in s. 624.501.
1154 (3) The office shall promptly examine the articles of
1155 incorporation. If it finds that the articles of incorporation
1156 conform to law, and that a permit has been or will be issued, it
1157 shall endorse its approval on each of the triplicate originals
1158 of the articles of incorporation, retain one copy for its files,
1159 and return the articles of incorporation remaining copies to the
1160 incorporators for filing with the Department of State.
1161 (4) If the office does not so find, it shall refuse to
1162 approve the articles of incorporation and shall return the
1163 originals.
1164 Section 21. Effective upon this act becoming a law,
1165 subsections (2) and (3) of section 628.111, Florida Statutes,
1166 are amended to read:
1167 628.111 Amendment of articles of incorporation; mutual
1168 insurer.—
1169 (2)(a) Upon adoption of the amendment, the insurer shall
1170 make in triplicate under its corporate seal a certificate
1171 thereof, setting forth the amendment and the date and manner of
1172 the adoption thereof, which certificate shall be executed by the
1173 insurer’s president or vice president and secretary or assistant
1174 secretary and acknowledged before an officer authorized to take
1175 acknowledgments. The insurer shall deliver the triplicate
1176 originals of the certificate to the office, together with the
1177 filing fee specified in s. 624.501.
1178 (b) The office shall promptly examine the certificate of
1179 amendment,; and, if it finds that the certificate and the
1180 amendment comply with law, it shall endorse its approval on the
1181 certificate of amendment upon each of the triplicate originals,
1182 place one on file in its office, and return the remaining sets
1183 to the insurer. The insurer shall forthwith file such endorsed
1184 certificate certificates of amendment with the Department of
1185 State. The amendment shall be effective when filed with and
1186 approved by the Department of State.
1187 (3) If the office finds that the proposed amendment or
1188 certificate does not comply with the law, it shall not approve
1189 the same, and shall return the triplicate certificate of
1190 amendment to the insurer.
1191 Section 22. Paragraph (a) of subsection (1) and paragraph
1192 (b) of subsection (4) of section 628.461, Florida Statutes, are
1193 amended to read:
1194 628.461 Acquisition of controlling stock.—
1195 (1) A person may not, individually or in conjunction with
1196 any affiliated person of such person, acquire directly or
1197 indirectly, conclude a tender offer or exchange offer for, enter
1198 into any agreement to exchange securities for, or otherwise
1199 finally acquire 10 percent or more of the outstanding voting
1200 securities of a domestic stock insurer or of a controlling
1201 company, unless:
1202 (a) The person or affiliated person has filed with the
1203 office and sent by registered mail to the principal office of
1204 the insurer and controlling company a letter of notification
1205 regarding the transaction or proposed transaction within 5 days
1206 after any form of tender offer or exchange offer is proposed, or
1207 within 5 days after the acquisition of the securities if no
1208 tender offer or exchange offer is involved. The notification
1209 must be provided on forms prescribed by the commission
1210 containing information determined necessary to understand the
1211 transaction and identify all purchasers and owners involved;
1212
1213 A filing required under this subsection must be made for any
1214 acquisition that equals or exceeds 10 percent of the outstanding
1215 voting securities.
1216 (4)
1217 (b) Any corporation, association, or trust filing the
1218 statement required by this section shall give all required
1219 information that is within the knowledge of the directors,
1220 officers, or trustees (or others performing functions similar to
1221 those of a director, officer, or trustee) of the corporation,
1222 association, or trust making the filing and of any person
1223 controlling either directly or indirectly such corporation,
1224 association, or trust. A copy of the statement and any
1225 amendments to the statement shall be sent by registered mail to
1226 the insurer at its principal office within the state and to any
1227 controlling company at its principal office. If any material
1228 change occurs in the facts set forth in the statement filed with
1229 the office and sent to such insurer or controlling company
1230 pursuant to this section, an amendment setting forth such
1231 changes shall be filed immediately with the office and sent
1232 immediately to such insurer and controlling company.
1233 Section 23. Paragraph (b) of subsection (5) of section
1234 628.4615, Florida Statutes, is amended to read:
1235 628.4615 Specialty insurers; acquisition of controlling
1236 stock, ownership interest, assets, or control; merger or
1237 consolidation.—
1238 (5)
1239 (b) Any person filing the statement required by this
1240 section shall give all required information that is within the
1241 knowledge of:
1242 1. The directors, officers, or trustees, if a corporation,
1243 or
1244 2. The partners, owners, managers, or joint venturers, or
1245 others performing functions similar to those of a director,
1246 officer, or trustee, if not a corporation,
1247
1248 of the person making the filing and of any person controlling
1249 either directly or indirectly such person. If any material
1250 change occurs in the facts set forth in the application filed
1251 with the office pursuant to this section, an amendment setting
1252 forth such changes shall be filed immediately with the office,
1253 and a copy of the amendment shall be sent by registered mail to
1254 the principal office of the specialty insurer and to the
1255 principal office of the controlling company.
1256 Section 24. Effective upon this act becoming a law,
1257 subsection (2) of section 628.717, Florida Statutes, is amended
1258 to read:
1259 628.717 Filing of articles of incorporation.—
1260 (2) The office shall promptly examine the articles of
1261 incorporation,; and, if it finds that the articles of
1262 incorporation comply with law, the office shall endorse its
1263 approval on the certificate of amendment upon each of the
1264 originals, place one on file in its office, and return the
1265 remaining sets to the incorporators. The incorporators shall
1266 promptly file such endorsed articles of incorporation with the
1267 Department of State. The articles of incorporation shall be
1268 effective when filed with and approved by the Department of
1269 State.
1270 Section 25. Effective upon this act becoming a law,
1271 subsection (2) of section 628.719, Florida Statutes, is amended
1272 to read:
1273 628.719 Amendment of articles of incorporation.—
1274 (2)(a) Upon adoption of an amendment, the mutual insurance
1275 holding company shall make under its corporate seal a
1276 certificate thereof, setting forth the amendment and the date
1277 and manner of the adoption thereof, which certificate shall be
1278 executed by the mutual insurance holding company’s president or
1279 vice president and secretary or assistant secretary and
1280 acknowledged before an officer authorized to take
1281 acknowledgments. The mutual insurance holding company shall
1282 deliver the originals of the certificate to the office.
1283 (b) The office shall promptly examine the certificate of
1284 amendment, and, if the office finds that the certificate and the
1285 amendment comply with law, the office shall endorse its approval
1286 on the certificate of amendment upon each of the originals,
1287 place one on file in its office, and return the remaining sets
1288 to the mutual insurance holding company. The mutual insurance
1289 holding company shall promptly file such endorsed certificate
1290 certificates of amendment with the Department of State. The
1291 amendment shall be effective when filed with and approved by the
1292 Department of State.
1293 Section 26. Effective upon this act becoming a law,
1294 subsection (4) of section 628.910, Florida Statutes, is amended
1295 to read:
1296 628.910 Incorporation options and requirements.—
1297 (4) In the case of a captive insurance company formed as a
1298 corporation or a nonprofit corporation, before the articles of
1299 incorporation are transmitted to the Secretary of State, the
1300 incorporators shall file the articles of incorporation in
1301 triplicate with the office. The office shall promptly examine
1302 the articles of incorporation. If it finds that the articles of
1303 incorporation conform to law, it shall endorse its approval on
1304 each of the triplicate originals of the articles of
1305 incorporation, retain one copy for its files, and return the
1306 articles of incorporation remaining copies to the incorporators
1307 for filing with the Department of State.
1308 Section 27. Subsection (5) of section 629.011, Florida
1309 Statutes, is amended, and subsections (6), (7), and (8) are
1310 added to that section, to read:
1311 629.011 Definitions.—As used in this part, the term:
1312 (5) “Reciprocal insurer” means an unincorporated
1313 aggregation of subscribers operating individually and
1314 collectively through an attorney in fact to provide reciprocal
1315 insurance among themselves.
1316 (a) An assessable reciprocal insurer is a reciprocal
1317 insurer that is able to levy an assessment on its subscribers to
1318 make up any shortfall in capital and surplus to cover claims and
1319 expenses as specified in s. 629.231.
1320 (b) A nonassessable reciprocal insurer is a reciprocal
1321 insurer authorized under s. 629.091(3) or s. 629.291(5) to issue
1322 policies where there is no recourse against subscribers for any
1323 shortfall in capital and surplus to cover claims and expenses.
1324 (6) “Subscriber contribution” means any transfer of money
1325 by a subscriber of a reciprocal insurer to the reciprocal
1326 insurer in excess of the premium approved by the office, when
1327 such money is counted as surplus for the reciprocal insurer or
1328 used to pay surplus notes.
1329 (7) “Subscriber savings account” means any account in which
1330 a reciprocal insurer assigns money for the benefit of an
1331 individual subscriber, other than accounts holding money for the
1332 payment of a specific claim by or settlement of a specific legal
1333 dispute with that individual subscriber.
1334 (8) “Subscribers’ advisory committee” means the governing
1335 committee of a domestic reciprocal insurer which is formed in
1336 compliance with s. 629.201 and represents the interests of the
1337 subscribers.
1338 Section 28. Section 629.071, Florida Statutes, is amended
1339 to read:
1340 629.071 Surplus funds required.—
1341 (1) An assessable A domestic reciprocal insurer hereunder
1342 formed, if it has otherwise complied with the applicable
1343 provisions of this code, may be authorized to transact insurance
1344 if it has and thereafter maintains surplus funds of not less
1345 than $3 million $250,000.
1346 (2) A nonassessable reciprocal insurer, if it has otherwise
1347 complied with the applicable provisions of this code, may be
1348 authorized to transact insurance if it has and thereafter
1349 maintains a surplus as to policyholders which is equal to that
1350 required under s. 624.408 for a domestic stock insurer
1351 authorized to transact like kinds of insurance In addition to
1352 the surplus required to be maintained under subsection (1), the
1353 insurer shall have, when first so authorized, an expendable
1354 surplus of not less than $750,000.
1355 Section 29. Effective upon this act becoming a law,
1356 subsection (3) of section 629.081, Florida Statutes, is amended
1357 to read:
1358 629.081 Organization of reciprocal insurer.—
1359 (3) The filing must be accompanied by the application fee
1360 required by s. 624.501(1)(a).
1361 Section 30. Section 629.082, Florida Statutes, is created
1362 to read:
1363 629.082 Reciprocal affiliates.—The attorney in fact of a
1364 reciprocal is an affiliate of the reciprocal for purposes of s.
1365 624.10.
1366 Section 31. Section 629.1015, Florida Statutes, is created
1367 to read:
1368 629.1015 Affiliate fees.—
1369 (1) Each reciprocal insurer doing business in this state
1370 which pays a fee, commission, or other financial consideration
1371 or payment to any affiliate directly or indirectly must provide
1372 to the office documentation supporting that such fee,
1373 commission, or other financial consideration or payment to any
1374 affiliate is fair and reasonable for each service being provided
1375 by contract. In determining whether the fee, commission, or
1376 other financial consideration or payment is fair and reasonable,
1377 the office must comply with s. 624.424(13).
1378 (2) For each agreement with an affiliate in force on July
1379 1, 2025, each domestic reciprocal insurer shall provide to the
1380 office no later than October 1, 2025, the cost incurred by the
1381 affiliate to provide each service, the amount charged to the
1382 domestic reciprocal insurer for each service, and the dollar
1383 amount of fees forgiven, waived, or reimbursed by the affiliate
1384 for the 2 most recent preceding years. If the total dollar
1385 amount charged to the domestic reciprocal insurer was greater
1386 than the total cost to provide services for either year, the
1387 domestic reciprocal insurer must explain how it determined the
1388 fee was fair and reasonable. For any proposed contract with an
1389 affiliate effective after July 1, 2025, the domestic reciprocal
1390 insurer must provide documentation to support that the fee,
1391 commission, or other financial consideration or payment to the
1392 affiliate is fair and reasonable.
1393 Section 32. Section 629.121, Florida Statutes, is amended
1394 to read:
1395 629.121 Attorney in fact Attorney’s bond.—
1396 (1) Concurrently with the filing of the declaration
1397 provided for in s. 629.081, the attorney in fact of a domestic
1398 reciprocal insurer shall file with the office a bond in favor of
1399 this state for the benefit of all persons damaged as a result of
1400 breach by the attorney in fact of the conditions of his or her
1401 bond as set forth in subsection (2). The bond shall be executed
1402 by the attorney in fact and by an authorized corporate surety
1403 and shall be subject to the approval of the office.
1404 (2) The bond shall be in the sum of $300,000 $100,000,
1405 aggregate in form, the bond conditioned that the attorney in
1406 fact will faithfully account for all moneys and other property
1407 of the insurer coming into his or her hands, and that he or she
1408 will not withdraw or appropriate to his or her own use from the
1409 funds of the insurer any moneys or property to which he or she
1410 is not entitled under the power of attorney.
1411 (3) The bond shall provide that it is not subject to
1412 cancellation unless 30 days’ advance notice in writing of
1413 cancellation is given both the attorney in fact and the office.
1414 Section 33. Section 629.162, Florida Statutes, is created
1415 to read:
1416 629.162 Subscriber contributions.—
1417 (1) Reciprocal insurers may, subject to prior approval by
1418 the office, require contributions from subscribers in addition
1419 to premiums approved by the office.
1420 (2) A reciprocal insurer shall clearly disclose required
1421 subscriber contributions on the declarations page of any policy
1422 issued by the reciprocal insurer, separate from any cost
1423 associated with the premium.
1424 (3) Reciprocal insurers must provide subscribers an annual
1425 report detailing how each dollar of subscriber contributions was
1426 allocated or spent.
1427 (4) Changes to subscriber contributions are subject to
1428 prior approval by the office.
1429 Section 34. Section 629.163, Florida Statutes, is created
1430 to read:
1431 629.163 Subscriber savings accounts.—
1432 (1) Reciprocal insurers may establish subscriber savings
1433 accounts.
1434 (2) Moneys assigned to subscriber savings accounts are not
1435 considered distributions under s. 629.164.
1436 (3) Subscriber savings accounts are subject to the
1437 following requirements:
1438 (a) Reciprocal insurers must inform each subscriber, in
1439 writing, of the limitations and restrictions imposed upon the
1440 use or possession of moneys assigned to subscriber savings
1441 accounts.
1442 (b) Reciprocal insurers must inform each subscriber, in
1443 writing, of the procedures used to assign moneys to subscriber
1444 savings accounts and any calculations used to determine the
1445 amount of moneys to be assigned to subscriber savings accounts.
1446 (c) Advertisements marketing the benefits of subscriber
1447 savings accounts must note the limitations and restrictions
1448 imposed upon the use or possession of moneys assigned to
1449 subscriber savings accounts.
1450 (d) Upon cancellation or nonrenewal of a subscriber’s
1451 policy or policies, the subscriber is entitled, within 60 days,
1452 to all moneys assigned to the subscriber’s savings account,
1453 except when such moneys are otherwise allocated by law or
1454 contract, or when such distribution is prohibited by order of
1455 the office.
1456 Section 35. Section 629.164, Florida Statutes, is created
1457 to read:
1458 629.164 Subscriber distributions.—
1459 (1) Reciprocal insurers may make distributions to
1460 subscribers from their subscriber savings accounts, as set forth
1461 in their subscriber’s agreement.
1462 (2) The subscribers’ advisory committee or the attorney in
1463 fact, as set forth in the subscriber’s agreement, has the
1464 authority to authorize distributions, subject to prior written
1465 approval by the office.
1466 (3) Distributions may not unfairly discriminate between
1467 classes of risks or policies, or between subscribers, but may
1468 vary as to classes of subscribers based on the experience of the
1469 classes.
1470 (4) A domestic reciprocal insurer may, upon prior written
1471 approval of the office, return to its subscribers a portion of
1472 unassigned funds of up to 10 percent of surplus, with
1473 distributions limited to 50 percent of net income from the
1474 previous calendar year. Such distribution may not unfairly
1475 discriminate between classes of risks or policies, or between
1476 subscribers, but may vary as to classes of subscribers based on
1477 the experience of the classes.
1478 Section 36. Section 629.171, Florida Statutes, is amended
1479 to read:
1480 629.171 Annual statement.—
1481 (1) The subscribers’ advisory committee shall procure an
1482 audited annual statement of the accounts and records of the
1483 insurer and the attorney in fact. The statement of the insurer
1484 must be prepared by an independent auditor at the expense of the
1485 reciprocal insurer and must be available for inspection by any
1486 subscriber. The statement of the attorney in fact must be
1487 prepared by an independent auditor at the expense of the
1488 attorney in fact.
1489 (2)(1) The annual statement filing of a reciprocal insurer
1490 must shall be submitted made and filed by its attorney in fact.
1491 (3)(2) The audited statement of the attorney in fact must
1492 shall be submitted with the annual statement filing of the
1493 reciprocal insurer, as required under s. 624.424, and
1494 supplemented by such information as may be required by the
1495 office relative to the affairs and transactions of the attorney
1496 in fact relating insofar as they relate to the reciprocal
1497 insurer.
1498 Section 37. Subsection (1) of section 629.181, Florida
1499 Statutes, is amended to read:
1500 629.181 Financial condition; method of determining.—In
1501 determining the financial condition of a reciprocal insurer, the
1502 office shall apply the following rules:
1503 (1) Subscriber contributions are The surplus deposits of
1504 subscribers shall be allowed as assets, except that any premium
1505 deposits delinquent for 90 days must shall first be charged
1506 against such subscriber contributions. Subscriber contributions
1507 may not exceed 10 percent of each individual subscriber’s policy
1508 premium for a nonassessable reciprocal insurer and 10 percent of
1509 each individual subscribers’ policy premium for an assessable
1510 reciprocal insurer surplus deposit.
