Florida Senate - 2025                             CS for SB 1740
       
       
        
       By the Committee on Banking and Insurance; and Senators Ingoglia
       and Sharief
       
       
       
       
       597-02493-25                                          20251740c1
    1                        A bill to be entitled                      
    2         An act relating to insurance; amending s. 215.5586,
    3         F.S.; revising legislative intent; specifying that
    4         hurricane mitigation grants funded through the My Safe
    5         Florida Home Program may be awarded only under certain
    6         circumstances; requiring the Department of Financial
    7         Services to require that certain mitigation
    8         improvements be made as a condition of reimbursing a
    9         homeowner approved for a grant; amending ss. 624.407
   10         and 624.408, F.S.; revising the surplus required for
   11         certain insurers applying for their original
   12         certificates of authority and to maintain their
   13         certificates of authority, respectively; amending s.
   14         624.4073, F.S.; specifying prohibitions for persons
   15         who were officers or directors of an insolvent
   16         insurer, attorneys in fact of a reciprocal insurer, or
   17         officers or directors of an attorney in fact of a
   18         reciprocal insurer; providing applicability; requiring
   19         the Office of Insurance Regulation to prohibit
   20         insurers or reciprocal insurers from paying any
   21         compensation to certain persons for certain violations
   22         until a specified time; amending s. 627.062, F.S.;
   23         prohibiting the office from requesting an insurer
   24         waive a deemed approval for residential property
   25         insurance rate filing under certain circumstances;
   26         prohibiting the office from issuing a notice of intent
   27         to disapprove a residential property insurance rate
   28         filing under certain circumstances; creating s.
   29         627.4263, F.S.; defining terms; requiring that
   30         insurers’ decisions to deny claims be made by
   31         qualified human professionals; specifying the duties
   32         of qualified human professionals; requiring an insurer
   33         to maintain certain records; prohibiting using
   34         artificial intelligence, machine learning systems, or
   35         algorithms as the sole basis for determining whether
   36         to deny a claim; requiring insurers to include certain
   37         information in denial communications to claimants;
   38         requiring that certain insurers detail certain
   39         information in its claims handling manual; authorizing
   40         the office to conduct market conduct examinations and
   41         investigations under certain circumstances; providing
   42         an effective date.
   43          
   44  Be It Enacted by the Legislature of the State of Florida:
   45  
   46         Section 1. Section 215.5586, Florida Statutes, is amended
   47  to read:
   48         215.5586 My Safe Florida Home Program.— There is
   49  established within the Department of Financial Services the My
   50  Safe Florida Home Program. The department shall provide fiscal
   51  accountability, contract management, and strategic leadership
   52  for the program, consistent with this section. This section does
   53  not create an entitlement for property owners or obligate the
   54  state in any way to fund the inspection or retrofitting of
   55  residential property in this state. Implementation of this
   56  program is subject to annual legislative appropriations. It is
   57  the intent of the Legislature that, subject to the availability
   58  of funds, the My Safe Florida Home Program provide licensed
   59  inspectors to perform hurricane mitigation inspections of
   60  eligible homes and grants to fund hurricane mitigation projects
   61  that result in property insurance credits, discounts, or other
   62  rate differentials on those homes. The department shall
   63  implement the program in such a manner that the total amount of
   64  funding requested by accepted applications, whether for
   65  inspections, grants, or other services or assistance, does not
   66  exceed the total amount of available funds. If, after
   67  applications are processed and approved, funds remain available,
   68  the department may accept applications up to the available
   69  amount. The program shall develop and implement a comprehensive
   70  and coordinated approach for hurricane damage mitigation
   71  pursuant to the requirements provided in this section.
   72         (1) HURRICANE MITIGATION INSPECTIONS.—
   73         (a) To be eligible for a hurricane mitigation inspection
   74  under the program:
   75         1. A home must be a single-family, detached residential
   76  property or a townhouse as defined in s. 481.203;
   77         2. A home must be site-built and owner-occupied; and
   78         3. The homeowner must have been granted a homestead
   79  exemption on the home under chapter 196.
   80         (b)1. An application for a hurricane mitigation inspection
   81  must contain a signed or electronically verified statement made
   82  under penalty of perjury that the applicant has submitted only
   83  one inspection application on the home or that the application
   84  is allowed under subparagraph 2., and the application must have
   85  documents attached which demonstrate that the applicant meets
   86  the requirements of paragraph (a).
