Florida Senate - 2025 CS for SB 1656
By the Committee on Banking and Insurance; and Senator Collins
597-02487-25 20251656c1
1 A bill to be entitled
2 An act relating to insurance regulations; amending s.
3 48.151, F.S.; providing that the Chief Financial
4 Officer is the agent for service of process on health
5 maintenance organizations; amending s. 252.63, F.S.;
6 revising the content of a publication from the
7 Commissioner of Insurance Regulation relating to
8 orders applicable to insurance in areas under a state
9 of emergency; creating s. 624.341, F.S.; providing
10 legislative findings and intent; requiring the
11 Department of Law Enforcement to accept certain
12 fingerprints; specifying procedures for
13 fingerprinting; authorizing the Department of Law
14 Enforcement to exchange certain records with the
15 Office of Insurance Regulation; specifying that
16 fingerprints may be submitted in accordance with
17 certain rules; authorizing that the fingerprints be
18 submitted through a third-party vendor authorized by
19 the Department of Law Enforcement; requiring the
20 Department of Law Enforcement to conduct certain
21 background checks; requiring that certain fingerprints
22 be submitted and entered into a specified system;
23 requiring the office to inform the Department of Law
24 Enforcement of any person whose fingerprints no longer
25 must be retained; specifying who bears the costs of
26 fingerprint processing; specifying that certain
27 criminal records be used by the office for certain
28 purposes; amending s. 624.4085, F.S.; revising the
29 definition of the term “life and health insurer”;
30 amending s. 624.422, F.S.; providing that the
31 appointment of the Chief Financial Officer for service
32 of process applies to insurers withdrawing from and
33 ceasing operations in this state until all insurers’
34 liabilities in this state are extinguished; amending
35 s. 624.424, F.S.; requiring certain authorized
36 insurers to provide certain information to the office;
37 revising the considerations of the office in
38 determining whether a fee, commission, or other
39 financial consideration is fair and reasonable;
40 amending s. 624.45, F.S.; conforming a provision to
41 changes made by the act; amending s. 624.610, F.S.;
42 deleting certain provisions relating to credits
43 allowed in specified reinsurance circumstances and
44 relating to assuming insurers’ accreditations;
45 requiring filing fees from reinsurers requesting to
46 operate in this state; deleting applicability
47 provisions; amending s. 626.9651, F.S.; requiring the
48 Office of Insurance Regulation and the Financial
49 Services Commission to adopt rules on cybersecurity of
50 certain insurance data; providing requirements for
51 such rules; providing duties of the office; providing
52 construction; amending s. 627.062, F.S.; prohibiting
53 personal residential property insurers from submitting
54 more than two use and file filings under certain
55 circumstances; providing an exception; amending s.
56 627.0621, F.S.; requiring that certain rate filings
57 with the office from residential property insurers
58 include rate transparency reports; providing for
59 acceptance or rejection by the office of such reports;
60 providing requirements for such reports; requiring
61 insurers to provide such reports to consumers;
62 requiring the office to define terms used in such
63 reports; requiring the office to establish and
64 maintain a specified center on its website; providing
65 requirements for the website; amending s. 627.0645,
66 F.S.; revising requirements of rate filing with the
67 office; amending s. 627.0651, F.S.; prohibiting motor
68 vehicle insurers from submitting more than two use and
69 file filings under certain circumstances; amending s.
70 627.4554, F.S.; requiring that certain forms be posted
71 on the website of the Department of Financial
72 Services, rather than the office; amending s.
73 627.6699, F.S.; deleting and revising definitions;
74 deleting provisions relating to the creation of the
75 Florida Small Employer Health Reinsurance Program;
76 amending s. 627.711, F.S.; requiring the office to
77 contract with a state university to design, operate,
78 upgrade, and maintain a specified database; requiring
79 property insurers to file certain policyholder forms
80 in the database; requiring the commission to adopt
81 rules; amending s. 627.7152, F.S.; deleting provisions
82 relating to requirements for reporting and rulemaking
83 regarding property insurance claims paid under
84 assignment agreements; creating s. 627.9145, F.S.;
85 providing reporting requirements for residential
86 property insurers; requiring the commission to adopt
87 rules; amending s. 627.915, F.S.; revising reporting
88 requirements for private passenger automobile
89 insurers; requiring the commission to adopt rules;
90 providing requirements for such rules; deleting
91 reporting requirement provisions for certain insurers;
92 amending ss. 628.081 and 628.091, F.S.; deleting the
93 requirement that domestic insurer incorporators
94 execute articles of incorporation and file them with
95 the office in triplicate; amending s. 628.111, F.S.;
96 deleting the requirement that domestic insurers make
97 copies of amendments to articles of incorporation in
98 triplicate; amending s. 628.461, F.S.; specifying the
99 method of sending notifications regarding transactions
100 or proposed transactions of voting securities of stock
101 insurers or controlling companies; revising the method
102 of filing certain statements; amending s. 628.4615,
103 F.S.; revising the method by which amendments to
104 certain applications must be sent to specialty
105 insurers; amending s. 628.717, F.S.; revising
106 requirements for the office’s responses upon receipt
107 of articles of incorporation; amending s. 628.719,
108 F.S.; revising the method by which mutual insurance
109 holding companies show their adoption of article of
110 incorporation amendments and deliver the amendments to
111 the office; revising the requirements for the office’s
112 responses upon receipt of amendments; amending s.
113 628.910, F.S.; deleting the requirement that captive
114 insurance company incorporators file articles of
115 incorporation in triplicate; revising the office’s
116 responses upon receipt of captive insurance company
117 articles of incorporation; amending s. 629.011, F.S.;
118 revising definitions and defining terms; amending s.
119 629.071, F.S.; authorizing assessable and
120 nonassessable reciprocal insurers, rather than
121 domestic reciprocal insurers, to transact insurance if
122 they maintain specified amounts of surplus funds;
123 amending s. 629.081, F.S.; conforming a provision to
124 changes made by the act; creating s. 629.082, F.S.;
125 providing that attorneys in fact of reciprocals are
126 affiliates of the reciprocals for specified purposes;
127 creating s. 629.1015, F.S.; requiring certain
128 reciprocal insurers to provide the office with
129 documentation supporting that fees, commissions, and
130 other financial considerations and payments to
131 affiliates are fair and reasonable; requiring the
132 office to comply with certain provisions when making
133 certain determinations; providing requirements for
134 documentation of such fees; amending s. 629.121, F.S.;
135 providing that certain bonds filed with the office as
136 security are filed by attorneys in fact, rather than
137 attorneys of domestic reciprocal insurers; increasing
138 the bond amount; creating s. 629.162, F.S.;
139 authorizing reciprocal insurers to require subscriber
140 contributions; providing disclosure and reporting
141 requirements for subscriber contributions; specifying
142 that changes to subscriber contributions are subject
143 to prior approval by the office; creating s. 629.163,
144 F.S.; authorizing reciprocal insurers to establish
145 subscriber savings accounts; specifying that moneys
146 assigned to subscriber savings accounts are not
147 considered distributions; providing that subscriber
148 savings accounts are subject to certain requirements;
149 creating s. 629.164, F.S.; authorizing reciprocal
150 insurers to make distributions to subscribers from
151 subscriber savings accounts under certain conditions;
152 providing that the subscribers’ advisory committee or
153 the attorney in fact has authority to authorize
154 distributions, subject to prior written approval by
155 the office; authorizing reciprocal insurers, upon
156 prior written approval, to return to subscribers
157 certain unassigned funds; providing that such returns
158 may not exceed a certain amount; prohibiting certain
159 distribution discriminations; amending s. 629.171,
160 F.S.; revising requirements for filing with the office
161 annual statements by reciprocal insurers; amending s.
162 629.181, F.S; replacing surplus deposits of
163 subscribers with subscriber contributions; providing
164 limits on subscriber contributions; amending s.
165 629.201, F.S.; requiring that each domestic reciprocal
166 insurer have a subscribers’ advisory committee;
167 requiring that such committee be formed in compliance
168 with specified laws; requiring that rules and
169 amendments adopted by subscribers have prior approval
170 by the office; revising subscribers’ advisory
171 committees’ duties and membership; providing for
172 election and terms; repealing s. 629.271, F.S.,
173 relating to distribution of savings; amending s.
174 629.291, F.S.; providing that forms filed with the
175 office for plans to merge a reciprocal insurer with
176 another reciprocal insurer or to convert a reciprocal
177 insurer to a stock or mutual insurer are adopted by
178 the commission rather than the office; amending s.
179 629.301, F.S.; specifying the manner in which impaired
180 reciprocal insurers are proceeded against if they
181 cannot make up deficiencies in assets; specifying the
182 manner in which assessments are levied upon
183 subscribers if reciprocal insurers are liquidated;
184 providing that assessments are subject to specified
185 limits; repealing ss. 629.401 and 629.520, F.S.,
186 relating to insurance exchange and the authority of a
187 limited reciprocal insurer, respectively; creating s.
188 629.56, F.S.; requiring reciprocal insurers to
189 maintain unearned premium reserves at all times;
190 amending s. 634.401, F.S.; revising provisions
191 relating to coverage for accidental damage under a
192 service warranty; creating s. 641.2012, F.S.;
193 providing applicability of service of process
194 provisions to health maintenance organizations;
195 amending s. 641.26, F.S.; revising requirements for
196 filing annual and quarterly reports by health
197 maintenance organizations; creating s. 641.283, F.S.;
198 providing applicability of administrative supervision
199 and hazardous insurer condition provisions to health
200 maintenance organizations; amending s. 651.011, F.S.;
201 providing and revising definitions; amending s.
202 651.018, F.S.; providing duties for the office if
203 certain conditions exist in continuing care
204 facilities; amending s. 651.019, F.S.; requiring
205 continuing care providers to provide to the office
206 specified information on financing and intended use of
207 proceeds under certain circumstances; creating s.
208 651.0212, F.S.; requiring or authorizing the office,
209 depending on the circumstance, to deny or revoke, or
210 in some cases to suspend, a provider’s authority to
211 engage in certain continuing care activities; amending
212 s. 651.0215, F.S.; revising the timeframe for the
213 office to examine and respond to consolidated
214 applications for provisional certificates of authority
215 and certificates of authority for providers of
216 continuing care; deleting provisions relating to the
217 duties of the office in responding to such
218 applications; revising the requirements for when an
219 application is deemed complete; amending s. 651.022,
220 F.S.; revising requirements for applications for
221 provisional certificates of authority of providers of
222 continuing care; deleting provisions relating to
223 duties of the office in responding to such
224 applications; revising the requirements for when an
225 application is deemed complete; amending s. 651.023,
226 F.S.; conforming provisions to changes made by the
227 act; revising the requirements for when an application
228 is deemed complete; amending s. 651.024, F.S.;
229 providing applicability of certain specialty insurer
230 provisions and nonapplicability of certain continuing
231 care provider requirements to bondholders under
232 certain circumstances; defining the term “consent
233 rights”; providing applicability of such provisions to
234 certain entities under certain circumstances; amending
235 s. 651.0246, F.S.; revising requirements for
236 applications for expansion of certificated continuing
237 care facilities; deleting specified duties of the
238 office in responding to such applications; revising
239 the timeframe for the office to review such
240 applications; amending s. 651.026, F.S.; revising
241 requirements for annual reports filed by providers of
242 continuing care; providing requirements for reports;
243 amending s. 651.0261, F.S.; providing additional
244 requirements for quarterly reports filed by continuing
245 care facilities; amending s. 651.033, F.S.; requiring
246 office approval before execution of an agreement for
247 establishing an escrow account; defining the terms
248 “emergency” and “business day”; specifying
249 circumstances under which providers of continuing care
250 may withdraw a specified percentage of the required
251 minimum liquid reserve; revising the timeframe for the
252 office to deny petitions for emergency withdrawals;
253 providing duties of escrow agents; amending s.
254 651.034, F.S.; revising duties of the office relating
255 to impaired continuing care providers; amending s.
256 651.035, F.S.; providing requirements for continuing
257 care providers’ minimum liquid reserve accounts in
258 escrow; providing requirements for debt service
259 reserve transfers from one financial institution or
260 lender to another; revising and providing requirements
261 for continuing care providers’ operating reserves in
262 escrow; revising the circumstances under which the
263 office may order transfer of the minimum liquid
264 reserve; amending s. 651.043, F.S.; revising
265 circumstances under which certain notices of
266 management changes must be provided to the office;
267 amending s. 651.071, F.S.; providing that continuing
268 care and continuing care at-home contracts must be
269 treated with higher priority over all other claims in
270 the event of receivership or liquidation proceedings
271 against a provider; providing an exception; amending
272 s. 651.085, F.S.; requiring designated resident
273 representatives in continuing care facilities to
274 perform their duties in good faith; requiring each
275 continuing care facility to have its own designated
276 resident representative; specifying the methods for
277 notifications to designated resident representatives
278 of certain meetings; creating s. 651.087, F.S;
279 specifying that providers who borrow from or pledge
280 the personal funds of residents commit a misdemeanor;
281 providing criminal penalties; amending s. 651.091,
282 F.S.; requiring continuing care facilities to post
283 notices of bankruptcy proceedings; providing
284 requirements for such notices; requiring continuing
285 care facilities to maintain certain records; requiring
286 providers of continuing care to make certain records
287 available for review and to deliver copies of
288 specified disclosure statements; creating s. 651.104,
289 F.S.; prohibiting persons from acting or holding
290 themselves out as management companies for continuing
291 care retirement communities without a certificate of
292 authority; providing requirements for certificate of
293 authority applications; prohibiting the office from
294 issuing certificates of authority under certain
295 circumstances; creating s. 651.1041, F.S.; providing
296 applicability of specified insurer provisions to
297 acquisitions of management companies; creating s.
298 651.1043, F.S.; providing requirements for management
299 company annual and quarterly financial statements;
300 requiring acquisition application filings under
301 certain circumstances; requiring monthly statement
302 filings under certain circumstances; providing fines
303 for noncompliance; providing rulemaking authority;
304 creating s. 651.1045, F.S.; providing grounds for the
305 office to refuse, suspend, and revoke management
306 company certificates of authority; providing that
307 revocation of a management company’s certificate of
308 authority does not relieve a provider from specified
309 obligations to residents and from annual statement
310 filings and license fees; authorizing the office to
311 seek enforcement actions; amending s. 651.105, F.S.;
312 authorizing the office to examine the businesses of
313 management companies and their parents, subsidiaries,
314 and affiliates under certain circumstances; requiring
315 the office to notify management companies of
316 compliance deficiencies and to require corrective
317 actions or plans; requiring management companies to
318 respond to such notices; amending s. 651.1065, F.S.;
319 prohibiting management companies from engaging in
320 certain acts if delinquency proceedings have been or
321 are to be initiated; providing penalties; amending s.
322 651.107, F.S.; requiring management companies to file
323 annual statements and pay license fees during periods
324 of certificate of authority suspension; providing for
325 automatic reinstatement or revocation of certificates
326 of authority; amending s. 651.108, F.S.; providing
327 administrative fines for management companies for
328 certain violations; creating s. 651.113, F.S.;
329 authorizing the office to consider certain information
330 in determining whether the continued operation of any
331 provider transacting business in this state may be
332 deemed to be in hazardous financial condition;
333 requiring providers and facilities determined to be
334 insolvent or in danger of insolvency to prepare a
335 plan; requiring the provider or facility to prepare a
336 specified plan; requiring that such plan be presented
337 to the office within a specified timeframe;
338 authorizing the office to issue an order requiring a
339 provider or facility to engage in certain acts under
340 certain circumstances; authorizing the office to issue
341 immediate final orders requiring certain acts;
342 providing construction; amending s. 651.114, F.S.;
343 deleting provisions relating to continuing care
344 facility trustees and lenders; creating s. 651.1165,
345 F.S.; requiring the office to record notices of lien
346 against continuing care facilities’ properties;
347 providing requirements for such liens; providing for
348 lien foreclosures in civil actions; providing that
349 such liens are preferred to all liens, mortgages, and
350 other encumbrances upon the property and all
351 unrecorded liens, mortgages, and other encumbrances;
352 providing conditions for lien releases; amending ss.
353 624.307, 627.642, 627.6475, 627.657, and 627.66997,
354 F.S.; conforming cross-references; providing
355 applicability dates; providing effective dates.
356
357 Be It Enacted by the Legislature of the State of Florida:
358
359 Section 1. Subsection (3) of section 48.151, Florida
360 Statutes, is amended to read:
361 48.151 Service on statutory agents for certain persons.—
362 (3) The Chief Financial Officer is the agent for service of
363 process on all insurers applying for authority to transact
364 insurance in this state, all licensed nonresident insurance
365 agents, all nonresident disability insurance agents licensed
366 pursuant to s. 626.835, any unauthorized insurer under s.
367 626.906 or s. 626.937, domestic reciprocal insurers, fraternal
368 benefit societies under chapter 632, warranty associations under
369 chapter 634, prepaid limited health service organizations under
370 chapter 636, health maintenance organizations under chapter 641,
371 and persons required to file statements under s. 628.461. The
372 Department of Financial Services shall create a secure online
373 portal as the sole means to accept service of process on the
374 Chief Financial Officer under this section.
375 Section 2. Subsection (3) of section 252.63, Florida
376 Statutes, is amended to read:
377 252.63 Commissioner of Insurance Regulation; powers in a
378 state of emergency.—
379 (3) The commissioner shall publish in the next available
380 publication of the Florida Administrative Register a notice
381 identifying the date the emergency order was issued and shall
382 include a hyperlink or website address providing direct access
383 to the emergency order copy of the text of any order issued
384 under this section, together with a statement describing the
385 modification or suspension and explaining how the modification
386 or suspension will facilitate recovery from the emergency.
387 Section 3. Section 624.341, Florida Statutes, is created to
388 read:
389 624.341 Authority of Department of Law Enforcement to
390 accept fingerprints of, and exchange criminal history records
391 with respect to, certain persons applying to the Office of
392 Insurance Regulation.—
393 (1) The Legislature finds that criminal activity of
394 insurers poses a particular danger to the residents of this
395 state. Floridians rely, in good faith, on the honest conduct of
396 those who issue and manage insurance policies and other
397 insurance instruments in this state. To safeguard this state’s
398 residents, the Legislature finds it necessary to ensure that
399 organizers, incorporators, subscribers, officers, employees,
400 contractors, affiliates, stockholders, directors, owners,
401 members, managers, volunteers, or any other persons who exercise
402 or have the ability to exercise effective control of, or who
403 influence or have the ability to influence the transaction of
404 the business of, or any other persons involved in, directly or
405 indirectly, the organization, operation, or management of any
406 insurer authorized to sell insurance are free of a criminal
407 background.
408 (2) The Department of Law Enforcement shall accept and
409 process fingerprints of organizers, incorporators, subscribers,
410 officers, employees, contractors, affiliates, stockholders,
411 directors, owners, members, managers, or volunteers involved,
412 directly or indirectly, in the organization, operation, or
413 management of:
414 (a) Any insurer or proposed insurer transacting or
415 proposing to transact insurance in this state.
416 (b) Any other entity that is examined or investigated or
417 that is eligible to be examined or investigated under the
418 provisions of the Florida Insurance Code.
419 (c) Any other person or entity subject to licensure under
420 the Florida Insurance Code.
421 (3) A full set of fingerprints of persons or entities
422 described in subsection (2) must be submitted to the office or
423 to a vendor, an entity, or an agency authorized by s.
424 943.053(13). The office, vendor, entity, or agency shall forward
425 the fingerprints to the Department of Law Enforcement for state
426 processing, and the Department of Law Enforcement shall forward
427 the fingerprints to the Federal Bureau of Investigation for
428 national processing as described in s. 624.34. Fees for state
429 and federal fingerprint processing must be borne by the person
430 submitting them. The state cost for fingerprint processing is as
431 provided in s. 943.053(3)(e).
432 (4) The Department of Law Enforcement may, to the extent
433 provided by federal law, exchange state, multistate, and federal
434 criminal history records with the office for the purpose of the
435 issuance, denial, suspension, or revocation of a certificate of
436 authority, certification, or license to operate in this state.
437 (5) Fingerprints for each person or entity described in
438 subsection (2) must be submitted in accordance with rules
439 adopted by the commission.
440 (a) Fingerprints may be submitted through a third-party
441 vendor authorized by the Department of Law Enforcement.
442 (b) The Department of Law Enforcement shall conduct the
443 state criminal history background check, and a federal criminal
444 history background check must be conducted through the Federal
445 Bureau of Investigation.
446 (c) All fingerprints submitted to the Department of Law
447 Enforcement must be submitted and entered into the statewide
448 automated fingerprint identification system established in s.
449 943.05(2)(b) and available for use in accordance with s.
450 943.05(2)(g) and (h). The office shall inform the Department of
451 Law Enforcement of any person whose fingerprints no longer must
452 be retained.
453 (d) The costs of fingerprint processing, including the cost
454 of retaining the fingerprints, must be borne by the person
455 subject to the background check.
456 (e) The office shall review the results of the state and
457 federal criminal history background checks and determine whether
458 the applicant meets requirements.
459 (6) Statewide criminal records obtained through the
460 Department of Law Enforcement, federal criminal records obtained
461 through the Federal Bureau of Investigation, and local criminal
462 records obtained through local law enforcement agencies must be
463 used by the office for the purpose of issuance, denial,
464 suspension, or revocation of certificates of authority,
465 certifications, or licenses issued to operate in this state.
466 Section 4. Paragraph (g) of subsection (1) of section
467 624.4085, Florida Statutes, is amended to read:
468 624.4085 Risk-based capital requirements for insurers.—
469 (1) As used in this section, the term:
470 (g) “Life and health insurer” means an insurer authorized
471 or eligible under the Florida Insurance Code to underwrite life
472 or health insurance. The term includes a property and casualty
473 insurer that writes accident and health insurance only.
474 Effective January 1, 2015, The term also includes a health
475 maintenance organization that is authorized in this state and
476 one or more other states, jurisdictions, or countries and a
477 prepaid limited health service organization that is authorized
478 in this state and one or more other states, jurisdictions, or
479 countries.
480 Section 5. Present subsection (3) of section 624.422,
481 Florida Statutes, is redesignated as subsection (4), and a new
482 subsection (3) is added to that section, to read:
483 624.422 Service of process; appointment of Chief Financial
484 Officer as process agent.—
485 (3) The appointment of the Chief Financial Officer under
486 this section applies to any insurer that withdraws from or
487 ceases operations in this state until the insurer has completed
488 its runoff of, or otherwise extinguished, all liabilities in
489 Florida.
490 Section 6. Subsection (13) of section 624.424, Florida
491 Statutes, is amended to read:
492 624.424 Annual statement and other information.—
493 (13) Each authorized insurer doing business in this state
494 which pays a fee, commission, or other financial consideration
495 or payment to any affiliate directly or indirectly is required
496 upon request to provide to the office any information the office
497 deems necessary. The fee, commission, or other financial
498 consideration or payment to any affiliate must be fair and
499 reasonable. In determining whether the fee, commission, or other
500 financial consideration or payment is fair and reasonable, the
501 office shall consider all of the following:
502 (a) The actual cost of each service provided by an
503 affiliate.
504 (b) The relative financial condition of the insurer and the
505 affiliate.
506 (c) The level of debt and how that debt is serviced.
507 (d) The amount of the dividends paid by the insurer and the
508 affiliates and for what purpose.
509 (e) Whether the terms of the written contract benefit the
510 insurer and are in the best interest of the policyholders or
511 subscribers.
512 (f) Any other such information as the office reasonably
513 requires in making this determination, among other things, the
514 actual cost of the service being provided.
515 Section 7. Subsection (2) of section 624.45, Florida
516 Statutes, is amended to read:
517 624.45 Participation of financial institutions in
518 reinsurance and in insurance exchanges.—Subject to applicable
519 laws relating to financial institutions and to any other
520 applicable provision of the Florida Insurance Code, any
521 financial institution or aggregation of such institutions may:
522 (2) Participate, directly or indirectly, as an underwriting
523 member or as an investor in an underwriting member of any
524 insurance exchange authorized in accordance with s. 629.401,
525 which underwriting member transacts only aggregate or specific
526 excess insurance over underlying self-insurance coverage for
527 self-insurance organizations authorized under the Florida
528 Insurance Code, for multiple-employer welfare arrangements, or
529 for workers’ compensation self-insurance trusts, in addition to
530 any reinsurance the underwriting member may transact.