1511 Section 38. Section 629.201, Florida Statutes, is amended
1512 to read:
1513 629.201 Subscribers’ advisory committee.—Each domestic
1514 reciprocal insurer must have a subscribers’ advisory committee
1515 representing the interests of the subscribers.
1516 (1) The subscribers’ advisory committee of a domestic
1517 reciprocal insurer exercising the subscribers’ rights must shall
1518 be formed in compliance with this section and selected under
1519 such rules as the subscribers adopt. Such rules, along with any
1520 amendments, must be approved by the office before becoming
1521 effective.
1522 (2) Not less than two-thirds of such committee shall be
1523 subscribers other than the attorney, or any person employed by,
1524 representing, or having a financial interest in the attorney.
1525 (3) The subscribers’ advisory committee shall perform all
1526 of the following duties:
1527 (a) Supervise the finances of the insurer.;
1528 (b) Supervise the insurer’s operations to such extent as to
1529 ensure assure conformity with the subscribers’ agreement, and
1530 power of attorney, and other governing documents.;
1531 (c) Hire independent auditors, counsel, and other experts
1532 at the expense of the insurer as necessary to fulfill the
1533 committee’s duties. Procure the audit of the accounts and
1534 records of the insurer and of the attorney at the expense of the
1535 insurer; and
1536 (d) Exercise any Have such additional powers and functions
1537 as may be conferred by the subscribers’ agreement.
1538 (3) The initial subscribers’ advisory committee must be
1539 appointed by the original subscribers or the attorney in fact.
1540 Within 6 months after the reciprocal insurer is authorized to
1541 transact insurance, at least two-thirds of the committee members
1542 must be elected as provided for in subsections (4) and (5).
1543 (4) The subscribers’ advisory committee must consist of
1544 subscribers of the reciprocal insurer. At least two-thirds of
1545 the subscribers’ advisory committee must consist of subscribers
1546 who are independent of, not employed by, not representing, not
1547 selected by, and without any financial interest in the attorney
1548 in fact. The independent subscribers must be elected by the
1549 subscribers of the reciprocal insurer.
1550 (5) Any rules governing the election of subscribers to the
1551 subscribers’ advisory committee require all of the following:
1552 (a) An electorate comprised exclusively of all subscribers
1553 of the reciprocal insurer.
1554 (b) Terms of not more than 5 years.
1555 (c) A process that allows subscribers to nominate other
1556 subscribers for election to the subscribers’ advisory committee.
1557 (6) If a reciprocal insurer has more than 50 subscribers,
1558 the attorney in fact must provide a platform by which
1559 subscribers can communicate with each other regarding the
1560 subscribers’ advisory committee election process.
1561 Section 39. Section 629.271, Florida Statutes, is repealed.
1562 Section 40. Effective upon this act becoming a law,
1563 subsections (1) and (2) of section 629.291, Florida Statutes,
1564 are amended to read:
1565 629.291 Merger or conversion.—
1566 (1) A reciprocal insurer, upon affirmative vote of not less
1567 than two-thirds of its subscribers who vote on such merger or
1568 conversion pursuant to due notice, and subject to approval by
1569 the office of the terms therefor, may merge with another
1570 reciprocal insurer or be converted to a stock or mutual insurer,
1571 to be thereafter governed by the applicable sections of the
1572 Florida Insurance Code. However, a domestic stock insurer may
1573 not convert to a reciprocal insurer.
1574 (2) A plan to merge a reciprocal insurer with another
1575 reciprocal insurer or for conversion of the reciprocal insurer
1576 to a stock or mutual insurer must be filed with the office on
1577 forms adopted by the commission office and must contain such
1578 information as the office reasonably requires to evaluate the
1579 transaction.
1580 Section 41. Section 629.301, Florida Statutes, is amended
1581 to read:
1582 629.301 Impaired reciprocal insurers.—
1583 (1) If the assets of a domestic reciprocal insurer are at
1584 any time insufficient to discharge its liabilities, other than
1585 any liability on account of funds contributed by the attorney in
1586 fact or others, and to maintain the required surplus, its
1587 attorney in fact shall forthwith make up the deficiency or levy
1588 an assessment upon the subscribers for the amount needed to make
1589 up the deficiency, but subject to the limitation set forth in
1590 the power of attorney or policy.
1591 (2) If the attorney in fact fails to make up such
1592 deficiency or to make the assessment within 30 days after the
1593 office orders the attorney in fact him or her to do so, or if
1594 the deficiency is not fully made up within 60 days after the
1595 date the assessment was made, the insurer shall be deemed
1596 insolvent and shall be proceeded against in the same manner as
1597 any other insurer under chapter 631 and the insurance as
1598 authorized by this code.
1599 (3) If liquidation of a reciprocal such an insurer is
1600 ordered, the receiver shall levy an assessment shall be levied
1601 upon the subscribers an assessment for such an amount as the
1602 receiver determines to be necessary to discharge all liabilities
1603 of the insurer. The liabilities must be, subject to limits as
1604 provided by this chapter, as the office determines to be
1605 necessary to discharge all liabilities of the insurer, exclusive
1606 of any funds contributed by the attorney in fact or other
1607 persons, but inclusive of including the reasonable cost of the
1608 liquidation. The assessment is subject to any limits set forth
1609 in the power of attorney, the subscriber’s agreement, the
1610 policy, or this chapter.
1611 Section 42. Section 629.401, Florida Statutes, is repealed.
1612 Section 43. Section 629.520, Florida Statutes, is repealed.
1613 Section 44. Section 629.56, Florida Statutes, is created to
1614 read:
1615 629.56 Unearned premium reserves.—A reciprocal insurer must
1616 maintain an unearned premium reserve at all times and as
1617 required under s. 625.051.
1618 Section 45. Section 634.341, Florida Statutes, is created
1619 to read:
1620 634.341 Authority of Department of Law Enforcement to
1621 accept fingerprints of, and exchange criminal history records
1622 with respect to, certain persons applying to the Office of
1623 Insurance Regulation.—
1624 (1) The Legislature finds that criminal activity of
1625 insurers poses a particular danger to the residents of this
1626 state. Floridians rely, in good faith, on the honest conduct of
1627 those who issue and manage insurance policies and other
1628 insurance instruments in this state. To safeguard this state’s
1629 residents, the Legislature finds it necessary to ensure that
1630 organizers, incorporators, subscribers, officers, employees,
1631 contractors, affiliates, stockholders, directors, owners,
1632 members, managers, volunteers, or any other persons who exercise
1633 or have the ability to exercise effective control of, or who
1634 influence or have the ability to influence the transaction of
1635 the business of, or any other persons involved in, directly or
1636 indirectly, the organization, operation, or management of any
1637 insurer authorized to sell insurance are free of a criminal
1638 background.
1639 (2) The Department of Law Enforcement shall accept and
1640 process fingerprints of organizers, incorporators, subscribers,
1641 officers, employees, contractors, affiliates, stockholders,
1642 directors, owners, members, managers, or volunteers involved,
1643 directly or indirectly, in the organization, operation, or
1644 management of:
1645 (a) Any insurer or proposed insurer transacting or
1646 proposing to transact insurance in this state.
1647 (b) Any other entity that is examined or investigated or
1648 that is eligible to be examined or investigated under the
1649 provisions of the Florida Insurance Code.
1650 (c) Any other person or entity subject to licensure under
1651 the Florida Insurance Code.
1652 (3) A full set of fingerprints of persons or entities
1653 described in subsection (2) shall be submitted to the office or
1654 to a vendor, entity, or agency authorized by s. 943.053(13). The
1655 office, vendor, entity, or agency shall forward the fingerprints
1656 to the Department of Law Enforcement for state processing, and
1657 the Department of Law Enforcement shall forward the fingerprints
1658 to the Federal Bureau of Investigation for national processing
1659 as described in s. 624.34. Fees for state and federal
1660 fingerprint processing shall be borne by the person submitting
1661 them. The state cost for fingerprint processing shall be as
1662 provided in s. 943.053(3)(e).
1663 (4) The Department of Law Enforcement may, to the extent
1664 provided by federal law, exchange state, multistate, and federal
1665 criminal history records with the office for the purpose of the
1666 issuance, denial, suspension, or revocation of a certificate of
1667 authority, certification, or license to operate in this state.
1668 (5) Fingerprints for each person or entity described in
1669 subsection (2) shall be submitted in accordance with rules
1670 adopted by the commission.
1671 (a) Fingerprints may be submitted through a third-party
1672 vendor authorized by the Department of Law Enforcement.
1673 (b) The Department of Law Enforcement must conduct the
1674 state criminal history background check, and a federal criminal
1675 history background check must be conducted through the Federal
1676 Bureau of Investigation.
1677 (c) All fingerprints submitted to the Department of Law
1678 Enforcement must be submitted and entered into the statewide
1679 automated fingerprint identification system established in s.
1680 943.05(2)(b) and available for use in accordance with s.
1681 943.05(2)(g) and (h). The office shall inform the Department of
1682 Law Enforcement of any person whose fingerprints no longer must
1683 be retained.
1684 (d) The costs of fingerprint processing, including the cost
1685 of retaining the fingerprints, shall be borne by the person
1686 subject to the background check.
1687 (e) The office shall review the results of the state and
1688 federal criminal history background checks and determine whether
1689 the applicant meets requirements.
1690 (6) Statewide criminal records obtained through the
1691 Department of Law Enforcement, federal criminal records obtained
1692 through the Federal Bureau of Investigation, and local criminal
1693 records obtained through local law enforcement agencies shall be
1694 used by the office for the purpose of issuance, denial,
1695 suspension, or revocation of certificates of authority,
1696 certifications, or licenses issued to operate in this state.
1697 Section 46. Paragraph (c) of subsection (13) of section
1698 634.401, Florida Statutes, is amended to read:
1699 634.401 Definitions.—As used in this part, the term:
1700 (13) “Service warranty” means any warranty, guaranty,
1701 extended warranty or extended guaranty, maintenance service
1702 contract equal to or greater than 1 year in length or which does
1703 not meet the exemption in paragraph (a), contract agreement, or
1704 other written promise for a specific duration to perform the
1705 repair, replacement, or maintenance of a consumer product, or
1706 for indemnification for repair, replacement, or maintenance, for
1707 operational or structural failure due to a defect in materials
1708 or workmanship, normal wear and tear, power surge, or accidental
1709 damage from handling in return for the payment of a segregated
1710 charge by the consumer; however:
1711 (c) All contracts that include coverage for accidental
1712 damage from handling must be covered by the contractual
1713 liability policy referred to in s. 634.406(3), unless issued by
1714 an association not required to establish an unearned premium
1715 reserve or maintain contractual liability insurance under s.
1716 634.406(7).
1717 Section 47. Section 641.2012, Florida Statutes, is created
1718 to read:
1719 641.2012 Service of process.—Sections 624.422 and 624.423
1720 apply to health maintenance organizations.
1721 Section 48. Subsections (1) and (3), paragraph (a) of
1722 subsection (5), and subsection (6) of section 641.26, Florida
1723 Statutes, are amended to read:
1724 641.26 Annual and quarterly reports.—
1725 (1) Every health maintenance organization shall file an
1726 annual statement covering the preceding calendar year on or
1727 before March 1, and quarterly statements covering the periods
1728 ending on March 31, June 30, and September 30 within 45 days
1729 after each such date, annually within 3 months after the end of
1730 its fiscal year, or within an extension of time therefor as the
1731 office, for good cause, may grant, in a form prescribed by the
1732 commission, file a report with the office, verified by the oath
1733 of two officers of the organization or, if not a corporation, of
1734 two persons who are principal managing directors of the affairs
1735 of the organization, properly notarized, showing its condition
1736 on the last day of the immediately preceding reporting period.
1737 Such report shall include:
1738 (a) A financial statement of the health maintenance
1739 organization filed by electronic means in a computer-readable
1740 form using a format acceptable to the office.
1741 (b) A financial statement of the health maintenance
1742 organization filed on forms acceptable to the office.
1743 (c) An audited financial statement of the health
1744 maintenance organization, including its balance sheet and a
1745 statement of operations for the preceding year certified by an
1746 independent certified public accountant, prepared in accordance
1747 with statutory accounting principles.
1748 (d) The number of health maintenance contracts issued and
1749 outstanding and the number of health maintenance contracts
1750 terminated.
1751 (e) The number and amount of damage claims for medical
1752 injury initiated against the health maintenance organization and
1753 any of the providers engaged by it during the reporting year,
1754 broken down into claims with and without formal legal process,
1755 and the disposition, if any, of each such claim.
1756 (f) An actuarial certification that:
1757 1. The health maintenance organization is actuarially
1758 sound, which certification shall consider the rates, benefits,
1759 and expenses of, and any other funds available for the payment
1760 of obligations of, the organization.
1761 2. The rates being charged or to be charged are actuarially
1762 adequate to the end of the period for which rates have been
1763 guaranteed.
1764 3. Incurred but not reported claims and claims reported but
1765 not fully paid have been adequately provided for.
1766 4. The health maintenance organization has adequately
1767 provided for all obligations required by s. 641.35(3)(a).
1768 (g) A report prepared by the certified public accountant
1769 and filed with the office describing material weaknesses in the
1770 health maintenance organization’s internal control structure as
1771 noted by the certified public accountant during the audit. The
1772 report must be filed with the annual audited financial report as
1773 required in paragraph (c). The health maintenance organization
1774 shall provide a description of remedial actions taken or
1775 proposed to correct material weaknesses, if the actions are not
1776 described in the independent certified public accountant’s
1777 report.
1778 (h) Such other information relating to the performance of
1779 health maintenance organizations as is required by the
1780 commission or office.
1781 (3) Every health maintenance organization shall file
1782 quarterly, for the first three calendar quarters of each year,
1783 an unaudited financial statement of the organization as
1784 described in paragraphs (1)(a) and (b). The statement for the
1785 quarter ending March 31 shall be filed on or before May 15, the
1786 statement for the quarter ending June 30 shall be filed on or
1787 before August 15, and the statement for the quarter ending
1788 September 30 shall be filed on or before November 15. The
1789 quarterly report shall be verified by the oath of two officers
1790 of the organization, properly notarized.
1791 (5) Each authorized health maintenance organization shall
1792 retain an independent certified public accountant, referred to
1793 in this section as “CPA,” who agrees by written contract with
1794 the health maintenance organization to comply with the
1795 provisions of this part.
1796 (a) The CPA shall provide to the HMO audited financial
1797 statements consistent with this part and s. 624.424.
1798 (6) To facilitate uniformity in financial statements and to
1799 facilitate office analysis, the commission may by rule adopt the
1800 form for financial statements of a health maintenance
1801 organization, requiring the financial statement to comply with
1802 s. 624.424 including supplements as approved by the National
1803 Association of Insurance Commissioners in 1995, and may adopt
1804 subsequent amendments thereto if the methodology remains
1805 substantially consistent, and may by rule require each health
1806 maintenance organization to submit to the office all or part of
1807 the information contained in the annual statement in a computer
1808 readable form compatible with the electronic data processing
1809 system specified by the office.
1810 Section 49. Section 641.283, Florida Statutes, is created
1811 to read:
1812 641.283 Administrative supervision and hazardous insurer
1813 conditions.—Sections 624.80-624.87 apply to health maintenance
1814 organizations.
1815 Section 50. Present subsections (5) through (15) and (16)
1816 through (29) of section 651.011, Florida Statutes, are
1817 redesignated as subsections (7) through (17) and (19) through
1818 (32), respectively, new subsections (5), (6), and (18) are added
1819 to that section, and present subsections (7), (8), (19), and
1820 (26) of that section are amended, to read:
1821 651.011 Definitions.—As used in this chapter, the term:
1822 (5) “Affiliate” means an entity that exercises control over
1823 or is directly or indirectly controlled by the provider through:
1824 (a) Equity ownership of voting securities;
1825 (b) Common managerial control; or
1826 (c) Collusive participation by the management of the
1827 insurer and affiliate in the management of the insurer or the
1828 affiliate.
1829 (6) “Affiliated person” of another person means:
1830 (a) The spouse of the other person;
1831 (b) The parents of the other person and their lineal
1832 descendants, or the parents of the other person’s spouse and
1833 their lineal descendants;
1834 (c) A person who directly or indirectly owns or controls,
1835 or holds with the power to vote, 10 percent or more of the
1836 outstanding voting securities of the other person;
1837 (d) A person 10 percent or more of whose outstanding voting
1838 securities are directly or indirectly owned or controlled, or
1839 held with power to vote, by the other person;
1840 (e) A person or group of persons who directly or indirectly
1841 control, are controlled by, or are under common control with the
1842 other person;
1843 (f) An officer, director, partner, copartner, or employee
1844 of the other person;
1845 (g) If the other person is an investment company, an
1846 investment adviser of such company, or a member of an advisory
1847 board of such company;
1848 (h) If the other person is an unincorporated investment
1849 company not having a board of directors, the depositor of such
1850 company; or
1851 (i) A person who has entered into a written or unwritten
1852 agreement to act in concert with the other person in acquiring
1853 or limiting the disposition of securities of a domestic stock
1854 insurer provider or controlling company.
1855 (9)(7) “Continuing care at-home” means, pursuant to a
1856 contract other than a contract described in subsection (7) (5),
1857 furnishing to a resident who resides outside the facility the
1858 right to future access to shelter and nursing care or personal
1859 services, whether such services are provided in the facility or
1860 in another setting designated in the contract, by an individual
1861 not related by consanguinity or affinity to the resident, upon
1862 payment of an entrance fee.
