December 07, 2019
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       CS for CS for SB 2176                           Second Engrossed
       
       
       
       
       
       
       
       
       20102176e2
       
    1                        A bill to be entitled                      
    2         An act relating to insurance; amending s. 30.2905,
    3         F.S.; providing for interpretation of provisions
    4         relating to workers’ compensation benefits for certain
    5         services performed by off-duty deputy sheriffs;
    6         authorizing sheriffs to include certain proportionate
    7         costs of workers’ compensation premiums for off-duty
    8         deputy sheriffs providing certain services; amending
    9         s. 112.18, F.S.; providing conditions under which a
   10         law enforcement officer, correctional officer, or
   11         correctional probation officer who suffers from a
   12         specified medical condition and has materially
   13         departed from the prescribed treatment for that
   14         condition shall lose a specified presumption for
   15         workers’ compensation claims made on or after a
   16         specified date; defining the term “prescribed course
   17         of treatment”; providing for independent medical
   18         examinations in certain situations; providing that
   19         only claims made before or within a specified period
   20         after leaving employment are eligible for a specified
   21         presumption; creating s. 624.46223, F.S.; prohibiting
   22         an association, fund, or pool created for the purpose
   23         of forming or managing a risk management mechanism or
   24         providing self-insurance for a public entity from
   25         requiring its members to give more than 60 days’
   26         notice of the member’s intention to withdraw from the
   27         association, fund, or pool; amending s. 627.062, F.S.;
   28         exempting certain categories or types of insurance and
   29         types of commercial lines risks from certain rate
   30         requirements; requiring that insurers or rating
   31         organizations establish and use rates, rating
   32         schedules, or rating manuals allowing for a reasonable
   33         rate of return on certain insurance and risks;
   34         requiring that an insurer notify the Office of
   35         Insurance Regulation of any changes to rates for
   36         certain insurance and risks; requiring that such
   37         notice contain certain information; requiring that an
   38         insurer maintain certain information; providing that
   39         such information is subject to examination by the
   40         office; requiring that the office consider certain
   41         rate factors and standards when examining such
   42         information for the purpose of determining whether the
   43         rate is excessive, inadequate, or unfairly
   44         discriminatory; requiring that a rating organization
   45         provide notice to the office of any changes to loss
   46         cost for certain types of insurance within a specified
   47         period after such change; providing requirements for
   48         such notification; requiring that a rating
   49         organization maintain certain information; providing
   50         that such information is subject to examination by the
   51         office; requiring that specified rate factors and
   52         standards be used in such examination; authorizing the
   53         office, when reviewing a rate, to require that an
   54         insurer provide certain information at the insurer’s
   55         expense; amending s. 627.0651, F.S.; exempting
   56         commercial motor vehicle insurance from certain motor
   57         vehicle insurance rate requirements; prohibiting
   58         certain insurance rates from being excessive,
   59         inadequate, or unfairly discriminatory; requiring that
   60         insurers or rating organizations establish and use
   61         rates, rating schedules, or rating manuals allowing
   62         for a reasonable rate of return on certain insurance
   63         and risks; requiring that an insurer notify the office
   64         of any changes to rates for certain insurance and
   65         risks; requiring that such notice contain certain
   66         information; requiring that an insurer maintain
   67         certain information; providing that such information
   68         is subject to examination by the office; requiring
   69         that the office consider certain rate factors and
   70         standards when examining such information for the
   71         purpose of determining whether the rate is excessive,
   72         inadequate, or unfairly discriminatory; requiring that
   73         a rating organization provide notice to the office of
   74         any changes to loss cost for certain types of
   75         insurance within a specified period after such change;
   76         providing requirements for such notification;
   77         requiring that a rating organization maintain certain
   78         information; providing that such information is
   79         subject to examination by the office; requiring that
   80         specified rate factors and standards be used in such
   81         examination; authorizing the office, when reviewing a
   82         rate, to require that an insurer provide certain
   83         information at the insurer’s expense; amending s.
   84         626.9541, F.S.; prohibiting construction to prevent a
   85         Medicare supplement insurer from granting a premium
   86         credit to insureds under certain circumstances;
   87         amending s. 627.6741, F.S.; specifying absence of a
   88         prohibition against certain Medicare supplement policy
   89         insurers from entering into agreements through a
   90         network with certain facilities; specifying absence of
   91         a requirement to file certain contracts with the
   92         Office of Insurance Regulation; amending s. 627.6745,
   93         F.S.; requiring certain insurers to factor certain
   94         deductibles and premium credits into loss-ratio
   95         calculation and policy premiums; amending s. 628.4615,
   96         F.S., relating to specialty insurers; conforming a
   97         cross-reference; amending s. 634.011, F.S.; revising
   98         the definition of the term “motor vehicle service
   99         agreement”; amending s. 634.031, F.S.; providing
  100         penalties for certain licensure violations; amending
  101         s. 634.041, F.S., relating to qualifications for
  102         licensure; conforming cross-references; amending s.