531
532 Nothing in this section shall be deemed to prohibit a financial
533 institution from engaging in any presently authorized insurance
534 activity.
535 Section 8. Present subsection (15) of section 624.610,
536 Florida Statutes, is redesignated as subsection (16), a new
537 subsection (15) is added to that section, and paragraph (b) of
538 subsection (3), paragraph (b) of subsection (12), and present
539 subsection (16) of that section are amended, to read:
540 624.610 Reinsurance.—
541 (3)
542 (b)1. Credit must be allowed when the reinsurance is ceded
543 to an assuming insurer that is accredited as a reinsurer in this
544 state. An accredited reinsurer is one that:
545 a. Files with the office evidence of its submission to this
546 state’s jurisdiction;
547 b. Submits to this state’s authority to examine its books
548 and records;
549 c. Is licensed or authorized to transact insurance or
550 reinsurance in at least one state or, in the case of a United
551 States branch of an alien assuming insurer, is entered through,
552 licensed, or authorized to transact insurance or reinsurance in
553 at least one state;
554 d. Files annually with the office a copy of its annual
555 statement filed with the insurance department of its state of
556 domicile any quarterly statements if required by its state of
557 domicile or such quarterly statements if specifically requested
558 by the office, and a copy of its most recent audited financial
559 statement; and
560 (I) Maintains a surplus as regards policyholders in an
561 amount not less than $20 million and whose accreditation has not
562 been denied by the office within 90 days after its submission;
563 or
564 (II) Maintains a surplus as regards policyholders in an
565 amount not less than $20 million and whose accreditation has
566 been approved by the office.
567 2. The office may deny or revoke an assuming insurer’s
568 accreditation if the assuming insurer does not submit the
569 required documentation pursuant to subparagraph 1., if the
570 assuming insurer fails to meet all of the standards required of
571 an accredited reinsurer, or if the assuming insurer’s
572 accreditation would be hazardous to the policyholders of this
573 state. In determining whether to deny or revoke accreditation,
574 the office may consider the qualifications of the assuming
575 insurer with respect to all the following subjects:
576 a. Its financial stability;
577 b. The lawfulness and quality of its investments;
578 c. The competency, character, and integrity of its
579 management;
580 d. The competency, character, and integrity of persons who
581 own or have a controlling interest in the assuming insurer; and
582 e. Whether claims under its contracts are promptly and
583 fairly adjusted and are promptly and fairly paid in accordance
584 with the law and the terms of the contracts.
585 3. Credit must not be allowed a ceding insurer if the
586 assuming insurer’s accreditation has been revoked by the office
587 after notice and the opportunity for a hearing.
588 4. The actual costs and expenses incurred by the office to
589 review a reinsurer’s request for accreditation and subsequent
590 reviews must be charged to and collected from the requesting
591 reinsurer. If the reinsurer fails to pay the actual costs and
592 expenses promptly when due, the office may refuse to accredit
593 the reinsurer or may revoke the reinsurer’s accreditation.
594 (12)
595 (b) The summary statement must be signed and attested to by
596 either the chief executive officer or the chief financial
597 officer of the reporting insurer. In addition to the summary
598 statement, the office may require the filing of any supporting
599 information relating to the ceding of such risks as it deems
600 necessary. If the summary statement prepared by the ceding
601 insurer discloses that the net effect of a reinsurance treaty or
602 treaties (or series of treaties with one or more affiliated
603 reinsurers entered into for the purpose of avoiding the
604 following threshold amount) at any time results in an increase
605 of more than 25 percent to the insurer’s surplus as to
606 policyholders, then the insurer shall certify in writing to the
607 office that the relevant reinsurance treaty or treaties comply
608 with the accounting requirements contained in any rule adopted
609 by the commission under subsection (16) (15). If such
610 certificate is filed after the summary statement of such
611 reinsurance treaty or treaties, the insurer shall refile the
612 summary statement with the certificate. In any event, the
613 certificate must state that a copy of the certificate was sent
614 to the reinsurer under the reinsurance treaty.
615 (15) Any application filed with the office to review a
616 reinsurer’s request to operate in this state under this section
617 must be accompanied by a filing fee equal to the application fee
618 charged under s. 624.501(1)(a).
619 (16) This act shall apply to all cessions on or after
620 January 1, 2001, under reinsurance agreements that have an
621 inception, anniversary, or renewal date on or after January 1,
622 2001.
623 Section 9. Section 626.9651, Florida Statutes, is amended
624 to read:
625 626.9651 Security of consumer data Privacy.—
626 (1) The department and commission shall must each adopt
627 rules consistent with other provisions of the Florida Insurance
628 Code to govern the use of a consumer’s nonpublic personal
629 financial and health information. These rules must be based on,
630 consistent with, and not more restrictive than the Privacy of
631 Consumer Financial and Health Information Regulation, adopted
632 September 26, 2000, by the National Association of Insurance
633 Commissioners; however, the rules must permit the use and
634 disclosure of nonpublic personal health information for
635 scientific, medical, or public policy research, in accordance
636 with federal law. In addition, these rules must be consistent
637 with, and not more restrictive than, the standards contained in
638 Title V of the Gramm-Leach-Bliley Act of 1999, Pub. L. No. 106
639 102, as amended in Title LXXV of the Fixing America’s Surface
640 Transportation (FAST) Act, Pub. L. No. 114-94. If the office
641 determines that a health insurer or health maintenance
642 organization is in compliance with, or is actively undertaking
643 compliance with, the consumer privacy protection rules adopted
644 by the United States Department of Health and Human Services, in
645 conformance with the Health Insurance Portability and
646 Affordability Act, that health insurer or health maintenance
647 organization is in compliance with this subsection section.
648 (2) The office and the commission shall adopt rules
649 consistent with state law, including the Florida Insurance Code,
650 to ensure the cybersecurity of a consumer’s nonpublic insurance
651 data. These rules may not be more restrictive than the National
652 Association of Insurance Commissioners Insurance Data Security
653 Model Law, adopted as of October 2017, and subsequent amendments
654 thereto if the methodology remains substantially consistent. The
655 rules must:
656 (a) Apply to all entities acting as insurers, transacting
657 insurance, or otherwise engaging in insurance activities in this
658 state, including entities licensed under chapter 641, and any
659 entity contracted to maintain, store, or process personal
660 information on behalf of a covered entity;
661 (b) Require the development and implementation of an
662 information security program as defined in the model law;
663 (c) Require investigation and notification of a
664 cybersecurity event as required under the model law;
665 (d) Require that each insurer submit to the department or
666 office all or part of the information required to be reported to
667 the department or office in a computer-readable form compatible
668 with the electronic data processing system of the department or
669 office; and
670 (e) Require that the office be copied on any notice
671 provided to the Attorney General under s. 501.171.
672 (3) Upon receiving information under this section, the
673 office shall review the information and may initiate an
674 examination or investigation under s. 624.316, s. 624.3161, or
675 s. 626.8828.
676 (4) This section does not establish a private cause of
677 action.
678 Section 10. Paragraph (a) of subsection (2) of section
679 627.062, Florida Statutes, is amended to read:
680 627.062 Rate standards.—
681 (2) As to all such classes of insurance:
682 (a) Insurers or rating organizations shall establish and
683 use rates, rating schedules, or rating manuals that allow the
684 insurer a reasonable rate of return on the classes of insurance
685 written in this state. A copy of rates, rating schedules, rating
686 manuals, premium credits or discount schedules, and surcharge
687 schedules, and changes thereto, must be filed with the office
688 under one of the following procedures:
689 1. If the filing is made at least 90 days before the
690 proposed effective date and is not implemented during the
691 office’s review of the filing and any proceeding and judicial
692 review, such filing is considered a use and file “file and use”
693 filing. In such case, the office shall finalize its review by
694 issuance of a notice of intent to approve or a notice of intent
695 to disapprove within 90 days after receipt of the filing. If the
696 90-day period ends on a weekend or a holiday under s.
697 110.117(1)(a)-(i), it must be extended until the conclusion of
698 the next business day. The notice of intent to approve and the
699 notice of intent to disapprove constitute agency action for
700 purposes of the Administrative Procedure Act. Requests for
701 supporting information, requests for mathematical or mechanical
702 corrections, or notification to the insurer by the office of its
703 preliminary findings does not toll the 90-day period during any
704 such proceedings and subsequent judicial review. The rate shall
705 be deemed approved if the office does not issue a notice of
706 intent to approve or a notice of intent to disapprove within 90
707 days after receipt of the filing.
708 2. If the filing is not made in accordance with
709 subparagraph 1., such filing must be made as soon as
710 practicable, but within 30 days after the effective date, and is
711 considered a “use and file” filing. An insurer making a “use and
712 file” filing is potentially subject to an order by the office to
713 return to policyholders those portions of rates found to be
714 excessive, as provided in paragraph (h). For purposes of this
715 subparagraph, a personal residential property insurer may not
716 submit more than two use and file filings affecting
717 policyholders within a single policy period, unless the filings
718 are exclusively related to reinsurance.
719 3. For all property insurance filings made or submitted
720 after January 25, 2007, but before May 1, 2012, an insurer
721 seeking a rate that is greater than the rate most recently
722 approved by the office shall make a use and file “file and use”
723 filing. For purposes of this subparagraph, motor vehicle
724 collision and comprehensive coverages are not considered
725 property coverages.
726
727 The provisions of this subsection do not apply to workers’
728 compensation, employer’s liability insurance, and motor vehicle
729 insurance.
730 Section 11. Present subsection (2) of section 627.0621,
731 Florida Statutes, is redesignated as subsection (3) and amended,
732 and a new subsection (2) is added to that section, to read:
733 627.0621 Transparency in rate regulation.—
734 (2) RATE TRANSPARENCY REPORT.—
735 (a) Beginning October 1, 2025, every rate filing requesting
736 a rate change for residential property coverage from a property
737 insurer must include a rate transparency report for acceptance
738 for use or modification by the office. The office may accept the
739 rate transparency report for filing, or if the office finds that
740 the report fails to provide the required information in concise
741 and plain language which aids consumers in their understanding
742 of insurance, or finds the report to be misleading, the office
743 must return the rate transparency report to the property insurer
744 for modification. The office’s acceptance for use or
745 modification of the report may not be deemed approval pursuant
746 to s. 627.062. The report must be compiled in a uniform format
747 prescribed by the commission and must include a graphical
748 representation identifying a percentage breakdown of rating
749 factors anticipated of the company, book, or program affected by
750 the filing.
751 (b) Along with an offer of coverage and upon renewal, an
752 insurer must provide the corresponding copy of the rate
753 transparency report for the consumer’s offered rate to aid
754 consumers in their understanding of insurance. If the report has
755 not been accepted for use or modified by the office, the report
756 must indicate that it is preliminary and subject to modification
757 by the office.
758 (c) The rate transparency report must include the following
759 categories of the book or program at the cumulative level:
760 1. The percentage of the total rate factor associated with
761 the cost of reinsurance.
762 2. The percentage of the total rate factor associated with
763 the cost of claims.
764 3. The percentage of the total rate factor associated with
765 the defense containment and costs.
766 4. The percentage of the total rate factor associated with
767 fees and commissions.
768 5. The percentage of the rate factor associated with profit
769 and contingency of the insurer.
770 6. Any other categories deemed necessary by the office or
771 commission.
772
773 An estimated percentage of the influence of each listed factor
774 must be provided to equal 100 percent.
775 (d) The insurer shall provide the rate transparency report
776 to the office upon the filing of a rate change with the office.
777 (e) The rate transparency report must also include the
778 following information:
779 1. Any major adverse findings by the office for the
780 previous 3 calendar years.
781 2. Whether the insurer uses affiliated entities to perform
782 functions of the insurer.
783 3. Contact information, to include a telephone number,
784 hours of service, and e-mail address for the Division of
785 Consumer Services of the department.
786 4. Contact information for the office.
787 5. Address for the website for public access to rate filing
788 and affiliate information outlined in subsection (3).
789 6. Any changes in the total insured value from the last
790 policy period.
791 (f) The office shall define, in concise and plain language,
792 any terms used with the rate transparency report to aid
793 consumers in their understanding of insurance.
794 (3)(2) WEBSITE FOR PUBLIC ACCESS TO RATE FILING
795 INFORMATION.—
796 (a) The office shall establish and maintain a comprehensive
797 resource center on its website that uses concise and plain
798 language to aid consumers in their understanding of insurance.
799 The website must include substantive information on the current
800 and historical dynamics of the market, data concerning the
801 financial condition and market conduct of insurance companies
802 available to consumers, and choices available to consumers. At a
803 minimum, the website must contain the following:
804 1. Reports, using graphical information wherever possible,
805 which outline information about the state of the market and
806 adverse and positive trends affecting it.
807 2. Tools that aid consumers in finding insurers.
808 3. Tools that aid consumers in selecting the coverages
809 beneficial to them.
810 4. Information about mitigation credits and the My Safe
811 Florida Home Program, as well as other credits insurers may
812 offer beyond wind mitigation.
813 5. Access to the rate transparency report, annual
814 statements, market conduct information, and other information
815 related to each insurer.
816 6. Information on the Citizens Property Insurance
817 Corporation takeout process, the clearinghouse, and general
818 information as reported by the office.
819 7.(a) With respect to any residential property rate filing,
820 the office shall provide the following information on a publicly
821 accessible Internet website:
822 a.1. The overall rate change requested by the insurer.
823 b.2. The rate change approved by the office along with all
824 of the actuary’s assumptions and recommendations forming the
825 basis of the office’s decision.
826 c.3. Certification by the office’s actuary that, based on
827 the actuary’s knowledge, his or her recommendations are
828 consistent with accepted actuarial principles.
829 d. Whether the insurer uses affiliated entities to perform
830 administrative, claims handling, or other functions of the
831 insurer and, if so, the total percentage of direct written
832 premium paid to the affiliated entities by the insurer in the
833 preceding annual calendar year.
834 (b) For any rate filing, regardless of whether or not the
835 filing is subject to a public hearing, the office shall provide
836 on its website a means for any policyholder who may be affected
837 by a proposed rate change to send an e-mail regarding the
838 proposed rate change. Such e-mail must be accessible to the
839 actuary assigned to review the rate filing.
840 (c) The statewide average requested rate change and final
841 approved statewide average rate change within a filing is not a
842 trade secret as defined in s. 688.002 or s. 812.081(1) and is
843 not subject to the public records exemption for trade secrets
844 provided in s. 119.0715 or s. 624.4213.
845 (d) County rating examples submitted to the office through
846 the rate collection system for the purposes of displaying rates
847 on the office website are not a trade secret as defined in s.
848 688.002 or s. 812.081(1) and are not subject to the public
849 records exemption for trade secrets provided in s. 119.0715 or
850 s. 624.4213.
851 Section 12. Paragraph (b) of subsection (3) of section
852 627.0645, Florida Statutes, is amended to read:
853 627.0645 Annual filings.—
854 (3) The filing requirements of this section shall be
855 satisfied by one of the following methods:
856 (b) If no rate change is proposed, a filing which consists
857 of a certification by an actuary that the existing rate level
858 produces rates which are actuarially sound and which are not
859 inadequate, as defined in s. 627.062. However, for residential
860 property and private passenger auto insurers, a full rate filing
861 is required after 2 consecutive years of certification under
862 this paragraph.
863 Section 13. Paragraph (b) of subsection (1) of section
864 627.0651, Florida Statutes, is amended to read:
865 627.0651 Making and use of rates for motor vehicle
866 insurance.—
867 (1) Insurers shall establish and use rates, rating
868 schedules, or rating manuals to allow the insurer a reasonable
869 rate of return on motor vehicle insurance written in this state.
870 A copy of rates, rating schedules, and rating manuals, and
871 changes therein, shall be filed with the office under one of the
872 following procedures:
873 (b) If the filing is not made in accordance with the
874 provisions of paragraph (a), such filing must shall be made as
875 soon as practicable, but no later than 30 days after the
876 effective date, and is shall be considered a “use and file”
877 filing. An insurer making a “use and file” filing is potentially
878 subject to an order by the office to return to policyholders
879 portions of rates found to be excessive, as provided in
880 subsection (11). For purposes of this paragraph, an insurer may
881 not submit more than two use and file filings impacting
882 policyholders within a single policy period.
883 Section 14. Effective upon this act becoming a law,
884 paragraph (a) of subsection (5) of section 627.4554, Florida
885 Statutes, is amended to read:
886 627.4554 Suitability in annuity transactions.—
887 (5) DUTIES OF INSURERS AND AGENTS.—
888 (a) An agent, when making a recommendation of an annuity,
889 shall act in the best interest of the consumer under the
890 circumstances known at the time the recommendation is made,
891 without placing the financial interest of the agent or insurer
892 ahead of the consumer’s interest. An agent has acted in the best
893 interest of the consumer if the agent has satisfied the
894 following obligations regarding care, disclosure, conflict of
895 interest, and documentation:
896 1.a. The agent, in making a recommendation, shall exercise
897 reasonable diligence, care, and skill to:
898 (I) Know the financial situation, insurance needs, and
899 financial objectives of the customer.
900 (II) Understand the available options after making a
901 reasonable inquiry into options available to the agent.
902 (III) Have a reasonable basis to believe the recommended
903 option effectively addresses the consumer’s financial situation,
904 insurance needs, and financial objectives over the life of the
905 product, as evaluated in light of the consumer profile
906 information.
907 (IV) Communicate the reason or reasons for the
908 recommendation.
909 b. The requirements of sub-subparagraph a. include:
910 (I) Making reasonable efforts to obtain consumer profile
911 information from the consumer before the recommendation of an
912 annuity.
913 (II) Requiring an agent to consider the types of products
914 the agent is authorized and licensed to recommend or sell which
915 address the consumer’s financial situation, insurance needs, and
916 financial objectives. This does not require analysis or
917 consideration of any products outside the authority and license
918 of the agent or other possible alternative products or
919 strategies available in the market at the time of the
920 recommendation. Agents shall be held to standards applicable to
921 agents with similar authority and licensure.
922 (III) Having a reasonable basis to believe the consumer
923 would benefit from certain features of the annuity, such as
924 annuitization, death or living benefit, or other insurance
925 related features.
926 c. The requirements of this subsection do not create a
927 fiduciary obligation or relationship and only create a
928 regulatory obligation as provided in this section.
929 d. The consumer profile information; characteristics of the
930 insurer; and product costs, rates, benefits, and features are
931 those factors generally relevant in making a determination
932 whether an annuity effectively addresses the consumer’s
933 financial situation, insurance needs, and financial objectives,
934 but the level of importance of each factor under the care
935 obligation of this paragraph may vary depending on the facts and
936 circumstances of a particular case. However, each factor may not
937 be considered in isolation.
938 e. The requirements under sub-subparagraph a. apply to the
939 particular annuity as a whole and the underlying subaccounts to
940 which funds are allocated at the time of purchase or exchange of
941 an annuity, and riders and similar product enhancements, if any.
942 f. Sub-subparagraph a. does not require that the annuity
943 with the lowest one-time occurrence compensation structure or
944 multiple occurrence compensation structure shall necessarily be
945 recommended.
946 g. Sub-subparagraph a. does not require the agent to have
947 ongoing monitoring obligations under the care obligation,
948 although such an obligation may be separately owed under the
949 terms of a fiduciary, consulting, investment, advising, or
950 financial planning agreement between the consumer and the agent.
951 h. In the case of an exchange or replacement of an annuity,
952 the agent shall consider the whole transaction, which includes
953 taking into consideration whether:
954 (I) The consumer will incur a surrender charge; be subject
955 to the commencement of a new surrender period; lose existing
956 benefits, such as death, living, or other contractual benefits;
957 or be subject to increased fees, investment advisory fees, or
958 charges for riders and similar product enhancements.
959 (II) The replacing product would substantially benefit the
960 consumer in comparison to the replaced product over the life of
961 the product.
962 (III) The consumer has had another annuity exchange or
963 replacement and, in particular, an exchange or replacement
964 within the preceding 60 months.
965 i. This section does not require an agent to obtain any
966 license other than an agent license with the appropriate line of
967 authority to sell, solicit, or negotiate insurance in this
968 state, including, but not limited to, any securities license, in
969 order to fulfill the duties and obligations contained in this
970 section; provided, the agent does not give advice or provide
971 services that are otherwise subject to securities laws or engage
972 in any other activity requiring other professional licenses.
973 2.a. Before the recommendation or sale of an annuity, the
974 agent shall prominently disclose to the consumer, on a form
975 substantially similar to that posted on the department office
976 website as Appendix A, related to an insurance agent disclosure
977 for annuities:
978 (I) A description of the scope and terms of the
979 relationship with the consumer and the role of the agent in the
980 transaction.
981 (II) An affirmative statement on whether the agent is
982 licensed and authorized to sell the following products:
983 (A) Fixed annuities.
984 (B) Fixed indexed annuities.
985 (C) Variable annuities.
986 (D) Life insurance.
987 (E) Mutual funds.
988 (F) Stocks and bonds.
989 (G) Certificates of deposit.
990 (III) An affirmative statement describing the insurers for
991 which the agent is authorized, contracted, or appointed, or
992 otherwise able to sell insurance products, using the following
993 descriptions:
994 (A) From one insurer;
995 (B) From two or more insurers; or
996 (C) From two or more insurers, although primarily
997 contracted with one insurer.
998 (IV) A description of the sources and types of cash
999 compensation and noncash compensation to be received by the
1000 agent, including whether the agent is to be compensated for the
1001 sale of a recommended annuity by commission as part of premium
1002 or other remuneration received from the insurer, intermediary,
1003 or other agent, or by fee as a result of a contract for advice
1004 or consulting services.
1005 (V) A notice of the consumer’s right to request additional
1006 information regarding cash compensation described in sub
1007 subparagraph b.
1008 b. Upon request of the consumer or the consumer’s
1009 designated representative, the agent shall disclose:
1010 (I) A reasonable estimate of the amount of cash
1011 compensation to be received by the agent, which may be stated as
1012 a range of amounts or percentages.
1013 (II) Whether the cash compensation is a one-time or
1014 multiple occurrence amount; and if a multiple occurrence amount,
1015 the frequency and amount of the occurrence, which may be stated
1016 as a range of amounts or percentages.
1017 c. Before or at the time of the recommendation or sale of
1018 an annuity, the agent shall have a reasonable basis to believe
1019 the consumer has been informed of various features of the
1020 annuity, such as the potential surrender period and surrender
1021 charge; potential tax penalty if the consumer sells, exchanges,
1022 surrenders, or annuitizes the annuity; mortality and expense
1023 fees; any annual fees; investment advisory fees; potential
1024 charges for and features of riders or other options of the
1025 annuity; limitations on interest returns; potential changes in
1026 nonguaranteed elements of the annuity; insurance and investment
1027 components; and market risk.
1028 3. An agent shall identify and avoid or reasonably manage
1029 and disclose material conflicts of interest, including material
1030 conflicts of interest related to an ownership interest.
1031 4. An agent shall at the time of the recommendation or
1032 sale:
1033 a. Make a written record of any recommendation and the
1034 basis for the recommendation, subject to this section.
1035 b. Obtain a consumer-signed statement on a form
1036 substantially similar to that posted on the department office
1037 website as Appendix B, related to a consumer’s refusal to
1038 provide information, documenting:
1039 (I) A customer’s refusal to provide the consumer profile
1040 information, if any.
1041 (II) A customer’s understanding of the ramifications of not
1042 providing his or her consumer profile information or providing
1043 insufficient consumer profile information.
1044 c. Obtain a consumer-signed statement on a form
1045 substantially similar to that posted on the department office
1046 website as Appendix C, related to a consumer’s decision to
1047 purchase an annuity not based on a recommendation, acknowledging
1048 the annuity transaction is not recommended if a customer decides
1049 to enter into an annuity transaction that is not based on the
1050 agent’s recommendation.