1863 (10)(8) “Control,” “controlling,” “controlled by,” “under
1864 common control with,” or “controlling company” means any
1865 corporation, trust, or association that directly or indirectly
1866 owns 10 25 percent or more of either the following:
1867 (a) The direct or indirect possession of the power to
1868 direct or cause the direction of the management and policies of
1869 a person, whether through the ownership of voting securities, by
1870 contract other than a commercial contract for goods or
1871 nonmanagement services, or otherwise. Control is presumed to
1872 exist if a person, directly or indirectly, owns, controls, holds
1873 with the power to vote, or holds proxies representing 10 percent
1874 or more of the voting securities of another person; or
1875 (b) A management company exercising control through a
1876 management agreement whereby the management company is
1877 responsible for the day-to-day business operations of the
1878 provider or the day-to-day decisionmaking on behalf of the
1879 provider
1880 (a) The voting securities of one or more providers that are
1881 stock corporations; or
1882 (b) The ownership interest of one or more providers that
1883 are not stock corporations.
1884 (18) “Governing body” or “full governing body” means a
1885 board of directors, a management company, a body of a provider,
1886 or an obligated group whose members are elected or appointed to
1887 set strategy, oversee management or operations of a provider,
1888 facility, or obligated group, and protect the interests of the
1889 provider, facility, or group.
1890 (22)(19) “Manager,” “management,” or “management company”
1891 means a person who administers the day-to-day business
1892 operations of a facility for a provider, is part of a committee
1893 that supervises the activities of a business that provides
1894 continuing care or a member of the full governing body of a
1895 business that provides continuing care, or is subject to the
1896 policies, directives, and oversight of the provider or governing
1897 body.
1898 (29)(26) “Regulatory action level event” means that any two
1899 of the following have occurred:
1900 (a) The provider’s debt service coverage ratio is less than
1901 the greater of the minimum ratio specified in the provider’s
1902 bond covenants or lending agreement for long-term financing or
1903 1.20:1 as of the most recent annual report filed with the office
1904 pursuant to s. 651.026 or s. 651.0261, or, if the provider does
1905 not have a debt service coverage ratio required by its lending
1906 institution, the provider’s debt service coverage ratio is less
1907 than 1.20:1 as of the most recent annual report filed with the
1908 office pursuant to s. 651.026 or s. 651.0261. If the provider is
1909 a member of an obligated group having cross-collateralized debt,
1910 the obligated group’s debt service coverage ratio must be used
1911 as the provider’s debt service coverage ratio.
1912 (b) The provider’s days cash on hand is less than the
1913 greater of the minimum number of days cash on hand specified in
1914 the provider’s bond covenants or lending agreement for long-term
1915 financing or 100 days. If the provider does not have a days cash
1916 on hand required by its lending institution, the days cash on
1917 hand may not be less than 100 as of the most recent annual
1918 report filed with the office pursuant to s. 651.026 or s.
1919 651.0261. If the provider is a member of an obligated group
1920 having cross-collateralized debt, the days cash on hand of the
1921 obligated group must be used as the provider’s days cash on
1922 hand.
1923 (c) The occupancy of the provider’s facility is less than
1924 80 percent averaged over the 12-month period immediately
1925 preceding the annual report filed with the office pursuant to s.
1926 651.026.
1927 Section 51. Section 651.018, Florida Statutes, is amended
1928 to read:
1929 651.018 Administrative supervision.—The office may place a
1930 facility in administrative supervision pursuant to part VI of
1931 chapter 624 if the office finds that one or more of the
1932 following conditions exist, and until the condition is resolved
1933 to the satisfaction of the office:
1934 (1) The facility is insolvent or impaired.
1935 (2) The facility is at a regulatory action level, pursuant
1936 to s. 651.034.
1937 (3) The facility reports a negative debt service ratio.
1938 (4) The facility has failed to file a monthly, quarterly,
1939 or annual financial statement or an audited financial statement
1940 as required by this chapter.
1941 (5) The facility was issued a financial statement with a
1942 going concern issue by an independent certified public
1943 accountant.
1944 (6) The facility is found to be in hazardous financial
1945 condition pursuant to s. 651.113.
1946 (7) The facility has entered into a forbearance agreement
1947 with a lender.
1948 Section 52. Paragraph (a) of subsection (1) of section
1949 651.019, Florida Statutes, is amended to read:
1950 651.019 New financing, additional financing, or
1951 refinancing.—
1952 (1)(a) A provider shall provide a written general outline
1953 of the amount and the anticipated terms of any new financing or
1954 refinancing, and the intended use of proceeds, to the office and
1955 the residents’ council at least 30 days before the closing date
1956 of the financing or refinancing transaction. If there is a
1957 material change in the noticed information, a provider shall
1958 provide an updated notice to the office and the residents’
1959 council within 10 business days after the provider becomes aware
1960 of such change.
1961 Section 53. Section 651.0212, Florida Statutes, is created
1962 to read:
1963 651.0212 General eligibility requirements to operate in
1964 this state.—
1965 (1) The office must deny or revoke a provider’s authority
1966 to conduct business relating to continuing care in this state,
1967 including, but not limited to, the authority to enter into
1968 contracts, provide continuing care or continuing care at-home,
1969 or construct facilities for the purpose of providing continuing
1970 care in this state, if the office determines that any of the
1971 following applies to the provider’s management, officers, or
1972 directors:
1973 (a) They are incompetent or untrustworthy.
1974 (b) They lack sufficient experience in continuing care
1975 management, posing a risk to contract holders.
1976 (c) They lack the experience, ability, or reputation
1977 necessary to ensure a reasonable likelihood of successful
1978 operation.
1979 (d) They are affiliated, directly or indirectly, with
1980 individuals or entities whose business practices have harmed
1981 residents, stockholders, investors, creditors, or the public
1982 through asset manipulation, fraudulent accounting, or bad faith
1983 actions.
1984 (2) The office may deny or revoke a provider’s authority to
1985 conduct business relating to continuing care in this state,
1986 including, but not limited to, the authority to enter into
1987 contracts, provide continuing care or continuing care at-home,
1988 or construct facilities for the purpose of providing continuing
1989 care in this state, if the office determines that any general
1990 partner, stockholder, or incorporator who exercises or has the
1991 ability to exercise effective control of the provider, or who
1992 influences or has the ability to influence the provider’s
1993 business transactions, lacks the financial standing and business
1994 experience necessary for the provider’s successful operation.
1995 (3) The office may deny, suspend, or revoke a provider’s
1996 authority to conduct business relating to continuing care in
1997 this state, including, but not limited to, the authority to
1998 enter into contracts, provide continuing care or continuing care
1999 at-home, or construct facilities for the purpose of providing
2000 continuing care, if the office determines that any general
2001 partner, subscriber, stockholder, or incorporator who exercises
2002 or has the ability to exercise effective control of the
2003 provider, or who influences or has the ability to influence the
2004 provider’s business transactions, has been found guilty of, or
2005 has pleaded guilty or nolo contendere to, any felony or crime
2006 punishable by imprisonment of 1 year or more under the laws of
2007 the United States, any state, or any other country, if the crime
2008 involves moral turpitude, regardless of whether a judgment of
2009 conviction has been entered by the court. However, if a provider
2010 operates under a valid certificate of authority, the provider
2011 must immediately remove any such person from his or her role in
2012 the business upon discovery of the conditions set forth in this
2013 subsection or remove such person upon the order of the office.
2014 Failure to remove such person constitutes grounds for suspension
2015 or revocation of the provider’s certificate of authority.
2016 (4) The office may deny, suspend, or revoke a provider’s
2017 authority to conduct business relating to continuing care in
2018 this state, including, but not limited to, the authority to
2019 enter into contracts, provide continuing care or continuing care
2020 at-home, or construct facilities for providing continuing care,
2021 if the office determines that any general partner, subscriber,
2022 stockholder, or incorporator who exercises or has the ability to
2023 exercise effective control of the provider, or who influences or
2024 has the ability to influence the provider’s business
2025 transactions, is now or was previously affiliated, directly or
2026 indirectly, through ownership of 10 percent or more, with any
2027 business, corporation, or entity that has been found guilty of,
2028 or has pleaded guilty or nolo contendere to, any felony or crime
2029 punishable by imprisonment for 1 year or more under the laws of
2030 the United States, any state, or any other country. However, if
2031 a provider operates under a valid certificate of authority, the
2032 provider must immediately remove any such person from his or her
2033 role in the business or notify the office upon discovery of the
2034 conditions set forth in this subsection. Failure to remove the
2035 person, provide notice to the office, or comply with an order
2036 from the office to remove the person from his or her role
2037 constitutes grounds for suspension or revocation of the
2038 provider’s certificate of authority.
2039 Section 54. Subsections (4) and (5) of section 651.0215,
2040 Florida Statutes, are amended to read:
2041 651.0215 Consolidated application for a provisional
2042 certificate of authority and a certificate of authority;
2043 required restrictions on use of entrance fees.—
2044 (4) Within 30 45 days after receipt of the information
2045 required under subsection (2), the office shall examine the
2046 information and notify the applicant in writing, specifically
2047 requesting any additional information that the office is
2048 authorized to require. An application is deemed complete when
2049 the office receives all requested information and the applicant
2050 corrects any error or omission of which the applicant was timely
2051 notified or when the time for such notification has expired.
2052 Within 15 days after receipt of all of the requested additional
2053 information, the office shall notify the applicant in writing
2054 that all of the requested information has been received and that
2055 the application is deemed complete as of the date of the notice.
2056 Failure to notify the applicant in writing within the 15-day
2057 period constitutes acknowledgment by the office that it has
2058 received all requested additional information, and the
2059 application is deemed complete for purposes of review on the
2060 date the applicant files all of the required additional
2061 information.
2062 (5) Within 45 days After an application is deemed complete
2063 in accordance with the timeframes set forth in chapter 120 as
2064 set forth in subsection (4) and upon completion of the remaining
2065 requirements of this section, the office shall complete its
2066 review and issue or deny a certificate of authority to the
2067 applicant. If a certificate of authority is denied, the office
2068 shall notify the applicant in writing, citing the specific
2069 failures to satisfy this chapter, and the applicant is entitled
2070 to an administrative hearing pursuant to chapter 120.
2071 Section 55. Subsections (3), (5), and (6) of section
2072 651.022, Florida Statutes, are amended to read:
2073 651.022 Provisional certificate of authority; application.—
2074 (3) In addition to the information required in subsection
2075 (2), an applicant for a provisional certificate of authority
2076 shall submit a feasibility study, prepared by an independent
2077 consultant, with appropriate financial, marketing, and actuarial
2078 assumptions for the first 5 years of operations. The feasibility
2079 study must include at least the following information:
2080 (a) A description of the proposed facility, including the
2081 location, size, anticipated completion date, and the proposed
2082 construction program.
2083 (b) An identification and evaluation of the primary and, if
2084 appropriate, the secondary market areas of the facility and the
2085 projected unit sales per month.
2086 (c) Projected revenues, including anticipated entrance
2087 fees; monthly service fees; nursing care revenues, if
2088 applicable; and all other sources of revenue.
2089 (d) Projected expenses, including staffing requirements and
2090 salaries; cost of property, plant, and equipment, including
2091 depreciation expense; interest expense; marketing expense; and
2092 other operating expenses.
2093 (e) A projected balance sheet.
2094 (f) Expectations of the financial condition of the project,
2095 including the projected cash flow, and an estimate of the funds
2096 anticipated to be necessary to cover startup losses.
2097 (g) The inflation factor, if any, assumed in the
2098 feasibility study for the proposed facility and how and where it
2099 is applied.
2100 (h) Project costs and the total amount of debt financing
2101 required, marketing projections, resident fees and charges, the
2102 competition, resident contract provisions, and other factors
2103 that affect the feasibility of the facility.
2104 (i) Appropriate population projections, including morbidity
2105 and mortality assumptions.
2106 (j) The name of the person who prepared the feasibility
2107 study and the experience of such person in preparing similar
2108 studies or otherwise consulting in the field of continuing care.
2109 The preparer of the feasibility study may be the provider or a
2110 contracted third party.
2111 (k) Any other information that the applicant deems relevant
2112 and appropriate to enable the office to make a more informed
2113 determination.
2114 (5)(a) Within 30 days after receipt of an application for a
2115 provisional certificate of authority, the office shall examine
2116 the application and shall notify the applicant in writing,
2117 specifically setting forth and specifically requesting any
2118 additional information the office is permitted by law to
2119 require. If the application submitted is determined by the
2120 office to be substantially incomplete so as to require
2121 substantial additional information, including biographical
2122 information, the office may return the application to the
2123 applicant with a written notice that the application as received
2124 is substantially incomplete and, therefore, unacceptable for
2125 filing without further action required by the office. Any filing
2126 fee received shall be refunded to the applicant.
2127 (b) Within 15 days after receipt of all of the requested
2128 additional information, the office shall notify the applicant in
2129 writing that all of the requested information has been received
2130 and the application is deemed to be complete as of the date of
2131 the notice. Failure to so notify the applicant in writing within
2132 the 15-day period shall constitute acknowledgment by the office
2133 that it has received all requested additional information, and
2134 the application shall be deemed to be complete for purposes of
2135 review upon the date of the filing of all of the requested
2136 additional information.
2137 (6) After an application is deemed complete in accordance
2138 with the timeframes set forth in chapter 120 Within 45 days
2139 after the date an application is deemed complete as set forth in
2140 paragraph (5)(b), the office shall complete its review and issue
2141 a provisional certificate of authority to the applicant based
2142 upon its review and a determination that the application meets
2143 all requirements of law, that the feasibility study was based on
2144 sufficient data and reasonable assumptions, and that the
2145 applicant will be able to provide continuing care or continuing
2146 care at-home as proposed and meet all financial and contractual
2147 obligations related to its operations, including the financial
2148 requirements of this chapter. If the application is denied, the
2149 office shall notify the applicant in writing, citing the
2150 specific failures to meet the provisions of this chapter. Such
2151 denial entitles the applicant to a hearing pursuant to chapter
2152 120.
2153 Section 56. Paragraphs (c) and (h) of subsection (1) and
2154 subsections (2), (3), and (7) of section 651.023, Florida
2155 Statutes, are amended to read:
2156 651.023 Certificate of authority; application.—
2157 (1) After issuance of a provisional certificate of
2158 authority, the office shall issue to the holder of such
2159 provisional certificate a certificate of authority if the holder
2160 of the provisional certificate provides the office with the
2161 following information:
2162 (c) Subject to subsection (3) (4), a provider may submit an
2163 application for a certificate of authority and any required
2164 exhibits upon submission of documents evidencing that the
2165 project has a minimum of 30 percent of the units reserved for
2166 which the provider is charging an entrance fee.
2167 (h) Documents evidencing that the applicant has complied
2168 with the escrow requirements of subsection (4) (5) or subsection
2169 (6) (7) and will be able to comply with s. 651.035.
2170
2171 If any material change occurs in the facts set forth in an
2172 application filed with the office pursuant to this subsection,
2173 an amendment setting forth such change must be filed with the
2174 office within 10 business days after the applicant becomes aware
2175 of such change, and a copy of the amendment must be sent by
2176 registered mail to the principal office of the facility and to
2177 the principal office of the controlling company.
2178 (2) Within 30 days after receipt of the information
2179 required under subsection (1), the office shall examine such
2180 information and notify the provider in writing, specifically
2181 requesting any additional information the office is permitted by
2182 law to require. Within 15 days after receipt of all of the
2183 requested additional information, the office shall notify the
2184 provider in writing that all of the requested information has
2185 been received and the application is deemed to be complete as of
2186 the date of the notice. Failure to notify the applicant in
2187 writing within the 15-day period constitutes acknowledgment by
2188 the office that it has received all requested additional
2189 information, and the application shall be deemed complete for
2190 purposes of review on the date of filing all of the required
2191 additional information.
2192 (3) After an application is deemed complete in accordance
2193 with the timeframes set forth in chapter 120 Within 45 days
2194 after an application is deemed complete as set forth in
2195 subsection (2), and upon completion of the remaining
2196 requirements of this section, the office shall complete its
2197 review and issue or deny a certificate of authority to the
2198 holder of a provisional certificate of authority. If a
2199 certificate of authority is denied, the office must notify the
2200 holder of the provisional certificate in writing, citing the
2201 specific failures to satisfy the provisions of this chapter. If
2202 denied, the holder of the provisional certificate is entitled to
2203 an administrative hearing pursuant to chapter 120.
2204 (7) In lieu of the provider fulfilling the requirements
2205 imposed under in subsection (5) and paragraphs (6)(b) and (c),
2206 the office may authorize the release of escrowed funds to retire
2207 all outstanding debts on the facility and equipment upon
2208 application of the provider and upon the provider’s showing that
2209 the provider will grant to the residents a first mortgage on the
2210 land, buildings, and equipment that constitute the facility, and
2211 that the provider has satisfied paragraphs (6)(a) and (d). Such
2212 mortgage shall secure the refund of the entrance fee in the
2213 amount required by this chapter. The granting of such mortgage
2214 is subject to the following:
2215 (a) The first mortgage is granted to an independent trust
2216 that is beneficially held by the residents. The document
2217 creating the trust must include a provision that agrees to an
2218 annual audit and will furnish to the office all information the
2219 office may reasonably require. The mortgage may secure payment
2220 on bonds issued to the residents or trustee. Such bonds are
2221 redeemable after termination of the residency contract in the
2222 amount and manner required by this chapter for the refund of an
2223 entrance fee.
2224 (b) Before granting a first mortgage to the residents, all
2225 construction must be substantially completed and substantially
2226 all equipment must be purchased. No part of the entrance fees
2227 may be pledged as security for a construction loan or otherwise
2228 used for construction expenses before the completion of
2229 construction.
2230 (c) If the provider is leasing the land or buildings used
2231 by the facility, the leasehold interest must be for a term of at
2232 least 30 years.