  103         634.095, F.S.; prohibiting service agreement companies
  104         from issuing certain deceptive advertisements,
  105         operating without a subsisting license, or remitting
  106         premiums to a person other than the obligated service
  107         agreement company; amending s. 634.121, F.S.; deleting
  108         a requirement that certain service agreement forms be
  109         approved by the Office of Insurance Regulation of the
  110         Financial Services Commission; requiring the service
  111         agreements to include certain written disclosures;
  112         amending s. 634.1213, F.S.; authorizing the office to
  113         order a service agreement company to stop using forms
  114         that do not comply with specified requirements;
  115         amending s. 634.137, F.S.; deleting a schedule for the
  116         submissions of certain reports; amending s. 634.141,
  117         F.S.; providing guidelines for the office to use in
  118         determining whether to examine a company; amending s.
  119         634.1815, F.S.; requiring certain rebates to be
  120         approved by the company issuing a service agreement;
  121         amending s. 634.282, F.S.; clarifying provisions
  122         relating to the refund of excess premiums or charges;
  123         requiring that a consumer receive a sample copy of the
  124         service agreement prior to the sale of a service
  125         agreement; amending s. 634.301, F.S.; revising certain
  126         definitions relating home warranties; amending s.
  127         634.303, F.S.; providing that it is a first-degree
  128         misdemeanor for a person without a subsisting license
  129         to provide or offer to provide home warranties;
  130         amending s. 634.308, F.S.; providing an exception to
  131         certain grounds for licensure suspension or
  132         revocation; amending s. 634.312, F.S.; deleting a
  133         requirement that certain home warranty agreement forms
  134         be approved by the office; requiring the home warranty
  135         contracts to include certain written disclosures;
  136         amending s. 634.3123, F.S.; authorizing the office to
  137         order a home warranty association to stop using forms
  138         that do not comply with specified requirements;
  139         amending s. 634.314, F.S.; providing guidelines for
  140         the office to use in determining whether to examine an
  141         association; amending s. 634.3205, F.S.; requiring
  142         certain rebates to be approved by the association
  143         issuing a service agreement; amending s. 634.336,
  144         F.S.; requiring that a consumer receive a sample copy
  145         of the service agreement prior to the sale of a
  146         service agreement; amending s. 634.344, F.S.;
  147         prohibiting certain coercive actions relating to the
  148         sale of a home warranty in connection with the lending
  149         of money; amending s. 634.401, F.S.; redefining the
  150         term “indemnify”; amending s. 634.403, F.S.; providing
  151         that it is a first-degree misdemeanor for a person
  152         without a subsisting license to provide or offer to
  153         provide service warranties; amending s. 634.406, F.S.,
  154         relating to financial requirements; conforming a
  155         cross-reference; amending s. 634.414, F.S.; deleting a
  156         requirement that certain service warranty forms be
  157         approved by the office; deleting certain requirements
  158         relating to the display of the issuing association’s
  159         name on literature; requiring the service warranty
  160         contracts to include certain written disclosures;
  161         amending s. 634.4145, F.S.; authorizing the office to
  162         order a service warranty association to stop using
  163         forms that do not comply with specified requirements;
  164         amending s. 634.415, F.S.; deleting a requirement that
  165         associations file certain quarterly statements and
  166         special reports; amending s. 634.416, F.S.; providing
  167         guidelines for the office to use in determining
  168         whether to examine an service warranty association;
  169         amending s. 634.4225, F.S.; requiring certain rebates
  170         to be approved by the association issuing a service
  171         warranty; amending s. 634.436, F.S.; requiring that a
  172         consumer receive a sample copy of the service
  173         agreement prior to the sale of a service agreement;
  174         amending s. 634.136, F.S.; deleting certain provisions
  175         requiring records to be maintained by motor vehicle
  176         service contract companies; amending s. 634.313, F.S.;
  177         deleting certain requirements for reports relating to
  178         taxes on premiums; repealing ss. 634.1216 and
  179         634.3126, F.S., relating to required rate filings;
  180         providing a short title; amending s. 624.310, F.S.;
  181         expanding the definition of “affiliated party” to
  182         include certain third-party marketers; creating s.