1051 5. Any requirement applicable to an agent under this
1052 subsection applies to every agent who has exercised material
1053 control or influence in the making of a recommendation and has
1054 received direct compensation as a result of the recommendation
1055 or sale, regardless of whether the agent has had any direct
1056 contact with the consumer. Activities such as providing or
1057 delivering marketing or education materials, product wholesaling
1058 or other back office product support, and general supervision of
1059 an agent do not, in and of themselves, constitute material
1060 control or influence.
1061 Section 15. Paragraphs (b), (p), (q), and (s) of subsection
1062 (3), paragraph (d) of subsection (9), paragraphs (b) and (c) of
1063 subsection (10), and subsection (11) of section 627.6699,
1064 Florida Statutes, are amended to read:
1065 627.6699 Employee Health Care Access Act.—
1066 (3) DEFINITIONS.—As used in this section, the term:
1067 (b) “Board” means the board of directors of the program.
1068 (p) “Plan of operation” means the plan of operation of the
1069 program, including articles, bylaws, and operating rules,
1070 adopted by the board under subsection (11).
1071 (q) “Program” means the Florida Small Employer Carrier
1072 Reinsurance Program created under subsection (11).
1073 (p)(s) “Reinsuring carrier” means a small employer carrier
1074 that elects to comply with reinsurance the requirements set
1075 forth in subsection (11).
1076 (9) SMALL EMPLOYER CARRIER’S ELECTION TO BECOME A RISK
1077 ASSUMING CARRIER OR A REINSURING CARRIER.—
1078 (d) A small employer carrier that elects to cease
1079 participating as a reinsuring carrier and to become a risk
1080 assuming carrier is prohibited from reinsuring or continuing to
1081 reinsure any small employer health benefits plan under
1082 subsection (11) as soon as the carrier becomes a risk-assuming
1083 carrier and must pay a prorated assessment based upon business
1084 issued as a reinsuring carrier for any portion of the year that
1085 the business was reinsured. A small employer carrier that elects
1086 to cease participating as a risk-assuming carrier and to become
1087 a reinsuring carrier is permitted to reinsure small employer
1088 health benefit plans under the terms set forth in subsection
1089 (11) and must pay a prorated assessment based upon business
1090 issued as a reinsuring carrier for any portion of the year that
1091 the business was reinsured.
1092 (10) ELECTION PROCESS TO BECOME A RISK-ASSUMING CARRIER.—
1093 (b) In determining whether to approve an application by a
1094 small employer carrier to become a risk-assuming carrier, the
1095 office shall consider:
1096 1. The carrier’s financial ability to support the
1097 assumption of the risk of small employer groups.
1098 2. The carrier’s history of rating and underwriting small
1099 employer groups.
1100 3. The carrier’s commitment to market fairly to all small
1101 employers in the state or its service area, as applicable.
1102 4. The carrier’s ability to assume and manage the risk of
1103 enrolling small employer groups without the protection of the
1104 reinsurance program provided in subsection (11).
1105 (c) A small employer carrier that becomes a risk-assuming
1106 carrier pursuant to this subsection is not subject to
1107 reinsurance the assessment provisions of subsection (11).
1108 (11) SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.—
1109 (a) There is created a nonprofit entity to be known as the
1110 “Florida Small Employer Health Reinsurance Program.”
1111 (b)1. The program shall operate subject to the supervision
1112 and control of the board.
1113 2. Effective upon this act becoming a law, the board shall
1114 consist of the director of the office or his or her designee,
1115 who shall serve as the chairperson, and 13 additional members
1116 who are representatives of carriers and insurance agents and are
1117 appointed by the director of the office and serve as follows:
1118 a. Five members shall be representatives of health insurers
1119 licensed under chapter 624 or chapter 641. Two members shall be
1120 agents who are actively engaged in the sale of health insurance.
1121 Four members shall be employers or representatives of employers.
1122 One member shall be a person covered under an individual health
1123 insurance policy issued by a licensed insurer in this state. One
1124 member shall represent the Agency for Health Care Administration
1125 and shall be recommended by the Secretary of Health Care
1126 Administration.
1127 b. A member appointed under this subparagraph shall serve a
1128 term of 4 years and shall continue in office until the member’s
1129 successor takes office, except that, in order to provide for
1130 staggered terms, the director of the office shall designate two
1131 of the initial appointees under this subparagraph to serve terms
1132 of 2 years and shall designate three of the initial appointees
1133 under this subparagraph to serve terms of 3 years.
1134 3. The director of the office may remove a member for
1135 cause.
1136 4. Vacancies on the board shall be filled in the same
1137 manner as the original appointment for the unexpired portion of
1138 the term.
1139 (c)1. The board shall submit to the office a plan of
1140 operation to assure the fair, reasonable, and equitable
1141 administration of the program. The board may at any time submit
1142 to the office any amendments to the plan that the board finds to
1143 be necessary or suitable.
1144 2. The office shall, after notice and hearing, approve the
1145 plan of operation if it determines that the plan submitted by
1146 the board is suitable to assure the fair, reasonable, and
1147 equitable administration of the program and provides for the
1148 sharing of program gains and losses equitably and
1149 proportionately in accordance with paragraph (j).
1150 3. The plan of operation, or any amendment thereto, becomes
1151 effective upon written approval of the office.
1152 (d) The plan of operation must, among other things:
1153 1. Establish procedures for handling and accounting for
1154 program assets and moneys and for an annual fiscal reporting to
1155 the office.
1156 2. Establish procedures for selecting an administering
1157 carrier and set forth the powers and duties of the administering
1158 carrier.
1159 3. Establish procedures for reinsuring risks.
1160 4. Establish procedures for collecting assessments from
1161 participating carriers to provide for claims reinsured by the
1162 program and for administrative expenses, other than amounts
1163 payable to the administrative carrier, incurred or estimated to
1164 be incurred during the period for which the assessment is made.
1165 5. Provide for any additional matters at the discretion of
1166 the board.
1167 (e) The board shall recommend to the office market conduct
1168 requirements and other requirements for carriers and agents,
1169 including requirements relating to:
1170 1. Registration by each carrier with the office of its
1171 intention to be a small employer carrier under this section;
1172 2. Publication by the office of a list of all small
1173 employer carriers, including a requirement applicable to agents
1174 and carriers that a health benefit plan may not be sold by a
1175 carrier that is not identified as a small employer carrier;
1176 3. The availability of a broadly publicized, toll-free
1177 telephone number for access by small employers to information
1178 concerning this section;
1179 4. Periodic reports by carriers and agents concerning
1180 health benefit plans issued; and
1181 5. Methods concerning periodic demonstration by small
1182 employer carriers and agents that they are marketing or issuing
1183 health benefit plans to small employers.
1184 (f) The program has the general powers and authority
1185 granted under the laws of this state to insurance companies and
1186 health maintenance organizations licensed to transact business,
1187 except the power to issue health benefit plans directly to
1188 groups or individuals. In addition thereto, the program has
1189 specific authority to:
1190 1. Enter into contracts as necessary or proper to carry out
1191 the provisions and purposes of this act, including the authority
1192 to enter into contracts with similar programs of other states
1193 for the joint performance of common functions or with persons or
1194 other organizations for the performance of administrative
1195 functions.
1196 2. Sue or be sued, including taking any legal action
1197 necessary or proper for recovering any assessments and penalties
1198 for, on behalf of, or against the program or any carrier.
1199 3. Take any legal action necessary to avoid the payment of
1200 improper claims against the program.
1201 4. Issue reinsurance policies, in accordance with the
1202 requirements of this act.
1203 5. Establish rules, conditions, and procedures for
1204 reinsurance risks under the program participation.
1205 6. Establish actuarial functions as appropriate for the
1206 operation of the program.
1207 7. Assess participating carriers in accordance with
1208 paragraph (j), and make advance interim assessments as may be
1209 reasonable and necessary for organizational and interim
1210 operating expenses. Interim assessments shall be credited as
1211 offsets against any regular assessments due following the close
1212 of the calendar year.
1213 8. Appoint appropriate legal, actuarial, and other
1214 committees as necessary to provide technical assistance in the
1215 operation of the program, and in any other function within the
1216 authority of the program.
1217 9. Borrow money to effect the purposes of the program. Any
1218 notes or other evidences of indebtedness of the program which
1219 are not in default constitute legal investments for carriers and
1220 may be carried as admitted assets.
1221 10. To the extent necessary, increase the $5,000 deductible
1222 reinsurance requirement to adjust for the effects of inflation.
1223 (g) A reinsuring carrier may reinsure with the program
1224 coverage of an eligible employee of a small employer, or any
1225 dependent of such an employee, subject to each of the following
1226 provisions:
1227 1. Except in the case of a late enrollee, a reinsuring
1228 carrier may reinsure an eligible employee or dependent within 60
1229 days after the commencement of the coverage of the small
1230 employer. A newly employed eligible employee or dependent of a
1231 small employer may be reinsured within 60 days after the
1232 commencement of his or her coverage.
1233 2. A small employer carrier may reinsure an entire employer
1234 group within 60 days after the commencement of the group’s
1235 coverage under the plan.
1236 3. The program may not reimburse a participating carrier
1237 with respect to the claims of a reinsured employee or dependent
1238 until the carrier has paid incurred claims of at least $5,000 in
1239 a calendar year for benefits covered by the program. In
1240 addition, the reinsuring carrier shall be responsible for 10
1241 percent of the next $50,000 and 5 percent of the next $100,000
1242 of incurred claims during a calendar year and the program shall
1243 reinsure the remainder.
1244 4. The board annually shall adjust the initial level of
1245 claims and the maximum limit to be retained by the carrier to
1246 reflect increases in costs and utilization within the standard
1247 market for health benefit plans within the state. The adjustment
1248 shall not be less than the annual change in the medical
1249 component of the “Consumer Price Index for All Urban Consumers”
1250 of the Bureau of Labor Statistics of the Department of Labor,
1251 unless the board proposes and the office approves a lower
1252 adjustment factor.
1253 5. A small employer carrier may terminate reinsurance for
1254 all reinsured employees or dependents on any plan anniversary.
1255 6. The premium rate charged for reinsurance by the program
1256 to a health maintenance organization that is approved by the
1257 Secretary of Health and Human Services as a federally qualified
1258 health maintenance organization pursuant to 42 U.S.C. s.
1259 300e(c)(2)(A) and that, as such, is subject to requirements that
1260 limit the amount of risk that may be ceded to the program, which
1261 requirements are more restrictive than subparagraph 3., shall be
1262 reduced by an amount equal to that portion of the risk, if any,
1263 which exceeds the amount set forth in subparagraph 3. which may
1264 not be ceded to the program.
1265 7. The board may consider adjustments to the premium rates
1266 charged for reinsurance by the program for carriers that use
1267 effective cost containment measures, including high-cost case
1268 management, as defined by the board.
1269 8. A reinsuring carrier shall apply its case-management and
1270 claims-handling techniques, including, but not limited to,
1271 utilization review, individual case management, preferred
1272 provider provisions, other managed care provisions or methods of
1273 operation, consistently with both reinsured business and
1274 nonreinsured business.
1275 (h)1. The board, as part of the plan of operation, shall
1276 establish a methodology for determining premium rates to be
1277 charged by the program for reinsuring small employers and
1278 individuals pursuant to this section. The methodology shall
1279 include a system for classification of small employers that
1280 reflects the types of case characteristics commonly used by
1281 small employer carriers in the state. The methodology shall
1282 provide for the development of basic reinsurance premium rates,
1283 which shall be multiplied by the factors set for them in this
1284 paragraph to determine the premium rates for the program. The
1285 basic reinsurance premium rates shall be established by the
1286 board, subject to the approval of the office. The premium rates
1287 set by the board may vary by geographical area, as determined
1288 under this section, to reflect differences in cost. The
1289 multiplying factors must be established as follows:
1290 a. The entire group may be reinsured for a rate that is 1.5
1291 times the rate established by the board.
1292 b. An eligible employee or dependent may be reinsured for a
1293 rate that is 5 times the rate established by the board.
1294 2. The board periodically shall review the methodology
1295 established, including the system of classification and any
1296 rating factors, to assure that it reasonably reflects the claims
1297 experience of the program. The board may propose changes to the
1298 rates which shall be subject to the approval of the office.
1299 (i) If a health benefit plan for a small employer issued in
1300 accordance with this subsection is entirely or partially
1301 reinsured with the program, the premium charged to the small
1302 employer for any rating period for the coverage issued must be
1303 consistent with the requirements relating to premium rates set
1304 forth in this section.
1305 (j)1. Before July 1 of each calendar year, the board shall
1306 determine and report to the office the program net loss for the
1307 previous year, including administrative expenses for that year,
1308 and the incurred losses for the year, taking into account
1309 investment income and other appropriate gains and losses.
1310 2. Any net loss for the year shall be recouped by
1311 assessment of the carriers, as follows:
1312 a. The operating losses of the program shall be assessed in
1313 the following order subject to the specified limitations. The
1314 first tier of assessments shall be made against reinsuring
1315 carriers in an amount which shall not exceed 5 percent of each
1316 reinsuring carrier’s premiums from health benefit plans covering
1317 small employers. If such assessments have been collected and
1318 additional moneys are needed, the board shall make a second tier
1319 of assessments in an amount which shall not exceed 0.5 percent
1320 of each carrier’s health benefit plan premiums. Except as
1321 provided in paragraph (m), risk-assuming carriers are exempt
1322 from all assessments authorized pursuant to this section. The
1323 amount paid by a reinsuring carrier for the first tier of
1324 assessments shall be credited against any additional assessments
1325 made.
1326 b. The board shall equitably assess carriers for operating
1327 losses of the plan based on market share. The board shall
1328 annually assess each carrier a portion of the operating losses
1329 of the plan. The first tier of assessments shall be determined
1330 by multiplying the operating losses by a fraction, the numerator
1331 of which equals the reinsuring carrier’s earned premium
1332 pertaining to direct writings of small employer health benefit
1333 plans in the state during the calendar year for which the
1334 assessment is levied, and the denominator of which equals the
1335 total of all such premiums earned by reinsuring carriers in the
1336 state during that calendar year. The second tier of assessments
1337 shall be based on the premiums that all carriers, except risk
1338 assuming carriers, earned on all health benefit plans written in
1339 this state. The board may levy interim assessments against
1340 carriers to ensure the financial ability of the plan to cover
1341 claims expenses and administrative expenses paid or estimated to
1342 be paid in the operation of the plan for the calendar year prior
1343 to the association’s anticipated receipt of annual assessments
1344 for that calendar year. Any interim assessment is due and
1345 payable within 30 days after receipt by a carrier of the interim
1346 assessment notice. Interim assessment payments shall be credited
1347 against the carrier’s annual assessment. Health benefit plan
1348 premiums and benefits paid by a carrier that are less than an
1349 amount determined by the board to justify the cost of collection
1350 may not be considered for purposes of determining assessments.
1351 c. Subject to the approval of the office, the board shall
1352 make an adjustment to the assessment formula for reinsuring
1353 carriers that are approved as federally qualified health
1354 maintenance organizations by the Secretary of Health and Human
1355 Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the extent,
1356 if any, that restrictions are placed on them that are not
1357 imposed on other small employer carriers.
1358 3. Before July 1 of each year, the board shall determine
1359 and file with the office an estimate of the assessments needed
1360 to fund the losses incurred by the program in the previous
1361 calendar year.
1362 4. If the board determines that the assessments needed to
1363 fund the losses incurred by the program in the previous calendar
1364 year will exceed the amount specified in subparagraph 2., the
1365 board shall evaluate the operation of the program and report its
1366 findings, including any recommendations for changes to the plan
1367 of operation, to the office within 180 days following the end of
1368 the calendar year in which the losses were incurred. The
1369 evaluation shall include an estimate of future assessments, the
1370 administrative costs of the program, the appropriateness of the
1371 premiums charged and the level of carrier retention under the
1372 program, and the costs of coverage for small employers. If the
1373 board fails to file a report with the office within 180 days
1374 following the end of the applicable calendar year, the office
1375 may evaluate the operations of the program and implement such
1376 amendments to the plan of operation the office deems necessary
1377 to reduce future losses and assessments.
1378 5. If assessments exceed the amount of the actual losses
1379 and administrative expenses of the program, the excess shall be
1380 held as interest and used by the board to offset future losses
1381 or to reduce program premiums. As used in this paragraph, the
1382 term “future losses” includes reserves for incurred but not
1383 reported claims.
1384 6. Each carrier’s proportion of the assessment shall be
1385 determined annually by the board, based on annual statements and
1386 other reports considered necessary by the board and filed by the
1387 carriers with the board.
1388 7. Provision shall be made in the plan of operation for the
1389 imposition of an interest penalty for late payment of an
1390 assessment.
1391 8. A carrier may seek, from the office, a deferment, in
1392 whole or in part, from any assessment made by the board. The
1393 office may defer, in whole or in part, the assessment of a
1394 carrier if, in the opinion of the office, the payment of the
1395 assessment would place the carrier in a financially impaired
1396 condition. If an assessment against a carrier is deferred, in
1397 whole or in part, the amount by which the assessment is deferred
1398 may be assessed against the other carriers in a manner
1399 consistent with the basis for assessment set forth in this
1400 section. The carrier receiving such deferment remains liable to
1401 the program for the amount deferred and is prohibited from
1402 reinsuring any individuals or groups in the program if it fails
1403 to pay assessments.
1404 (k) Neither the participation in the program as reinsuring
1405 carriers, the establishment of rates, forms, or procedures, nor
1406 any other joint or collective action required by this act, may
1407 be the basis of any legal action, criminal or civil liability,
1408 or penalty against the program or any of its carriers either
1409 jointly or separately.
1410 (l) The board shall monitor compliance with this section,
1411 including the market conduct of small employer carriers, and
1412 shall report to the office any unfair trade practices and
1413 misleading or unfair conduct by a small employer carrier that
1414 has been reported to the board by agents, consumers, or any
1415 other person. The office shall investigate all reports and, upon
1416 a finding of noncompliance with this section or of unfair or
1417 misleading practices, shall take action against the small
1418 employer carrier as permitted under the insurance code or
1419 chapter 641. The board is not given investigatory or regulatory
1420 powers, but must forward all reports of cases or abuse or
1421 misrepresentation to the office.
1422 (m) Notwithstanding paragraph (j), the administrative
1423 expenses of the program shall be recouped by assessment of risk
1424 assuming carriers and reinsuring carriers and such amounts shall
1425 not be considered part of the operating losses of the plan for
1426 the purposes of this paragraph. Each carrier’s portion of such
1427 administrative expenses shall be determined by multiplying the
1428 total of such administrative expenses by a fraction, the
1429 numerator of which equals the carrier’s earned premium
1430 pertaining to direct writing of small employer health benefit
1431 plans in the state during the calendar year for which the
1432 assessment is levied, and the denominator of which equals the
1433 total of such premiums earned by all carriers in the state
1434 during such calendar year.
1435 (n) The board shall advise the office, the Agency for
1436 Health Care Administration, the department, other executive
1437 departments, and the Legislature on health insurance issues.
1438 Specifically, the board shall:
1439 1. Provide a forum for stakeholders, consisting of
1440 insurers, employers, agents, consumers, and regulators, in the
1441 private health insurance market in this state.
1442 2. Review and recommend strategies to improve the
1443 functioning of the health insurance markets in this state with a
1444 specific focus on market stability, access, and pricing.
1445 3. Make recommendations to the office for legislation
1446 addressing health insurance market issues and provide comments
1447 on health insurance legislation proposed by the office.
1448 4. Meet at least three times each year. One meeting shall
1449 be held to hear reports and to secure public comment on the
1450 health insurance market, to develop any legislation needed to
1451 address health insurance market issues, and to provide comments
1452 on health insurance legislation proposed by the office.
1453 5. Issue a report to the office on the state of the health
1454 insurance market by September 1 each year. The report shall
1455 include recommendations for changes in the health insurance
1456 market, results from implementation of previous recommendations,
1457 and information on health insurance markets.
1458 Section 16. Paragraphs (c), (d), and (e) are added to
1459 subsection (2) of section 627.711, Florida Statutes, to read:
1460 627.711 Notice of premium discounts for hurricane loss
1461 mitigation; uniform mitigation verification inspection form.—
1462 (2)
1463 (c) The office shall contract with a state university to
1464 design, operate, upgrade, and maintain a statewide database for
1465 uniform mitigation verification inspection forms. This database
1466 must be managed by the office to collect and evaluate mitigation
1467 features of residential properties within this state.
1468 (d) Beginning January 1, 2026, each insurer shall
1469 electronically file a copy of uniform mitigation inspection
1470 forms submitted by policyholders in the database created
1471 pursuant to paragraph (c) within 15 business days after receipt
1472 using the electronic format prescribed by the office.
1473 (e) The Financial Services Commission shall adopt rules to
1474 implement this subsection.
1475 Section 17. Effective upon this act becoming a law,
1476 subsection (12) of section 627.7152, Florida Statutes, is
1477 amended to read:
1478 627.7152 Assignment agreements.—
1479 (12) The office shall require each insurer to report by
1480 January 30, 2022, and each year thereafter data on each
1481 residential and commercial property insurance claim paid in the
1482 prior calendar year under an assignment agreement. The Financial
1483 Services Commission shall adopt by rule a list of the data
1484 required, which must include specific data about claims
1485 adjustment and settlement timeframes and trends, grouped by
1486 whether litigated or not litigated and by loss adjustment
1487 expenses.
1488 Section 18. Section 627.9145, Florida Statutes, is created
1489 to read:
1490 627.9145 Reports by residential property insurers.
1491 Beginning March 1, 2026, and by March 1 every year thereafter,
1492 each authorized insurer and surplus lines insurer transacting
1493 residential property insurance in this state shall file with the
1494 office a report addressing the following areas:
1495 (1) Policy types, perils covered, statuses, and premiums.
1496 (2) Location and limits of writings in this state.
1497 (3) Coverages, deductibles, and exclusions.
1498 (4) Mitigation discounts.
1499 (5) Claims reporting requirements.
1500 (6) Any other information deemed necessary by the
1501 commission to provide the office with the ability to track
1502 mitigation and resiliency trends occurring in the residential
1503 property market.
1504
1505 The commission shall adopt rules specifying the information
1506 required to be reported under this section and the format
1507 required for the reports.
1508 Section 19. Subsections (2), (4), and (5) of section
1509 627.915, Florida Statutes, are amended to read:
1510 627.915 Insurer experience reporting.—
1511 (2) Beginning January 1, 2026, each insurer transacting
1512 private passenger automobile insurance in this state shall file
1513 monthly with the office a report addressing the following areas:
1514 (a) Policy coverage categories, including policies in force
1515 and total direct premiums earned and written.
1516 (b) Type, location, and limits of writings in this state.
1517 (c) Claims reporting requirements.
1518 (d) Any other information deemed necessary by the
1519 commission to provide the office with the ability to track
1520 trends occurring in the private passenger automobile insurance
1521 market.
1522
1523 The commission shall adopt rules specifying the information
1524 required to be reported under this subsection and the format
1525 required for the reports. Each insurer transacting fire,
1526 homeowner’s multiple peril, commercial multiple peril, medical
1527 malpractice, products liability, workers’ compensation, private
1528 passenger automobile liability, commercial automobile liability,
1529 private passenger automobile physical damage, commercial
1530 automobile physical damage, officers’ and directors’ liability
1531 insurance, or other liability insurance shall report, for each
1532 such line of insurance, the information specified in this
1533 subsection to the office. The information shall be reported for
1534 direct Florida business only and shall be reported on a
1535 calendar-year basis annually by April 1 for the preceding
1536 calendar year:
1537 (a) Direct premiums written.
1538 (b) Direct premiums earned.
1539 (c) Loss reserves for all known claims:
1540 1. At beginning of the year.
1541 2. At end of the year.
1542 (d) Reserves for losses incurred but not reported:
1543 1. At beginning of the year.
1544 2. At end of the year.
1545 (e) Allocated loss adjustment expense:
1546 1. Reserve at beginning of the year.