2233 Section 57. Present subsection (3) of section 651.024,
2234 Florida Statutes, is redesignated as subsection (5), and a new
2235 subsection (3) and subsection (4) are added to that section, to
2236 read:
2237 651.024 Acquisition.—
2238 (3) A bondholder that obtains consent rights from a
2239 provider which allow the bondholder to have oversight or
2240 decisionmaking authority over a facility or in the financial
2241 decisions of the facility is subject to s. 628.4615 and is not
2242 required to submit filings pursuant to s. 651.022, s. 651.023,
2243 or s. 651.0245. For purposes of this subsection, the term
2244 “consent rights” includes, but is not limited to, all of the
2245 following:
2246 (a) Approving or initiating the sale of a facility.
2247 (b) Approving or entering into an affiliation arrangement
2248 on behalf of the facility.
2249 (c) Approving or executing new or amended financing for the
2250 facility.
2251 (d) Approving or entering into a forbearance agreement for
2252 the facility.
2253 (4) A continuing care retirement community that enters into
2254 an affiliation agreement with another entity resulting in a
2255 change of officers, directors, or effective control is subject
2256 to s. 628.4615 and is not required to submit filings pursuant to
2257 s. 651.022, s. 651.023, or s. 651.0245.
2258 Section 58. Paragraph (a) of subsection (2), paragraph (a)
2259 of subsection (5), and subsection (6) of section 651.0246,
2260 Florida Statutes, are amended to read:
2261 651.0246 Expansions.—
2262 (2) A provider applying for expansion of a certificated
2263 facility must submit all of the following:
2264 (a) A feasibility study prepared by an independent
2265 certified public accountant. The feasibility study must include
2266 at least the following information:
2267 1. A description of the facility and proposed expansion,
2268 including the location, the size, the anticipated completion
2269 date, and the proposed construction program.
2270 2. An identification and evaluation of the primary and, if
2271 applicable, secondary market areas of the facility and the
2272 projected unit sales per month.
2273 3. Projected revenues, including anticipated entrance fees;
2274 monthly service fees; nursing care revenues, if applicable; and
2275 all other sources of revenue.
2276 4. Projected expenses, including for staffing requirements
2277 and salaries; the cost of property, plant, and equipment,
2278 including depreciation expense; interest expense; marketing
2279 expense; and other operating expenses.
2280 5. A projected balance sheet of the applicant.
2281 6. The expectations for the financial condition of the
2282 project, including the projected cash flow and an estimate of
2283 the funds anticipated to be necessary to cover startup losses.
2284 7. The inflation factor, if any, assumed in the study for
2285 the proposed expansion and how and where it is applied.
2286 8. Project costs; the total amount of debt financing
2287 required; marketing projections; resident rates, fees, and
2288 charges; the competition; resident contract provisions; and
2289 other factors that affect the feasibility of the facility.
2290 9. Appropriate population projections, including morbidity
2291 and mortality assumptions.
2292 10. The name of the person who prepared the feasibility
2293 study and his or her experience in preparing similar studies or
2294 otherwise consulting in the field of continuing care.
2295 11. Financial forecasts or projections prepared in
2296 accordance with standards adopted by the American Institute of
2297 Certified Public Accountants or in accordance with standards for
2298 feasibility studies for continuing care retirement communities
2299 adopted by the Actuarial Standards Board.
2300 12. An independent evaluation and examination opinion for
2301 the first 5 years of operations, or a comparable opinion
2302 acceptable to the office, by the certified public accountant who
2303 prepared the study, of the underlying assumptions used as a
2304 basis for the forecasts or projections in the study and that the
2305 assumptions are reasonable and proper and the project as
2306 proposed is feasible.
2307 13. The description of and plan for the ongoing operation
2308 of existing facilities.
2309 14.13. Any other information that the provider deems
2310 relevant and appropriate to provide to enable the office to make
2311 a more informed determination.
2312
2313 If any material change occurs in the facts set forth in an
2314 application filed with the office pursuant to this section, an
2315 amendment setting forth such change must be filed with the
2316 office within 10 business days after the applicant becomes aware
2317 of such change, and a copy of the amendment must be sent by
2318 registered mail to the principal office of the facility and to
2319 the principal office of the controlling company.
2320 (5)(a) Within 30 days after receipt of an application for
2321 expansion, the office shall examine the application and shall
2322 notify the applicant in writing, specifically requesting any
2323 additional information that the office is authorized to require.
2324 Within 15 days after the office receives all the requested
2325 additional information, the office shall notify the applicant in
2326 writing that the requested information has been received and
2327 that the application is deemed complete as of the date of the
2328 notice. Failure to notify the applicant in writing within the
2329 15-day period constitutes acknowledgment by the office that it
2330 has received all requested additional information, and the
2331 application is deemed complete for purposes of review on the
2332 date the applicant files all of the required additional
2333 information. If the application submitted is determined by the
2334 office to be substantially incomplete so as to require
2335 substantial additional information, including biographical
2336 information, the office may return the application to the
2337 applicant with a written notice stating that the application as
2338 received is substantially incomplete and, therefore, is
2339 unacceptable for filing without further action required by the
2340 office. Any filing fee received must be refunded to the
2341 applicant.
2342 (6) Within 45 30 days after the date on which an
2343 application is deemed complete as provided in paragraph (5)(b),
2344 the office shall complete its review and, based upon its review,
2345 approve an expansion by the applicant and issue a determination
2346 that the application meets all requirements of law, that the
2347 feasibility study was based on sufficient data and reasonable
2348 assumptions, and that the applicant will be able to provide
2349 continuing care or continuing care at-home as proposed and meet
2350 all financial and contractual obligations related to its
2351 operations, including the financial requirements of this
2352 chapter. If the application is denied, the office must notify
2353 the applicant in writing, citing the specific failures to meet
2354 the requirements of this chapter. The denial entitles the
2355 applicant to a hearing pursuant to chapter 120.
2356 Section 59. Present subsections (3) through (10) of section
2357 651.026, Florida Statutes, are redesignated as subsections (5)
2358 through (12), respectively, paragraphs (g) and (h) are added to
2359 subsection (2) and new subsections (3) and (4) are added to that
2360 section, and subsection (1), paragraphs (e) and (f) of
2361 subsection (2), and present subsection (6) of that section are
2362 amended, to read:
2363 651.026 Annual reports.—
2364 (1) Annually, on or before May 1, the provider shall file
2365 an annual report and such other information and data showing its
2366 condition as of the last day of the preceding calendar year,
2367 except as provided in subsection (7) (5). If the office does not
2368 receive the required information on or before May 1, a late fee
2369 may be charged pursuant to s. 651.015(2)(c). The office may
2370 approve an extension of up to 30 days.
2371 (2) The annual report shall be in such form as the
2372 commission prescribes and shall contain at least the following:
2373 (e) Each facility shall file with the office annually,
2374 together with the annual report required by this section, A
2375 computation of its minimum liquid reserve calculated in
2376 accordance with s. 651.035 on a form prescribed by the
2377 commission.
2378 (f) If, due to a change in generally accepted accounting
2379 principles, the balance sheet, statement of income and expenses,
2380 statement of equity or fund balances, or statement of cash flows
2381 is known by any other name or title, the annual report must
2382 contain Financial statements using the changed name names or
2383 title titles that most closely corresponds correspond to a
2384 balance sheet, statement of income and expenses, statement of
2385 equity or fund balances, and statement of changes in cash flows,
2386 in the event that, due to a change in generally accepted
2387 accounting principles, the balance sheet, statement of income
2388 and expenses, statement of equity or fund balances, or statement
2389 of cash flows is known by another name or title.
2390 (g) An accounts payable aging schedule that lists all
2391 outstanding repayment obligations and the corresponding amounts
2392 owed to each vendor.
2393 (h) Details on any debt that has been forgiven or deferred
2394 during the period. Details must include the entity the debt is
2395 due to, the amount forgiven or deferred, an explanation as to
2396 why the debt was forgiven or deferred, and whether the debt has
2397 been assumed by another party on behalf of the facility.
2398 (3) Each facility shall file with the office all escrow
2399 bank statements for the last quarter of the reporting period
2400 which support the funds held in each of the minimum liquid
2401 reserves bank accounts. The liquid reserves funds include the
2402 debt service reserve, the operating reserve, and the renewal and
2403 replacement reserve.
2404 (4) Any provider that has been placed into administrative
2405 supervision under s. 651.018 shall provide a compiled 2-year
2406 forecast, submitted on a form prescribed by the office, as long
2407 as the provider operates under administrative supervision. The
2408 compiled data in the 2-year forecast shall be presented on a
2409 monthly basis.
2410 (8)(6) The workpapers, account analyses, descriptions of
2411 basic assumptions, and other information necessary for a full
2412 understanding of the annual statement of a provider as filed
2413 with the office shall be made available for visual inspection by
2414 the office at the facility or, if the office requests, at
2415 another agreed-upon site. Photocopies shall be provided to the
2416 office upon request may not be made unless consented to by the
2417 provider.
2418 Section 60. Present subsections (2), (3), and (4) of
2419 section 651.0261, Florida Statutes, are redesignated as
2420 subsections (3), (4), and (5), respectively, a new subsection
2421 (2) is added to that section, and subsection (1) and present
2422 subsection (3) of that section are amended, to read:
2423 651.0261 Quarterly and monthly statements.—
2424 (1) Within 45 days after the end of each fiscal quarter,
2425 each provider shall file a quarterly unaudited financial
2426 statement of the provider or of the facility in the form
2427 prescribed by commission rule and days cash on hand, occupancy,
2428 debt service coverage ratio, and a detailed listing of the
2429 assets maintained in the liquid reserve as required under s.
2430 651.035. The last quarterly statement for a fiscal year is not
2431 required if a provider does not have pending a regulatory action
2432 level event, impairment, or a corrective action plan. If a
2433 provider falls below two or more of the thresholds set forth in
2434 s. 651.011(29) s. 651.011(26) at the end of any fiscal quarter,
2435 the provider shall submit to the office, at the same time as the
2436 quarterly statement, an explanation of the circumstances and a
2437 description of the actions it will take to meet the
2438 requirements.
2439 (2) Each provider shall file with the office quarterly,
2440 together with the quarterly statement required by this section:
2441 (a) All escrow bank statements for each quarter which
2442 support the funds held in each of the minimum liquid reserve
2443 bank account, including, but not limited to, the debt service
2444 reserve, the operating reserve, and the renewal and replacement
2445 reserve.
2446 (b) An accounts payable aging schedule that lists all
2447 outstanding repayment obligations and the corresponding amounts
2448 owed to vendors.
2449 (c) Details on any debt that has been forgiven or deferred
2450 during the period. Such details must include the entity the debt
2451 is due to, the amount forgiven or deferred, an explanation as to
2452 why the debt was forgiven or deferred, and whether the debt has
2453 been assumed by another party on behalf of the facility. If a
2454 facility is required to file monthly financial statements with
2455 the office, the facility is required to include details on
2456 forgiven or deferred debt with the monthly filing.
2457 (4)(3) A filing under subsection (3) (2) may be required if
2458 any of the following applies:
2459 (a) The provider is:
2460 1. Subject to administrative supervision proceedings;
2461 2. Subject to a corrective action plan resulting from a
2462 regulatory action level event and for up to 2 years after the
2463 factors that caused the regulatory action level event have been
2464 corrected; or
2465 3. Subject to delinquency or receivership proceedings or
2466 has filed for bankruptcy.
2467 (b) The provider or facility displays a declining financial
2468 position.
2469 (c) A change of ownership of the provider or facility has
2470 occurred within the previous 2 years.
2471 (d) The provider is found to be impaired.
2472 Section 61. Paragraph (c) of subsection (1), subsection
2473 (2), paragraph (a) of subsection (3), and paragraph (c) of
2474 subsection (5) of section 651.033, Florida Statutes, are
2475 amended, and subsection (7) is added to that section, to read:
2476 651.033 Escrow accounts.—
2477 (1) When funds are required to be deposited in an escrow
2478 account pursuant to s. 651.0215, s. 651.022, s. 651.023, s.
2479 651.0246, s. 651.035, or s. 651.055:
2480 (c) Any agreement establishing an escrow account required
2481 under this chapter is subject to approval by the office before
2482 execution. The agreement must be in writing and contain, in
2483 addition to any other provisions required by law, a provision
2484 whereby the escrow agent agrees to abide by the duties imposed
2485 by paragraphs (b) and (e), (3)(a) and (b), (5)(a), and
2486 subsection (6).
2487 (2)(a) As used in this subsection, the term “emergency”
2488 means conditions that exist beyond the control of the provider,
2489 such as severe damage to the provider’s physical premises caused
2490 by a natural or manmade disaster or another event of comparable
2491 gravity and severity.
2492 (b) Notwithstanding s. 651.035(7), in the event of an
2493 emergency and upon written petition by the provider to the
2494 office, on a form prescribed by the commission, the office may
2495 allow a withdrawal of up to 10 percent of the required minimum
2496 liquid reserve, consistent with the requirements governing how
2497 funds can be used under s. 651.035. Before submitting the
2498 petition to the office, the provider must meet with the office
2499 to review the emergency petition. In the meeting, the provider
2500 must address the details of the emergency, the circumstances
2501 leading to the need for an emergency petition, the provider’s
2502 plan to mitigate the emergency, the amount being requested, and
2503 the provider’s plan and timeline to restore the minimum liquid
2504 reserves into compliance with s. 651.035. The office shall have
2505 10 business 3 working days to deny the petition for the
2506 emergency 10-percent withdrawal. If the office fails to deny the
2507 petition within 10 business 3 working days, the petition is
2508 deemed to have been granted by the office. For purposes of this
2509 section, the term “business day working day” means each day that
2510 is not a Saturday, Sunday, or legal holiday as defined by
2511 Florida law. Also, for purposes of this section, the day the
2512 petition is received by the office is not counted as one of the
2513 10 3 days.
2514 (3) When entrance fees are required to be deposited in an
2515 escrow account pursuant to s. 651.0215, s. 651.022, s. 651.023,
2516 s. 651.0246, or s. 651.055:
2517 (a) The provider shall deliver to the resident a written
2518 receipt. The receipt must show the payor’s name and address, the
2519 date, the price of the care contract, and the amount of money
2520 paid. A copy of each receipt, together with the funds, must be
2521 deposited with the escrow agent or as provided in paragraph (c).
2522 The escrow agent must release such funds to the provider 7 days
2523 after the date of receipt of the funds by the escrow agent if
2524 the provider, operating under a certificate of authority issued
2525 by the office, has met the requirements of s. 651.0215(7) s.
2526 651.0215(8), s. 651.023(5) s. 651.023(6), or s. 651.0246.
2527 However, if the resident rescinds the contract within the 7-day
2528 period, the escrow agent must release the escrowed fees to the
2529 resident.
2530 (5) When funds are required to be deposited in an escrow
2531 account pursuant to s. 651.0215, s. 651.022, s. 651.023, s.
2532 651.0246, or s. 651.035, the following apply:
2533 (c) In accordance with the annual and quarterly filing
2534 deadlines set forth in ss. 651.026 and 651.0261 On or before the
2535 20th day of the month following the quarter for which the
2536 statement is due, the provider shall file with the office a copy
2537 of the escrow agent’s statement or, if the provider has not
2538 received the escrow agent’s statement, a copy of the written
2539 request to the escrow agent for the statement.
2540 (7) The escrow agent shall provide prompt written
2541 notification to the office upon withdrawal of any funds from an
2542 account required by s. 651.035. Any escrow agreement established
2543 to meet any requirement of s. 651.035 must contain this
2544 provision.
2545 Section 62. Subsection (2) of section 651.034, Florida
2546 Statutes, is amended to read:
2547 651.034 Financial and operating requirements for
2548 providers.—
2549 (2) Except when the office’s remedial rights are suspended
2550 pursuant to s. 651.114(11)(a), The office must take action
2551 necessary to place an impaired provider under regulatory
2552 control, including administrative supervision or any remedy
2553 available under part I of chapter 631. An impairment is
2554 sufficient grounds for the department to be appointed as
2555 receiver as provided in chapter 631, except when the office’s
2556 remedial rights are suspended pursuant to s. 651.114(11)(a). If
2557 the office’s remedial rights are suspended pursuant to s.
2558 651.114(11)(a), the impaired provider must make available to the
2559 office copies of any corrective action plan approved by the
2560 third-party lender or trustee to cure the impairment and any
2561 related required report. For purposes of s. 631.051, impairment
2562 of a provider is defined according to the term “impaired” has
2563 the same meaning as in under s. 651.011. The office may forego
2564 taking action for up to 90 180 days after the impairment if the
2565 office finds there is a reasonable expectation that the
2566 impairment may be eliminated within the 90-day 180-day period.
2567 Section 63. Subsections (1) and (3), paragraph (b) of
2568 subsection (7), and subsection (8) of section 651.035, Florida
2569 Statutes, are amended to read:
2570 651.035 Minimum liquid reserve requirements.—
2571 (1) A provider shall maintain in escrow a minimum liquid
2572 reserve consisting of the following reserves, as applicable.
2573 Each established account must be separate and unique to a
2574 facility, unencumbered, and not commingled with any other funds
2575 from any other account, facility, affiliate, or obligated group.