   87         2. An applicant may submit a subsequent hurricane
   88  mitigation inspection application for the same home only if:
   89         a. The original hurricane mitigation inspection application
   90  has been denied or withdrawn because of errors or omissions in
   91  the application;
   92         b. The original hurricane mitigation inspection application
   93  was denied or withdrawn because the home did not meet the
   94  eligibility criteria for an inspection at the time of the
   95  previous application, and the homeowner reasonably believes the
   96  home now is eligible for an inspection; or
   97         c. The program’s eligibility requirements for an inspection
   98  have changed since the original application date, and the
   99  applicant reasonably believes the home is eligible under the new
  100  requirements.
  101         (c) An applicant meeting the requirements of paragraph (a)
  102  may receive an inspection of a home under the program without
  103  being eligible for a grant under subsection (2) or applying for
  104  such grant.
  105         (d) Licensed inspectors are to provide home inspections of
  106  eligible homes to determine what mitigation measures are needed,
  107  what insurance premium discounts may be available, and what
  108  improvements to existing residential properties are needed to
  109  reduce the property’s vulnerability to hurricane damage. An
  110  inspector may inspect a townhouse as defined in s. 481.203 to
  111  determine if opening protection mitigation as listed in
  112  subparagraph (2)(e)1. would provide improvements to mitigate
  113  hurricane damage.
  114         (e) The department shall contract with wind certification
  115  entities to provide hurricane mitigation inspections. The
  116  inspections provided to homeowners, at a minimum, must include:
  117         1. A home inspection and report that summarizes the results
  118  and identifies recommended improvements a homeowner may take to
  119  mitigate hurricane damage.
  120         2. A range of cost estimates regarding the recommended
  121  mitigation improvements.
  122         3. Information regarding estimated premium discounts,
  123  correlated to the current mitigation features and the
  124  recommended mitigation improvements identified by the
  125  inspection.
  126         (f) To qualify for selection by the department as a wind
  127  certification entity to provide hurricane mitigation
  128  inspections, the entity must, at a minimum, meet the following
  129  requirements:
  130         1. Use hurricane mitigation inspectors who are licensed or
  131  certified as:
  132         a. A building inspector under s. 468.607;
  133         b. A general, building, or residential contractor under s.
  134  489.111;
  135         c. A professional engineer under s. 471.015;
  136         d. A professional architect under s. 481.213; or
  137         e. A home inspector under s. 468.8314 and who have
  138  completed at least 3 hours of hurricane mitigation training
  139  approved by the Construction Industry Licensing Board, which
  140  training must include hurricane mitigation techniques,
  141  compliance with the uniform mitigation verification form, and
  142  completion of a proficiency exam.
  143         2. Use hurricane mitigation inspectors who also have
  144  undergone drug testing and a background screening. The
  145  department may conduct criminal record checks of inspectors used
  146  by wind certification entities. Inspectors must submit a set of
  147  fingerprints to the department for state and national criminal
  148  history checks and must pay the fingerprint processing fee set
  149  forth in s. 624.501. The fingerprints must be sent by the
  150  department to the Department of Law Enforcement and forwarded to
  151  the Federal Bureau of Investigation for processing. The results
  152  must be returned to the department for screening. The
  153  fingerprints must be taken by a law enforcement agency,
  154  designated examination center, or other department-approved
  155  entity.
  156         3. Provide a quality assurance program including a
  157  reinspection component.
  158         (2) HURRICANE MITIGATION GRANTS.—Financial grants shall be
  159  used by homeowners to make improvements recommended by an
  160  inspection which increase resistance to hurricane damage.
  161         (a) A homeowner is eligible for a hurricane mitigation
  162  grant if all of the following criteria are met:
  163         1. The home must be eligible for an inspection under
  164  subsection (1).
  165         2. The home must be a dwelling with an insured value of
  166  $700,000 or less. Homeowners who are low-income persons, as
  167  defined in s. 420.0004(11), are exempt from this requirement.
  168         3. The home must undergo an acceptable hurricane mitigation
  169  inspection as provided in subsection (1).
  170         4. The building permit application for initial construction
  171  of the home must have been made before January 1, 2008.
