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         651.087Solicitation 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.