2576 Funds held in escrow under paragraphs (a), (c), and (d) must be
2577 held completely separate from any funds held by a trustee under
2578 paragraph (b), meaning the debt service, operating, and renewal
2579 and replacement reserves must have their own distinct account
2580 number:
2581 (a) Each provider shall maintain in escrow as a debt
2582 service reserve the aggregate amount of all principal and
2583 interest payments due during the fiscal year on any mortgage
2584 loan or other long-term financing of the facility, including
2585 property taxes as recorded in the audited financial report
2586 required under s. 651.026. The amount must include any leasehold
2587 payments and all costs related to such payments. If principal
2588 payments are not due during the fiscal year, the provider must
2589 maintain in escrow as a minimum liquid reserve an amount equal
2590 to interest payments due during the next 12 months on any
2591 mortgage loan or other long-term financing of the facility,
2592 including property taxes. If a provider does not have a mortgage
2593 loan or other financing on the facility, the provider must
2594 deposit monthly in escrow as a minimum liquid reserve an amount
2595 equal to one-twelfth of the annual property tax liability as
2596 indicated in the most recent tax notice provided pursuant to s.
2597 197.322(3), and must annually pay property taxes out of such
2598 escrow.
2599 (b) A provider that has outstanding indebtedness that
2600 requires a debt service reserve to be held in escrow pursuant to
2601 a trust indenture or mortgage lien on the facility and for which
2602 the debt service reserve may only be used to pay principal and
2603 interest payments on the debt that the debtor is obligated to
2604 pay, and which may include property taxes and insurance, may
2605 include such debt service reserve in computing the minimum
2606 liquid reserve needed to satisfy this subsection if the provider
2607 furnishes to the office a copy of the agreement under which such
2608 debt service reserve is held, together with a statement of the
2609 amount being held in escrow for the debt service reserve,
2610 certified by the lender or trustee and the provider to be
2611 correct. The trustee shall provide the office with any
2612 information concerning the debt service reserve account upon
2613 request of the provider or the office. In addition, the trust
2614 indenture, loan agreement, or escrow agreement must provide that
2615 the provider, trustee, lender, escrow agent, or a person
2616 designated to act in its place shall notify the office in
2617 writing at least 10 days before the withdrawal of any portion of
2618 the debt service reserve funds required to be held in escrow as
2619 described in this paragraph. The notice must include an
2620 affidavit sworn to by the provider, the trustee, or a person
2621 designated to act in its place which includes the amount of the
2622 scheduled debt service payment, the payment due date, the amount
2623 of the withdrawal, the accounts from which the withdrawal will
2624 be made, and a plan with a schedule for replenishing the
2625 withdrawn funds. If the plan is revised by a consultant that is
2626 retained as prescribed in the provider’s financing documents,
2627 the revised plan must be submitted to the office within 10 days
2628 after the approval by the lender or trustee. If a debt service
2629 reserve is transferred from one financial institution or lender
2630 to another, the provider must provide notice to the office at
2631 least 10 days before the transfer takes place. The notice must
2632 include an affidavit sworn to by the provider and include the
2633 name of the institution where the debt service reserve is being
2634 transferred, the date of transfer, the amount being transferred,
2635 a copy of the agreement requiring the transfer to the new
2636 financial institution, and the contact information for the
2637 escrow agent of the new account. The new escrow agreement must
2638 comply with s. 651.033. Any funds held pursuant to this section
2639 do not negate the requirement to maintain an escrow account as
2640 required in paragraph (a). Any such separate debt service
2641 reserves are not subject to the transfer provisions set forth in
2642 subsection (8).
2643 (c) Each provider shall maintain in escrow an operating
2644 reserve equal to or greater than the following amounts:
2645 1. Thirty 30 percent of the total operating expenses
2646 projected in the feasibility study required by s. 651.023 for
2647 the first 12 months of operation.
2648 2. After the first 12 months of operation, 30 percent of
2649 the operating reserve in the annual report filed pursuant to s.
2650 651.026.
2651 3. Once a provider maintains an occupancy level in excess
2652 of 80 percent for at least 12 months and has presented in its
2653 most recent annual report that it has reached stabilized
2654 occupancy, 15 percent of the total operating reserve upon
2655 approval of the office.
2656 4. If the provider has been found to meet any of the
2657 following conditions, 30 percent of the total operating reserve:
2658 a. Is at regulatory action level under s. 651.034.
2659 b. Is placed under administrative supervision.
2660 c. Is in a hazardous financial condition under s. 651.113.
2661 d. Filed or has notified the office of its intent to file
2662 for bankruptcy.
2663 e. Failed to maintain minimum liquid reserve requirements
2664 under subsections (10) and (11).
2665
2666 Upon notice from the office that a condition identified in this
2667 subparagraph exists, the provider has 10 days within which to
2668 fund the operating reserve at 50 percent and provide evidence of
2669 the funding to the office.
2670 (d) Before reducing the operating reserve required under
2671 paragraph (c), the provider must obtain written approval from
2672 the office Thereafter, each provider shall maintain in escrow an
2673 operating reserve equal to 15 percent of the total operating
2674 expenses in the annual report filed pursuant to s. 651.026.
2675 (e) If a provider has been in operation for more than 12
2676 months, the total annual operating expenses must be determined
2677 by averaging the total annual operating expenses reported to the
2678 office by the number of annual reports filed with the office
2679 within the preceding 3-year period subject to adjustment if
2680 there is a change in the number of facilities owned. For
2681 purposes of this subsection, total annual operating expenses
2682 include all expenses of the facility except depreciation and
2683 amortization; interest and property taxes included in paragraph
2684 (a); extraordinary expenses that are adequately explained and
2685 documented in accordance with generally accepted accounting
2686 principles; liability insurance premiums in excess of those paid
2687 in calendar year 1999; and changes in the obligation to provide
2688 future services to current residents. For providers initially
2689 licensed during or after calendar year 1999, liability insurance
2690 must be included in the total operating expenses in an amount
2691 not to exceed the premium paid during the first 12 months of
2692 facility operation. The operating reserves required under this
2693 subsection must be in an unencumbered account held in escrow for
2694 the benefit of the residents. Such funds may not be encumbered
2695 or subject to any liens or charges by the escrow agent or
2696 judgments, garnishments, or creditors’ claims against the
2697 provider or facility. However, if a facility had a lien,
2698 mortgage, trust indenture, or similar debt instrument in place
2699 before January 1, 1993, which encumbered all or any part of the
2700 reserves required by this subsection and such funds were used to
2701 meet the requirements of this subsection, then such arrangement
2702 may be continued, unless a refinancing or acquisition has
2703 occurred, and the provider is in compliance with this
2704 subsection.
2705 (f)(d) Each provider shall maintain in escrow a renewal and
2706 replacement reserve equal to 15 percent of the total accumulated
2707 depreciation based on the audited financial statement required
2708 to be filed pursuant to s. 651.026, not to exceed 15 percent of
2709 the facility’s average operating expenses for the past 3 fiscal
2710 years based on the audited financial statements for each of
2711 those years. For a provider who is an operator of a facility but
2712 is not the owner and depreciation is not included as part of the
2713 provider’s financial statement, the renewal and replacement
2714 reserve required by this paragraph must equal 15 percent of the
2715 total operating expenses of the provider, as described in this
2716 section. Each provider licensed before October 1, 1983, shall
2717 fully fund the renewal and replacement reserve by October 1,
2718 2003, by multiplying the difference between the former escrow
2719 requirement and the present escrow requirement by the number of
2720 years the facility has been in operation after October 1, 1983.
2721 (3) If principal and interest payments are paid to a trust
2722 that is beneficially held by the residents as described in s.
2723 651.023(6) s. 651.023(7), the office may waive all or any
2724 portion of the escrow requirements for mortgage principal and
2725 interest contained in subsection (1) if the office finds that
2726 such waiver is not inconsistent with the security protections
2727 intended by this chapter.
2728 (7)
2729 (b)1. For all other proposed withdrawals, in order to
2730 receive the consent of the office, the provider must file
2731 documentation showing why the withdrawal is necessary for the
2732 continued operation of the facility and such additional
2733 information as the office reasonably requires.
2734 2. The office shall notify the provider when the filing is
2735 deemed complete. If the provider has complied with all prior
2736 requests for information, the filing is deemed complete after 30
2737 days without communication from the office.
2738 3. Within 30 days after the date a file is deemed complete,
2739 the office shall provide the provider with written notice of its
2740 approval or disapproval of the request. The provider may not
2741 withdraw funds until the office provides such written notice.
2742 The office may disapprove any request to withdraw such funds if
2743 it determines that the withdrawal is not in the best interest of
2744 the residents.
2745 (8) The office may order the immediate transfer of up to
2746 100 percent of the funds held in the minimum liquid reserve to
2747 the custody of the department pursuant to part III of chapter
2748 625 if the office finds that the provider is impaired or
2749 insolvent, the facility is found to have withdrawn funds without
2750 approval by the office, or if the facility fails to fund the
2751 minimum liquid reserve required by subsection (10) or subsection
2752 (11). The office may order such a transfer regardless of whether
2753 the office has suspended or revoked, or intends to suspend or
2754 revoke, the certificate of authority of the provider.
2755 Section 64. Subsection (2) of section 651.043, Florida
2756 Statutes, is amended to read:
2757 651.043 Approval of change in management.—
2758 (2) A provider or management company shall notify the
2759 office, in writing or electronically, of any change in the
2760 information required by s. 651.022(2) management within 10
2761 business days. For each new management company or manager not
2762 employed by a management company, the provider shall submit to
2763 the office the information required by s. 651.022(2) and a copy
2764 of the written management contract, if applicable.
2765 Section 65. Subsection (1) of section 651.071, Florida
2766 Statutes, is amended to read:
2767 651.071 Contracts as preferred claims on liquidation or
2768 receivership.—
2769 (1) In the event of receivership or liquidation proceedings
2770 against a provider, all continuing care and continuing care at
2771 home contracts executed by a provider are deemed preferred
2772 claims against all assets owned by the provider.; however, Such
2773 claims are subordinate to any secured claim and must be treated
2774 with higher priority over all other claims, except Class 1
2775 claims. For purposes of s. 631.271, such contracts are deemed
2776 Class 2 claims.
2777 Section 66. Subsections (2) and (3) of section 651.085,
2778 Florida Statutes, are amended to read:
2779 651.085 Quarterly meetings between residents and the
2780 governing body of the provider; resident representation before
2781 the governing body of the provider.—
2782 (2) A residents’ council formed pursuant to s. 651.081,
2783 members of which are elected by the residents, shall nominate
2784 and elect a designated resident representative to represent them
2785 before the governing body of the provider on matters specified
2786 in subsection (3). The initial designated resident
2787 representative elected under this section shall be elected to
2788 serve at least 12 months. The designated resident representative
2789 does not have to be a current member of the residents’ council;
2790 however, such individual must be a resident, as defined in s.
2791 651.011. Designated resident representatives shall perform their
2792 duties in good faith. For providers that own or operate more
2793 than one facility in the state, each facility must have its own
2794 designated resident representative.
2795 (3) The designated resident representative shall be
2796 notified in writing or electronically by a representative of the
2797 provider at least 14 days in advance of any meeting of the full
2798 governing body at which the annual budget and proposed changes
2799 or increases in resident fees or services are on the agenda or
2800 will be discussed before presenting the increases in resident
2801 fees or services to all residents. The designated resident
2802 representative shall be invited to attend and participate in
2803 that portion of the meeting designated for the discussion of
2804 such changes. Designated resident representatives shall perform
2805 their duties in good faith. For providers that own or operate
2806 more than one facility in the state, each facility must have its
2807 own designated resident representative.
2808 Section 67. Section 651.087, Florida Statutes, is created
2809 to read:
2810 651.087 Solicitation of loans from residents.—In addition
2811 to any damages or civil penalties to which a provider, a person
2812 employed by a provider, or a person acting on behalf of a
2813 provider, including, but not limited to, a management company,
2814 who borrows from or pledges any personal funds of a resident
2815 other than the amount agreed to by a written contract approved
2816 by the office pursuant to s. 651.055 commits a misdemeanor of
2817 the first degree, punishable as provided in 775.082 or s.
2818 775.083.
2819 Section 68. Paragraphs (h) through (n) of subsection (2) of
2820 section 651.091, Florida Statutes, are redesignated as
2821 paragraphs (i) through (o), respectively, and a new paragraph
2822 (h) and paragraph (p) are added to that subsection, present
2823 paragraph (h) of subsection (2) and paragraph (d) of subsection
2824 (3) are amended, to read:
2825 651.091 Availability, distribution, and posting of reports
2826 and records; requirement of full disclosure.—
2827 (2) Every continuing care facility shall:
2828 (h) Post a notice of any bankruptcy proceedings in a
2829 prominent location within the facility which is accessible to
2830 all residents and the general public. Such notice must include a
2831 summary of the bankruptcy proceedings and specify where the full
2832 legal record of the bankruptcy proceedings can be inspected
2833 within the facility. The facility shall also designate and make
2834 available a management representative to discuss the bankruptcy
2835 proceedings and address questions from residents. The notice
2836 required under this paragraph must also include a listing of all
2837 court documents related to the bankruptcy proceedings and the
2838 designated representative’s contact information.
2839 (i)(h) Deliver the information described in s. 651.085(4)
2840 in writing or electronically to the president or chair of the
2841 residents’ council and make supporting documentation available
2842 upon request.
2843 (p) Maintain records showing compliance with the
2844 requirements of this subsection, including how, where, and when
2845 the required information was provided.
2846 (3) Before entering into a contract to furnish continuing
2847 care or continuing care at-home, the provider undertaking to
2848 furnish the care, or the agent of the provider, shall make full
2849 disclosure, obtain written acknowledgment of receipt, and
2850 provide copies of the disclosure documents to the prospective
2851 resident or his or her legal representative, of the following
2852 information:
2853 (d) In keeping with the intent of this subsection relating
2854 to disclosure, the provider shall make available for review:
2855 1. Master plans approved by the provider’s board or
2856 governing body;
2857 2. Any proposed or approved and any plans for expansion or
2858 phased development within the next 3 years, to the extent that
2859 the availability of such plans does not put at risk real estate,
2860 financing, acquisition, negotiations, or other implementation of
2861 operational plans and thus jeopardize the success of
2862 negotiations, operations, and development.
2863 Section 69. Section 651.104, Florida Statutes, is created
2864 to read:
2865 651.104 Certificate of authority to act as a management
2866 company.—
2867 (1) It is unlawful for any person to act as or hold himself
2868 or herself out to be management company for a continuing care
2869 retirement community in this state without a valid certificate
2870 of authority issued by the office pursuant to this section. A
2871 management company that was operating in this state as of June
2872 30, 2025, may continue to operate until January 1, 2026, as a
2873 management company without a certificate of authority and is not
2874 in violation of the requirement to possess a valid certificate
2875 of authority as a management company during that period of time.
2876 To qualify for and hold authority to act as a management company
2877 in this state, a management company must otherwise be in
2878 compliance pursuant to this section and with its organizational
2879 agreement. A person who, on or after January 1, 2026, does not
2880 hold a certificate of authority to act as a management company
2881 while operating as a management company is subject to a fine of
2882 $10,000 per violation per day.
2883 (2) A management company shall file with the office an
2884 application for a certificate of authority on a form adopted by
2885 the commission and furnished by the office. The application must
2886 include or have attached the following information and
2887 documents:
2888 (a) All basic organizational documents of the management
2889 company, such as the articles of incorporation, articles of
2890 association, partnership agreement, trade name certificate,
2891 trust agreement, shareholder agreement, and other applicable
2892 documents, and all amendments to those documents.
2893 (b) The bylaws, rules, and regulations or similar documents
2894 regulating the conduct or the internal affairs of the management
2895 company.
2896 (c) The names, addresses, official positions, and
2897 professional qualifications of the individuals employed or
2898 retained by the management company who are responsible for the
2899 conduct of the affairs of the management company, including all
2900 members of the board of directors, board of trustees, executive
2901 committee, or other governing board or committee, and the
2902 principal officers, or equivalent, or for a partnership or
2903 association of the management company, the partners or members.
2904 (d) Audited annual financial statements, prepared in
2905 accordance with generally accepted accounting principles, for
2906 the 2 most recent fiscal years, which prove that the applicant
2907 has a positive net worth in both fiscal years. If the applicant
2908 has been in existence for less than 2 fiscal years, the
2909 application must include financial statements or reports,
2910 certified by an officer of the applicant and prepared in
2911 accordance with generally accepted accounting principles, for
2912 any completed fiscal years and for any month during the current
2913 fiscal year for which such financial statements or reports have
2914 been completed. If the applicant reports net losses for either
2915 of the 2 most recent fiscal years, the applicant must provide
2916 pro forma financial statements up to the period of time that the
2917 applicant demonstrates 2 consecutive years of profitability. Pro
2918 forma financial statements must include the balance sheet,
2919 income statement, and cash flow statement. An audited financial
2920 statement or report prepared on a consolidated basis must
2921 include a columnar consolidating or combining worksheet that
2922 must be filed with the report and comply with the following:
2923 1. Amounts shown on the consolidated audited financial
2924 report must be shown on the worksheet;
2925 2. Amounts for each entity must be stated separately; and
2926 3. Explanations of consolidating and eliminating entries
2927 must be included.
2928 (e) Any information as the office may require in order to
2929 review the current financial condition of the applicant.
2930 (f) A statement describing the business plan, including
2931 information on staffing levels and activities proposed or
2932 ongoing, in this state and nationwide. The plan must provide
2933 details setting forth the applicant’s capability of providing a
2934 sufficient number of experienced and qualified personnel in the
2935 areas of issuing continuing care life contracts and managing
2936 continuing care retirement communities or similar communities,
2937 compliance with statutory requirements, and claims processing,
2938 recordkeeping, and underwriting.
2939 (g) If the applicant is not currently acting as a
2940 management company, a statement of the amounts and sources of
2941 the funds available for organization expenses and the proposed
2942 arrangements for reimbursement and compensation of incorporators
2943 or other principals.