1547 2. Reserve at end of the year.
1548 3. Paid during the year.
1549 (f) Unallocated loss adjustment expense:
1550 1. Reserve at beginning of the year.
1551 2. Reserve at end of the year.
1552 3. Paid during the year.
1553 (g) Direct losses paid.
1554 (h) Underwriting income or loss.
1555 (i) Commissions and brokerage fees.
1556 (j) Taxes, licenses, and fees.
1557 (k) Other acquisition costs.
1558 (l) General expenses.
1559 (m) Policyholder dividends.
1560 (n) Net investment gain or loss and other income gain or
1561 loss allocated pro rata by earned premium to Florida business
1562 utilizing the investment allocation formula contained in the
1563 National Association of Insurance Commissioner’s Profitability
1564 Report by line by state.
1565 (4) The office shall provide a summary of information
1566 provided pursuant to subsections (1) and (2) in its annual
1567 report.
1568 (5) Any insurer or insurer group which does not write at
1569 least 0.5 percent of the Florida market based on premiums
1570 written shall not have to file any report required by subsection
1571 (2) other than a report indicating its percentage of the market
1572 share. That percentage shall be calculated by dividing the
1573 current premiums written by the preceding year’s total premiums
1574 written in the state for that line of insurance.
1575 Section 20. Effective upon this act becoming a law,
1576 subsection (2) of section 628.081, Florida Statutes, is amended
1577 to read:
1578 628.081 Incorporation of domestic insurer.—
1579 (2) The incorporators shall execute articles of
1580 incorporation in triplicate. At least three of them shall
1581 acknowledge execution before an officer authorized to take
1582 acknowledgments.
1583 Section 21. Effective upon this act becoming a law,
1584 subsections (2), (3), and (4) of section 628.091, Florida
1585 Statutes, are amended to read:
1586 628.091 Filing, approval of articles of incorporation.—
1587 (2) The incorporators shall file the triplicate originals
1588 of the articles of incorporation with the office, accompanied by
1589 the filing fee specified in s. 624.501.
1590 (3) The office shall promptly examine the articles of
1591 incorporation. If it finds that the articles of incorporation
1592 conform to law, and that a permit has been or will be issued, it
1593 must shall endorse its approval on each of the triplicate
1594 originals of the articles of incorporation, retain one copy for
1595 its files, and return the articles of incorporation remaining
1596 copies to the incorporators for filing with the Department of
1597 State.
1598 (4) If the office does not so find, it must shall refuse to
1599 approve the articles of incorporation and shall return the
1600 originals.
1601 Section 22. Effective upon this act becoming a law,
1602 subsections (2) and (3) of section 628.111, Florida Statutes,
1603 are amended to read:
1604 628.111 Amendment of articles of incorporation; mutual
1605 insurer.—
1606 (2)(a) Upon adoption of the amendment, the insurer shall
1607 make in triplicate under its corporate seal a certificate
1608 thereof, setting forth the amendment and the date and manner of
1609 the adoption thereof, which certificate must shall be executed
1610 by the insurer’s president or vice president and secretary or
1611 assistant secretary and acknowledged before an officer
1612 authorized to take acknowledgments. The insurer shall deliver
1613 the triplicate originals of the certificate to the office,
1614 together with the filing fee specified in s. 624.501.
1615 (b) The office shall promptly examine the certificate of
1616 amendment,; and, if it finds that the certificate and the
1617 amendment comply with law, it must shall endorse its approval on
1618 the certificate of amendment upon each of the triplicate
1619 originals, place one on file in its office, and return the
1620 remaining sets to the insurer. The insurer shall forthwith file
1621 such endorsed certificate certificates of amendment with the
1622 Department of State. The amendment is shall be effective when
1623 filed with and approved by the Department of State.
1624 (3) If the office finds that the proposed amendment or
1625 certificate does not comply with the law, it may shall not
1626 approve the same, and must shall return the triplicate
1627 certificate of amendment to the insurer.
1628 Section 23. Paragraph (a) of subsection (1) and paragraph
1629 (b) of subsection (4) of section 628.461, Florida Statutes, are
1630 amended to read:
1631 628.461 Acquisition of controlling stock.—
1632 (1) A person may not, individually or in conjunction with
1633 any affiliated person of such person, acquire directly or
1634 indirectly, conclude a tender offer or exchange offer for, enter
1635 into any agreement to exchange securities for, or otherwise
1636 finally acquire 10 percent or more of the outstanding voting
1637 securities of a domestic stock insurer or of a controlling
1638 company, unless:
1639 (a) The person or affiliated person has filed with the
1640 office and sent by registered mail to the principal office of
1641 the insurer and controlling company a letter of notification
1642 regarding the transaction or proposed transaction within 5 days
1643 after any form of tender offer or exchange offer is proposed, or
1644 within 5 days after the acquisition of the securities if no
1645 tender offer or exchange offer is involved. The notification
1646 must be provided on forms prescribed by the commission
1647 containing information determined necessary to understand the
1648 transaction and identify all purchasers and owners involved;
1649
1650 A filing required under this subsection must be made for any
1651 acquisition that equals or exceeds 10 percent of the outstanding
1652 voting securities.
1653 (4)
1654 (b) Any corporation, association, or trust filing the
1655 statement required by this section shall give all required
1656 information that is within the knowledge of the directors,
1657 officers, or trustees (or others performing functions similar to
1658 those of a director, officer, or trustee) of the corporation,
1659 association, or trust making the filing and of any person
1660 controlling either directly or indirectly such corporation,
1661 association, or trust. A copy of the statement and any
1662 amendments to the statement shall be sent by registered mail to
1663 the insurer at its principal office within the state and to any
1664 controlling company at its principal office. If any material
1665 change occurs in the facts set forth in the statement filed with
1666 the office and sent to such insurer or controlling company
1667 pursuant to this section, an amendment setting forth such
1668 changes shall be filed immediately with the office and sent
1669 immediately to such insurer and controlling company.
1670 Section 24. Paragraph (b) of subsection (5) of section
1671 628.4615, Florida Statutes, is amended to read:
1672 628.4615 Specialty insurers; acquisition of controlling
1673 stock, ownership interest, assets, or control; merger or
1674 consolidation.—
1675 (5)
1676 (b) Any person filing the statement required by this
1677 section shall give all required information that is within the
1678 knowledge of:
1679 1. The directors, officers, or trustees, if a corporation,
1680 or
1681 2. The partners, owners, managers, or joint venturers, or
1682 others performing functions similar to those of a director,
1683 officer, or trustee, if not a corporation,
1684
1685 of the person making the filing and of any person controlling
1686 either directly or indirectly such person. If any material
1687 change occurs in the facts set forth in the application filed
1688 with the office pursuant to this section, an amendment setting
1689 forth such changes must shall be filed immediately with the
1690 office, and a copy of the amendment must shall be sent by
1691 registered mail to the principal office of the specialty insurer
1692 and to the principal office of the controlling company.
1693 Section 25. Effective upon this act becoming a law,
1694 subsection (2) of section 628.717, Florida Statutes, is amended
1695 to read:
1696 628.717 Filing of articles of incorporation.—
1697 (2) The office shall promptly examine the articles of
1698 incorporation,; and, if it finds that the articles of
1699 incorporation comply with law, the office must shall endorse its
1700 approval on the certificate of amendment upon each of the
1701 originals, place one on file in its office, and return the
1702 remaining sets to the incorporators. The incorporators shall
1703 promptly file such endorsed articles of incorporation with the
1704 Department of State. The articles of incorporation are shall be
1705 effective when filed with and approved by the Department of
1706 State.
1707 Section 26. Effective upon this act becoming a law,
1708 subsection (2) of section 628.719, Florida Statutes, is amended
1709 to read:
1710 628.719 Amendment of articles of incorporation.—
1711 (2)(a) Upon adoption of an amendment, the mutual insurance
1712 holding company shall make under its corporate seal a
1713 certificate thereof, setting forth the amendment and the date
1714 and manner of the adoption thereof, which certificate must shall
1715 be executed by the mutual insurance holding company’s president
1716 or vice president and secretary or assistant secretary and
1717 acknowledged before an officer authorized to take
1718 acknowledgments. The mutual insurance holding company shall
1719 deliver the originals of the certificate to the office.
1720 (b) The office shall promptly examine the certificate of
1721 amendment, and, if the office finds that the certificate and the
1722 amendment comply with law, the office must shall endorse its
1723 approval on the certificate of amendment upon each of the
1724 originals, place one on file in its office, and return the
1725 remaining sets to the mutual insurance holding company. The
1726 mutual insurance holding company shall promptly file such
1727 endorsed certificate certificates of amendment with the
1728 Department of State. The amendment is shall be effective when
1729 filed with and approved by the Department of State.
1730 Section 27. Effective upon this act becoming a law,
1731 subsection (4) of section 628.910, Florida Statutes, is amended
1732 to read:
1733 628.910 Incorporation options and requirements.—
1734 (4) In the case of a captive insurance company formed as a
1735 corporation or a nonprofit corporation, before the articles of
1736 incorporation are transmitted to the Secretary of State, the
1737 incorporators shall file the articles of incorporation in
1738 triplicate with the office. The office shall promptly examine
1739 the articles of incorporation. If it finds that the articles of
1740 incorporation conform to law, it must shall endorse its approval
1741 on each of the triplicate originals of the articles of
1742 incorporation, retain one copy for its files, and return the
1743 articles of incorporation remaining copies to the incorporators
1744 for filing with the Department of State.
1745 Section 28. Subsection (5) of section 629.011, Florida
1746 Statutes, is amended, and subsections (6), (7), and (8) are
1747 added to that section, to read:
1748 629.011 Definitions.—As used in this part, the term:
1749 (5) “Reciprocal insurer” means an unincorporated
1750 aggregation of subscribers operating individually and
1751 collectively through an attorney in fact to provide reciprocal
1752 insurance among themselves.
1753 (a) An assessable reciprocal insurer is a reciprocal
1754 insurer that is able to levy an assessment on its subscribers to
1755 make up any shortfall in capital and surplus to cover claims and
1756 expenses as specified in s. 629.231.
1757 (b) A nonassessable reciprocal insurer is a reciprocal
1758 insurer authorized under s. 629.091(3) or s. 629.291(5) to issue
1759 policies where there is no recourse against subscribers for any
1760 shortfall in capital and surplus to cover claims and expenses.
1761 (6) “Subscriber contribution” means any transfer of money
1762 by a subscriber of a reciprocal insurer to the reciprocal
1763 insurer in excess of the premium approved by the office, if such
1764 money is counted as surplus for the reciprocal insurer or used
1765 to pay surplus notes.
1766 (7) “Subscriber savings account” means any account in which
1767 a reciprocal insurer assigns money for the benefit of an
1768 individual subscriber, other than accounts holding money for the
1769 payment of a specific claim by or settlement of a specific legal
1770 dispute with that individual subscriber.
1771 (8) “Subscribers’ advisory committee” means the governing
1772 committee of a domestic reciprocal insurer which is formed in
1773 compliance with s. 629.201 and represents the interests of the
1774 subscribers.
1775 Section 29. Section 629.071, Florida Statutes, is amended
1776 to read:
1777 629.071 Surplus funds required.—
1778 (1) An assessable A domestic reciprocal insurer hereunder
1779 formed, if it has otherwise complied with the applicable
1780 provisions of this code, may be authorized to transact insurance
1781 if it has and thereafter maintains surplus funds of not less
1782 than $3 million $250,000.
1783 (2) A nonassessable reciprocal insurer, if it has otherwise
1784 complied with the applicable provisions of this code, may be
1785 authorized to transact insurance if it has and thereafter
1786 maintains a surplus as to policyholders which is equal to that
1787 required under s. 624.408 for a domestic stock insurer
1788 authorized to transact like kinds of insurance In addition to
1789 the surplus required to be maintained under subsection (1), the
1790 insurer shall have, when first so authorized, an expendable
1791 surplus of not less than $750,000.
1792 Section 30. Effective upon this act becoming a law,
1793 subsection (3) of section 629.081, Florida Statutes, is amended
1794 to read:
1795 629.081 Organization of reciprocal insurer.—
1796 (3) The filing must be accompanied by the application fee
1797 required by s. 624.501(1)(a).
1798 Section 31. Section 629.082, Florida Statutes, is created
1799 to read:
1800 629.082 Reciprocal affiliates.—The attorney in fact of a
1801 reciprocal is an affiliate of the reciprocal for purposes of s.
1802 624.10.
1803 Section 32. Section 629.1015, Florida Statutes, is created
1804 to read:
1805 629.1015 Affiliate fees.—
1806 (1) Each reciprocal insurer doing business in this state
1807 which pays a fee, commission, or other financial consideration
1808 or payment to any affiliate directly or indirectly must provide
1809 to the office documentation supporting that such fee,
1810 commission, or other financial consideration or payment to any
1811 affiliate is fair and reasonable for each service being provided
1812 by contract. In determining whether the fee, commission, or
1813 other financial consideration or payment is fair and reasonable,
1814 the office must comply with s. 624.424(13).
1815 (2) For each agreement with an affiliate in force on July
1816 1, 2025, each domestic reciprocal insurer shall provide to the
1817 office no later than October 1, 2025, the cost incurred by the
1818 affiliate to provide each service, the amount charged to the
1819 domestic reciprocal insurer for each service, and the dollar
1820 amount of fees forgiven, waived, or reimbursed by the affiliate
1821 for the 2 most recent preceding years. If the total dollar
1822 amount charged to the domestic reciprocal insurer was greater
1823 than the total cost to provide services for either year, the
1824 domestic reciprocal insurer must explain how it determined the
1825 fee was fair and reasonable. For any proposed contract with an
1826 affiliate effective after July 1, 2025, the domestic reciprocal
1827 insurer must provide documentation to support that the fee,
1828 commission, or other financial consideration or payment to the
1829 affiliate is fair and reasonable.
1830 Section 33. Section 629.121, Florida Statutes, is amended
1831 to read:
1832 629.121 Attorney in fact Attorney’s bond.—
1833 (1) Concurrently with the filing of the declaration
1834 provided for in s. 629.081, the attorney in fact of a domestic
1835 reciprocal insurer shall file with the office a bond in favor of
1836 this state for the benefit of all persons damaged as a result of
1837 breach by the attorney in fact of the conditions of his or her
1838 bond as set forth in subsection (2). The bond must shall be
1839 executed by the attorney in fact and by an authorized corporate
1840 surety and shall be subject to the approval of the office.
1841 (2) The bond must shall be in the sum of $300,000 $100,000,
1842 aggregate in form, the bond conditioned that the attorney in
1843 fact will faithfully account for all moneys and other property
1844 of the insurer coming into his or her hands, and that he or she
1845 will not withdraw or appropriate to his or her own use from the
1846 funds of the insurer any moneys or property to which he or she
1847 is not entitled under the power of attorney.
1848 (3) The bond must shall provide that it is not subject to
1849 cancellation unless 30 days’ advance notice in writing of
1850 cancellation is given both the attorney in fact and the office.
1851 Section 34. Section 629.162, Florida Statutes, is created
1852 to read:
1853 629.162 Subscriber contributions.—
1854 (1) Reciprocal insurers may, subject to prior approval by
1855 the office, require contributions from subscribers in addition
1856 to premiums approved by the office.
1857 (2) A reciprocal insurer shall clearly disclose required
1858 subscriber contributions on the declarations page of any policy
1859 issued by the reciprocal insurer, separate from any cost
1860 associated with the premium.
1861 (3) Reciprocal insurers shall provide subscribers an annual
1862 report detailing how each dollar of subscriber contributions was
1863 allocated or spent.
1864 (4) Changes to subscriber contributions are subject to
1865 prior approval by the office.
1866 Section 35. Section 629.163, Florida Statutes, is created
1867 to read:
1868 629.163 Subscriber savings accounts.—
1869 (1) Reciprocal insurers may establish subscriber savings
1870 accounts.
1871 (2) Moneys assigned to subscriber savings accounts are not
1872 considered distributions under s. 629.164.
1873 (3) Subscriber savings accounts are subject to the
1874 following requirements:
1875 (a) Reciprocal insurers shall inform each subscriber, in
1876 writing, of the limitations and restrictions imposed upon the
1877 use or possession of moneys assigned to subscriber savings
1878 accounts.
1879 (b) Reciprocal insurers shall inform each subscriber, in
1880 writing, of the procedures used to assign moneys to subscriber
1881 savings accounts and any calculations used to determine the
1882 amount of moneys to be assigned to subscriber savings accounts.
1883 (c) Advertisements marketing the benefits of subscriber
1884 savings accounts must note the limitations and restrictions
1885 imposed upon the use or possession of moneys assigned to
1886 subscriber savings accounts.
1887 (d) Upon cancellation or nonrenewal of a subscriber’s
1888 policy or policies, the subscriber is entitled, within 60 days,
1889 to all moneys assigned to the subscriber’s savings account,
1890 except when such moneys are otherwise allocated by law or
1891 contract, or when such distribution is prohibited by order of
1892 the office.
1893 Section 36. Section 629.164, Florida Statutes, is created
1894 to read:
1895 629.164 Subscriber distributions.—
1896 (1) Reciprocal insurers may make distributions to
1897 subscribers from their subscriber savings accounts, as set forth
1898 in their subscriber’s agreement.
1899 (2) The subscribers’ advisory committee or the attorney in
1900 fact, as set forth in the subscriber’s agreement, has the
1901 authority to authorize distributions, subject to prior written
1902 approval by the office.
1903 (3) Distributions may not unfairly discriminate between
1904 classes of risks or policies, or between subscribers, but may
1905 vary as to classes of subscribers based on the experience of the
1906 classes.
1907 (4) A domestic reciprocal insurer may, upon prior written
1908 approval of the office, return to its subscribers a portion of
1909 unassigned funds of up to 10 percent of surplus, with
1910 distributions limited to 50 percent of net income from the
1911 previous calendar year. Such distribution may not unfairly
1912 discriminate between classes of risks or policies, or between
1913 subscribers, but may vary as to classes of subscribers based on
1914 the experience of the classes.
1915 Section 37. Section 629.171, Florida Statutes, is amended
1916 to read:
1917 629.171 Annual statement.—
1918 (1) The subscribers’ advisory committee shall procure an
1919 audited annual statement of the accounts and records of the
1920 insurer and the attorney in fact. The statement of the insurer
1921 must be prepared by an independent auditor at the expense of the
1922 reciprocal insurer and must be available for inspection by any
1923 subscriber. The statement of the attorney in fact must be
1924 prepared by an independent auditor at the expense of the
1925 attorney in fact.
1926 (2)(1) The annual statement filing of a reciprocal insurer
1927 must shall be submitted made and filed by its attorney in fact.
1928 (3)(2) The audited statement of the attorney in fact must
1929 shall be submitted with the annual statement filing of the
1930 reciprocal insurer, as required under s. 624.424, and
1931 supplemented by such information as may be required by the
1932 office relative to the affairs and transactions of the attorney
1933 in fact relating insofar as they relate to the reciprocal
1934 insurer.
1935 Section 38. Subsection (1) of section 629.181, Florida
1936 Statutes, is amended to read:
1937 629.181 Financial condition; method of determining.—In
1938 determining the financial condition of a reciprocal insurer, the
1939 office shall apply the following rules:
1940 (1) Subscriber contributions are The surplus deposits of
1941 subscribers shall be allowed as assets, except that any premium
1942 deposits delinquent for 90 days must shall first be charged
1943 against such subscriber contributions. Subscriber contributions
1944 may not exceed 10 percent of each individual subscriber’s policy
1945 premium for a nonassessable reciprocal insurer and 10 percent of
1946 each individual subscribers’ policy premium for an assessable
1947 reciprocal insurer surplus deposit.
1948 Section 39. Section 629.201, Florida Statutes, is amended
1949 to read:
1950 629.201 Subscribers’ advisory committee.—Each domestic
1951 reciprocal insurer must have a subscribers’ advisory committee
1952 representing the interests of the subscribers.
1953 (1) The subscribers’ advisory committee of a domestic
1954 reciprocal insurer exercising the subscribers’ rights must shall
1955 be formed in compliance with this section and selected under
1956 such rules as the subscribers adopt. Such rules, along with any
1957 amendments, must be approved by the office before becoming
1958 effective.
1959 (2) Not less than two-thirds of such committee shall be
1960 subscribers other than the attorney, or any person employed by,
1961 representing, or having a financial interest in the attorney.
1962 (3) The subscribers’ advisory committee shall perform all
1963 of the following duties:
1964 (a) Supervise the finances of the insurer.;
1965 (b) Supervise the insurer’s operations to such extent as to
1966 ensure assure conformity with the subscribers’ agreement, and
1967 power of attorney, and other governing documents.;
1968 (c) Hire independent auditors, counsel, and other experts
1969 at the expense of the insurer as necessary to fulfill the
1970 committee’s duties. Procure the audit of the accounts and
1971 records of the insurer and of the attorney at the expense of the
1972 insurer; and
1973 (d) Exercise any Have such additional powers and functions
1974 as may be conferred by the subscribers’ agreement.
1975 (3) The initial subscribers’ advisory committee must be
1976 appointed by the original subscribers or the attorney in fact.
1977 Within 6 months after the reciprocal insurer is authorized to
1978 transact insurance, at least two-thirds of the committee members
1979 must be elected as provided for in subsections (4) and (5).
1980 (4) The subscribers’ advisory committee must be composed of
1981 subscribers of the reciprocal insurer. At least two-thirds of
1982 the subscribers’ advisory committee must be composed of
1983 subscribers who are independent of, not employed by, not
1984 representing, not selected by, and without any financial
1985 interest in the attorney in fact. The independent subscribers
1986 must be elected by the subscribers of the reciprocal insurer.
1987 (5) Any rules governing the election of subscribers to the
1988 subscribers’ advisory committee require all of the following:
1989 (a) An electorate composed exclusively of all subscribers
1990 of the reciprocal insurer.
1991 (b) Terms of not more than 5 years.
1992 (c) A process that allows subscribers to nominate other
1993 subscribers for election to the subscribers’ advisory committee.
1994 (6) If a reciprocal insurer has more than 50 subscribers,
1995 the attorney in fact must provide a platform by which
1996 subscribers can communicate with each other regarding the
1997 subscribers’ advisory committee election process.
1998 Section 40. Section 629.271, Florida Statutes, is repealed.
1999 Section 41. Effective upon this act becoming a law,
2000 subsections (1) and (2) of section 629.291, Florida Statutes,
2001 are amended to read:
2002 629.291 Merger or conversion.—
2003 (1) A reciprocal insurer, upon affirmative vote of not less
2004 than two-thirds of its subscribers who vote on such merger or
2005 conversion pursuant to due notice, and subject to approval by
2006 the office of the terms therefor, may merge with another
2007 reciprocal insurer or be converted to a stock or mutual insurer,
2008 to be thereafter governed by the applicable sections of the
2009 Florida Insurance Code. However, a domestic stock insurer may
2010 not convert to a reciprocal insurer.
2011 (2) A plan to merge a reciprocal insurer with another
2012 reciprocal insurer or for conversion of the reciprocal insurer
2013 to a stock or mutual insurer must be filed with the office on
2014 forms adopted by the commission office and must contain such
2015 information as the office reasonably requires to evaluate the
2016 transaction.
2017 Section 42. Section 629.301, Florida Statutes, is amended
2018 to read:
2019 629.301 Impaired reciprocal insurers.—
2020 (1) If the assets of a domestic reciprocal insurer are at
2021 any time insufficient to discharge its liabilities, other than
2022 any liability on account of funds contributed by the attorney in
2023 fact or others, and to maintain the required surplus, its
2024 attorney in fact must shall forthwith make up the deficiency or
2025 levy an assessment upon the subscribers for the amount needed to
2026 make up the deficiency, but subject to the limitation set forth
2027 in the power of attorney or policy.
2028 (2) If the attorney in fact fails to make up such
2029 deficiency or to make the assessment within 30 days after the
2030 office orders the attorney in fact him or her to do so, or if
2031 the deficiency is not fully made up within 60 days after the
2032 date the assessment was made, the insurer is shall be deemed
2033 insolvent and must shall be proceeded against in the same manner
2034 as any other insurer under chapter 631 and the insurance as
2035 authorized by this code.