  183         624.46223, F.S.; prohibiting a self-insurance
  184         association, fund, or pool from requiring its members
  185         to provide more than a specified maximum period of
  186         notice of any member’s intent to withdraw; amending s.
  187         626.221, F.S.; expanding the list of individuals who
  188         are exempt from the requirement to pass an examination
  189         before being issued a license as an agent, customer
  190         representative, or adjuster; amending s. 626.025,
  191         F.S.; including family members of insurance agents in
  192         a prohibition related to the transaction of life
  193         insurance; amending s. 626.2815, F.S.; providing an
  194         exemption from certain continuing education
  195         requirements to certain agents; authorizing the
  196         department to take certain action in applying such
  197         exemption; amending s. 626.621, F.S.; expanding
  198         grounds for discretionary refusal, suspension, or
  199         revocation of certain licenses; amending s. 626.641,
  200         F.S.; prohibiting the Department of Financial Services
  201         from issuing certain licenses in certain
  202         circumstances; amending s. 626.798, F.S.; prohibiting
  203         a family member of a life insurance agent from being a
  204         beneficiary of certain policies; prohibiting an agent
  205         or a family member of such agent from being designated
  206         as a trustee or guardian or being granted power of
  207         attorney unless he or she is a family member of the
  208         policy owner or insured, or is a bank or trust company
  209         duly authorized to act as a fiduciary; amending s.
  210         626.9521, F.S.; increasing the administrative fine
  211         that may be imposed for each willful violation of the
  212         offenses of twisting and churning; increasing the
  213         administrative fine that may be imposed for each
  214         willful violation of the offense of submitting
  215         fraudulent signatures on an application or policy
  216         related document; requiring that a licensee make a
  217         reasonable effort to ascertain a customer’s age at the
  218         time of completion of an insurance application;
  219         authorizing the use of video depositions in certain
  220         circumstances; amending s. 626.99, F.S.; requiring
  221         that the buyer’s guide for fixed annuities be in the
  222         form provided by the National Association of Insurance
  223         Commissioners Annuity Disclosure Model Regulation;
  224         authorizing the use of a policy summary for variable
  225         annuities until the NAIC or the department develops a
  226         buyer’s guide; extending the unconditional refund
  227         period for fixed annuity contracts and variable or
  228         market value annuity contracts for customers 65 years
  229         of age or older; requiring that the unconditional
  230         refund amount for a variable or market value annuity
  231         contract be equal to the cash surrender value provided
  232         in the contract, plus any fees or charges deducted
  233         from the premiums or imposed under the contract;
  234         providing for applicability of certain provisions;
  235         requiring that an insurer provide a prospective
  236         purchaser of an annuity policy with a buyer’s guide to
  237         annuities; requiring that such buyer’s guide contain
  238         certain information; requiring that an insurer attach
  239         a cover page to an annuity policy informing the
  240         purchaser of the unconditional refund period;
  241         requiring that the cover page provide other specified
  242         information; amending s. 627.4554, F.S.; defining the
  243         term “accredited investor”; authorizing the Department
  244         of Financial Services to order an insurance agent to
  245         pay monetary restitution to a senior consumer under
  246         certain circumstances; limiting the amount of such
  247         restitution; prohibiting an annuity contract issued to
  248         a senior consumer from containing a surrender or
  249         deferred sales charge for withdrawal of funds from an
  250         annuity in excess of a specified maximum amount;
  251         providing for the periodic reduction of such charge;
  252         providing effective dates.
  253  
  254  Be It Enacted by the Legislature of the State of Florida:
  255  
  256         Section 1. Subsection (2) of section 30.2905, Florida
  257  Statutes, is amended to read:
  258         30.2905 Program to contract for employment of off-duty
  259  deputies for security services.—
  260         (2)(a) Any such public or private employer of a deputy
  261  sheriff shall be responsible for the acts or omissions of the
  262  deputy sheriff while performing services for that employer while
  263  off duty, including workers’ compensation benefits.
  264         (b) However, for the workers’ compensation purposes of this
  265  section:,
  266         1. A deputy sheriff so employed who sustains an injury
  267  while enforcing the criminal, traffic, or penal laws of this
  268  state shall be regarded as working on duty.
  269         2. The term “enforcing the criminal, traffic, or penal laws
  270  of this state” shall be interpreted to include, but is not
  271  limited to, providing security, patrol, or traffic direction for
  272  a private or public employer.
  273         3. A sheriff may include the sheriff’s proportionate costs
  274  of workers’ compensation premiums for the off-duty deputy
  275  sheriffs providing such services.