2944 (h) Such other data, financial statements, and pertinent
2945 information as the commission or office may reasonably require
2946 with respect to the management company, its directors, or its
2947 trustees, or with respect to any parent, subsidiary, or
2948 affiliate, if the management company relies on a contractual or
2949 financial relationship with such parent, subsidiary, or
2950 affiliate in order to meet the financial requirements of this
2951 chapter, to determine the financial status of the management
2952 company and the management capabilities of its managers and
2953 owners.
2954 (3) An applicant must also submit all of the following for
2955 all individuals referenced in paragraph (2)(c):
2956 (a) A complete biographical statement on a form prescribed
2957 by the commission.
2958 (b) An independent background report as prescribed by the
2959 commission.
2960 (c) A full set of fingerprints to the office or to a
2961 vendor, entity, or agency authorized by s. 943.053(13). The
2962 office, vendor, entity, or agency, as applicable, shall forward
2963 the fingerprints to the Department of Law Enforcement for state
2964 processing, and the Department of Law Enforcement shall forward
2965 the fingerprints to the Federal Bureau of Investigation for
2966 national processing in accordance with s. 943.053 and 28 C.F.R.
2967 s. 20.
2968 (d) A self-disclosure of any administrative, civil, or
2969 criminal complaints, settlements, or discipline of the
2970 applicant, or any of the applicant’s affiliates, which relates
2971 to a violation of the insurance laws or continuing care
2972 retirement community laws, in any state.
2973 (4)(a) The applicant shall make available for inspection by
2974 the office copies of all contracts and contract templates
2975 relating to services provided by the management company to
2976 providers or other persons using the services of the management
2977 company.
2978 (b) The applicant shall also make available for inspection
2979 by the office copies of all contracts and contract templates
2980 with any provider.
2981 (5) The office may not issue a certificate of authority if
2982 it determines that the management company or any individual
2983 specified in paragraph (2)(c) is not competent, trustworthy,
2984 financially responsible, or of good personal and business
2985 reputation.
2986 (6) A certificate of authority issued under this section
2987 remains valid, unless suspended or revoked by the office, so
2988 long as the certificateholder continues in business in this
2989 state.
2990 Section 70. Section 651.1041, Florida Statutes, is created
2991 to read:
2992 651.1041 Acquisition of a management company.—An
2993 acquisition of a management company is governed by s. 628.4615
2994 as if the company were a specialty insurer.
2995 Section 71. Section 651.1043, Florida Statutes, is created
2996 to read:
2997 651.1043 Management company annual and quarterly financial
2998 statements; notice of change of ownership; fines for
2999 noncompliance.—
3000 (1) Each authorized management company shall annually file
3001 with the office a full and true statement of its financial
3002 condition, transactions, and affairs within 3 months after the
3003 end of the management company’s fiscal year or within such
3004 extension of time as the office may grant for good cause. The
3005 statement must be for the preceding fiscal year and must be in
3006 such form and contain such matters as the commission prescribes
3007 and must be verified by at least two officers of the management
3008 company.
3009 (2) Each authorized management company shall also annually
3010 file an audited financial statement prepared in accordance with
3011 generally accepted accounting principles by an independent
3012 certified public accountant. The audited financial statement
3013 must be filed with the office within 3 months after the end of
3014 the management company’s fiscal year and be for the preceding
3015 fiscal year. An audited financial statement prepared on a
3016 consolidated basis must include a columnar consolidating or
3017 combining worksheet that must be filed with the statement and
3018 must comply with all of the following:
3019 (a) Amounts shown on the consolidated audited financial
3020 statement must be shown on the worksheet.
3021 (b) Amounts for each entity must be stated separately.
3022 (c) Explanations of consolidating and eliminating entries
3023 must be included.
3024 (3) For the purpose of determining the financial status of
3025 the management company and the management capabilities of its
3026 managers and owners, the management company must submit such
3027 other data, financial statements, and pertinent information as
3028 the commission or office may reasonably require with respect to
3029 the management company, its directors, or its trustees, or with
3030 respect to any parent, subsidiary, or affiliate if the
3031 management company relies on a contractual or financial
3032 relationship with such parent, subsidiary, or affiliate in order
3033 to meet the financial requirements of this chapter.
3034 (4) For any material change in its ownership, a management
3035 company shall file an acquisition application as required by s.
3036 651.024.
3037 (5) Within 45 days after the end of each fiscal quarter,
3038 each management company shall file a quarterly unaudited
3039 financial statement in the form prescribed by commission rule.
3040 (6) If the office finds that such information is needed to
3041 properly monitor the financial condition of a management company
3042 or is otherwise needed to protect the public interest, the
3043 office may require the management company to file:
3044 (a) Within 25 days after the end of each month, a monthly
3045 unaudited financial statement of the management company in the
3046 form prescribed by the commission by rule.
3047 (b) For the purpose of determining the financial status of
3048 the management company and the management capabilities of its
3049 managers and owners, such other data, financial statements, and
3050 pertinent information as the office may reasonably require with
3051 respect to the management company, its directors, or its
3052 trustees, or with respect to any parent, subsidiary, or
3053 affiliate if the management company relies on a contractual or
3054 financial relationship with such parent, subsidiary, or
3055 affiliate in order to meet the financial requirements of this
3056 chapter.
3057 (7) Any management company that fails to file an annual
3058 financial report or quarterly financial report in the form and
3059 within the time required by this section shall forfeit to the
3060 office an amount set by order of the office which does not
3061 exceed $1,000 for each of the first 10 days of noncompliance and
3062 does not exceed $2,000 for each subsequent day of noncompliance.
3063 Upon notice by the office that the management company is not in
3064 compliance with this section, the management company’s authority
3065 to perform in the capacity of a management company for any
3066 provider or facility in this state ceases until the office
3067 determines the management company to be in compliance. The
3068 office may not collect more than $100,000 under this subsection
3069 with respect to any particular report.
3070 (8) All moneys collected by the office under this section
3071 must be deposited to the credit of the Insurance Regulatory
3072 Trust Fund.
3073 (9) The commission may by rule require all or part of the
3074 statements or filings required under this section to be
3075 submitted by electronic means in a computer-readable form
3076 compatible with the electronic data format specified by the
3077 commission.
3078 Section 72. Section 651.1045, Florida Statutes, is created
3079 to read:
3080 651.1045 Management company grounds for discretionary
3081 denial, suspension, or revocation of certificate of authority.—
3082 (1) The office may deny an application or suspend or revoke
3083 the certificate of authority of any applicant or management
3084 company if it finds that any one or more of the following
3085 grounds applicable to the applicant or management company exist:
3086 (a) Failing to continue to meet the requirements for the
3087 certificate of authority originally granted.
3088 (b) Failing to meet one or more of the qualifications for
3089 the certificate of authority under this chapter.
3090 (c) Making a material misstatement or misrepresentation to
3091 obtain the certificate of authority or committing fraud in
3092 obtaining or in attempting to obtain the certificate of
3093 authority.
3094 (d) Demonstrating a lack of fitness or trustworthiness.
3095 (e) Engaging in fraudulent or dishonest practices of
3096 management in the conduct of business.
3097 (f) Misappropriating, converting, or withholding moneys.
3098 (g) Failing to comply with, or violating, any lawful order
3099 or rule issued by the office or commission or violating any
3100 provision of this chapter.
3101 (h) Becoming insolvent or financially impaired or
3102 conducting business in a manner that poses a risk to the public.
3103 (i) Refusing to be examined or to produce accounts,
3104 records, and files for examination, refusing to give information
3105 with respect to its affairs, or refusing to perform any other
3106 legal obligation under this chapter when required by the office.
3107 (j) Failing to comply with the requirements of s. 651.1043.
3108 (k) Failing to maintain full compliance with escrow
3109 accounts or funds as required by this chapter, if responsible
3110 for the day-to-day operations of the provider.
3111 (l) Failing to meet the requirements of this chapter for
3112 disclosure of information to residents concerning the facility,
3113 its ownership, its management, its development, or its financial
3114 condition, or failing to honor its continuing care or continuing
3115 care at-home contracts, if responsible for the day-to-day
3116 operations of the provider.
3117 (m) Having any cause for which issuance of the license
3118 could have been denied had it then existed and been known to the
3119 office.
3120 (n) Having owners, managers, officers, or directors who
3121 have been found guilty of, or have pleaded guilty or nolo
3122 contendere to, a felony in this state or any other state,
3123 regardless of whether a judgment or conviction was entered by
3124 the court having jurisdiction of such cases.
3125 (o) Engaging in unfair methods of competition or in unfair
3126 or deceptive acts or practices prohibited under part IX of
3127 chapter 626.
3128 (p) Demonstrating a pattern of bankrupt enterprises.
3129 (q) Including in ownership, control, or management any
3130 person who:
3131 1. Is not reputable and of responsible character;
3132 2. Is so lacking in management expertise as to make the
3133 operation of the provider hazardous to potential and existing
3134 residents;
3135 3. Is so lacking in management experience, ability, and
3136 standing as to jeopardize the reasonable promise of successful
3137 operation;
3138 4. Is affiliated, directly or indirectly, through ownership
3139 or control, with any person whose business operations are or
3140 have been marked by business practices or conduct that is
3141 detrimental to the public, contract holders, investors, or
3142 creditors; by manipulation of assets, finances, or accounts; or
3143 by bad faith; or
3144 5. Has business operations marked by business practices or
3145 conduct that is detrimental to the public, contract holders,
3146 investors, or creditors; by manipulation of assets, finances, or
3147 accounts; or by bad faith.
3148 (r) Failing to file a notice of change in management,
3149 failing to remove a disapproved manager, or persisting in
3150 appointing disapproved managers.
3151 (2) Revocation of a management company’s certificate of
3152 authority under this section does not relieve a provider of the
3153 provider’s obligation to residents under the terms and
3154 conditions of any continuing care or continuing care at-home
3155 contract between the provider and residents or this chapter. The
3156 management company shall continue to file its annual statement
3157 and pay license fees to the office as required under this
3158 chapter as if the certificate of authority had continued in full
3159 force, but the management company may not issue any new
3160 contracts on behalf of a provider.
3161 (3) The office may seek an action in the circuit court of
3162 the Second Judicial Circuit, in and for Leon County, to enforce
3163 the office’s order and the provisions of this section.
3164 Section 73. Subsections (1), (4), (5), and (6) of section
3165 651.105, Florida Statutes, are amended to read:
3166 651.105 Examination.—
3167 (1) The office may at any time, and shall at least once
3168 every 3 years, examine the business of any applicant for a
3169 certificate of authority and any provider or management company
3170 engaged in the execution of care contracts or engaged in the
3171 performance of obligations under such contracts, in the same
3172 manner as is provided for the examination of insurance companies
3173 pursuant to ss. 624.316 and 624.318. For a provider or
3174 management company as deemed accredited under s. 651.028, such
3175 examinations must take place at least once every 5 years. An
3176 examination covering the preceding 3 or 5 fiscal years of the
3177 provider or management company, as applicable, must be commenced
3178 within 12 months after the end of the most recent fiscal year
3179 covered by the examination. Such examination may include events
3180 subsequent to the end of the most recent fiscal year and the
3181 events of any prior period which relate to possible violations
3182 of this chapter or which affect the present financial condition
3183 of the provider or management company. At least once every 3 or
3184 5 fiscal years, as applicable, the office shall conduct an
3185 interview in person, telephonically, or through electronic
3186 communication with the current president or chair of the
3187 residents’ council, or another designated officer of the council
3188 if the president or chair is not available, as part of the
3189 examination process. The examinations must be made by a
3190 representative or examiner designated by the office whose
3191 compensation will be fixed by the office pursuant to s. 624.320.
3192 Routine examinations may be made by having the necessary
3193 documents submitted to the office,; and, for this purpose,
3194 financial documents and records conforming to commonly accepted
3195 accounting principles and practices, as required under s.
3196 651.026, are deemed adequate. The final written report of each
3197 examination must be filed with the office and, when so filed,
3198 constitutes a public record. Any provider or management company
3199 being examined shall, upon request, give reasonable and timely
3200 access to all of its records. The representative or examiner
3201 designated by the office may at any time examine the records and
3202 affairs and inspect the physical property of any provider or
3203 management company, whether in connection with a formal
3204 examination or not.
3205 (4) The office shall notify the provider or management
3206 company and the executive officer of the governing body of the
3207 provider or management company in writing of all deficiencies in
3208 its compliance with the provisions of this chapter and the rules
3209 adopted pursuant to this chapter and shall set a reasonable
3210 length of time for compliance by the provider or management
3211 company. In addition, the office shall require corrective action
3212 or request a corrective action plan from the provider or
3213 management company which plan demonstrates a good faith attempt
3214 to remedy the deficiencies by a specified date. If the provider
3215 or management company fails to comply within the established
3216 length of time, the office may initiate action against the
3217 provider or management company in accordance with the provisions
3218 of this chapter.
3219 (5) A provider or management company shall respond to
3220 written correspondence from the office and provide data,
3221 financial statements, and pertinent information as requested by
3222 the office. The office has standing to petition a circuit court
3223 for mandatory injunctive relief to compel access to and require
3224 the provider or management company to produce the documents,
3225 data, records, and other information requested by the office.
3226 The office may petition the circuit court in the county in which
3227 the facility is situated or the Circuit Court of Leon County to
3228 enforce this section.
3229 (6) Unless a provider is impaired or subject to a
3230 regulatory action level event, any parent, subsidiary, or
3231 affiliate is not subject to examination by the office as part of
3232 a routine examination. However, If a provider, or facility, or
3233 management company relies on a contractual or financial
3234 relationship with a parent, a subsidiary, or an affiliate in
3235 order to meet the financial requirements of this chapter, the
3236 office may examine any parent, subsidiary, or affiliate that has
3237 a contractual or financial relationship with the provider, or
3238 facility, or management company to the extent necessary to
3239 ascertain the financial condition of the provider or management
3240 company. For any provider that has been placed into
3241 administrative supervision under s. 651.018, any parent,
3242 subsidiary, or affiliate is subject to examination by the
3243 office.
3244 Section 74. Section 651.1065, Florida Statutes, is amended
3245 to read:
3246 651.1065 Soliciting or accepting new continuing care
3247 contracts by impaired or insolvent facilities or providers.—
3248 (1) Regardless of whether delinquency proceedings as to a
3249 continuing care facility have been or are to be initiated, a
3250 proprietor, a general partner, a member, an officer, a director,
3251 a trustee, or a manager, or a management company of a continuing
3252 care facility may not actively solicit, approve the solicitation
3253 or acceptance of, or accept new continuing care contracts in
3254 this state after the proprietor, general partner, member,
3255 officer, director, trustee, or manager, or a management company
3256 knew, or reasonably should have known, that the continuing care
3257 facility was impaired or insolvent except with the written
3258 permission of the office. If the facility has declared
3259 bankruptcy, the bankruptcy court or trustee appointed by the
3260 court has jurisdiction over such matters. The office must
3261 approve or disapprove the continued marketing of new contracts
3262 within 15 days after receiving a request from a provider.
3263 (2) A proprietor, a general partner, a member, an officer,
3264 a director, a trustee, or a manager, or a management company
3265 that who violates this section commits a felony of the third
3266 degree, punishable as provided in s. 775.082, s. 775.083, or s.
3267 775.084.
3268 Section 75. Subsections (2) and (3) of section 651.107,
3269 Florida Statutes, are amended to read:
3270 651.107 Duration of suspension; obligations during
3271 suspension period; reinstatement.—
3272 (2) During the period of suspension, the provider or
3273 management company shall file its annual statement and pay
3274 license fees and taxes as required under this chapter as if the
3275 certificate had continued in full force,; but the provider shall
3276 issue no new contracts.
3277 (3) Upon expiration of the suspension period, if within
3278 such period the certificate of authority has not otherwise
3279 terminated, the provider’s or management company’s certificate
3280 of authority shall automatically be reinstated unless the office
3281 finds that the causes for the suspension have not been removed
3282 or that the provider or management company is otherwise not in
3283 compliance with the requirements of this chapter. If not so
3284 automatically reinstated, the certificate of authority shall be
3285 deemed to be revoked as of the end of the suspension period or
3286 upon failure of the provider or management company to continue
3287 the certificate during the suspension period, whichever event
3288 first occurs.
3289 Section 76. Subsection (2) of section 651.108, Florida
3290 Statutes, is amended to read:
3291 651.108 Administrative fines.—
3292 (2) If it is found that the provider or management company
3293 has knowingly and willfully violated a lawful order of the
3294 office or a provision of this chapter, the office may impose a
3295 fine of up to in an amount not to exceed $10,000 for each such
3296 violation.
3297 Section 77. Section 651.113, Florida Statutes, is created
3298 to read:
3299 651.113 Hazardous facility or provider standards; office’s
3300 evaluation and enforcement authority; immediate final order.—
3301 (1) In determining whether the continued operation of any
3302 provider transacting business in this state may be deemed to be
3303 in hazardous financial condition, the office may consider, in
3304 the totality of the circumstances, any of the following:
3305 (a) The provider’s or facility’s financial statements
3306 contain findings or conditions that the office considers
3307 detrimental to its financial stability.
3308 (b) An independent auditor has identified significant
3309 financial risks or issued a going concern opinion.
3310 (c) The provider’s or facility’s current or projected ratio
3311 of total assets, including required reserves, to total
3312 liabilities indicates financial impairment or deterioration, or
3313 trends suggest a potential decline in operations, working
3314 capital, or equity.
3315 (d) The provider’s or facility’s current or projected ratio
3316 of current assets to current liabilities indicates financial
3317 impairment or deterioration, or trends suggest a potential
3318 decline in operations, working capital, or equity.
3319 (e) The provider or facility is unable to carry out normal
3320 daily activities and meet its obligations as they become due,
3321 based on its current or projected cash flow and liquidity
3322 position.