  172         5. The homeowner must agree to make his or her home
  173  available for inspection once a mitigation project is completed.
  174         6. The homeowner must agree to provide to the department
  175  information received from the homeowner’s insurer identifying
  176  the discounts realized by the homeowner because of the
  177  mitigation improvements funded through the program.
  178         (b)1. An application for a grant must contain a signed or
  179  electronically verified statement made under penalty of perjury
  180  that the applicant has submitted only one grant application or
  181  that the application is allowed under subparagraph 2., and the
  182  application must have documents attached demonstrating that the
  183  applicant meets the requirements of paragraph (a).
  184         2. An applicant may submit a subsequent grant application
  185  if:
  186         a. The original grant application was denied or withdrawn
  187  because the application contained errors or omissions;
  188         b. The original grant application was denied or withdrawn
  189  because the home did not meet the eligibility criteria for a
  190  grant at the time of the previous application, and the homeowner
  191  reasonably believes that the home now is eligible for a grant;
  192  or
  193         c. The program’s eligibility requirements for a grant have
  194  changed since the original application date, and the applicant
  195  reasonably believes that he or she is an eligible homeowner
  196  under the new requirements.
  197         3. A grant application must include a statement from the
  198  homeowner which contains the name and state license number of
  199  the contractor that the homeowner acknowledges as the intended
  200  contractor for the mitigation work. The program must
  201  electronically verify that the contractor’s state license number
  202  is accurate and up to date before grant approval.
  203         (c) All grants must be matched on the basis of $1 provided
  204  by the applicant for $2 provided by the state up to a maximum
  205  state contribution of $10,000 toward the actual cost of the
  206  mitigation project, except as provided in paragraph (h).
  207         (d) All hurricane mitigation performed under the program
  208  must be based upon the securing of all required local permits
  209  and inspections and must be performed by properly licensed
  210  contractors.
  211         (e) When recommended by a hurricane mitigation inspection,
  212  grants for eligible homes may be used for the following
  213  improvements:
  214         1. Opening protection, including exterior doors, garage
  215  doors, windows, and skylights.
  216         2. Reinforcing roof-to-wall connections.
  217         3. Improving the strength of roof-deck attachments.
  218         4. Secondary water resistance for roof.
  219         (f) When recommended by a hurricane mitigation inspection,
  220  grants for townhouses, as defined in s. 481.203, may only be
  221  used for opening protection.
  222         (g) A grant may be awarded only for each mitigation
  223  improvement that, when applied to the home, will result in a
  224  property insurance mitigation credit, discount, or other rate
  225  differential. If necessary for the home to qualify for a
  226  mitigation credit, discount, or other rate differential, the
  227  department must may require that improvements be made to all
  228  openings, including exterior doors, garage doors, windows, and
  229  skylights, as a condition of reimbursing a homeowner approved
  230  for a grant. The department may adopt, by rule, the maximum
  231  grant allowances for any improvement allowable under paragraph
  232  (e) or paragraph (f).
  233         (h) Low-income homeowners, as defined in s. 420.0004(11),
  234  who otherwise meet the applicable requirements of this
  235  subsection are eligible for a grant of up to $10,000 and are not
  236  required to provide a matching amount to receive the grant.
  237         (i)1. The department shall develop a process that ensures
  238  the most efficient means to collect and verify inspection
  239  applications and grant applications to determine eligibility.
  240  The department may direct hurricane mitigation inspectors to
  241  collect and verify grant application information or use the
  242  Internet or other electronic means to collect information and
  243  determine eligibility.
  244         2. The department shall prioritize the review and approval
  245  of such inspection applications and grant applications in the
  246  following order:
  247         a. First, applications from low-income persons, as defined
  248  in s. 420.0004, who are at least 60 years old;
  249         b. Second, applications from all other low-income persons,
  250  as defined in s. 420.0004;
  251         c. Third, applications from moderate-income persons, as
  252  defined in s. 420.0004, who are at least 60 years old;
  253         d. Fourth, applications from all other moderate-income
  254  persons, as defined in s. 420.0004; and
  255         e. Last, all other applications.