  276         Section 2. Section 112.18, Florida Statutes, is amended to
  277  read:
  278         112.18 Firefighters and law enforcement or correctional
  279  officers; special provisions relative to disability.—
  280         (1)(a) Any condition or impairment of health of any Florida
  281  state, municipal, county, port authority, special tax district,
  282  or fire control district firefighter or any law enforcement
  283  officer, or correctional officer, or correctional probation
  284  officer as defined in s. 943.10(1), (2), or (3) caused by
  285  tuberculosis, heart disease, or hypertension resulting in total
  286  or partial disability or death shall be presumed to have been
  287  accidental and to have been suffered in the line of duty unless
  288  the contrary be shown by competent evidence. However, any such
  289  firefighter or law enforcement officer must shall have
  290  successfully passed a physical examination upon entering into
  291  any such service as a firefighter or law enforcement officer,
  292  which examination failed to reveal any evidence of any such
  293  condition. Such presumption does shall not apply to benefits
  294  payable under or granted in a policy of life insurance or
  295  disability insurance, unless the insurer and insured have
  296  negotiated for such additional benefits to be included in the
  297  policy contract.
  298         (b)1. For any workers’ compensation claim filed under this
  299  section and chapter 440 occurring on or after July 1, 2010, a
  300  law enforcement officer, correctional officer, or correctional
  301  probation officer as defined in s. 943.10(1), (2), or (3)
  302  suffering from tuberculosis, heart disease, or hypertension is
  303  presumed not to have incurred such disease in the line of duty
  304  as provided in this section if the law enforcement officer,
  305  correctional officer, or correctional probation officer:
  306         a. Departed in a material fashion from the prescribed
  307  course of treatment of his or her personal physician and the
  308  departure is demonstrated to have resulted in a significant
  309  aggravation of the tuberculosis, heart disease, or hypertension
  310  resulting in disability or increasing the disability or need for
  311  medical treatment; or
  312         b. Was previously compensated pursuant to this section and
  313  chapter 440 for tuberculosis, heart disease, or hypertension and
  314  thereafter sustains and reports a new compensable workers’
  315  compensation claim under this section and chapter 440, and the
  316  law enforcement officer, correctional officer, or correctional
  317  probation officer has departed in a material fashion from the
  318  prescribed course of treatment of an authorized physician for
  319  the preexisting workers’ compensation claim and the departure is
  320  demonstrated to have resulted in a significant aggravation of
  321  the tuberculosis, heart disease, or hypertension resulting in
  322  disability or increasing the disability or need for medical
  323  treatment.
  324         2. As used in this paragraph, “prescribed course of
  325  treatment” means prescribed medical courses of action and
  326  prescribed medicines for the specific disease or diseases
  327  claimed and as documented in the prescribing physician’s medical
  328  records.
  329         3. If there is a dispute as to the appropriateness of the
  330  course of treatment prescribed by a physician under sub
  331  subparagraph 1.a. or sub-subparagraph 1.b. or whether a
  332  departure in a material fashion from the prescribed course of
  333  treatment is demonstrated to have resulted in a significant
  334  aggravation of the tuberculosis, heart disease, or hypertension
  335  resulting in disability or increasing the disability or need for
  336  medical treatment, the law enforcement officer, correctional
  337  officer, or correctional probation officer is entitled to seek
  338  an independent medical examination pursuant to s. 440.13(5).
  339         4. A law enforcement officer, correctional officer, or
  340  correctional probation officer is not entitled to the
  341  presumption provided in this section unless a claim for benefits
  342  is made prior to or within 180 days after leaving the employment
  343  of the employing agency.
  344         (2) This section authorizes each governmental entity
  345  specified in subsection (1) shall be construed to authorize the
  346  above governmental entities to negotiate policy contracts for
  347  life and disability insurance to include accidental death
  348  benefits or double indemnity coverage which shall include the
  349  presumption that any condition or impairment of health of any
  350  firefighter, law enforcement officer, or correctional officer
  351  caused by tuberculosis, heart disease, or hypertension resulting
  352  in total or partial disability or death was accidental and
  353  suffered in the line of duty, unless the contrary be shown by
  354  competent evidence.
  355         Section 3. Section 624.46223, Florida Statutes, is created
  356  to read:
  357         624.46223Notice of intent to withdraw.—An association,
  358  fund, or pool authorized under Florida law and created for the
  359  purpose of forming or managing a risk management mechanism or
  360  providing self-insurance for a public entity in this state may
  361  not require its members, as a prerequisite for withdrawing from
  362  the association, fund, or pool, to give more than 60 days’
  363  notice of the member’s intention to withdraw from the
  364  association, fund, or pool.