3323 (f) The provider’s or facility’s past-year operating losses
3324 or projected operating losses are significant enough to
3325 jeopardize daily operations or long-term viability.
3326 (g) The insolvency of an affiliated provider or facility or
3327 other affiliated person results in legal liability of the
3328 provider or facility for payments and expenses of such magnitude
3329 as to jeopardize the provider’s or facility’s ability to meet
3330 its obligations as they become due, without substantial
3331 disposition of assets outside the ordinary course of business,
3332 any restructuring of debt, or externally forced revisions of its
3333 operations.
3334 (h) The age and collectability of payables and receivables.
3335 (i) The provider or facility cannot demonstrate a
3336 significant reduction or resolution of a deteriorating financial
3337 condition.
3338 (j) A startup provider, a facility undergoing expansion, or
3339 an entity refinancing its debt has developed a financial
3340 condition that could seriously jeopardize current or future
3341 operations.
3342 (k) A facility has entered into a forbearance agreement
3343 with a lender based on an inability to make timely debt
3344 payments.
3345 (2) The provider or facility shall prepare a plan to
3346 address and correct any condition that has led to a hazardous
3347 financial condition. The plan must be presented to the office
3348 within 30 days after the date of the determination.
3349 (3) If the office determines that the continued operations
3350 of a provider or facility authorized to transact business in
3351 this state may be hazardous to its residents or to the general
3352 public, the office may issue an order requiring the provider or
3353 facility to do any of the following:
3354 (a) Obtain additional financing or revenues to maintain
3355 solvency.
3356 (b) Reduce expenses by specified methods or amounts.
3357 (c) Increase the operating reserve.
3358 (d) File reports to the office concerning the market value
3359 of the provider’s or facility’s assets.
3360 (e) Limit or withdraw from certain investments or
3361 discontinue certain investment practices to the extent the
3362 office deems necessary.
3363 (f) Document the adequacy of income and operating reserves
3364 in relation to expenses.
3365 (g) File, in addition to regular annual statements, interim
3366 financial reports on a form prescribed by the commission.
3367 (h) Correct corporate governance practice deficiencies and
3368 adopt and use governance practices acceptable to the office.
3369 (i) Provide a business plan acceptable to the office in
3370 order to continue to transact business in this state.
3371 (4) The office may, pursuant to ss. 120.569 and 120.57, in
3372 its discretion and without advance notice or hearing, issue an
3373 immediate final order to any insurer requiring the actions
3374 specified in subsection (3).
3375 (5) This section may not be interpreted to limit the powers
3376 granted to the office by any laws of this state, nor may it be
3377 interpreted to supersede any laws of this state.
3378 Section 78. Subsection (11) of section 651.114, Florida
3379 Statutes, is amended to read:
3380 651.114 Delinquency proceedings; remedial rights.—
3381 (11)(a) The rights of the office described in this section
3382 are subordinate to the rights of a trustee or lender pursuant to
3383 the terms of a resolution, ordinance, loan agreement, indenture
3384 of trust, mortgage, lease, security agreement, or other
3385 instrument creating or securing bonds or notes issued to finance
3386 a facility, and the office, subject to paragraph (c), may not
3387 exercise its remedial rights provided under this section and ss.
3388 651.018, 651.106, 651.108, and 651.116 with respect to a
3389 facility that is subject to a lien, mortgage, lease, or other
3390 encumbrance or trust indenture securing bonds or notes issued in
3391 connection with the financing of the facility, if the trustee or
3392 lender, by inclusion or by amendment to the loan documents or by
3393 a separate contract with the office, agrees that the rights of
3394 residents under a continuing care or continuing care at-home
3395 contract will be honored and will not be disturbed by a
3396 foreclosure or conveyance in lieu thereof as long as the
3397 resident:
3398 1. Is current in the payment of all monetary obligations
3399 required by the contract;
3400 2. Is in compliance and continues to comply with all
3401 provisions of the contract; and
3402 3. Has asserted no claim inconsistent with the rights of
3403 the trustee or lender.
3404 (b) This subsection does not require a trustee or lender
3405 to:
3406 1. Continue to engage in the marketing or resale of new
3407 continuing care or continuing care at-home contracts;
3408 2. Pay any rebate of entrance fees as may be required by a
3409 resident’s continuing care or continuing care at-home contract
3410 as of the date of acquisition of the facility by the trustee or
3411 lender and until expiration of the period described in paragraph
3412 (d);
3413 3. Be responsible for any act or omission of any owner or
3414 operator of the facility arising before the acquisition of the
3415 facility by the trustee or lender; or
3416 4. Provide services to the residents to the extent that the
3417 trustee or lender would be required to advance or expend funds
3418 that have not been designated or set aside for such purposes.
3419 (c) If the office determines, at any time during the
3420 suspension of its remedial rights as provided in paragraph (a),
3421 that:
3422 1. The trustee or lender is not in compliance with
3423 paragraph (a);
3424 2. A lender or trustee has assigned or has agreed to assign
3425 all or a portion of a delinquent or defaulted loan to a third
3426 party without the office’s written consent;
3427 3. The provider engaged in the misappropriation,
3428 conversion, or illegal commitment or withdrawal of minimum
3429 liquid reserve or escrowed funds required under this chapter;
3430 4. The provider refused to be examined by the office
3431 pursuant to s. 651.105(1); or
3432 5. The provider refused to produce any relevant accounts,
3433 records, and files requested as part of an examination,
3434
3435 the office shall notify the trustee or lender in writing of its
3436 determination, setting forth the reasons giving rise to the
3437 determination and specifying those remedial rights afforded to
3438 the office which the office shall then reinstate.
3439 (d) Upon acquisition of a facility by a trustee or lender
3440 and evidence satisfactory to the office that the requirements of
3441 paragraph (a) have been met, the office shall issue a 90-day
3442 temporary certificate of authority granting the trustee or
3443 lender the authority to engage in the business of providing
3444 continuing care or continuing care at-home and to issue
3445 continuing care or continuing care at-home contracts subject to
3446 the office’s right to immediately suspend or revoke the
3447 temporary certificate of authority if the office determines that
3448 any of the grounds described in s. 651.106 apply to the trustee
3449 or lender or that the terms of the contract used as the basis
3450 for the issuance of the temporary certificate of authority by
3451 the office have not been or are not being met by the trustee or
3452 lender since the date of acquisition.
3453 Section 79. Section 651.1165, Florida Statutes, is created
3454 to read:
3455 651.1165 Recording of lien by the office.—
3456 (1) The office may record with the county recorder of any
3457 county a notice of lien against the facility’s properties on
3458 behalf of all residents and contract holders who enter into life
3459 care contracts with the applicant to secure performance of the
3460 provider’s obligations to residents and contract holders
3461 pursuant to life care contracts.
3462 (2) From the time of the recording under subsection (1),
3463 there exists a lien for an amount equal to the reasonable value
3464 of services to be performed under a life care contract in favor
3465 of each resident and contract holder on the land and
3466 improvements of the facility’s properties owned by the provider,
3467 not exempt from execution, which are listed in the notice of
3468 lien filed pursuant to subsection (3) and which are located in
3469 the county in which the notice of lien is recorded.
3470 (3) The lien shall be perfected by the office by executing
3471 by affidavit the notice and claim of lien, which must contain:
3472 (a) The legal description of the lands and improvements to
3473 be charged with a lien.
3474 (b) The name of the owner of the property affected.
3475 (c) A statement that the lien has been filed by the office
3476 pursuant to this section.
3477 (4) The lien may be released or partially released at the
3478 request of the applicant if, in the judgment of the
3479 commissioner, such release or partial release inures to the
3480 benefit of the residents and contract holders and the
3481 performance of the provider’s obligations to the residents and
3482 contract holders.
3483 (5) The lien may be foreclosed by civil action. Any number
3484 of persons claiming liens against the same property pursuant to
3485 this section may join in the same action. If separate actions
3486 are commenced, the court may consolidate such actions. The court
3487 shall, as part of the costs, allow reasonable attorney fees for
3488 each claimant who is a party to the action.
3489 (6) In a civil action filed pursuant to this section, the
3490 judgment must be entered in favor of each resident and contract
3491 holder having a lien who has joined in the foreclosure action
3492 for the amount equal to the reasonable value of services to be
3493 performed under a life care contract in favor of each resident
3494 and contract holder. The court shall order the sheriff to sell
3495 any property subject to the lien at the time judgment is given,
3496 in the same manner as real and personal property is sold on
3497 execution. The lien for the reasonable value of services to be
3498 performed under a life care contract must be on equal footing
3499 with claims of other residents and contract holders. If a sale
3500 is ordered and the property sold and the proceeds of the sale
3501 are not sufficient to discharge all liens of residents and
3502 contract holders against the property, the proceeds must be
3503 prorated among the respective residents and contract holders.
3504 (7) The lien provided for in this section is preferred to
3505 all liens, mortgages, or other encumbrances upon the property
3506 attaching subsequently to the time the lien is recorded and is
3507 preferred to all unrecorded liens, mortgages, and other
3508 encumbrances. The amount secured by any lien having priority to
3509 the lien filed pursuant to this section may not be increased
3510 without prior approval of the office.
3511 (8) The office shall file a release of the lien upon proof
3512 of complete performance of all obligations to residents and
3513 contract holders pursuant to life care contracts.
3514 (9) The office may subordinate any lien filed pursuant to
3515 this section to the lien of a first mortgage or other long-term
3516 financing obtained by the provider, regardless of the time at
3517 which the subsequent lien attaches.
3518 Section 80. Subsection (3) of section 627.642, Florida
3519 Statutes, is amended to read:
3520 627.642 Outline of coverage.—
3521 (3) In addition to the outline of coverage, a policy as
3522 specified in s. 627.6699(3)(j) s. 627.6699(3)(k) must be
3523 accompanied by an identification card that contains, at a
3524 minimum:
3525 (a) The name of the organization issuing the policy or the
3526 name of the organization administering the policy, whichever
3527 applies.
3528 (b) The name of the contract holder.
3529 (c) The type of plan only if the plan is filed in the
3530 state, an indication that the plan is self-funded, or the name
3531 of the network.
3532 (d) The member identification number, contract number, and
3533 policy or group number, if applicable.
3534 (e) A contact phone number or electronic address for
3535 authorizations and admission certifications.
3536 (f) A phone number or electronic address whereby the
3537 covered person or hospital, physician, or other person rendering
3538 services covered by the policy may obtain benefits verification
3539 and information in order to estimate patient financial
3540 responsibility, in compliance with privacy rules under the
3541 Health Insurance Portability and Accountability Act.
3542 (g) The national plan identifier, in accordance with the
3543 compliance date set forth by the federal Department of Health
3544 and Human Services.
3545
3546 The identification card must present the information in a
3547 readily identifiable manner or, alternatively, the information
3548 may be embedded on the card and available through magnetic
3549 stripe or smart card. The information may also be provided
3550 through other electronic technology.
3551 Section 81. Paragraph (a) of subsection (2), paragraphs
3552 (a), (e), and (g) of subsection (7), and paragraph (a) of
3553 subsection (8) of section 627.6475, Florida Statutes, are
3554 amended to read:
3555 627.6475 Individual reinsurance pool.—
3556 (2) DEFINITIONS.—As used in this section:
3557 (a) “Board,” “Carrier,” and “health benefit plan” have the
3558 same meaning ascribed in s. 627.6699(3).
3559 (7) INDIVIDUAL HEALTH REINSURANCE PROGRAM.—
3560 (a) The individual health reinsurance program shall operate
3561 subject to the supervision and control of the board of the small
3562 employer health reinsurance program established pursuant to s.
3563 627.6699(11). The board shall establish a separate, segregated
3564 account for eligible individuals reinsured pursuant to this
3565 section, which account may not be commingled with the small
3566 employer health reinsurance account.
3567 (e)1. Before March 1 of each calendar year, the board shall
3568 determine and report to the office the program net loss in the
3569 individual account for the previous year, including
3570 administrative expenses for that year and the incurred losses
3571 for that year, taking into account investment income and other
3572 appropriate gains and losses.
3573 2. Any net loss in the individual account for the year
3574 shall be recouped by assessing the carriers as follows:
3575 a. The operating losses of the program shall be assessed in
3576 the following order subject to the specified limitations. The
3577 first tier of assessments shall be made against reinsuring
3578 carriers in an amount that may not exceed 5 percent of each
3579 reinsuring carrier’s premiums for individual health insurance.
3580 If such assessments have been collected and additional moneys
3581 are needed, the board shall make a second tier of assessments in
3582 an amount that may not exceed 0.5 percent of each carrier’s
3583 health benefit plan premiums.
3584 b. Except as provided in paragraph (f), risk-assuming
3585 carriers are exempt from all assessments authorized pursuant to
3586 this section. The amount paid by a reinsuring carrier for the
3587 first tier of assessments shall be credited against any
3588 additional assessments made.
3589 c. The board shall equitably assess reinsuring carriers for
3590 operating losses of the individual account based on market
3591 share. The board shall annually assess each carrier a portion of
3592 the operating losses of the individual account. The first tier
3593 of assessments shall be determined by multiplying the operating
3594 losses by a fraction, the numerator of which equals the
3595 reinsuring carrier’s earned premium pertaining to direct
3596 writings of individual health insurance in the state during the
3597 calendar year for which the assessment is levied, and the
3598 denominator of which equals the total of all such premiums
3599 earned by reinsuring carriers in the state during that calendar
3600 year. The second tier of assessments shall be based on the
3601 premiums that all carriers, except risk-assuming carriers,
3602 earned on all health benefit plans written in this state. The
3603 board may levy interim assessments against reinsuring carriers
3604 to ensure the financial ability of the plan to cover claims
3605 expenses and administrative expenses paid or estimated to be
3606 paid in the operation of the plan for the calendar year prior to
3607 the association’s anticipated receipt of annual assessments for
3608 that calendar year. Any interim assessment is due and payable
3609 within 30 days after receipt by a carrier of the interim
3610 assessment notice. Interim assessment payments shall be credited
3611 against the carrier’s annual assessment. Health benefit plan
3612 premiums and benefits paid by a carrier that are less than an
3613 amount determined by the board to justify the cost of collection
3614 may not be considered for purposes of determining assessments.
3615 d. Subject to the approval of the office, the board shall
3616 adjust the assessment formula for reinsuring carriers that are
3617 approved as federally qualified health maintenance organizations
3618 by the Secretary of Health and Human Services pursuant to 42
3619 U.S.C. s. 300e(c)(2)(A) to the extent, if any, that restrictions
3620 are placed on them which are not imposed on other carriers.
3621 3. Before March 1 of each year, the board shall determine
3622 and file with the office an estimate of the assessments needed
3623 to fund the losses incurred by the program in the individual
3624 account for the previous calendar year.
3625 4. If the board determines that the assessments needed to
3626 fund the losses incurred by the program in the individual
3627 account for the previous calendar year will exceed the amount
3628 specified in subparagraph 2., the board shall evaluate the
3629 operation of the program and report its findings and
3630 recommendations to the office in the format established in s.
3631 627.6699(11) for the comparable report for the small employer
3632 reinsurance program.
3633 (g) Except as otherwise provided in this section, the board
3634 and the office shall have all powers, duties, and
3635 responsibilities with respect to carriers that issue and
3636 reinsure individual health insurance, as specified for the board
3637 and the office in s. 627.6699(11) with respect to small employer
3638 carriers, including, but not limited to, the provisions of s.
3639 627.6699(11) relating to:
3640 1. Use of assessments that exceed the amount of actual
3641 losses and expenses.
3642 2. The annual determination of each carrier’s proportion of
3643 the assessment.
3644 3. Interest for late payment of assessments.
3645 4. Authority for the office to approve deferment of an
3646 assessment against a carrier.
3647 5. Limited immunity from legal actions or carriers.
3648 6. Development of standards for compensation to be paid to
3649 agents. Such standards shall be limited to those specifically
3650 enumerated in s. 627.6699(11)(d) s. 627.6699(12)(d).
3651 7. Monitoring compliance by carriers with this section.
3652 (8) STANDARDS TO ASSURE FAIR MARKETING.—
3653 (a) Each health insurance issuer that offers individual
3654 health insurance shall actively market coverage to eligible
3655 individuals in the state. The provisions of s. 627.6699(11) s.
3656 627.6699(12) that apply to small employer carriers that market
3657 policies to small employers shall also apply to health insurance
3658 issuers that offer individual health insurance with respect to
3659 marketing policies to individuals.
3660 Section 82. Subsection (1) of section 627.66997, Florida
3661 Statutes, is amended to read:
3662 627.66997 Stop-loss insurance.—
3663 (1) A self-insured health benefit plan established or
3664 maintained by a small employer, as defined in s. 627.6699(3)(s)
3665 s. 627.6699(3)(v), is exempt from s. 627.6699 and may use a
3666 stop-loss insurance policy issued to the employer. For purposes
3667 of this subsection, the term “stop-loss insurance policy” means
3668 an insurance policy issued to a small employer which covers the
3669 small employer’s obligation for the excess cost of medical care
3670 on an equivalent basis per employee provided under a self
3671 insured health benefit plan.
3672 (a) A small employer stop-loss insurance policy is
3673 considered a health insurance policy and is subject to s.
3674 627.6699 if the policy has an aggregate attachment point that is
3675 lower than the greatest of:
3676 1. Two thousand dollars multiplied by the number of
3677 employees;
3678 2. One hundred twenty percent of expected claims, as
3679 determined by the stop-loss insurer in accordance with actuarial
3680 standards of practice; or
3681 3. Twenty thousand dollars.
3682 (b) Once claims under the small employer health benefit
3683 plan reach the aggregate attachment point set forth in paragraph
3684 (a), the stop-loss insurance policy authorized under this
3685 section must cover 100 percent of all claims that exceed the
3686 aggregate attachment point.