  256         3. The department shall start accepting inspection
  257  applications and grant applications no earlier than the
  258  effective date of a legislative appropriation funding
  259  inspections and grants, as follows:
  260         a. Initially, from applicants prioritized under sub
  261  subparagraph 2.a.;
  262         b. From applicants prioritized under sub-subparagraph 2.b.,
  263  beginning 15 days after the program initially starts accepting
  264  applications;
  265         c. From applicants prioritized under sub-subparagraph 2.c.,
  266  beginning 30 days after the program initially starts accepting
  267  applications;
  268         d. From applicants described in sub-subparagraph 2.d.,
  269  beginning 45 days after the program initially starts accepting
  270  applications; and
  271         e. From all other applicants, beginning 60 days after the
  272  program initially starts accepting applications.
  273         4. The program may accept a certification directly from a
  274  low-income homeowner or moderate-income homeowner who meets the
  275  requirements of s. 420.0004(11) or (12), respectively, if the
  276  homeowner provides such certification in a signed or
  277  electronically verified statement made under penalty of perjury.
  278         (j) A homeowner who receives a grant shall finalize
  279  construction and request a final inspection, or request an
  280  extension for an additional 6 months, within 1 year after grant
  281  approval. If a homeowner fails to comply with this paragraph,
  282  his or her application is deemed abandoned and the grant money
  283  reverts to the department.
  284         (3) REQUESTS FOR INFORMATION.—The department may request
  285  that an applicant provide additional information. An application
  286  is deemed withdrawn by the applicant if the department does not
  287  receive a response to its request for additional information
  288  within 60 days after the notification of any apparent error or
  289  omission.
  290         (4) EDUCATION, CONSUMER AWARENESS, AND OUTREACH.—
  291         (a) The department may undertake a statewide multimedia
  292  public outreach and advertising campaign to inform consumers of
  293  the availability and benefits of hurricane inspections and of
  294  the safety and financial benefits of residential hurricane
  295  damage mitigation. The department may seek out and use local,
  296  state, federal, and private funds to support the campaign.
  297         (b) The program may develop brochures for distribution to
  298  Citizens Property Insurance Corporation and other licensed
  299  entities or nonprofits that work with the department to educate
  300  the public on the benefits of the program. Citizens Property
  301  Insurance Corporation must distribute the brochure to
  302  policyholders of the corporation each year the program is
  303  funded. The brochures may be made available electronically.
  304         (5) FUNDING.—The department may seek out and leverage
  305  local, state, federal, or private funds to enhance the financial
  306  resources of the program.
  307         (6) RULES.—The department shall adopt rules pursuant to ss.
  308  120.536(1) and 120.54 to govern the program; implement the
  309  provisions of this section; including rules governing hurricane
  310  mitigation inspections and grants, mitigation contractors, and
  311  training of inspectors and contractors; and carry out the duties
  312  of the department under this section.
  313         (7) HURRICANE MITIGATION INSPECTOR LIST.—The department
  314  shall develop and maintain as a public record a current list of
  315  hurricane mitigation inspectors authorized to conduct hurricane
  316  mitigation inspections pursuant to this section.
  317         (8) CONTRACT MANAGEMENT.—
  318         (a) The department may contract with third parties for
  319  grants management, inspection services, contractor services for
  320  low-income homeowners, information technology, educational
  321  outreach, and auditing services. Such contracts are considered
  322  direct costs of the program and are not subject to
  323  administrative cost limits. The department shall contract with
  324  providers that have a demonstrated record of successful business
  325  operations in areas directly related to the services to be
  326  provided and shall ensure the highest accountability for use of
  327  state funds, consistent with this section.
  328         (b) The department shall implement a quality assurance and
  329  reinspection program that determines whether initial inspections
  330  and home improvements are completed in a manner consistent with
  331  the intent of the program. The department may use valid random
  332  sampling in order to perform the quality assurance portion of
  333  the program.
  334         (9) INTENT.—It is the intent of the Legislature that grants
  335  made to residential property owners under this section shall be
  336  considered disaster-relief assistance within the meaning of s.
  337  139 of the Internal Revenue Code of 1986, as amended.