2036 (3) If liquidation of a reciprocal such an insurer is
2037 ordered, the receiver must levy an assessment shall be levied
2038 upon the subscribers an assessment for such an amount as the
2039 receiver determines to be necessary to discharge all liabilities
2040 of the insurer. The liabilities must be, subject to limits as
2041 provided by this chapter, as the office determines to be
2042 necessary to discharge all liabilities of the insurer, exclusive
2043 of any funds contributed by the attorney in fact or other
2044 persons, but inclusive of including the reasonable cost of the
2045 liquidation. The assessment is subject to any limits set forth
2046 in the power of attorney, the subscriber’s agreement, the
2047 policy, or this chapter.
2048 Section 43. Section 629.401, Florida Statutes, is repealed.
2049 Section 44. Section 629.520, Florida Statutes, is repealed.
2050 Section 45. Section 629.56, Florida Statutes, is created to
2051 read:
2052 629.56 Unearned premium reserves.—A reciprocal insurer must
2053 maintain an unearned premium reserve at all times and as
2054 required under s. 625.051.
2055 Section 46. Paragraph (c) of subsection (13) of section
2056 634.401, Florida Statutes, is amended to read:
2057 634.401 Definitions.—As used in this part, the term:
2058 (13) “Service warranty” means any warranty, guaranty,
2059 extended warranty or extended guaranty, maintenance service
2060 contract equal to or greater than 1 year in length or which does
2061 not meet the exemption in paragraph (a), contract agreement, or
2062 other written promise for a specific duration to perform the
2063 repair, replacement, or maintenance of a consumer product, or
2064 for indemnification for repair, replacement, or maintenance, for
2065 operational or structural failure due to a defect in materials
2066 or workmanship, normal wear and tear, power surge, or accidental
2067 damage from handling in return for the payment of a segregated
2068 charge by the consumer; however:
2069 (c) All contracts that include coverage for accidental
2070 damage from handling must be covered by the contractual
2071 liability policy referred to in s. 634.406(3), unless issued by
2072 an association not required to establish an unearned premium
2073 reserve or maintain contractual liability insurance under s.
2074 634.406(7).
2075 Section 47. Section 641.2012, Florida Statutes, is created
2076 to read:
2077 641.2012 Service of process.—Sections 624.422 and 624.423
2078 apply to health maintenance organizations.
2079 Section 48. Subsections (1) and (3), paragraph (a) of
2080 subsection (5), and subsection (6) of section 641.26, Florida
2081 Statutes, are amended to read:
2082 641.26 Annual and quarterly reports.—
2083 (1) Every health maintenance organization shall file an
2084 annual statement covering the preceding calendar year on or
2085 before March 1, and quarterly statements covering the periods
2086 ending on March 31, June 30, and September 30 within 45 days
2087 after each such date, annually within 3 months after the end of
2088 its fiscal year, or within an extension of time therefor as the
2089 office, for good cause, may grant, in a form prescribed by the
2090 commission, file a report with the office, verified by the oath
2091 of two officers of the organization or, if not a corporation, of
2092 two persons who are principal managing directors of the affairs
2093 of the organization, properly notarized, showing its condition
2094 on the last day of the immediately preceding reporting period.
2095 Such report shall include:
2096 (a) A financial statement of the health maintenance
2097 organization filed by electronic means in a computer-readable
2098 form using a format acceptable to the office.
2099 (b) A financial statement of the health maintenance
2100 organization filed on forms acceptable to the office.
2101 (c) An audited financial statement of the health
2102 maintenance organization, including its balance sheet and a
2103 statement of operations for the preceding year certified by an
2104 independent certified public accountant, prepared in accordance
2105 with statutory accounting principles.
2106 (d) The number of health maintenance contracts issued and
2107 outstanding and the number of health maintenance contracts
2108 terminated.
2109 (e) The number and amount of damage claims for medical
2110 injury initiated against the health maintenance organization and
2111 any of the providers engaged by it during the reporting year,
2112 broken down into claims with and without formal legal process,
2113 and the disposition, if any, of each such claim.
2114 (f) An actuarial certification that:
2115 1. The health maintenance organization is actuarially
2116 sound, which certification shall consider the rates, benefits,
2117 and expenses of, and any other funds available for the payment
2118 of obligations of, the organization.
2119 2. The rates being charged or to be charged are actuarially
2120 adequate to the end of the period for which rates have been
2121 guaranteed.
2122 3. Incurred but not reported claims and claims reported but
2123 not fully paid have been adequately provided for.
2124 4. The health maintenance organization has adequately
2125 provided for all obligations required by s. 641.35(3)(a).
2126 (g) A report prepared by the certified public accountant
2127 and filed with the office describing material weaknesses in the
2128 health maintenance organization’s internal control structure as
2129 noted by the certified public accountant during the audit. The
2130 report must be filed with the annual audited financial report as
2131 required in paragraph (c). The health maintenance organization
2132 shall provide a description of remedial actions taken or
2133 proposed to correct material weaknesses, if the actions are not
2134 described in the independent certified public accountant’s
2135 report.
2136 (h) Such other information relating to the performance of
2137 health maintenance organizations as is required by the
2138 commission or office.
2139 (3) Every health maintenance organization shall file
2140 quarterly, for the first three calendar quarters of each year,
2141 an unaudited financial statement of the organization as
2142 described in paragraphs (1)(a) and (b). The statement for the
2143 quarter ending March 31 shall be filed on or before May 15, the
2144 statement for the quarter ending June 30 shall be filed on or
2145 before August 15, and the statement for the quarter ending
2146 September 30 shall be filed on or before November 15. The
2147 quarterly report shall be verified by the oath of two officers
2148 of the organization, properly notarized.
2149 (5) Each authorized health maintenance organization shall
2150 retain an independent certified public accountant, referred to
2151 in this section as “CPA,” who agrees by written contract with
2152 the health maintenance organization to comply with the
2153 provisions of this part.
2154 (a) The CPA shall provide to the HMO audited financial
2155 statements consistent with this part and s. 624.424.
2156 (6) To facilitate uniformity in financial statements and to
2157 facilitate office analysis, the commission may by rule adopt the
2158 form for financial statements of a health maintenance
2159 organization, requiring the financial statement to comply with
2160 s. 624.424 including supplements as approved by the National
2161 Association of Insurance Commissioners in 1995, and may adopt
2162 subsequent amendments thereto if the methodology remains
2163 substantially consistent, and may by rule require each health
2164 maintenance organization to submit to the office all or part of
2165 the information contained in the annual statement in a computer
2166 readable form compatible with the electronic data processing
2167 system specified by the office.
2168 Section 49. Section 641.283, Florida Statutes, is created
2169 to read:
2170 641.283 Administrative supervision and hazardous insurer
2171 conditions.—Sections 624.80-624.87 apply to health maintenance
2172 organizations.
2173 Section 50. Present subsections (5) through (15) and (16)
2174 through (29) of section 651.011, Florida Statutes, are
2175 redesignated as subsections (7) through (17) and (19) through
2176 (32), respectively, new subsections (5), (6), and (18) are added
2177 to that section, and present subsections (7), (8), (19), and
2178 (26) of that section are amended, to read:
2179 651.011 Definitions.—As used in this chapter, the term:
2180 (5) “Affiliate” means an entity that exercises control over
2181 or is directly or indirectly controlled by the provider through:
2182 (a) Equity ownership of voting securities;
2183 (b) Common managerial control; or
2184 (c) Collusive participation by the management of the
2185 insurer and affiliate in the management of the insurer or the
2186 affiliate.
2187 (6) “Affiliated person” of another person means:
2188 (a) The spouse of the other person;
2189 (b) The parents of the other person and their lineal
2190 descendants, or the parents of the other person’s spouse and
2191 their lineal descendants;
2192 (c) A person who directly or indirectly owns or controls,
2193 or holds with the power to vote, 10 percent or more of the
2194 outstanding voting securities of the other person;
2195 (d) A person 10 percent or more of whose outstanding voting
2196 securities are directly or indirectly owned or controlled, or
2197 held with power to vote, by the other person;
2198 (e) A person or group of persons who directly or indirectly
2199 control, are controlled by, or are under common control with the
2200 other person;
2201 (f) An officer, director, partner, copartner, or employee
2202 of the other person;
2203 (g) If the other person is an investment company, an
2204 investment adviser of such company, or a member of an advisory
2205 board of such company;
2206 (h) If the other person is an unincorporated investment
2207 company not having a board of directors, the depositor of such
2208 company; or
2209 (i) A person who has entered into a written or unwritten
2210 agreement to act in concert with the other person in acquiring
2211 or limiting the disposition of securities of a domestic stock
2212 insurer provider or controlling company.
2213 (9)(7) “Continuing care at-home” means, pursuant to a
2214 contract other than a contract described in subsection (7) (5),
2215 furnishing to a resident who resides outside the facility the
2216 right to future access to shelter and nursing care or personal
2217 services, whether such services are provided in the facility or
2218 in another setting designated in the contract, by an individual
2219 not related by consanguinity or affinity to the resident, upon
2220 payment of an entrance fee.
2221 (10)(8) “Control,” “controlling,” “controlled by,” “under
2222 common control with,” or “controlling company” means any
2223 corporation, trust, or association that directly or indirectly
2224 owns 10 25 percent or more of either the following:
2225 (a) The direct or indirect possession of the power to
2226 direct or cause the direction of the management and policies of
2227 a person, whether through the ownership of voting securities, by
2228 contract other than a commercial contract for goods or
2229 nonmanagement services, or otherwise. Control is presumed to
2230 exist if a person, directly or indirectly, owns, controls, holds
2231 with the power to vote, or holds proxies representing 10 percent
2232 or more of the voting securities of another person; or
2233 (b) A management company exercising control through a
2234 management agreement whereby the management company is
2235 responsible for the day-to-day business operations of the
2236 provider or the day-to-day decisionmaking on behalf of the
2237 provider
2238 (a) The voting securities of one or more providers that are
2239 stock corporations; or
2240 (b) The ownership interest of one or more providers that
2241 are not stock corporations.
2242 (18) “Governing body” or “full governing body” means a
2243 board of directors, a management company, a body of a provider,
2244 or an obligated group whose members are elected or appointed to
2245 set strategy, oversee management or operations of a provider,
2246 facility, or obligated group, and protect the interests of the
2247 provider, facility, or group.
2248 (22)(19) “Manager,” “management,” or “management company”
2249 means a person who administers the day-to-day business
2250 operations of a facility for a provider, is part of a committee
2251 that supervises the activities of a business that provides
2252 continuing care or a member of the full governing body of a
2253 business that provides continuing care, or is subject to the
2254 policies, directives, and oversight of the provider or governing
2255 body.
2256 (29)(26) “Regulatory action level event” means that any two
2257 of the following have occurred:
2258 (a) The provider’s debt service coverage ratio is less than
2259 the greater of the minimum ratio specified in the provider’s
2260 bond covenants or lending agreement for long-term financing or
2261 1.20:1 as of the most recent annual report filed with the office
2262 pursuant to s. 651.026 or s. 651.0261, or, if the provider does
2263 not have a debt service coverage ratio required by its lending
2264 institution, the provider’s debt service coverage ratio is less
2265 than 1.20:1 as of the most recent annual report filed with the
2266 office pursuant to s. 651.026 or s. 651.0261. If the provider is
2267 a member of an obligated group having cross-collateralized debt,
2268 the obligated group’s debt service coverage ratio must be used
2269 as the provider’s debt service coverage ratio.
2270 (b) The provider’s days cash on hand is less than the
2271 greater of the minimum number of days cash on hand specified in
2272 the provider’s bond covenants or lending agreement for long-term
2273 financing or 100 days. If the provider does not have a days cash
2274 on hand required by its lending institution, the days cash on
2275 hand may not be less than 100 as of the most recent annual
2276 report filed with the office pursuant to s. 651.026 or s.
2277 651.0261. If the provider is a member of an obligated group
2278 having cross-collateralized debt, the days cash on hand of the
2279 obligated group must be used as the provider’s days cash on
2280 hand.
2281 (c) The occupancy of the provider’s facility is less than
2282 80 percent averaged over the 12-month period immediately
2283 preceding the annual report filed with the office pursuant to s.
2284 651.026.
2285 Section 51. Section 651.018, Florida Statutes, is amended
2286 to read:
2287 651.018 Administrative supervision.—The office may place a
2288 facility in administrative supervision pursuant to part VI of
2289 chapter 624 if the office finds that one or more of the
2290 following conditions exist, and until the condition is resolved
2291 to the satisfaction of the office:
2292 (1) The facility is insolvent or impaired.
2293 (2) The facility is at a regulatory action level, pursuant
2294 to s. 651.034.
2295 (3) The facility reports a negative debt service ratio.
2296 (4) The facility has failed to file a monthly, quarterly,
2297 or annual financial statement or an audited financial statement
2298 as required by this chapter.
2299 (5) The facility was issued a financial statement with a
2300 going concern issue by an independent certified public
2301 accountant.
2302 (6) The facility is found to be in hazardous financial
2303 condition pursuant to s. 651.113.
2304 (7) The facility has entered into a forbearance agreement
2305 with a lender.
2306 Section 52. Paragraph (a) of subsection (1) of section
2307 651.019, Florida Statutes, is amended to read:
2308 651.019 New financing, additional financing, or
2309 refinancing.—
2310 (1)(a) A provider shall provide a written general outline
2311 of the amount and the anticipated terms of any new financing or
2312 refinancing, and the intended use of proceeds, to the office and
2313 the residents’ council at least 30 days before the closing date
2314 of the financing or refinancing transaction. If there is a
2315 material change in the noticed information, a provider must
2316 shall provide an updated notice to the office and the residents’
2317 council within 10 business days after the provider becomes aware
2318 of such change.
2319 Section 53. Section 651.0212, Florida Statutes, is created
2320 to read:
2321 651.0212 General eligibility requirements to operate in
2322 this state.—
2323 (1) The office must deny or revoke a provider’s authority
2324 to conduct business relating to continuing care in this state,
2325 including, but not limited to, the authority to enter into
2326 contracts, provide continuing care or continuing care at-home,
2327 or construct facilities for the purpose of providing continuing
2328 care in this state, if the office determines that any of the
2329 following applies to the provider’s management, officers, or
2330 directors:
2331 (a) They are incompetent or untrustworthy.
2332 (b) They lack sufficient experience in continuing care
2333 management, posing a risk to contract holders.
2334 (c) They lack the experience, ability, or reputation
2335 necessary to ensure a reasonable likelihood of successful
2336 operation.
2337 (d) They are affiliated, directly or indirectly, with
2338 individuals or entities whose business practices have harmed
2339 residents, stockholders, investors, creditors, or the public
2340 through asset manipulation, fraudulent accounting, or bad faith
2341 actions.
2342 (2) The office may deny or revoke a provider’s authority to
2343 conduct business relating to continuing care in this state,
2344 including, but not limited to, the authority to enter into
2345 contracts, provide continuing care or continuing care at-home,
2346 or construct facilities for the purpose of providing continuing
2347 care in this state, if the office determines that any general
2348 partner, stockholder, or incorporator who exercises or has the
2349 ability to exercise effective control of the provider, or who
2350 influences or has the ability to influence the provider’s
2351 business transactions, lacks the financial standing and business
2352 experience necessary for the provider’s successful operation.
2353 (3) The office may deny, suspend, or revoke a provider’s
2354 authority to conduct business relating to continuing care in
2355 this state, including, but not limited to, the authority to
2356 enter into contracts, provide continuing care or continuing care
2357 at-home, or construct facilities for the purpose of providing
2358 continuing care, if the office determines that any general
2359 partner, subscriber, stockholder, or incorporator who exercises
2360 or has the ability to exercise effective control of the
2361 provider, or who influences or has the ability to influence the
2362 provider’s business transactions, has been found guilty of, or
2363 has pleaded guilty or nolo contendere to, any felony or crime
2364 punishable by imprisonment of 1 year or more under the laws of
2365 the United States, any state, or any other country, if the crime
2366 involves moral turpitude, regardless of whether a judgment of
2367 conviction has been entered by the court. However, if a provider
2368 operates under a valid certificate of authority, the provider
2369 must immediately remove any such person from his or her role in
2370 the business upon discovery of the conditions set forth in this
2371 subsection or remove such person upon the order of the office.
2372 Failure to remove such person constitutes grounds for suspension
2373 or revocation of the provider’s certificate of authority.
2374 (4) The office may deny, suspend, or revoke a provider’s
2375 authority to conduct business relating to continuing care in
2376 this state, including, but not limited to, the authority to
2377 enter into contracts, provide continuing care or continuing care
2378 at-home, or construct facilities for providing continuing care,
2379 if the office determines that any general partner, subscriber,
2380 stockholder, or incorporator who exercises or has the ability to
2381 exercise effective control of the provider, or who influences or
2382 has the ability to influence the provider’s business
2383 transactions, is now or was previously affiliated, directly or
2384 indirectly, through ownership of 10 percent or more, with any
2385 business, corporation, or entity that has been found guilty of,
2386 or has pleaded guilty or nolo contendere to, any felony or crime
2387 punishable by imprisonment for 1 year or more under the laws of
2388 the United States, any state, or any other country. However, if
2389 a provider operates under a valid certificate of authority, the
2390 provider must immediately remove any such person from his or her
2391 role in the business or notify the office upon discovery of the
2392 conditions set forth in this subsection. Failure to remove the
2393 person, provide notice to the office, or comply with an order
2394 from the office to remove the person from his or her role
2395 constitutes grounds for suspension or revocation of the
2396 provider’s certificate of authority.
2397 Section 54. Subsections (4) and (5) of section 651.0215,
2398 Florida Statutes, are amended to read:
2399 651.0215 Consolidated application for a provisional
2400 certificate of authority and a certificate of authority;
2401 required restrictions on use of entrance fees.—
2402 (4) Within 30 45 days after receipt of the information
2403 required under subsection (2), the office shall examine the
2404 information and notify the applicant in writing, specifically
2405 requesting any additional information that the office is
2406 authorized to require. An application is deemed complete when
2407 the office receives all requested information and the applicant
2408 corrects any error or omission of which the applicant was timely
2409 notified or when the time for such notification has expired.
2410 Within 15 days after receipt of all of the requested additional
2411 information, the office shall notify the applicant in writing
2412 that all of the requested information has been received and that
2413 the application is deemed complete as of the date of the notice.
2414 Failure to notify the applicant in writing within the 15-day
2415 period constitutes acknowledgment by the office that it has
2416 received all requested additional information, and the
2417 application is deemed complete for purposes of review on the
2418 date the applicant files all of the required additional
2419 information.
2420 (5) Within 45 days After an application is deemed complete
2421 in accordance with the timeframes set forth in chapter 120 as
2422 set forth in subsection (4) and upon completion of the remaining
2423 requirements of this section, the office shall complete its
2424 review and issue or deny a certificate of authority to the
2425 applicant. If a certificate of authority is denied, the office
2426 must shall notify the applicant in writing, citing the specific
2427 failures to satisfy this chapter, and the applicant is entitled
2428 to an administrative hearing pursuant to chapter 120.
2429 Section 55. Subsections (3), (5), and (6) of section
2430 651.022, Florida Statutes, are amended to read:
2431 651.022 Provisional certificate of authority; application.—
2432 (3) In addition to the information required in subsection
2433 (2), an applicant for a provisional certificate of authority
2434 shall submit a feasibility study, prepared by an independent
2435 consultant, with appropriate financial, marketing, and actuarial
2436 assumptions for the first 5 years of operations. The feasibility
2437 study must include at least the following information:
2438 (a) A description of the proposed facility, including the
2439 location, size, anticipated completion date, and the proposed
2440 construction program.
2441 (b) An identification and evaluation of the primary and, if
2442 appropriate, the secondary market areas of the facility and the
2443 projected unit sales per month.
2444 (c) Projected revenues, including anticipated entrance
2445 fees; monthly service fees; nursing care revenues, if
2446 applicable; and all other sources of revenue.
2447 (d) Projected expenses, including staffing requirements and
2448 salaries; cost of property, plant, and equipment, including
2449 depreciation expense; interest expense; marketing expense; and
2450 other operating expenses.
2451 (e) A projected balance sheet.
2452 (f) Expectations of the financial condition of the project,
2453 including the projected cash flow, and an estimate of the funds
2454 anticipated to be necessary to cover startup losses.
2455 (g) The inflation factor, if any, assumed in the
2456 feasibility study for the proposed facility and how and where it
2457 is applied.
2458 (h) Project costs and the total amount of debt financing
2459 required, marketing projections, resident fees and charges, the
2460 competition, resident contract provisions, and other factors
2461 that affect the feasibility of the facility.
2462 (i) Appropriate population projections, including morbidity
2463 and mortality assumptions.
2464 (j) The name of the person who prepared the feasibility
2465 study and the experience of such person in preparing similar
2466 studies or otherwise consulting in the field of continuing care.
2467 The preparer of the feasibility study may be the provider or a
2468 contracted third party.
2469 (k) Any other information that the applicant deems relevant
2470 and appropriate to enable the office to make a more informed
2471 determination.
2472 (5)(a) Within 30 days after receipt of an application for a
2473 provisional certificate of authority, the office shall examine
2474 the application and shall notify the applicant in writing,
2475 specifically setting forth and specifically requesting any
2476 additional information the office is permitted by law to
2477 require. If the application submitted is determined by the
2478 office to be substantially incomplete so as to require
2479 substantial additional information, including biographical
2480 information, the office may return the application to the
2481 applicant with a written notice that the application as received
2482 is substantially incomplete and, therefore, unacceptable for
2483 filing without further action required by the office. Any filing
2484 fee received shall be refunded to the applicant.
2485 (b) Within 15 days after receipt of all of the requested
2486 additional information, the office shall notify the applicant in
2487 writing that all of the requested information has been received
2488 and the application is deemed to be complete as of the date of
2489 the notice. Failure to so notify the applicant in writing within
2490 the 15-day period shall constitute acknowledgment by the office
2491 that it has received all requested additional information, and
2492 the application shall be deemed to be complete for purposes of
2493 review upon the date of the filing of all of the requested
2494 additional information.
2495 (6) After an application is deemed complete in accordance
2496 with the timeframes set forth in chapter 120 Within 45 days
2497 after the date an application is deemed complete as set forth in
2498 paragraph (5)(b), the office shall complete its review and issue
2499 a provisional certificate of authority to the applicant based
2500 upon its review and a determination that the application meets
2501 all requirements of law, that the feasibility study was based on
2502 sufficient data and reasonable assumptions, and that the
2503 applicant will be able to provide continuing care or continuing
2504 care at-home as proposed and meet all financial and contractual
2505 obligations related to its operations, including the financial
2506 requirements of this chapter. If the application is denied, the
2507 office must shall notify the applicant in writing, citing the
2508 specific failures to meet the provisions of this chapter. Such
2509 denial entitles the applicant to a hearing pursuant to chapter
2510 120.
2511 Section 56. Subsections (2) and (3) of section 651.023,
2512 Florida Statutes, are amended to read:
2513 651.023 Certificate of authority; application.—
2514 (2) Within 30 days after receipt of the information
2515 required under subsection (1), the office shall examine such
2516 information and notify the provider in writing, specifically
2517 requesting any additional information the office is permitted by
2518 law to require. Within 15 days after receipt of all of the
2519 requested additional information, the office shall notify the
2520 provider in writing that all of the requested information has
2521 been received and the application is deemed to be complete as of
2522 the date of the notice. Failure to notify the applicant in
2523 writing within the 15-day period constitutes acknowledgment by
2524 the office that it has received all requested additional
2525 information, and the application shall be deemed complete for
2526 purposes of review on the date of filing all of the required
2527 additional information.