3687 Section 83. Reciprocal insurers licensed before July 1,
3688 2025, have until July 1, 2026, to comply with the changes made
3689 to subscribers’ advisory committees in s. 629.201, Florida
3690 Statutes. Reciprocal insurers licensed before July 1, 2025, have
3691 until July 1, 2028, to comply with the changes made to unearned
3692 premium reserve requirements imposed under s. 629.56, Florida
3693 Statutes.
3694 Section 84. Except as otherwise expressly provided in this
3695 act and except for this section, which shall take effect upon
3696 this act becoming a law, this act shall take effect July 1,
3697 2025.
3698
3699 ================= T I T L E A M E N D M E N T ================
3700 And the title is amended as follows:
3701 Delete everything before the enacting clause
3702 and insert:
3703 A bill to be entitled
3704 An act relating to insurance regulations; amending s.
3705 48.151, F.S.; providing that the Chief Financial
3706 Officer is the agent for service of process on health
3707 maintenance organizations; amending s. 252.63, F.S.;
3708 revising the content of a publication from the
3709 Commissioner of Insurance Regulation relating to
3710 orders applicable to insurance in areas under the
3711 state of emergency; amending s. 624.4085, F.S.;
3712 revising the definition of the term “life and health
3713 insurer”; amending s. 624.422, F.S.; providing that
3714 the appointment of the Chief Financial Officer for
3715 service of process applies to insurers withdrawing
3716 from and ceasing operations in this state until all
3717 insurers’ liabilities in this state are extinguished;
3718 amending s. 624.424, F.S.; requiring certain
3719 authorized insurers to provide certain information to
3720 the office; revising the considerations of the office
3721 in determining whether a fee, commission, or other
3722 financial consideration is fair and reasonable;
3723 amending s. 624.45, F.S.; conforming a provision to
3724 changes made by the act; amending s. 624.610, F.S.;
3725 removing certain provisions relating to credits
3726 allowed in specified reinsurance circumstances and
3727 relating to assuming insurers’ accreditations;
3728 requiring filing fees from reinsurers requesting to
3729 operate in this state; removing applicability
3730 provisions; amending s. 626.9651, F.S.; requiring the
3731 Office of Insurance Regulation and the Financial
3732 Services Commission to adopt rules on cybersecurity of
3733 certain insurance data; providing requirements for
3734 such rules; providing duties of the office; providing
3735 construction; amending s. 627.062, F.S.; prohibiting
3736 personal residential property insurers from submitting
3737 more than two “use and file” filing under certain
3738 circumstances; providing an exception; amending s.
3739 627.0621, F.S.; requiring certain rate filings with
3740 the office from residential property insurers to
3741 include rate transparency reports; providing for
3742 acceptance or rejection by the office of such reports;
3743 providing requirements for such reports; requiring
3744 insurers to provide such reports to consumers;
3745 requiring the office to define terms used in such
3746 reports; requiring the office to establish and
3747 maintain a specified center on its website; providing
3748 requirements for the website; amending s. 627.0645,
3749 F.S.; revising requirements of rate filing with the
3750 office; amending s. 627.0651, F.S.; prohibiting motor
3751 vehicle insurers from submitting more than two “use
3752 and file” filings under certain circumstances;
3753 amending s. 627.4554, F.S.; requiring that certain
3754 forms be posted on the website of the Department of
3755 Financial Services, rather than the office; amending
3756 s. 627.6699, F.S.; removing and revising definitions;
3757 removing provisions relating to the creation of the
3758 Florida Small Employer Health Reinsurance Program;
3759 amending s. 627.711, F.S.; requiring the office to
3760 contract with a state university to design, operate,
3761 upgrade, and maintain a specified database; requiring
3762 property insurers to file certain policyholder forms
3763 in the database; requiring the commission to adopt
3764 rules; amending s. 627.7152, F.S.; removing provisions
3765 relating to requirements for reporting and rulemaking
3766 regarding property insurance claims paid under
3767 assignment agreements; creating s. 627.9145, F.S.;
3768 providing reporting requirements for residential
3769 property insurers; requiring the commission to adopt
3770 rules; amending s. 627.915, F.S.; revising reporting
3771 requirements for private passenger automobile
3772 insurers; requiring the commission to adopt rules;
3773 providing requirements for such rules; removing
3774 reporting requirement provisions for certain insurers;
3775 amending ss. 628.081 and 628.091, F.S.; removing the
3776 requirement that domestic insurer incorporators
3777 execute articles of incorporation and file them with
3778 the office in triplicate; amending s. 628.111, F.S.;
3779 removing the requirement that domestic insurers make
3780 copies of amendments to articles of incorporation in
3781 triplicate; amending s. 628.461, F.S.; specifying the
3782 method of sending notifications regarding transactions
3783 or proposed transactions of voting securities of stock
3784 insurers or controlling companies; revising the method
3785 of filing certain statements; amending s. 628.4615,
3786 F.S.; revising the method by which amendments to
3787 certain applications must be sent to specialty
3788 insurers; amending s. 628.717, F.S.; revising
3789 requirements for the office’s responses upon receipt
3790 of articles of incorporation; amending s. 628.719,
3791 F.S.; revising the method by which mutual insurance
3792 holding companies show their adoption of article of
3793 incorporation amendments and deliver the amendments to
3794 the office; revising the requirements for the office’s
3795 responses upon receipt of amendments; amending s.
3796 628.910, F.S.; removing the requirement that captive
3797 insurance company incorporators file articles of
3798 incorporation in triplicate; revising the office’s
3799 responses upon receipt of captive insurance company
3800 articles of incorporation; amending s. 629.011, F.S.;
3801 revising and providing definitions; amending s.
3802 629.071, F.S.; authorizing assessable and
3803 nonassessable reciprocal insurers, rather than
3804 domestic reciprocal insurers, to transact insurance if
3805 they maintain specified amounts of surplus funds;
3806 amending s. 629.081, F.S.; conforming a provision to
3807 changes made by the act; creating s. 629.082, F.S.;
3808 providing that attorneys in fact of reciprocals are
3809 affiliates of the reciprocals for specified purposes;
3810 creating s. 629.1015, F.S.; requiring certain
3811 reciprocal insurers to provide the office with
3812 documentation supporting that fees, commissions, and
3813 other financial considerations and payments to
3814 affiliates are fair and reasonable; requiring the
3815 office to comply with certain provisions when making
3816 certain determinations; providing requirements for
3817 documentation of such fees; amending s. 629.121, F.S.;
3818 providing that certain bonds filed with the office as
3819 security are filed by attorneys in fact, rather than
3820 attorneys of domestic reciprocal insurers; increasing
3821 the bond amount; creating s. 629.162, F.S.;
3822 authorizing reciprocal insurers to require subscriber
3823 contributions; providing disclosure and reporting
3824 requirements for subscriber contributions; specifying
3825 that changes to subscriber contributions are subject
3826 to prior approval by the office; creating s. 629.163,
3827 F.S.; authorizing reciprocal insurers to establish
3828 subscriber savings accounts; specifying that moneys
3829 assigned to subscriber savings accounts are not
3830 considered distributions; providing that subscriber
3831 savings accounts are subject to certain requirements;
3832 creating s. 629.164, F.S.; authorizing reciprocal
3833 insurers to make distributions to subscribers from
3834 subscriber savings accounts under certain conditions;
3835 providing that the subscribers’ advisory committee or
3836 the attorney in fact has authority to authorize
3837 distributions, subject to prior written approval by
3838 the office; authorizing reciprocal insurers, upon
3839 prior written approval, to return to subscribers
3840 certain unassigned funds; providing that such returns
3841 may not exceed a certain amount; prohibiting certain
3842 distribution discriminations; amending s. 629.171,
3843 F.S.; revising requirements for filing with the office
3844 annual statements by reciprocal insurers; amending s.
3845 629.181, F.S; replacing surplus deposits of
3846 subscribers with subscriber contributions; providing
3847 limits on subscriber contributions; amending s.
3848 629.201, F.S.; requiring that each domestic reciprocal
3849 insurer have a subscribers’ advisory committee;
3850 requiring that such committee be formed in compliance
3851 with specified laws; requiring that rules and
3852 amendments adopted by subscribers have prior approval
3853 by the office; revising subscribers’ advisory
3854 committees’ duties and membership; providing for
3855 election and terms; repealing s. 629.271, F.S.,
3856 relating to distribution of savings; amending s.
3857 629.291, F.S.; providing that forms filed with the
3858 office for plans to merge a reciprocal insurer with
3859 another reciprocal insurer or to convert a reciprocal
3860 insurer to a stock or mutual insurer are adopted by
3861 the commission rather than the office; amending s.
3862 629.301, F.S.; specifying the manner in which impaired
3863 reciprocal insurers are proceeded against if they
3864 cannot make up deficiencies in assets; specifying the
3865 manner in which assessments are levied upon
3866 subscribers if reciprocal insurers are liquidated;
3867 providing that assessments are subject to specified
3868 limits; repealing ss. 629.401 and 629.520, F.S.,
3869 relating to insurance exchange and the authority of a
3870 limited reciprocal insurer, respectively; creating s.
3871 629.56, F.S.; requiring reciprocal insurers to
3872 maintain unearned premium reserves at all times;
3873 creating s. 634.341, F.S.; providing legislative
3874 intent; requiring the Department of Law Enforcement to
3875 accept certain fingerprints; specifying procedures for
3876 fingerprinting; authorizing the Department of Law
3877 Enforcement to exchange certain records with the
3878 office; specifying that fingerprints may be submitted
3879 in accordance with certain rules; authorizing the
3880 fingerprints to be submitted through a third-party
3881 vendor authorized by the Department of Law
3882 Enforcement; requiring the Department of Law
3883 Enforcement to conduct certain background checks;
3884 requiring certain fingerprints be submitted and
3885 entered into a specified system; requiring the office
3886 to inform the Department of Law Enforcement of any
3887 person whose fingerprints no longer must be retained;
3888 specifying who bears the costs of fingerprint
3889 processing; specifying that certain criminal records
3890 be used by the office for certain purposes; amending
3891 s. 634.401, F.S.; revising provisions relating to
3892 coverage for accidental damage under a service
3893 warranty; creating s. 641.2012, F.S.; providing
3894 applicability of service of process provisions to
3895 health maintenance organizations; amending s. 641.26,
3896 F.S.; revising requirements for filing annual and
3897 quarterly reports by health maintenance organizations;
3898 creating s. 641.283, F.S.; providing applicability of
3899 administrative supervision and hazardous insurer
3900 condition provisions to health maintenance
3901 organizations; amending s. 651.011, F.S.; providing
3902 and revising definitions; amending s. 651.018, F.S.;
3903 providing duties for the office if certain conditions
3904 exist in continuing care facilities; amending s.
3905 651.019, F.S.; requiring continuing care providers to
3906 provide to the office specified information on
3907 financing and intended use of proceeds under certain
3908 circumstances; creating s. 651.0212, F.S.; requiring
3909 or authorizing the office to deny or revoke a
3910 provider’s authority to engage in certain continuing
3911 care activities under certain circumstances; amending
3912 s. 651.0215, F.S.; revising the timeframe for the
3913 office to examine and respond to consolidated
3914 applications for provisional certificates of authority
3915 and certificates of authority for providers of
3916 continuing care; removing provisions relating to the
3917 duties of the office in responding to such
3918 applications; revising the requirements for when an
3919 application is deemed complete; amending s. 651.022,
3920 F.S.; revising requirements for applications for
3921 provisional certificates of authority of providers of
3922 continuing care; removing provisions relating to
3923 duties of the office in responding to such
3924 applications; revising the requirements for when an
3925 application is deemed complete; amending s. 651.023,
3926 F.S.; conforming provisions to changes made by the
3927 act; revising the requirements for when an application
3928 is deemed complete; amending s. 651.024, F.S.;
3929 providing applicability of certain specialty insurer
3930 provisions and nonapplicability of certain continuing
3931 care provider requirements to bondholders under
3932 certain circumstances; defining the term “consent
3933 rights”; providing applicability of such provisions to
3934 certain entities under certain circumstances; amending
3935 s. 651.0246, F.S.; revising requirements for
3936 applications for expansion of certificated continuing
3937 care facilities; removing specified duties of the
3938 office in responding to such applications; revising
3939 the timeframe for the office to review such
3940 applications; amending s. 651.026, F.S.; revising
3941 requirements for annual reports filed by providers of
3942 continuing care; providing requirements for reports;
3943 amending s. 651.0261, F.S.; providing additional
3944 requirements for quarterly reports filed by continuing
3945 care facilities; amending s. 651.033, F.S.; requiring
3946 office approval before execution of an agreement for
3947 establishing an escrow account; defining the terms
3948 “emergency” and “business day”; specifying
3949 circumstances under which providers of continuing care
3950 may withdraw a specified percentage of the required
3951 minimum liquid reserve; revising the timeframe for the
3952 office to deny petitions for emergency withdrawals;
3953 providing duties of escrow agents; amending s.
3954 651.034, F.S.; revising duties of the office relating
3955 to impaired continuing care providers; amending s.
3956 651.035, F.S.; providing requirements for continuing
3957 care providers’ minimum liquid reserve accounts in
3958 escrow; providing requirements for debt service
3959 reserve transfers from one financial institution or
3960 lender to another; revising and providing requirements
3961 for continuing care providers’ operating reserves in
3962 escrow; revising the circumstances under which the
3963 office may order transfer of the minimum liquid
3964 reserve; amending s. 651.043, F.S.; revising
3965 circumstances under which certain notices of
3966 management changes must be provided to the office;
3967 amending s. 651.071, F.S.; providing that continuing
3968 care and continuing care at-home contracts must be
3969 treated with higher priority over all other claims in
3970 the event of receivership or liquidation proceedings
3971 against a provider; providing an exception; amending
3972 s. 651.085, F.S.; requiring designated resident
3973 representatives in continuing care facilities to
3974 perform their duties in good faith; requiring each
3975 continuing care facility to have its own designated
3976 resident representative; specifying the methods for
3977 notifications to designated resident representatives
3978 of certain meetings; creating s. 651.087, F.S;
3979 specifying that providers who borrow from or pledge
3980 the personal funds of residents commit a misdemeanor;
3981 providing criminal penalties; amending s. 651.091,
3982 F.S.; requiring continuing care facilities to post
3983 notices of bankruptcy proceedings; providing
3984 requirements for such notices; requiring continuing
3985 care facilities to maintain certain records; requiring
3986 providers of continuing care to make certain records
3987 available for review and to deliver copies of
3988 specified disclosure statements; creating s. 651.104,
3989 F.S.; prohibiting persons from acting or holding
3990 themselves out as management companies for continuing
3991 care retirement communities without a certificate of
3992 authority; providing requirements for certificate of
3993 authority applications; prohibiting the office from
3994 issuing certificates of authority under certain
3995 circumstances; creating s. 651.1041, F.S.; providing
3996 applicability of specified insurer provisions to
3997 acquisitions of management companies; creating s.
3998 651.1043, F.S.; providing requirements for management
3999 company annual and quarterly financial statements;
4000 requiring acquisition application filings under
4001 certain circumstances; requiring monthly statement
4002 filings under certain circumstances; providing fines
4003 for noncompliance; providing rulemaking authority;
4004 creating s. 651.1045, F.S.; providing grounds for the
4005 office to refuse, suspend, and revoke management
4006 company certificates of authority; providing that
4007 revocation of a management company’s certificate of
4008 authority does not relieve a provider from specified
4009 obligations to residents and from annual statement
4010 filings and license fees; authorizing the office to
4011 seek enforcement actions; amending s. 651.105, F.S.;
4012 authorizing the office to examine the businesses of
4013 management companies and their parents, subsidiaries,
4014 and affiliates under certain circumstances; requiring
4015 the office to notify management companies of
4016 compliance deficiencies and to require corrective
4017 actions or plans; requiring management companies to
4018 respond to such notices; amending s. 651.1065, F.S.;
4019 prohibiting management companies from engaging in
4020 certain acts if delinquency proceedings have been or
4021 are to be initiated; providing penalties; amending s.
4022 651.107, F.S.; requiring management companies to file
4023 annual statements and pay license fees during periods
4024 of certificate of authority suspension; providing for
4025 automatic reinstatement or revocation of certificates
4026 of authority; amending s. 651.108, F.S.; providing
4027 administrative fines for management companies for
4028 certain violations; creating s. 651.113, F.S.;
4029 authorizing the office to consider certain information
4030 in determining whether the continued operation of any
4031 provider transacting business in this state may be
4032 deemed to be in hazardous financial condition;
4033 requiring providers and facilities determined to be
4034 insolvent or in danger of insolvency to prepare a
4035 plan; requiring the provider or facility to prepare a
4036 specified plan; requiring such plan to be presented to
4037 the office within a specified timeframe; authorizing
4038 the office to issue an order requiring a provider or
4039 facility to engage in certain acts under certain
4040 circumstances; authorizing the office to issue
4041 immediate final orders requiring certain acts;
4042 providing construction; amending s. 651.114, F.S.;
4043 removing provisions relating to continuing care
4044 facility trustees and lenders; creating s. 651.1165,
4045 F.S.; requiring the office to record notices of lien
4046 against continuing care facilities’ properties;
4047 providing requirements for such liens; providing for
4048 lien foreclosures in civil actions; providing that
4049 such liens are preferred to all liens, mortgages, and
4050 other encumbrances upon the property and all
4051 unrecorded liens, mortgages, and other encumbrances;
4052 providing conditions for lien releases; amending ss.
4053 627.642, 627.6475, 627.657, and 627.66997, F.S.;
4054 conforming cross-references; providing applicability
4055 dates; providing effective dates.