  338         (10) REPORTS.—The department shall make an annual report on
  339  the activities of the program that shall account for the use of
  340  state funds and indicate the number of inspections requested,
  341  the number of inspections performed, the number of grant
  342  applications received, the number and value of grants approved,
  343  and the estimated average annual amount of insurance premium
  344  discounts and total estimated annual amount of insurance premium
  345  discounts homeowners received from insurers as a result of
  346  mitigation funded through the program. The report must be
  347  delivered to the President of the Senate and the Speaker of the
  348  House of Representatives by February 1 of each year.
  349         Section 2. Subsection (1) of section 624.407, Florida
  350  Statutes, is amended to read:
  351         624.407 Surplus required; new insurers.—
  352         (1) To receive authority to transact any one kind or
  353  combinations of kinds of insurance, as defined in part V of this
  354  chapter, an insurer applying for its original certificate of
  355  authority in this state shall possess surplus as to
  356  policyholders at least the greater of:
  357         (a) For a property and casualty insurer, $5 million, or
  358  $2.5 million for any other insurer;
  359         (b) For life insurers, 4 percent of the insurer’s total
  360  liabilities;
  361         (c) For life and health insurers, 4 percent of the
  362  insurer’s total liabilities, plus 6 percent of the insurer’s
  363  liabilities relative to health insurance;
  364         (d) For all insurers other than life insurers and life and
  365  health insurers, 10 percent of the insurer’s total liabilities;
  366         (e) Notwithstanding paragraph (a) or paragraph (d), for a
  367  domestic insurer that transacts residential property insurance
  368  and is:
  369         1. Not a wholly owned subsidiary of an insurer domiciled in
  370  any other state, $35 $15 million.
  371         2. A wholly owned subsidiary of an insurer domiciled in any
  372  other state, $50 million;
  373         (f) Notwithstanding paragraphs (a), (d), and (e), for a
  374  domestic insurer that only transacts limited sinkhole coverage
  375  insurance for personal lines residential property pursuant to s.
  376  627.7151, $10 $7.5 million; or
  377         (g) Notwithstanding paragraphs (a), (d), and (e), for an
  378  insurer that only transacts residential property insurance in
  379  the form of renter’s insurance, tenant’s coverage, cooperative
  380  unit owner insurance, or any combination thereof, $12.5 $10
  381  million.
  382         Section 3. Section 624.4073, Florida Statutes, is amended
  383  to read:
  384         624.4073 Officers and directors or attorneys in fact of
  385  insolvent insurers.—
  386         (1) Any person who was an officer or director of an insurer
  387  doing business in this state and who served in that capacity
  388  within the 2-year period before the date the insurer became
  389  insolvent, for any insolvency that occurs on or after July 1,
  390  2002, but before July 1, 2025, may not thereafter serve as an
  391  officer or director of an insurer authorized in this state or
  392  have direct or indirect control over the selection or
  393  appointment of an officer or director through contract, trust,
  394  or by operation of law.
  395         (2)Any person who was an officer or director of an insurer
  396  doing business in this state, was the attorney in fact of a
  397  reciprocal insurer doing business in this state, or was an
  398  officer or director of an attorney in fact of a reciprocal
  399  insurer doing business in this state and who served in that
  400  capacity within the 5-year period before the date such insurer
  401  or reciprocal insurer became insolvent, for any insolvency that
  402  occurs on or after July 1, 2025, may not thereafter do any of
  403  the following:
  404         (a)Serve as an officer or a director of an insurer
  405  authorized in this state.
  406         (b)Serve as an officer or a director of a managing general
  407  agent of an insurer authorized in this state.
  408         (c)Serve as an attorney in fact or as an officer or a
  409  director of the attorney in fact of a reciprocal insurer
  410  authorized in this state.
  411         (d)Serve as an officer or a director of an affiliate of an
  412  insurer authorized in this state which provides services to such
  413  insurer.
  414         (e)Exercise direct or indirect control through contract,
  415  trust, or by operation of law over the selection or appointment
  416  of any position specified in paragraphs (a)-(d), unless the
  417  officer or director demonstrates that his or her personal
  418  actions or omissions were not a significant contributing cause
  419  to the insolvency.
  420         (3)(a)The prohibitions in subsections (1) and (2) do not
  421  apply if the officer, director, or attorney in fact
  422  demonstrates, and the office determines, that his or her
  423  personal actions or omissions were not a significant
  424  contributing cause to the insolvency.