2528 (3) After an application is deemed complete in accordance
2529 with the timeframes set forth in chapter 120 Within 45 days
2530 after an application is deemed complete as set forth in
2531 subsection (2), and upon completion of the remaining
2532 requirements of this section, the office shall complete its
2533 review and issue or deny a certificate of authority to the
2534 holder of a provisional certificate of authority. If a
2535 certificate of authority is denied, the office must notify the
2536 holder of the provisional certificate in writing, citing the
2537 specific failures to satisfy the provisions of this chapter. If
2538 denied, the holder of the provisional certificate is entitled to
2539 an administrative hearing pursuant to chapter 120.
2540 Section 57. Present subsection (3) of section 651.024,
2541 Florida Statutes, is redesignated as subsection (5), and a new
2542 subsection (3) and subsection (4) are added to that section, to
2543 read:
2544 651.024 Acquisition.—
2545 (3) A bondholder that obtains consent rights from a
2546 provider which allow the bondholder to have oversight or
2547 decisionmaking authority over a facility or in the financial
2548 decisions of the facility is subject to s. 628.4615 and is not
2549 required to submit filings pursuant to s. 651.022, s. 651.023,
2550 or s. 651.0245. For purposes of this subsection, the term
2551 “consent rights” includes, but is not limited to, all of the
2552 following:
2553 (a) Approving or initiating the sale of a facility.
2554 (b) Approving or entering into an affiliation arrangement
2555 on behalf of the facility.
2556 (c) Approving or executing new or amended financing for the
2557 facility.
2558 (d) Approving or entering into a forbearance agreement for
2559 the facility.
2560 (4) A continuing care retirement community that enters into
2561 an affiliation agreement with another entity resulting in a
2562 change of officers, directors, or effective control is subject
2563 to s. 628.4615 and is not required to submit filings pursuant to
2564 s. 651.022, s. 651.023, or s. 651.0245.
2565 Section 58. Paragraph (a) of subsection (2), paragraph (a)
2566 of subsection (5), and subsection (6) of section 651.0246,
2567 Florida Statutes, are amended to read:
2568 651.0246 Expansions.—
2569 (2) A provider applying for expansion of a certificated
2570 facility must submit all of the following:
2571 (a) A feasibility study prepared by an independent
2572 certified public accountant. The feasibility study must include
2573 at least the following information:
2574 1. A description of the facility and proposed expansion,
2575 including the location, the size, the anticipated completion
2576 date, and the proposed construction program.
2577 2. An identification and evaluation of the primary and, if
2578 applicable, secondary market areas of the facility and the
2579 projected unit sales per month.
2580 3. Projected revenues, including anticipated entrance fees;
2581 monthly service fees; nursing care revenues, if applicable; and
2582 all other sources of revenue.
2583 4. Projected expenses, including for staffing requirements
2584 and salaries; the cost of property, plant, and equipment,
2585 including depreciation expense; interest expense; marketing
2586 expense; and other operating expenses.
2587 5. A projected balance sheet of the applicant.
2588 6. The expectations for the financial condition of the
2589 project, including the projected cash flow and an estimate of
2590 the funds anticipated to be necessary to cover startup losses.
2591 7. The inflation factor, if any, assumed in the study for
2592 the proposed expansion and how and where it is applied.
2593 8. Project costs; the total amount of debt financing
2594 required; marketing projections; resident rates, fees, and
2595 charges; the competition; resident contract provisions; and
2596 other factors that affect the feasibility of the facility.
2597 9. Appropriate population projections, including morbidity
2598 and mortality assumptions.
2599 10. The name of the person who prepared the feasibility
2600 study and his or her experience in preparing similar studies or
2601 otherwise consulting in the field of continuing care.
2602 11. Financial forecasts or projections prepared in
2603 accordance with standards adopted by the American Institute of
2604 Certified Public Accountants or in accordance with standards for
2605 feasibility studies for continuing care retirement communities
2606 adopted by the Actuarial Standards Board.
2607 12. An independent evaluation and examination opinion for
2608 the first 5 years of operations, or a comparable opinion
2609 acceptable to the office, by the certified public accountant who
2610 prepared the study, of the underlying assumptions used as a
2611 basis for the forecasts or projections in the study and that the
2612 assumptions are reasonable and proper and the project as
2613 proposed is feasible.
2614 13. The description of and plan for the ongoing operation
2615 of existing facilities.
2616 14.13. Any other information that the provider deems
2617 relevant and appropriate to provide to enable the office to make
2618 a more informed determination.
2619
2620 If any material change occurs in the facts set forth in an
2621 application filed with the office pursuant to this section, an
2622 amendment setting forth such change must be filed with the
2623 office within 10 business days after the applicant becomes aware
2624 of such change, and a copy of the amendment must be sent by
2625 registered mail to the principal office of the facility and to
2626 the principal office of the controlling company.
2627 (5)(a) Within 30 days after receipt of an application for
2628 expansion, the office shall examine the application and shall
2629 notify the applicant in writing, specifically requesting any
2630 additional information that the office is authorized to require.
2631 Within 15 days after the office receives all the requested
2632 additional information, the office shall notify the applicant in
2633 writing that the requested information has been received and
2634 that the application is deemed complete as of the date of the
2635 notice. Failure to notify the applicant in writing within the
2636 15-day period constitutes acknowledgment by the office that it
2637 has received all requested additional information, and the
2638 application is deemed complete for purposes of review on the
2639 date the applicant files all of the required additional
2640 information. If the application submitted is determined by the
2641 office to be substantially incomplete so as to require
2642 substantial additional information, including biographical
2643 information, the office may return the application to the
2644 applicant with a written notice stating that the application as
2645 received is substantially incomplete and, therefore, is
2646 unacceptable for filing without further action required by the
2647 office. Any filing fee received must be refunded to the
2648 applicant.
2649 (6) Within 45 30 days after the date on which an
2650 application is deemed complete as provided in paragraph (5)(b),
2651 the office shall complete its review and, based upon its review,
2652 approve an expansion by the applicant and issue a determination
2653 that the application meets all requirements of law, that the
2654 feasibility study was based on sufficient data and reasonable
2655 assumptions, and that the applicant will be able to provide
2656 continuing care or continuing care at-home as proposed and meet
2657 all financial and contractual obligations related to its
2658 operations, including the financial requirements of this
2659 chapter. If the application is denied, the office must notify
2660 the applicant in writing, citing the specific failures to meet
2661 the requirements of this chapter. The denial entitles the
2662 applicant to a hearing pursuant to chapter 120.
2663 Section 59. Present subsections (3) through (10) of section
2664 651.026, Florida Statutes, are redesignated as subsections (5)
2665 through (12), respectively, paragraphs (g) and (h) are added to
2666 subsection (2) and new subsections (3) and (4) are added to that
2667 section, and subsection (1), paragraphs (e) and (f) of
2668 subsection (2), and present subsection (6) of that section are
2669 amended, to read:
2670 651.026 Annual reports.—
2671 (1) Annually, on or before May 1, the provider shall file
2672 an annual report and such other information and data showing its
2673 condition as of the last day of the preceding calendar year,
2674 except as provided in subsection (7) (5). If the office does not
2675 receive the required information on or before May 1, a late fee
2676 may be charged pursuant to s. 651.015(2)(c). The office may
2677 approve an extension of up to 30 days.
2678 (2) The annual report shall be in such form as the
2679 commission prescribes and shall contain at least the following:
2680 (e) Each facility shall file with the office annually,
2681 together with the annual report required by this section, A
2682 computation of its minimum liquid reserve calculated in
2683 accordance with s. 651.035 on a form prescribed by the
2684 commission.
2685 (f) If, due to a change in generally accepted accounting
2686 principles, the balance sheet, statement of income and expenses,
2687 statement of equity or fund balances, or statement of cash flows
2688 is known by any other name or title, the annual report must
2689 contain Financial statements using the changed name names or
2690 title titles that most closely corresponds correspond to a
2691 balance sheet, statement of income and expenses, statement of
2692 equity or fund balances, and statement of changes in cash flows,
2693 in the event that, due to a change in generally accepted
2694 accounting principles, the balance sheet, statement of income
2695 and expenses, statement of equity or fund balances, or statement
2696 of cash flows is known by another name or title.
2697 (g) An accounts payable aging schedule that lists all
2698 outstanding repayment obligations and the corresponding amounts
2699 owed to each vendor.
2700 (h) Details on any debt that has been forgiven or deferred
2701 during the period. Details must include the entity the debt is
2702 due to, the amount forgiven or deferred, an explanation as to
2703 why the debt was forgiven or deferred, and whether the debt has
2704 been assumed by another party on behalf of the facility.
2705 (3) Each facility shall file with the office all escrow
2706 bank statements for the last quarter of the reporting period
2707 which support the funds held in each of the minimum liquid
2708 reserves bank accounts. The liquid reserves funds include the
2709 debt service reserve, the operating reserve, and the renewal and
2710 replacement reserve.
2711 (4) Any provider that has been placed into administrative
2712 supervision under s. 651.018 shall provide a compiled 2-year
2713 forecast, submitted on a form prescribed by the office, as long
2714 as the provider operates under administrative supervision. The
2715 compiled data in the 2-year forecast must be presented on a
2716 monthly basis.
2717 (8)(6) The workpapers, account analyses, descriptions of
2718 basic assumptions, and other information necessary for a full
2719 understanding of the annual statement of a provider as filed
2720 with the office shall be made available for visual inspection by
2721 the office at the facility or, if the office requests, at
2722 another agreed-upon site. Photocopies must be provided to the
2723 office upon request may not be made unless consented to by the
2724 provider.
2725 Section 60. Present subsections (2), (3), and (4) of
2726 section 651.0261, Florida Statutes, are redesignated as
2727 subsections (3), (4), and (5), respectively, a new subsection
2728 (2) is added to that section, and subsection (1) and present
2729 subsection (3) of that section are amended, to read:
2730 651.0261 Quarterly and monthly statements.—
2731 (1) Within 45 days after the end of each fiscal quarter,
2732 each provider shall file a quarterly unaudited financial
2733 statement of the provider or of the facility in the form
2734 prescribed by commission rule and days cash on hand, occupancy,
2735 debt service coverage ratio, and a detailed listing of the
2736 assets maintained in the liquid reserve as required under s.
2737 651.035. The last quarterly statement for a fiscal year is not
2738 required if a provider does not have pending a regulatory action
2739 level event, impairment, or a corrective action plan. If a
2740 provider falls below two or more of the thresholds set forth in
2741 s. 651.011(29) s. 651.011(26) at the end of any fiscal quarter,
2742 the provider shall submit to the office, at the same time as the
2743 quarterly statement, an explanation of the circumstances and a
2744 description of the actions it will take to meet the
2745 requirements.
2746 (2) Each provider shall file with the office quarterly,
2747 together with the quarterly statement required by this section:
2748 (a) All escrow bank statements for each quarter which
2749 support the funds held in each of the minimum liquid reserve
2750 bank account, including, but not limited to, the debt service
2751 reserve, the operating reserve, and the renewal and replacement
2752 reserve.
2753 (b) An accounts payable aging schedule that lists all
2754 outstanding repayment obligations and the corresponding amounts
2755 owed to vendors.
2756 (c) Details on any debt that has been forgiven or deferred
2757 during the period. Such details must include the entity the debt
2758 is due to, the amount forgiven or deferred, an explanation as to
2759 why the debt was forgiven or deferred, and whether the debt has
2760 been assumed by another party on behalf of the facility. If a
2761 facility is required to file monthly financial statements with
2762 the office, the facility is required to include details on
2763 forgiven or deferred debt with the monthly filing.
2764 (4)(3) A filing under subsection (3) (2) may be required if
2765 any of the following applies:
2766 (a) The provider is:
2767 1. Subject to administrative supervision proceedings;
2768 2. Subject to a corrective action plan resulting from a
2769 regulatory action level event and for up to 2 years after the
2770 factors that caused the regulatory action level event have been
2771 corrected; or
2772 3. Subject to delinquency or receivership proceedings or
2773 has filed for bankruptcy.
2774 (b) The provider or facility displays a declining financial
2775 position.
2776 (c) A change of ownership of the provider or facility has
2777 occurred within the previous 2 years.
2778 (d) The provider is found to be impaired.
2779 Section 61. Paragraph (c) of subsection (1), subsection
2780 (2), and paragraph (c) of subsection (5) of section 651.033,
2781 Florida Statutes, are amended, and subsection (7) is added to
2782 that section, to read:
2783 651.033 Escrow accounts.—
2784 (1) When funds are required to be deposited in an escrow
2785 account pursuant to s. 651.0215, s. 651.022, s. 651.023, s.
2786 651.0246, s. 651.035, or s. 651.055:
2787 (c) Any agreement establishing an escrow account required
2788 under this chapter is subject to approval by the office before
2789 execution. The agreement must be in writing and contain, in
2790 addition to any other provisions required by law, a provision
2791 whereby the escrow agent agrees to abide by the duties imposed
2792 by paragraphs (b) and (e), (3)(a) and (b), (5)(a), and
2793 subsection (6).
2794 (2)(a) As used in this subsection, the term “emergency”
2795 means conditions that exist beyond the control of the provider,
2796 such as severe damage to the provider’s physical premises caused
2797 by a natural or manmade disaster or another event of comparable
2798 gravity and severity.
2799 (b) Notwithstanding s. 651.035(7), in the event of an
2800 emergency and upon written petition by the provider to the
2801 office, on a form prescribed by the commission, the office may
2802 allow a withdrawal of up to 10 percent of the required minimum
2803 liquid reserve, consistent with the requirements governing how
2804 funds can be used under s. 651.035. Before submitting the
2805 petition to the office, the provider must meet with the office
2806 to review the emergency petition. In the meeting, the provider
2807 must address the details of the emergency, the circumstances
2808 leading to the need for an emergency petition, the provider’s
2809 plan to mitigate the emergency, the amount being requested, and
2810 the provider’s plan and timeline to restore the minimum liquid
2811 reserves into compliance with s. 651.035. The office shall have
2812 10 business 3 working days to deny the petition for the
2813 emergency 10-percent withdrawal. If the office fails to deny the
2814 petition within 10 business 3 working days, the petition is
2815 deemed to have been granted by the office. For purposes of this
2816 section, the term “business day working day” means each day that
2817 is not a Saturday, Sunday, or legal holiday as defined by
2818 Florida law. Also, for purposes of this section, the day the
2819 petition is received by the office is not counted as one of the
2820 10 3 days.
2821 (5) When funds are required to be deposited in an escrow
2822 account pursuant to s. 651.0215, s. 651.022, s. 651.023, s.
2823 651.0246, or s. 651.035, the following apply:
2824 (c) In accordance with the annual and quarterly filing
2825 deadlines set forth in ss. 651.026 and 651.0261 On or before the
2826 20th day of the month following the quarter for which the
2827 statement is due, the provider shall file with the office a copy
2828 of the escrow agent’s statement or, if the provider has not
2829 received the escrow agent’s statement, a copy of the written
2830 request to the escrow agent for the statement.
2831 (7) The escrow agent shall provide prompt written
2832 notification to the office upon withdrawal of any funds from an
2833 account required by s. 651.035. Any escrow agreement established
2834 to meet any requirement of s. 651.035 must contain this
2835 provision.
2836 Section 62. Subsection (2) of section 651.034, Florida
2837 Statutes, is amended to read:
2838 651.034 Financial and operating requirements for
2839 providers.—
2840 (2) Except when the office’s remedial rights are suspended
2841 pursuant to s. 651.114(11)(a), The office must take action
2842 necessary to place an impaired provider under regulatory
2843 control, including administrative supervision or any remedy
2844 available under part I of chapter 631. An impairment is
2845 sufficient grounds for the department to be appointed as
2846 receiver as provided in chapter 631, except when the office’s
2847 remedial rights are suspended pursuant to s. 651.114(11)(a). If
2848 the office’s remedial rights are suspended pursuant to s.
2849 651.114(11)(a), the impaired provider must make available to the
2850 office copies of any corrective action plan approved by the
2851 third-party lender or trustee to cure the impairment and any
2852 related required report. For purposes of s. 631.051, impairment
2853 of a provider is defined according to the term “impaired” has
2854 the same meaning as in under s. 651.011. The office may forego
2855 taking action for up to 90 180 days after the impairment if the
2856 office finds there is a reasonable expectation that the
2857 impairment may be eliminated within the 90-day 180-day period.
2858 Section 63. Subsection (1), paragraph (b) of subsection
2859 (7), and subsection (8) of section 651.035, Florida Statutes,
2860 are amended to read:
2861 651.035 Minimum liquid reserve requirements.—
2862 (1) A provider shall maintain in escrow a minimum liquid
2863 reserve consisting of the following reserves, as applicable.
2864 Each established account must be separate and unique to a
2865 facility, unencumbered, and not commingled with any other funds
2866 from any other account, facility, affiliate, or obligated group.
2867 Funds held in escrow under paragraphs (a), (c), and (d) must be
2868 held completely separate from any funds held by a trustee under
2869 paragraph (b), meaning the debt service, operating, and renewal
2870 and replacement reserves must have their own distinct account
2871 number:
2872 (a) Each provider shall maintain in escrow as a debt
2873 service reserve the aggregate amount of all principal and
2874 interest payments due during the fiscal year on any mortgage
2875 loan or other long-term financing of the facility, including
2876 property taxes as recorded in the audited financial report
2877 required under s. 651.026. The amount must include any leasehold
2878 payments and all costs related to such payments. If principal
2879 payments are not due during the fiscal year, the provider must
2880 maintain in escrow as a minimum liquid reserve an amount equal
2881 to interest payments due during the next 12 months on any
2882 mortgage loan or other long-term financing of the facility,
2883 including property taxes. If a provider does not have a mortgage
2884 loan or other financing on the facility, the provider must
2885 deposit monthly in escrow as a minimum liquid reserve an amount
2886 equal to one-twelfth of the annual property tax liability as
2887 indicated in the most recent tax notice provided pursuant to s.
2888 197.322(3), and must annually pay property taxes out of such
2889 escrow.
2890 (b) A provider that has outstanding indebtedness that
2891 requires a debt service reserve to be held in escrow pursuant to
2892 a trust indenture or mortgage lien on the facility and for which
2893 the debt service reserve may only be used to pay principal and
2894 interest payments on the debt that the debtor is obligated to
2895 pay, and which may include property taxes and insurance, may
2896 include such debt service reserve in computing the minimum
2897 liquid reserve needed to satisfy this subsection if the provider
2898 furnishes to the office a copy of the agreement under which such
2899 debt service reserve is held, together with a statement of the
2900 amount being held in escrow for the debt service reserve,
2901 certified by the lender or trustee and the provider to be
2902 correct. The trustee shall provide the office with any
2903 information concerning the debt service reserve account upon
2904 request of the provider or the office. In addition, the trust
2905 indenture, loan agreement, or escrow agreement must provide that
2906 the provider, trustee, lender, escrow agent, or a person
2907 designated to act in its place shall notify the office in
2908 writing at least 10 days before the withdrawal of any portion of
2909 the debt service reserve funds required to be held in escrow as
2910 described in this paragraph. The notice must include an
2911 affidavit sworn to by the provider, the trustee, or a person
2912 designated to act in its place which includes the amount of the
2913 scheduled debt service payment, the payment due date, the amount
2914 of the withdrawal, the accounts from which the withdrawal will
2915 be made, and a plan with a schedule for replenishing the
2916 withdrawn funds. If the plan is revised by a consultant that is
2917 retained as prescribed in the provider’s financing documents,
2918 the revised plan must be submitted to the office within 10 days
2919 after the approval by the lender or trustee. If a debt service
2920 reserve is transferred from one financial institution or lender
2921 to another, the provider must provide notice to the office at
2922 least 10 days before the transfer takes place. The notice must
2923 include an affidavit sworn to by the provider and include the
2924 name of the institution where the debt service reserve is being
2925 transferred, the date of transfer, the amount being transferred,
2926 a copy of the agreement requiring the transfer to the new
2927 financial institution, and the contact information for the
2928 escrow agent of the new account. The new escrow agreement must
2929 comply with s. 651.033. Any funds held pursuant to this section
2930 do not negate the requirement to maintain an escrow account as
2931 required in paragraph (a). Any such separate debt service
2932 reserves are not subject to the transfer provisions set forth in
2933 subsection (8).
2934 (c) Each provider shall maintain in escrow an operating
2935 reserve equal to or greater than the following amounts:
2936 1. Thirty 30 percent of the total operating expenses
2937 projected in the feasibility study required by s. 651.023 for
2938 the first 12 months of operation.
2939 2. After the first 12 months of operation, 30 percent of
2940 the operating reserve in the annual report filed pursuant to s.
2941 651.026.
2942 3. Once a provider maintains an occupancy level in excess
2943 of 80 percent for at least 12 months and has presented in its
2944 most recent annual report that it has reached stabilized
2945 occupancy, 15 percent of the total operating reserve upon
2946 approval of the office.
2947 4. If the provider has been found to meet any of the
2948 following conditions, 30 percent of the total operating reserve:
2949 a. Is at regulatory action level under s. 651.034.
2950 b. Is placed under administrative supervision.
2951 c. Is in a hazardous financial condition under s. 651.113.
2952 d. Filed or has notified the office of its intent to file
2953 for bankruptcy.
2954 e. Failed to maintain minimum liquid reserve requirements
2955 under subsections (10) and (11).
2956
2957 Upon notice from the office that a condition identified in this
2958 subparagraph exists, the provider has 10 days within which to
2959 fund the operating reserve at 50 percent and provide evidence of
2960 the funding to the office.
2961 (d) Before reducing the operating reserve required under
2962 paragraph (c), the provider must obtain written approval from
2963 the office Thereafter, each provider shall maintain in escrow an
2964 operating reserve equal to 15 percent of the total operating
2965 expenses in the annual report filed pursuant to s. 651.026.
2966 (e) If a provider has been in operation for more than 12
2967 months, the total annual operating expenses must be determined
2968 by averaging the total annual operating expenses reported to the
2969 office by the number of annual reports filed with the office
2970 within the preceding 3-year period subject to adjustment if
2971 there is a change in the number of facilities owned. For
2972 purposes of this subsection, total annual operating expenses
2973 include all expenses of the facility except depreciation and
2974 amortization; interest and property taxes included in paragraph
2975 (a); extraordinary expenses that are adequately explained and
2976 documented in accordance with generally accepted accounting
2977 principles; liability insurance premiums in excess of those paid
2978 in calendar year 1999; and changes in the obligation to provide
2979 future services to current residents. For providers initially
2980 licensed during or after calendar year 1999, liability insurance
2981 must be included in the total operating expenses in an amount
2982 not to exceed the premium paid during the first 12 months of
2983 facility operation. The operating reserves required under this
2984 subsection must be in an unencumbered account held in escrow for
2985 the benefit of the residents. Such funds may not be encumbered
2986 or subject to any liens or charges by the escrow agent or
2987 judgments, garnishments, or creditors’ claims against the
2988 provider or facility. However, if a facility had a lien,
2989 mortgage, trust indenture, or similar debt instrument in place
2990 before January 1, 1993, which encumbered all or any part of the
2991 reserves required by this subsection and such funds were used to
2992 meet the requirements of this subsection, then such arrangement
2993 may be continued, unless a refinancing or acquisition has
2994 occurred, and the provider is in compliance with this
2995 subsection.
2996 (f)(d) Each provider shall maintain in escrow a renewal and
2997 replacement reserve equal to 15 percent of the total accumulated
2998 depreciation based on the audited financial statement required
2999 to be filed pursuant to s. 651.026, not to exceed 15 percent of
3000 the facility’s average operating expenses for the past 3 fiscal
3001 years based on the audited financial statements for each of
3002 those years. For a provider who is an operator of a facility but
3003 is not the owner and depreciation is not included as part of the
3004 provider’s financial statement, the renewal and replacement
3005 reserve required by this paragraph must equal 15 percent of the
3006 total operating expenses of the provider, as described in this
3007 section. Each provider licensed before October 1, 1983, shall
3008 fully fund the renewal and replacement reserve by October 1,
3009 2003, by multiplying the difference between the former escrow
3010 requirement and the present escrow requirement by the number of
3011 years the facility has been in operation after October 1, 1983.
3012 (7)
3013 (b)1. For all other proposed withdrawals, in order to
3014 receive the consent of the office, the provider must file
3015 documentation showing why the withdrawal is necessary for the
3016 continued operation of the facility and such additional
3017 information as the office reasonably requires.
3018 2. The office shall notify the provider when the filing is
3019 deemed complete. If the provider has complied with all prior
3020 requests for information, the filing is deemed complete after 30
3021 days without communication from the office.
3022 3. Within 30 days after the date a file is deemed complete,
3023 the office shall provide the provider with written notice of its
3024 approval or disapproval of the request. The provider may not
3025 withdraw funds until the office provides such written notice.
3026 The office may disapprove any request to withdraw such funds if
3027 it determines that the withdrawal is not in the best interest of
3028 the residents.
3029 (8) The office may order the immediate transfer of up to
3030 100 percent of the funds held in the minimum liquid reserve to
3031 the custody of the department pursuant to part III of chapter
3032 625 if the office finds that the provider is impaired or
3033 insolvent, if the facility is found to have withdrawn funds
3034 without approval by the office, or if the facility fails to fund
3035 the minimum liquid reserve required by subsection (10) or
3036 subsection (11). The office may order such a transfer regardless
3037 of whether the office has suspended or revoked, or intends to
3038 suspend or revoke, the certificate of authority of the provider.
3039 Section 64. Subsection (2) of section 651.043, Florida
3040 Statutes, is amended to read:
3041 651.043 Approval of change in management.—
3042 (2) A provider or management company shall notify the
3043 office, in writing or electronically, of any change in the
3044 information required by s. 651.022(2) management within 10
3045 business days. For each new management company or manager not
3046 employed by a management company, the provider shall submit to
3047 the office the information required by s. 651.022(2) and a copy
3048 of the written management contract, if applicable.
3049 Section 65. Subsection (1) of section 651.071, Florida
3050 Statutes, is amended to read:
3051 651.071 Contracts as preferred claims on liquidation or
3052 receivership.—
3053 (1) In the event of receivership or liquidation proceedings
3054 against a provider, all continuing care and continuing care at
3055 home contracts executed by a provider are deemed preferred
3056 claims against all assets owned by the provider.; however, Such
3057 claims are subordinate to any secured claim and must be treated
3058 with higher priority over all other claims, except Class 1
3059 claims. For purposes of s. 631.271, such contracts are deemed
3060 Class 2 claims.
3061 Section 66. Subsections (2) and (3) of section 651.085,
3062 Florida Statutes, are amended to read:
3063 651.085 Quarterly meetings between residents and the
3064 governing body of the provider; resident representation before
3065 the governing body of the provider.—
3066 (2) A residents’ council formed pursuant to s. 651.081,
3067 members of which are elected by the residents, shall nominate
3068 and elect a designated resident representative to represent them
3069 before the governing body of the provider on matters specified
3070 in subsection (3). The initial designated resident
3071 representative elected under this section shall be elected to
3072 serve at least 12 months. The designated resident representative
3073 does not have to be a current member of the residents’ council;
3074 however, such individual must be a resident, as defined in s.
3075 651.011. Designated resident representatives shall perform their
3076 duties in good faith. For providers that own or operate more
3077 than one facility in the state, each facility must have its own
3078 designated resident representative.
3079 (3) The designated resident representative shall be
3080 notified in writing or electronically by a representative of the
3081 provider at least 14 days in advance of any meeting of the full
3082 governing body at which the annual budget and proposed changes
3083 or increases in resident fees or services are on the agenda or
3084 will be discussed before presenting the increases in resident
3085 fees or services to all residents. The designated resident
3086 representative shall be invited to attend and participate in
3087 that portion of the meeting designated for the discussion of
3088 such changes. Designated resident representatives shall perform
3089 their duties in good faith. For providers that own or operate
3090 more than one facility in the state, each facility must have its
3091 own designated resident representative.
3092 Section 67. Section 651.087, Florida Statutes, is created
3093 to read:
3094 651.087 Solicitation of loans from residents.—In addition
3095 to any damages or civil penalties to which a provider, a person
3096 employed by a provider, or a person acting on behalf of a
3097 provider, including, but not limited to, a management company,
3098 who borrows from or pledges any personal funds of a resident
3099 other than the amount agreed to by a written contract approved
3100 by the office pursuant to s. 651.055 commits a misdemeanor of
3101 the first degree, punishable as provided in 775.082 or s.
3102 775.083.
3103 Section 68. Paragraphs (h) through (n) of subsection (2) of
3104 section 651.091, Florida Statutes, are redesignated as
3105 paragraphs (i) through (o), respectively, and a new paragraph
3106 (h) and paragraph (p) are added to that subsection, present
3107 paragraph (h) of subsection (2) and paragraph (d) of subsection
3108 (3) are amended, to read:
3109 651.091 Availability, distribution, and posting of reports
3110 and records; requirement of full disclosure.—
3111 (2) Every continuing care facility shall:
3112 (h) Post a notice of any bankruptcy proceedings in a
3113 prominent location within the facility which is accessible to
3114 all residents and the general public. Such notice must include a
3115 summary of the bankruptcy proceedings and specify where the full
3116 legal record of the bankruptcy proceedings can be inspected
3117 within the facility. The facility shall also designate and make
3118 available a management representative to discuss the bankruptcy
3119 proceedings and address questions from residents. The notice
3120 required under this paragraph must also include a listing of all
3121 court documents related to the bankruptcy proceedings and the
3122 designated representative’s contact information.
3123 (i)(h) Deliver the information described in s. 651.085(4)
3124 in writing or electronically to the president or chair of the
3125 residents’ council and make supporting documentation available
3126 upon request.
3127 (p) Maintain records showing compliance with the
3128 requirements of this subsection, including how, where, and when
3129 the required information was provided.
3130 (3) Before entering into a contract to furnish continuing
3131 care or continuing care at-home, the provider undertaking to
3132 furnish the care, or the agent of the provider, shall make full
3133 disclosure, obtain written acknowledgment of receipt, and
3134 provide copies of the disclosure documents to the prospective
3135 resident or his or her legal representative, of the following
3136 information:
3137 (d) In keeping with the intent of this subsection relating
3138 to disclosure, the provider shall make available for review:
3139 1. Master plans approved by the provider’s board or
3140 governing body; and
3141 2. Any proposed or approved and any plans for expansion or
3142 phased development within the next 3 years, to the extent that
3143 the availability of such plans does not put at risk real estate,
3144 financing, acquisition, negotiations, or other implementation of
3145 operational plans and thus jeopardize the success of
3146 negotiations, operations, and development.
3147 Section 69. Section 651.104, Florida Statutes, is created
3148 to read:
3149 651.104 Certificate of authority to act as a management
3150 company.—
3151 (1) It is unlawful for any person to act as or hold himself
3152 or herself out to be management company for a continuing care
3153 retirement community in this state without a valid certificate
3154 of authority issued by the office pursuant to this section. A
3155 management company that was operating in this state as of June
3156 30, 2025, may continue to operate until January 1, 2026, as a
3157 management company without a certificate of authority and is not
3158 in violation of the requirement to possess a valid certificate
3159 of authority as a management company during that period of time.
3160 To qualify for and hold authority to act as a management company
3161 in this state, a management company must otherwise be in
3162 compliance pursuant to this section and with its organizational
3163 agreement. A person who, on or after January 1, 2026, does not
3164 hold a certificate of authority to act as a management company
3165 while operating as a management company is subject to a fine of
3166 $10,000 per violation per day.
3167 (2) A management company shall file with the office an
3168 application for a certificate of authority on a form adopted by
3169 the commission and furnished by the office. The application must
3170 include or have attached the following information and
3171 documents:
3172 (a) All basic organizational documents of the management
3173 company, such as the articles of incorporation, articles of
3174 association, partnership agreement, trade name certificate,
3175 trust agreement, shareholder agreement, and other applicable
3176 documents, and all amendments to those documents.
3177 (b) The bylaws, rules, and regulations or similar documents
3178 regulating the conduct or the internal affairs of the management
3179 company.
3180 (c) The names, addresses, official positions, and
3181 professional qualifications of the individuals employed or
3182 retained by the management company who are responsible for the
3183 conduct of the affairs of the management company, including all
3184 members of the board of directors, board of trustees, executive
3185 committee, or other governing board or committee, and the
3186 principal officers, or equivalent, or for a partnership or
3187 association of the management company, the partners or members.
3188 (d) Audited annual financial statements, prepared in
3189 accordance with generally accepted accounting principles, for
3190 the 2 most recent fiscal years, which prove that the applicant
3191 has a positive net worth in both fiscal years. If the applicant
3192 has been in existence for less than 2 fiscal years, the
3193 application must include financial statements or reports,
3194 certified by an officer of the applicant and prepared in
3195 accordance with generally accepted accounting principles, for
3196 any completed fiscal years and for any month during the current
3197 fiscal year for which such financial statements or reports have
3198 been completed. If the applicant reports net losses for either
3199 of the 2 most recent fiscal years, the applicant must provide
3200 pro forma financial statements up to the period of time that the
3201 applicant demonstrates 2 consecutive years of profitability. Pro
3202 forma financial statements must include the balance sheet,
3203 income statement, and cash flow statement. An audited financial
3204 statement or report prepared on a consolidated basis must
3205 include a columnar consolidating or combining worksheet that
3206 must be filed with the report and comply with the following:
3207 1. Amounts shown on the consolidated audited financial
3208 report must be shown on the worksheet;
3209 2. Amounts for each entity must be stated separately; and
3210 3. Explanations of consolidating and eliminating entries
3211 must be included.
3212 (e) Any information as the office may require in order to
3213 review the current financial condition of the applicant.
3214 (f) A statement describing the business plan, including
3215 information on staffing levels and activities proposed or
3216 ongoing, in this state and nationwide. The plan must provide
3217 details setting forth the applicant’s capability of providing a
3218 sufficient number of experienced and qualified personnel in the
3219 areas of issuing continuing care life contracts and managing
3220 continuing care retirement communities or similar communities,
3221 compliance with statutory requirements, and claims processing,
3222 recordkeeping, and underwriting.
3223 (g) If the applicant is not currently acting as a
3224 management company, a statement of the amounts and sources of
3225 the funds available for organization expenses and the proposed
3226 arrangements for reimbursement and compensation of incorporators
3227 or other principals.
3228 (h) Such other data, financial statements, and pertinent
3229 information as the commission or office may reasonably require
3230 with respect to the management company, its directors, or its
3231 trustees, or with respect to any parent, subsidiary, or
3232 affiliate, if the management company relies on a contractual or
3233 financial relationship with such parent, subsidiary, or
3234 affiliate in order to meet the financial requirements of this
3235 chapter, to determine the financial status of the management
3236 company and the management capabilities of its managers and
3237 owners.
3238 (3) An applicant must also submit all of the following for
3239 all individuals referenced in paragraph (2)(c):
3240 (a) A complete biographical statement on a form prescribed
3241 by the commission.
3242 (b) An independent background report as prescribed by the
3243 commission.
3244 (c) A full set of fingerprints to the office or to a
3245 vendor, entity, or agency authorized by s. 943.053(13). The
3246 office, vendor, entity, or agency, as applicable, shall forward
3247 the fingerprints to the Department of Law Enforcement for state
3248 processing, and the Department of Law Enforcement shall forward
3249 the fingerprints to the Federal Bureau of Investigation for
3250 national processing in accordance with s. 943.053 and 28 C.F.R.
3251 s. 20.
3252 (d) A self-disclosure of any administrative, civil, or
3253 criminal complaints, settlements, or discipline of the
3254 applicant, or any of the applicant’s affiliates, which relates
3255 to a violation of the insurance laws or continuing care
3256 retirement community laws, in any state.
3257 (4)(a) The applicant shall make available for inspection by
3258 the office copies of all contracts and contract templates
3259 relating to services provided by the management company to
3260 providers or other persons using the services of the management
3261 company.
3262 (b) The applicant shall also make available for inspection
3263 by the office copies of all contracts and contract templates
3264 with any provider.
3265 (5) The office may not issue a certificate of authority if
3266 it determines that the management company or any individual
3267 specified in paragraph (2)(c) is not competent, trustworthy,
3268 financially responsible, or of good personal and business
3269 reputation.
3270 (6) A certificate of authority issued under this section
3271 remains valid, unless suspended or revoked by the office, so
3272 long as the certificateholder continues in business in this
3273 state.
3274 Section 70. Section 651.1041, Florida Statutes, is created
3275 to read:
3276 651.1041 Acquisition of a management company.—An
3277 acquisition of a management company is governed by s. 628.4615
3278 as if the company were a specialty insurer.
3279 Section 71. Section 651.1043, Florida Statutes, is created
3280 to read:
3281 651.1043 Management company annual and quarterly financial
3282 statements; notice of change of ownership; fines for
3283 noncompliance.—
3284 (1) Each authorized management company shall annually file
3285 with the office a full and true statement of its financial
3286 condition, transactions, and affairs within 3 months after the
3287 end of the management company’s fiscal year or within such
3288 extension of time as the office may grant for good cause. The
3289 statement must be for the preceding fiscal year and must be in
3290 such form and contain such matters as the commission prescribes
3291 and must be verified by at least two officers of the management
3292 company.
3293 (2) Each authorized management company shall also annually
3294 file an audited financial statement prepared in accordance with
3295 generally accepted accounting principles by an independent
3296 certified public accountant. The audited financial statement
3297 must be filed with the office within 3 months after the end of
3298 the management company’s fiscal year and be for the preceding
3299 fiscal year. An audited financial statement prepared on a
3300 consolidated basis must include a columnar consolidating or
3301 combining worksheet that must be filed with the statement and
3302 must comply with all of the following:
3303 (a) Amounts shown on the consolidated audited financial
3304 statement must be shown on the worksheet.
3305 (b) Amounts for each entity must be stated separately.
3306 (c) Explanations of consolidating and eliminating entries
3307 must be included.
3308 (3) For the purpose of determining the financial status of
3309 the management company and the management capabilities of its
3310 managers and owners, the management company must submit such
3311 other data, financial statements, and pertinent information as
3312 the commission or office may reasonably require with respect to
3313 the management company, its directors, or its trustees, or with
3314 respect to any parent, subsidiary, or affiliate if the
3315 management company relies on a contractual or financial
3316 relationship with such parent, subsidiary, or affiliate in order
3317 to meet the financial requirements of this chapter.
3318 (4) For any material change in its ownership, a management
3319 company shall file an acquisition application as required by s.
3320 651.024.
3321 (5) Within 45 days after the end of each fiscal quarter,
3322 each management company shall file a quarterly unaudited
3323 financial statement in the form prescribed by commission rule.
3324 (6) If the office finds that such information is needed to
3325 properly monitor the financial condition of a management company
3326 or is otherwise needed to protect the public interest, the
3327 office may require the management company to file:
3328 (a) Within 25 days after the end of each month, a monthly
3329 unaudited financial statement of the management company in the
3330 form prescribed by the commission by rule.
3331 (b) For the purpose of determining the financial status of
3332 the management company and the management capabilities of its
3333 managers and owners, such other data, financial statements, and
3334 pertinent information as the office may reasonably require with
3335 respect to the management company, its directors, or its
3336 trustees, or with respect to any parent, subsidiary, or
3337 affiliate if the management company relies on a contractual or
3338 financial relationship with such parent, subsidiary, or
3339 affiliate in order to meet the financial requirements of this
3340 chapter.
3341 (7) Any management company that fails to file an annual
3342 financial report or quarterly financial report in the form and
3343 within the time required by this section shall forfeit to the
3344 office an amount set by order of the office which does not
3345 exceed $1,000 for each of the first 10 days of noncompliance and
3346 does not exceed $2,000 for each subsequent day of noncompliance.
3347 Upon notice by the office that the management company is not in
3348 compliance with this section, the management company’s authority
3349 to perform in the capacity of a management company for any
3350 provider or facility in this state ceases until the office
3351 determines the management company to be in compliance. The
3352 office may not collect more than $100,000 under this subsection
3353 with respect to any particular report.
3354 (8) All moneys collected by the office under this section
3355 must be deposited to the credit of the Insurance Regulatory
3356 Trust Fund.
3357 (9) The commission may by rule require all or part of the
3358 statements or filings required under this section to be
3359 submitted by electronic means in a computer-readable form
3360 compatible with the electronic data format specified by the
3361 commission.
3362 Section 72. Section 651.1045, Florida Statutes, is created
3363 to read:
3364 651.1045 Management company grounds for discretionary
3365 denial, suspension, or revocation of certificate of authority.—
3366 (1) The office may deny an application or suspend or revoke
3367 the certificate of authority of any applicant or management
3368 company if it finds that any one or more of the following
3369 grounds applicable to the applicant or management company exist:
3370 (a) Failing to continue to meet the requirements for the
3371 certificate of authority originally granted.
3372 (b) Failing to meet one or more of the qualifications for
3373 the certificate of authority under this chapter.
3374 (c) Making a material misstatement or misrepresentation to
3375 obtain the certificate of authority or committing fraud in
3376 obtaining or in attempting to obtain the certificate of
3377 authority.
3378 (d) Demonstrating a lack of fitness or trustworthiness.
3379 (e) Engaging in fraudulent or dishonest practices of
3380 management in the conduct of business.
3381 (f) Misappropriating, converting, or withholding moneys.
3382 (g) Failing to comply with, or violating, any lawful order
3383 or rule issued by the office or commission or violating any
3384 provision of this chapter.
3385 (h) Becoming insolvent or financially impaired or
3386 conducting business in a manner that poses a risk to the public.
3387 (i) Refusing to be examined or to produce accounts,
3388 records, and files for examination, refusing to give information
3389 with respect to its affairs, or refusing to perform any other
3390 legal obligation under this chapter when required by the office.
3391 (j) Failing to comply with the requirements of s. 651.1043.
3392 (k) Failing to maintain full compliance with escrow
3393 accounts or funds as required by this chapter, if responsible
3394 for the day-to-day operations of the provider.
3395 (l) Failing to meet the requirements of this chapter for
3396 disclosure of information to residents concerning the facility,
3397 its ownership, its management, its development, or its financial
3398 condition, or failing to honor its continuing care or continuing
3399 care at-home contracts, if responsible for the day-to-day
3400 operations of the provider.
3401 (m) Having any cause for which issuance of the license
3402 could have been denied had it then existed and been known to the
3403 office.
3404 (n) Having owners, managers, officers, or directors who
3405 have been found guilty of, or have pleaded guilty or nolo
3406 contendere to, a felony in this state or any other state,
3407 regardless of whether a judgment or conviction was entered by
3408 the court having jurisdiction of such cases.
3409 (o) Engaging in unfair methods of competition or in unfair
3410 or deceptive acts or practices prohibited under part IX of
3411 chapter 626.
3412 (p) Demonstrating a pattern of bankrupt enterprises.
3413 (q) Including in ownership, control, or management any
3414 person who:
3415 1. Is not reputable and of responsible character;
3416 2. Is so lacking in management expertise as to make the
3417 operation of the provider hazardous to potential and existing
3418 residents;
3419 3. Is so lacking in management experience, ability, and
3420 standing as to jeopardize the reasonable promise of successful
3421 operation;
3422 4. Is affiliated, directly or indirectly, through ownership
3423 or control, with any person whose business operations are or
3424 have been marked by business practices or conduct that is
3425 detrimental to the public, contract holders, investors, or
3426 creditors; by manipulation of assets, finances, or accounts; or
3427 by bad faith; or
3428 5. Has business operations marked by business practices or
3429 conduct that is detrimental to the public, contract holders,
3430 investors, or creditors; by manipulation of assets, finances, or
3431 accounts; or by bad faith.
3432 (r) Failing to file a notice of change in management,
3433 failing to remove a disapproved manager, or persisting in
3434 appointing disapproved managers.
3435 (2) Revocation of a management company’s certificate of
3436 authority under this section does not relieve a provider of the
3437 provider’s obligation to residents under the terms and
3438 conditions of any continuing care or continuing care at-home
3439 contract between the provider and residents or this chapter. The
3440 management company shall continue to file its annual statement
3441 and pay license fees to the office as required under this
3442 chapter as if the certificate of authority had continued in full
3443 force, but the management company may not issue any new
3444 contracts on behalf of a provider.
3445 (3) The office may seek an action in the circuit court of
3446 the Second Judicial Circuit, in and for Leon County, to enforce
3447 the office’s order and the provisions of this section.
3448 Section 73. Subsections (1), (4), (5), and (6) of section
3449 651.105, Florida Statutes, are amended to read:
3450 651.105 Examination.—
3451 (1) The office may at any time, and shall at least once
3452 every 3 years, examine the business of any applicant for a
3453 certificate of authority and any provider or management company
3454 engaged in the execution of care contracts or engaged in the
3455 performance of obligations under such contracts, in the same
3456 manner as is provided for the examination of insurance companies
3457 pursuant to ss. 624.316 and 624.318. For a provider or
3458 management company as deemed accredited under s. 651.028, such
3459 examinations must take place at least once every 5 years. An
3460 examination covering the preceding 3 or 5 fiscal years of the
3461 provider or management company, as applicable, must be commenced
3462 within 12 months after the end of the most recent fiscal year
3463 covered by the examination. Such examination may include events
3464 subsequent to the end of the most recent fiscal year and the
3465 events of any prior period which relate to possible violations
3466 of this chapter or which affect the present financial condition
3467 of the provider or management company. At least once every 3 or
3468 5 fiscal years, as applicable, the office shall conduct an
3469 interview in person, telephonically, or through electronic
3470 communication with the current president or chair of the
3471 residents’ council, or another designated officer of the council
3472 if the president or chair is not available, as part of the
3473 examination process. The examinations must be made by a
3474 representative or examiner designated by the office whose
3475 compensation will be fixed by the office pursuant to s. 624.320.
3476 Routine examinations may be made by having the necessary
3477 documents submitted to the office,; and, for this purpose,
3478 financial documents and records conforming to commonly accepted
3479 accounting principles and practices, as required under s.
3480 651.026, are deemed adequate. The final written report of each
3481 examination must be filed with the office and, when so filed,
3482 constitutes a public record. Any provider or management company
3483 being examined shall, upon request, give reasonable and timely
3484 access to all of its records. The representative or examiner
3485 designated by the office may at any time examine the records and
3486 affairs and inspect the physical property of any provider or
3487 management company, whether in connection with a formal
3488 examination or not.
3489 (4) The office shall notify the provider or management
3490 company and the executive officer of the governing body of the
3491 provider or management company in writing of all deficiencies in
3492 its compliance with the provisions of this chapter and the rules
3493 adopted pursuant to this chapter and shall set a reasonable
3494 length of time for compliance by the provider or management
3495 company. In addition, the office shall require corrective action
3496 or request a corrective action plan from the provider or
3497 management company which plan demonstrates a good faith attempt
3498 to remedy the deficiencies by a specified date. If the provider
3499 or management company fails to comply within the established
3500 length of time, the office may initiate action against the
3501 provider or management company in accordance with the provisions
3502 of this chapter.
3503 (5) A provider or management company shall respond to
3504 written correspondence from the office and provide data,
3505 financial statements, and pertinent information as requested by
3506 the office. The office has standing to petition a circuit court
3507 for mandatory injunctive relief to compel access to and require
3508 the provider or management company to produce the documents,
3509 data, records, and other information requested by the office.
3510 The office may petition the circuit court in the county in which
3511 the facility is situated or the Circuit Court of Leon County to
3512 enforce this section.
3513 (6) Unless a provider is impaired or subject to a
3514 regulatory action level event, any parent, subsidiary, or
3515 affiliate is not subject to examination by the office as part of
3516 a routine examination. However, If a provider, or facility, or
3517 management company relies on a contractual or financial
3518 relationship with a parent, a subsidiary, or an affiliate in
3519 order to meet the financial requirements of this chapter, the
3520 office may examine any parent, subsidiary, or affiliate that has
3521 a contractual or financial relationship with the provider, or
3522 facility, or management company to the extent necessary to
3523 ascertain the financial condition of the provider or management
3524 company. For any provider that has been placed into
3525 administrative supervision under s. 651.018, any parent,
3526 subsidiary, or affiliate is subject to examination by the
3527 office.