  425         (b)For any violation of paragraph (2)(b), paragraph
  426  (2)(c), or paragraph (2)(d), the office shall prohibit an
  427  insurer or reciprocal insurer authorized in this state from
  428  paying any compensation to a managing general agent, affiliate,
  429  or attorney in fact that has an officer or director or is an
  430  attorney in fact that engaged in such violation until the office
  431  determines the violation has been remedied.
  432         Section 4. Paragraphs (f) through (i) of subsection (1) of
  433  section 624.408, Florida Statutes, are amended to read:
  434         624.408 Surplus required; current insurers.—
  435         (1) To maintain a certificate of authority to transact any
  436  one kind or combinations of kinds of insurance, as defined in
  437  part V of this chapter, an insurer in this state must at all
  438  times maintain surplus as to policyholders at least the greater
  439  of:
  440         (f) For residential property insurers not holding a
  441  certificate of authority before July 1, 2025 2011, $35 $15
  442  million.
  443         (g) For residential property insurers holding a certificate
  444  of authority before July 1, 2025 2011, and until June 30, 2030
  445  2016, $15 $5 million; on or after July 1, 2030 2016, and until
  446  June 30, 2035 2021, $25 $10 million; on or after July 1, 2035
  447  2021, $35 $15 million.
  448         (h) Notwithstanding paragraphs (e), (f), and (g), for a
  449  domestic insurer that only transacts limited sinkhole coverage
  450  insurance for personal lines residential property pursuant to s.
  451  627.7151:, $7.5 million.
  452         1.For such an insurer that does not hold a certificate of
  453  authority before July 1, 2025, $10 million.
  454         2.For such an insurer holding a certificate of authority
  455  before July 1, 2025, and until June 30, 2030, $7.5 million; on
  456  or after July 1, 2030, and until June 30, 2035, $8.75 million;
  457  on or after July 1, 2035, $10 million.
  458         (i) Notwithstanding paragraphs (a), (d), and (e), for an
  459  insurer that only transacts residential property insurance in
  460  the form of renter’s insurance, tenant’s coverage, cooperative
  461  unit owner insurance, or any combination thereof:, $10 million.
  462         1.For such an insurer that does not hold a certificate of
  463  authority before July 1, 2025, $12.5 million.
  464         2.For such an insurer holding a certificate of authority
  465  before July 1, 2025, and until June 30, 2030, $10 million; on or
  466  after July 1, 2030, and until June 30, 2035, $11.25 million; on
  467  or after July 1, 2035, $12.5 million.
  468  
  469  The office may reduce the surplus requirement in paragraphs (f)
  470  and (g) if the insurer is not writing new business, has premiums
  471  in force of less than $1 million per year in residential
  472  property insurance, or is a mutual insurance company.
  473         Section 5. Paragraph (a) of subsection (2) of section
  474  627.062, Florida Statutes, is amended to read:
  475         627.062 Rate standards.—
  476         (2) As to all such classes of insurance:
  477         (a) Insurers or rating organizations shall establish and
  478  use rates, rating schedules, or rating manuals that allow the
  479  insurer a reasonable rate of return on the classes of insurance
  480  written in this state. A copy of rates, rating schedules, rating
  481  manuals, premium credits or discount schedules, and surcharge
  482  schedules, and changes thereto, must be filed with the office
  483  under one of the following procedures:
  484         1. If the filing is made at least 90 days before the
  485  proposed effective date and is not implemented during the
  486  office’s review of the filing and any proceeding and judicial
  487  review, such filing is considered a “file and use” filing. In
  488  such case, the office shall finalize its review by issuance of a
  489  notice of intent to approve or a notice of intent to disapprove
  490  within 90 days after receipt of the filing. If the 90-day period
  491  ends on a weekend or a holiday under s. 110.117(1)(a)-(i), it
  492  must be extended until the conclusion of the next business day.
  493  The notice of intent to approve and the notice of intent to
  494  disapprove constitute agency action for purposes of the
  495  Administrative Procedure Act. Requests for supporting
  496  information, requests for mathematical or mechanical
  497  corrections, or notifications notification to the insurer by the
  498  office of its preliminary findings do does not toll the 90-day
  499  period during any such proceedings and subsequent judicial
  500  review. The rate is shall be deemed approved if the office does
  501  not issue a notice of intent to approve or a notice of intent to
  502  disapprove within 90 days after receipt of the filing. The
  503  office may not request that an insurer waive such deemed
  504  approval for any residential property insurance rate filing in
  505  which the insurer proposes a rate decrease, provided that the
  506  decrease is not solely due to a reduction in coverage or changes
  507  to policy forms. The office may not issue a notice of intent to
  508  disapprove a residential property insurance rate filing in which
  509  the insurer proposes a rate decrease unless it has completed a
  510  finalized review.