3528 Section 74. Section 651.1065, Florida Statutes, is amended
3529 to read:
3530 651.1065 Soliciting or accepting new continuing care
3531 contracts by impaired or insolvent facilities or providers.—
3532 (1) Regardless of whether delinquency proceedings as to a
3533 continuing care facility have been or are to be initiated, a
3534 proprietor, a general partner, a member, an officer, a director,
3535 a trustee, or a manager, or a management company of a continuing
3536 care facility may not actively solicit, approve the solicitation
3537 or acceptance of, or accept new continuing care contracts in
3538 this state after the proprietor, general partner, member,
3539 officer, director, trustee, or manager, or a management company
3540 knew, or reasonably should have known, that the continuing care
3541 facility was impaired or insolvent except with the written
3542 permission of the office. If the facility has declared
3543 bankruptcy, the bankruptcy court or trustee appointed by the
3544 court has jurisdiction over such matters. The office must
3545 approve or disapprove the continued marketing of new contracts
3546 within 15 days after receiving a request from a provider.
3547 (2) A proprietor, a general partner, a member, an officer,
3548 a director, a trustee, or a manager, or a management company
3549 that who violates this section commits a felony of the third
3550 degree, punishable as provided in s. 775.082, s. 775.083, or s.
3551 775.084.
3552 Section 75. Subsections (2) and (3) of section 651.107,
3553 Florida Statutes, are amended to read:
3554 651.107 Duration of suspension; obligations during
3555 suspension period; reinstatement.—
3556 (2) During the period of suspension, the provider or
3557 management company shall file its annual statement and pay
3558 license fees and taxes as required under this chapter as if the
3559 certificate had continued in full force,; but the provider shall
3560 issue no new contracts.
3561 (3) Upon expiration of the suspension period, if within
3562 such period the certificate of authority has not otherwise
3563 terminated, the provider’s or management company’s certificate
3564 of authority shall automatically be reinstated unless the office
3565 finds that the causes for the suspension have not been removed
3566 or that the provider or management company is otherwise not in
3567 compliance with the requirements of this chapter. If not so
3568 automatically reinstated, the certificate of authority shall be
3569 deemed to be revoked as of the end of the suspension period or
3570 upon failure of the provider or management company to continue
3571 the certificate during the suspension period, whichever event
3572 first occurs.
3573 Section 76. Subsection (2) of section 651.108, Florida
3574 Statutes, is amended to read:
3575 651.108 Administrative fines.—
3576 (2) If it is found that the provider or management company
3577 has knowingly and willfully violated a lawful order of the
3578 office or a provision of this chapter, the office may impose a
3579 fine of up to in an amount not to exceed $10,000 for each such
3580 violation.
3581 Section 77. Section 651.113, Florida Statutes, is created
3582 to read:
3583 651.113 Hazardous facility or provider standards; office’s
3584 evaluation and enforcement authority; immediate final order.—
3585 (1) In determining whether the continued operation of any
3586 provider transacting business in this state may be deemed to be
3587 in hazardous financial condition, the office may consider, in
3588 the totality of the circumstances, any of the following:
3589 (a) Whether the provider’s or facility’s financial
3590 statements contain findings or conditions that the office
3591 considers detrimental to its financial stability.
3592 (b) Whether an independent auditor has identified
3593 significant financial risks or issued a going concern opinion.
3594 (c) Whether the provider’s or facility’s current or
3595 projected ratio of total assets, including required reserves, to
3596 total liabilities indicates financial impairment or
3597 deterioration, or trends suggest a potential decline in
3598 operations, working capital, or equity.
3599 (d) Whether the provider’s or facility’s current or
3600 projected ratio of current assets to current liabilities
3601 indicates financial impairment or deterioration, or trends
3602 suggest a potential decline in operations, working capital, or
3603 equity.
3604 (e) Whether the provider or facility is unable to carry out
3605 normal daily activities and meet its obligations as they become
3606 due, based on its current or projected cash flow and liquidity
3607 position.
3608 (f) Whether the provider’s or facility’s past-year
3609 operating losses or projected operating losses are significant
3610 enough to jeopardize daily operations or long-term viability.
3611 (g) Whether the insolvency of an affiliated provider or
3612 facility or other affiliated person results in legal liability
3613 of the provider or facility for payments and expenses of such
3614 magnitude as to jeopardize the provider’s or facility’s ability
3615 to meet its obligations as they become due, without substantial
3616 disposition of assets outside the ordinary course of business,
3617 any restructuring of debt, or externally forced revisions of its
3618 operations.
3619 (h) The age and collectability of payables and receivables.
3620 (i) Whether the provider or facility can demonstrate a
3621 significant reduction or resolution of a deteriorating financial
3622 condition.
3623 (j) Whether a startup provider, a facility undergoing
3624 expansion, or an entity refinancing its debt has developed a
3625 financial condition that could seriously jeopardize current or
3626 future operations.
3627 (k) Whether a facility has entered into a forbearance
3628 agreement with a lender based on an inability to make timely
3629 debt payments.
3630 (2) The provider or facility shall prepare a plan to
3631 address and correct any condition that has led to a hazardous
3632 financial condition. The plan must be presented to the office
3633 within 30 days after the date of the determination.
3634 (3) If the office determines that the continued operations
3635 of a provider or facility authorized to transact business in
3636 this state may be hazardous to its residents or to the general
3637 public, the office may issue an order requiring the provider or
3638 facility to do any of the following:
3639 (a) Obtain additional financing or revenues to maintain
3640 solvency.
3641 (b) Reduce expenses by specified methods or amounts.
3642 (c) Increase the operating reserve.
3643 (d) File reports to the office concerning the market value
3644 of the provider’s or facility’s assets.
3645 (e) Limit or withdraw from certain investments or
3646 discontinue certain investment practices to the extent the
3647 office deems necessary.
3648 (f) Document the adequacy of income and operating reserves
3649 in relation to expenses.
3650 (g) File, in addition to regular annual statements, interim
3651 financial reports on a form prescribed by the commission.
3652 (h) Correct corporate governance practice deficiencies and
3653 adopt and use governance practices acceptable to the office.
3654 (i) Provide a business plan acceptable to the office in
3655 order to continue to transact business in this state.
3656 (4) The office may, pursuant to ss. 120.569 and 120.57, in
3657 its discretion and without advance notice or hearing, issue an
3658 immediate final order to any insurer requiring the actions
3659 specified in subsection (3).
3660 (5) This section may not be interpreted to limit the powers
3661 granted to the office by any laws of this state, nor may it be
3662 interpreted to supersede any laws of this state.
3663 Section 78. Subsection (11) of section 651.114, Florida
3664 Statutes, is amended to read:
3665 651.114 Delinquency proceedings; remedial rights.—
3666 (11)(a) The rights of the office described in this section
3667 are subordinate to the rights of a trustee or lender pursuant to
3668 the terms of a resolution, ordinance, loan agreement, indenture
3669 of trust, mortgage, lease, security agreement, or other
3670 instrument creating or securing bonds or notes issued to finance
3671 a facility, and the office, subject to paragraph (c), may not
3672 exercise its remedial rights provided under this section and ss.
3673 651.018, 651.106, 651.108, and 651.116 with respect to a
3674 facility that is subject to a lien, mortgage, lease, or other
3675 encumbrance or trust indenture securing bonds or notes issued in
3676 connection with the financing of the facility, if the trustee or
3677 lender, by inclusion or by amendment to the loan documents or by
3678 a separate contract with the office, agrees that the rights of
3679 residents under a continuing care or continuing care at-home
3680 contract will be honored and will not be disturbed by a
3681 foreclosure or conveyance in lieu thereof as long as the
3682 resident:
3683 1. Is current in the payment of all monetary obligations
3684 required by the contract;
3685 2. Is in compliance and continues to comply with all
3686 provisions of the contract; and
3687 3. Has asserted no claim inconsistent with the rights of
3688 the trustee or lender.
3689 (b) This subsection does not require a trustee or lender
3690 to:
3691 1. Continue to engage in the marketing or resale of new
3692 continuing care or continuing care at-home contracts;
3693 2. Pay any rebate of entrance fees as may be required by a
3694 resident’s continuing care or continuing care at-home contract
3695 as of the date of acquisition of the facility by the trustee or
3696 lender and until expiration of the period described in paragraph
3697 (d);
3698 3. Be responsible for any act or omission of any owner or
3699 operator of the facility arising before the acquisition of the
3700 facility by the trustee or lender; or
3701 4. Provide services to the residents to the extent that the
3702 trustee or lender would be required to advance or expend funds
3703 that have not been designated or set aside for such purposes.
3704 (c) If the office determines, at any time during the
3705 suspension of its remedial rights as provided in paragraph (a),
3706 that:
3707 1. The trustee or lender is not in compliance with
3708 paragraph (a);
3709 2. A lender or trustee has assigned or has agreed to assign
3710 all or a portion of a delinquent or defaulted loan to a third
3711 party without the office’s written consent;
3712 3. The provider engaged in the misappropriation,
3713 conversion, or illegal commitment or withdrawal of minimum
3714 liquid reserve or escrowed funds required under this chapter;
3715 4. The provider refused to be examined by the office
3716 pursuant to s. 651.105(1); or
3717 5. The provider refused to produce any relevant accounts,
3718 records, and files requested as part of an examination,
3719
3720 the office shall notify the trustee or lender in writing of its
3721 determination, setting forth the reasons giving rise to the
3722 determination and specifying those remedial rights afforded to
3723 the office which the office shall then reinstate.
3724 (d) Upon acquisition of a facility by a trustee or lender
3725 and evidence satisfactory to the office that the requirements of
3726 paragraph (a) have been met, the office shall issue a 90-day
3727 temporary certificate of authority granting the trustee or
3728 lender the authority to engage in the business of providing
3729 continuing care or continuing care at-home and to issue
3730 continuing care or continuing care at-home contracts subject to
3731 the office’s right to immediately suspend or revoke the
3732 temporary certificate of authority if the office determines that
3733 any of the grounds described in s. 651.106 apply to the trustee
3734 or lender or that the terms of the contract used as the basis
3735 for the issuance of the temporary certificate of authority by
3736 the office have not been or are not being met by the trustee or
3737 lender since the date of acquisition.
3738 Section 79. Section 651.1165, Florida Statutes, is created
3739 to read:
3740 651.1165 Recording of lien by the office.—
3741 (1) The office may record with the county recorder of any
3742 county a notice of lien against the facility’s properties on
3743 behalf of all residents and contract holders who enter into life
3744 care contracts with the applicant to secure performance of the
3745 provider’s obligations to residents and contract holders
3746 pursuant to life care contracts.
3747 (2) From the time of the recording under subsection (1),
3748 there exists a lien for an amount equal to the reasonable value
3749 of services to be performed under a life care contract in favor
3750 of each resident and contract holder on the land and
3751 improvements of the facility’s properties owned by the provider,
3752 not exempt from execution, which are listed in the notice of
3753 lien filed pursuant to subsection (3) and which are located in
3754 the county in which the notice of lien is recorded.
3755 (3) The lien is perfected by the office by executing by
3756 affidavit the notice and claim of lien, which must contain:
3757 (a) The legal description of the lands and improvements to
3758 be charged with a lien.
3759 (b) The name of the owner of the property affected.
3760 (c) A statement that the lien has been filed by the office
3761 pursuant to this section.
3762 (4) The lien may be released or partially released at the
3763 request of the applicant if, in the judgment of the
3764 commissioner, such release or partial release inures to the
3765 benefit of the residents and contract holders and the
3766 performance of the provider’s obligations to the residents and
3767 contract holders.
3768 (5) The lien may be foreclosed by civil action. Any number
3769 of persons claiming liens against the same property pursuant to
3770 this section may join in the same action. If separate actions
3771 are commenced, the court may consolidate such actions. The court
3772 shall, as part of the costs, allow reasonable attorney fees for
3773 each claimant who is a party to the action.
3774 (6) In a civil action filed pursuant to this section, the
3775 judgment must be entered in favor of each resident and contract
3776 holder having a lien who has joined in the foreclosure action
3777 for the amount equal to the reasonable value of services to be
3778 performed under a life care contract in favor of each resident
3779 and contract holder. The court shall order the sheriff to sell
3780 any property subject to the lien at the time judgment is given,
3781 in the same manner as real and personal property is sold on
3782 execution. The lien for the reasonable value of services to be
3783 performed under a life care contract must be on equal footing
3784 with claims of other residents and contract holders. If a sale
3785 is ordered and the property sold and the proceeds of the sale
3786 are not sufficient to discharge all liens of residents and
3787 contract holders against the property, the proceeds must be
3788 prorated among the respective residents and contract holders.
3789 (7) The lien provided for in this section is preferred to
3790 all liens, mortgages, or other encumbrances upon the property
3791 attaching subsequently to the time the lien is recorded and is
3792 preferred to all unrecorded liens, mortgages, and other
3793 encumbrances. The amount secured by any lien having priority to
3794 the lien filed pursuant to this section may not be increased
3795 without prior approval of the office.
3796 (8) The office shall file a release of the lien upon proof
3797 of complete performance of all obligations to residents and
3798 contract holders pursuant to life care contracts.
3799 (9) The office may subordinate any lien filed pursuant to
3800 this section to the lien of a first mortgage or other long-term
3801 financing obtained by the provider, regardless of the time at
3802 which the subsequent lien attaches.
3803 Section 80. Paragraph (b) of subsection (4) of section
3804 624.307, Florida Statutes, is amended to read:
3805 624.307 General powers; duties.—
3806 (4) The department and office may each collect, propose,
3807 publish, and disseminate information relating to the subject
3808 matter of any duties imposed upon it by law.
3809 (b) The office shall publish all orders, data required by
3810 s. 627.915(2), reports required by s. 627.7154(3), and all
3811 reports that are not confidential and exempt on its website in a
3812 timely fashion.
3813 Section 81. Subsection (3) of section 627.642, Florida
3814 Statutes, is amended to read:
3815 627.642 Outline of coverage.—
3816 (3) In addition to the outline of coverage, a policy as
3817 specified in s. 627.6699(3)(j) s. 627.6699(3)(k) must be
3818 accompanied by an identification card that contains, at a
3819 minimum:
3820 (a) The name of the organization issuing the policy or the
3821 name of the organization administering the policy, whichever
3822 applies.
3823 (b) The name of the contract holder.
3824 (c) The type of plan only if the plan is filed in the
3825 state, an indication that the plan is self-funded, or the name
3826 of the network.
3827 (d) The member identification number, contract number, and
3828 policy or group number, if applicable.
3829 (e) A contact phone number or electronic address for
3830 authorizations and admission certifications.
3831 (f) A phone number or electronic address whereby the
3832 covered person or hospital, physician, or other person rendering
3833 services covered by the policy may obtain benefits verification
3834 and information in order to estimate patient financial
3835 responsibility, in compliance with privacy rules under the
3836 Health Insurance Portability and Accountability Act.
3837 (g) The national plan identifier, in accordance with the
3838 compliance date set forth by the federal Department of Health
3839 and Human Services.
3840
3841 The identification card must present the information in a
3842 readily identifiable manner or, alternatively, the information
3843 may be embedded on the card and available through magnetic
3844 stripe or smart card. The information may also be provided
3845 through other electronic technology.
3846 Section 82. Paragraph (a) of subsection (2), paragraphs
3847 (a), (e), and (g) of subsection (7), and paragraph (a) of
3848 subsection (8) of section 627.6475, Florida Statutes, are
3849 amended to read:
3850 627.6475 Individual reinsurance pool.—
3851 (2) DEFINITIONS.—As used in this section:
3852 (a) “Board,” “Carrier,” and “health benefit plan” have the
3853 same meaning ascribed in s. 627.6699(3).
3854 (7) INDIVIDUAL HEALTH REINSURANCE PROGRAM.—
3855 (a) The individual health reinsurance program shall operate
3856 subject to the supervision and control of the board of the small
3857 employer health reinsurance program established pursuant to s.
3858 627.6699(11). The board shall establish a separate, segregated
3859 account for eligible individuals reinsured pursuant to this
3860 section, which account may not be commingled with the small
3861 employer health reinsurance account.
3862 (e)1. Before March 1 of each calendar year, the board shall
3863 determine and report to the office the program net loss in the
3864 individual account for the previous year, including
3865 administrative expenses for that year and the incurred losses
3866 for that year, taking into account investment income and other
3867 appropriate gains and losses.
3868 2. Any net loss in the individual account for the year
3869 shall be recouped by assessing the carriers as follows:
3870 a. The operating losses of the program shall be assessed in
3871 the following order subject to the specified limitations. The
3872 first tier of assessments shall be made against reinsuring
3873 carriers in an amount that may not exceed 5 percent of each
3874 reinsuring carrier’s premiums for individual health insurance.
3875 If such assessments have been collected and additional moneys
3876 are needed, the board shall make a second tier of assessments in
3877 an amount that may not exceed 0.5 percent of each carrier’s
3878 health benefit plan premiums.
3879 b. Except as provided in paragraph (f), risk-assuming
3880 carriers are exempt from all assessments authorized pursuant to
3881 this section. The amount paid by a reinsuring carrier for the
3882 first tier of assessments shall be credited against any
3883 additional assessments made.
3884 c. The board shall equitably assess reinsuring carriers for
3885 operating losses of the individual account based on market
3886 share. The board shall annually assess each carrier a portion of
3887 the operating losses of the individual account. The first tier
3888 of assessments shall be determined by multiplying the operating
3889 losses by a fraction, the numerator of which equals the
3890 reinsuring carrier’s earned premium pertaining to direct
3891 writings of individual health insurance in the state during the
3892 calendar year for which the assessment is levied, and the
3893 denominator of which equals the total of all such premiums
3894 earned by reinsuring carriers in the state during that calendar
3895 year. The second tier of assessments shall be based on the
3896 premiums that all carriers, except risk-assuming carriers,
3897 earned on all health benefit plans written in this state. The
3898 board may levy interim assessments against reinsuring carriers
3899 to ensure the financial ability of the plan to cover claims
3900 expenses and administrative expenses paid or estimated to be
3901 paid in the operation of the plan for the calendar year prior to
3902 the association’s anticipated receipt of annual assessments for
3903 that calendar year. Any interim assessment is due and payable
3904 within 30 days after receipt by a carrier of the interim
3905 assessment notice. Interim assessment payments shall be credited
3906 against the carrier’s annual assessment. Health benefit plan
3907 premiums and benefits paid by a carrier that are less than an
3908 amount determined by the board to justify the cost of collection
3909 may not be considered for purposes of determining assessments.
3910 d. Subject to the approval of the office, the board shall
3911 adjust the assessment formula for reinsuring carriers that are
3912 approved as federally qualified health maintenance organizations
3913 by the Secretary of Health and Human Services pursuant to 42
3914 U.S.C. s. 300e(c)(2)(A) to the extent, if any, that restrictions
3915 are placed on them which are not imposed on other carriers.
3916 3. Before March 1 of each year, the board shall determine
3917 and file with the office an estimate of the assessments needed
3918 to fund the losses incurred by the program in the individual
3919 account for the previous calendar year.
3920 4. If the board determines that the assessments needed to
3921 fund the losses incurred by the program in the individual
3922 account for the previous calendar year will exceed the amount
3923 specified in subparagraph 2., the board shall evaluate the
3924 operation of the program and report its findings and
3925 recommendations to the office in the format established in s.
3926 627.6699(11) for the comparable report for the small employer
3927 reinsurance program.
3928 (g) Except as otherwise provided in this section, the board
3929 and the office shall have all powers, duties, and
3930 responsibilities with respect to carriers that issue and
3931 reinsure individual health insurance, as specified for the board
3932 and the office in s. 627.6699(11) with respect to small employer
3933 carriers, including, but not limited to, the provisions of s.
3934 627.6699(11) relating to:
3935 1. Use of assessments that exceed the amount of actual
3936 losses and expenses.
3937 2. The annual determination of each carrier’s proportion of
3938 the assessment.
3939 3. Interest for late payment of assessments.
3940 4. Authority for the office to approve deferment of an
3941 assessment against a carrier.
3942 5. Limited immunity from legal actions or carriers.
3943 6. Development of standards for compensation to be paid to
3944 agents. Such standards shall be limited to those specifically
3945 enumerated in s. 627.6699(11)(d) s. 627.6699(12)(d).
3946 7. Monitoring compliance by carriers with this section.
3947 (8) STANDARDS TO ASSURE FAIR MARKETING.—
3948 (a) Each health insurance issuer that offers individual
3949 health insurance shall actively market coverage to eligible
3950 individuals in the state. The provisions of s. 627.6699(11) s.
3951 627.6699(12) that apply to small employer carriers that market
3952 policies to small employers shall also apply to health insurance
3953 issuers that offer individual health insurance with respect to
3954 marketing policies to individuals.
3955 Section 83. Subsection (2) of section 627.657, Florida
3956 Statutes, is amended to read:
3957 627.657 Provisions of group health insurance policies.—
3958 (2) The medical policy as specified in s. 627.6699(3)(j) s.
3959 627.6699(3)(k) must be accompanied by an identification card
3960 that contains, at a minimum:
3961 (a) The name of the organization issuing the policy or name
3962 of the organization administering the policy, whichever applies.
3963 (b) The name of the certificateholder.
3964 (c) The type of plan only if the plan is filed in the
3965 state, an indication that the plan is self-funded, or the name
3966 of the network.
3967 (d) The member identification number, contract number, and
3968 policy or group number, if applicable.
3969 (e) A contact phone number or electronic address for
3970 authorizations and admission certifications.
3971 (f) A phone number or electronic address whereby the
3972 covered person or hospital, physician, or other person rendering
3973 services covered by the policy may obtain benefits verification
3974 and information in order to estimate patient financial
3975 responsibility, in compliance with privacy rules under the
3976 Health Insurance Portability and Accountability Act.
3977 (g) The national plan identifier, in accordance with the
3978 compliance date set forth by the federal Department of Health
3979 and Human Services.
3980
3981 The identification card must present the information in a
3982 readily identifiable manner or, alternatively, the information
3983 may be embedded on the card and available through magnetic
3984 stripe or smart card. The information may also be provided
3985 through other electronic technology.
3986 Section 84. Subsection (1) of section 627.66997, Florida
3987 Statutes, is amended to read:
3988 627.66997 Stop-loss insurance.—
3989 (1) A self-insured health benefit plan established or
3990 maintained by a small employer, as defined in s. 627.6699(3)(s)
3991 s. 627.6699(3)(v), is exempt from s. 627.6699 and may use a
3992 stop-loss insurance policy issued to the employer. For purposes
3993 of this subsection, the term “stop-loss insurance policy” means
3994 an insurance policy issued to a small employer which covers the
3995 small employer’s obligation for the excess cost of medical care
3996 on an equivalent basis per employee provided under a self
3997 insured health benefit plan.
3998 (a) A small employer stop-loss insurance policy is
3999 considered a health insurance policy and is subject to s.
4000 627.6699 if the policy has an aggregate attachment point that is
4001 lower than the greatest of:
4002 1. Two thousand dollars multiplied by the number of
4003 employees;
4004 2. One hundred twenty percent of expected claims, as
4005 determined by the stop-loss insurer in accordance with actuarial
4006 standards of practice; or
4007 3. Twenty thousand dollars.
4008 (b) Once claims under the small employer health benefit
4009 plan reach the aggregate attachment point set forth in paragraph
4010 (a), the stop-loss insurance policy authorized under this
4011 section must cover 100 percent of all claims that exceed the
4012 aggregate attachment point.
4013 Section 85. Reciprocal insurers licensed before July 1,
4014 2025, have until July 1, 2026, to comply with the changes made
4015 to subscribers’ advisory committees in s. 629.201, Florida
4016 Statutes. Reciprocal insurers licensed before July 1, 2025, have
4017 until July 1, 2028, to comply with the changes made to unearned
4018 premium reserve requirements imposed under s. 629.56, Florida
4019 Statutes.
4020 Section 86. Except as otherwise expressly provided in this
4021 act and except for this section, which shall take effect upon
4022 this act becoming a law, this act shall take effect July 1,
4023 2025.