  511         2. If the filing is not made in accordance with
  512  subparagraph 1., such filing must be made as soon as
  513  practicable, but within 30 days after the effective date, and is
  514  considered a “use and file” filing. An insurer making a “use and
  515  file” filing is potentially subject to an order by the office to
  516  return to policyholders those portions of rates found to be
  517  excessive, as provided in paragraph (h).
  518         3. For all property insurance filings made or submitted
  519  after January 25, 2007, but before May 1, 2012, an insurer
  520  seeking a rate that is greater than the rate most recently
  521  approved by the office shall make a “file and use” filing. For
  522  purposes of this subparagraph, motor vehicle collision and
  523  comprehensive coverages are not considered property coverages.
  524  
  525  The provisions of this subsection do not apply to workers’
  526  compensation, employer’s liability insurance, and motor vehicle
  527  insurance.
  528         Section 6. Section 627.4263, Florida Statutes, is created
  529  to read:
  530         627.4263Use of algorithms, artificial intelligence
  531  systems, and machine learning systems in claims handling.
  532         (1)As used in this section:
  533         (a)“Algorithm” means a clearly specified mathematical
  534  process for computation that uses rules designed to give
  535  prescribed results.
  536         (b)“Artificial intelligence system” means a machine-based
  537  system that may have varying levels of autonomy and that can,
  538  for a given set of objectives, generate outputs such as
  539  predictions, recommendations, content, or other outputs
  540  influencing decisions made in real or virtual environments.
  541         (c)“Machine learning system” means an artificial
  542  intelligence system that has the ability to learn from provided
  543  data without being explicitly programmed.
  544         (d)“Qualified human professional” means an individual who,
  545  under the Florida Insurance Code, may have authority to adjust
  546  or deny a claim or a portion of a claim and has such authority
  547  over a particular claim.
  548         (2)An insurer’s decision to deny a claim or any portion of
  549  a claim must be made by a qualified human professional.
  550         (3)A qualified human professional must also:
  551         (a)Analyze the facts of the claim and the terms of the
  552  insurance policy independently of any system or algorithm.
  553         (b)Review the accuracy of any output generated by such a
  554  system or algorithm.
  555         (c)Conduct any review of a claim adjustment or claim
  556  decision that was made by another qualified human professional.
  557         (4)An insurer shall maintain detailed records of the
  558  activities of qualified human professionals that are required
  559  under this section, including:
  560         (a)The name and title of the qualified human professional
  561  who made the decision to deny the claim or a portion of the
  562  claim and of any qualified human professional who reviewed the
  563  claim adjustment or claim decision.
  564         (b)The date and time of the claim decision and of any
  565  review of the claim adjustment.
  566         (c)Documentation of the basis for the denial of the claim
  567  or a portion of the claim, including any information provided by
  568  an algorithm, artificial intelligence system, or machine
  569  learning system.
  570         (5)An artificial intelligence system, a machine learning
  571  system, or an algorithm may not serve as the sole basis for
  572  determining whether to deny a claim.
  573         (6)In all denial communications to a claimant, an insurer
  574  shall:
  575         (a)Clearly identify the qualified human professional who
  576  made the decision to deny the claim or a portion of the claim.
  577         (b)Include a statement affirming that an algorithm, an
  578  artificial intelligence system, or a machine learning system did
  579  not serve as the sole basis for determining whether to deny the
  580  claim.
  581         (7)An insurer that uses an algorithm, an artificial
  582  intelligence system, or a machine learning system as part of its
  583  claims handling process must detail in its claims handling
  584  manual the manner in which such systems are used and the manner
  585  in which the insurer complies with this section.
  586         (8)The office may conduct market conduct examinations and
  587  investigations or use any method it deems necessary to verify
  588  compliance with this section.
  589         Section 7. This act shall take effect July 1, 2025.