  365         Section 4. Paragraph (d) is added to subsection (3) of
  366  section 627.062, Florida Statutes, to read:
  367         627.062 Rate standards.—
  368         (3)
  369         (d)1. The following categories or kinds of insurance and
  370  types of commercial lines risks are not subject to paragraph
  371  (2)(a) or paragraph (2)(f):
  372         a. Excess or umbrella.
  373         b. Surety and fidelity.
  374         c. Boiler and machinery and leakage and fire extinguishing
  375  equipment.
  376         d. Errors and omissions.
  377         e. Directors and officers, employment practices, and
  378  management liability.
  379         f. Intellectual property and patent infringement liability.
  380         g. Advertising injury and Internet liability insurance.
  381         h. Property risks rated under a highly protected risks
  382  rating plan.
  383         i. Any other commercial lines categories or kinds of
  384  insurance or types of commercial lines risks that the office
  385  determines should not be subject to paragraph (2)(a) or
  386  paragraph (2)(f) because of the existence of a competitive
  387  market for such insurance, similarity of such insurance to other
  388  categories or kinds of insurance not subject to paragraph (2)(a)
  389  or paragraph (2)(f), or to improve the general operational
  390  efficiency of the office.
  391         2. Insurers or rating organizations shall establish and use
  392  rates, rating schedules, or rating manuals to allow the insurer
  393  a reasonable rate of return on insurance and risks described in
  394  subparagraph 1. which are written in this state.
  395         3. An insurer must notify the office of any changes to
  396  rates for insurance and risks described in subparagraph 1. no
  397  later than 30 days after the effective date of the change. The
  398  notice must include the name of the insurer, the type or kind of
  399  insurance subject to rate change, total premium written during
  400  the immediately preceding year by the insurer for the type or
  401  kind of insurance subject to the rate change, and the average
  402  statewide percentage change in rates. Underwriting files,
  403  premiums, losses, and expense statistics with regard to
  404  insurance and risks described in subparagraph 1. written by an
  405  insurer shall be maintained by the insurer and subject to
  406  examination by the office. Upon examination, the office shall,
  407  in accordance with generally accepted and reasonable actuarial
  408  techniques, consider the rate factors in paragraphs (2)(b), (c),
  409  and (d) and the standards in paragraph (2)(e) to determine if
  410  the rate is excessive, inadequate, or unfairly discriminatory.
  411         4. A rating organization must notify the office of any
  412  changes to loss cost for insurance and risks described in
  413  subparagraph 1. no later than 30 days after the effective date
  414  of the change. The notice must include the name of the rating
  415  organization, the type or kind of insurance subject to a loss
  416  cost change, loss costs during the immediately preceding year
  417  for the type or kind of insurance subject to the loss cost
  418  change, and the average statewide percentage change in loss
  419  cost. Loss and exposure statistics with regard to risks
  420  applicable to loss costs for a rating organization not subject
  421  to paragraph (2)(a) or paragraph (2)(f) shall be maintained by
  422  the rating organization and are subject to examination by the
  423  office. Upon examination, the office shall, in accordance with
  424  generally accepted and reasonable actuarial techniques, consider
  425  the rate factors in paragraphs (2)(b)-(d) and the standards in
  426  paragraph (2)(e) to determine if the rate is excessive,
  427  inadequate, or unfairly discriminatory.
  428         5. In reviewing a rate, the office may require the insurer
  429  to provide at the insurer’s expense all information necessary to
  430  evaluate the condition of the company and the reasonableness of
  431  the rate according to the applicable criteria described in this
  432  section.
  433         Section 5. Subsection (14) is added to section 627.0651,
  434  Florida Statutes, to read:
  435         627.0651 Making and use of rates for motor vehicle
  436  insurance.—
  437         (14)(a) Commercial motor vehicle insurance covering a fleet
  438  of 20 or more self-propelled vehicles is not subject to
  439  subsection (1), subsection (2), or subsection (9) or s.
  440  627.0645.
  441         (b) The rates for insurance described in this subsection
  442  may not be excessive, inadequate, or unfairly discriminatory.
  443         (c) Insurers shall establish and use rates, rating
  444  schedules, or rating manuals to allow the insurer a reasonable
  445  rate of return on commercial motor vehicle insurance written in
  446  this state covering a fleet of 20 or more self-propelled
  447  vehicles.
  448         (d) An insurer must notify the office of any changes to
  449  rates for type of insurance described in this subsection no
  450  later than 30 days after the effective date of the change. The
  451  notice shall include the name of the insurer, the type or kind
  452  of insurance subject to rate change, total premium written
  453  during the immediately preceding year by the insurer for the
  454  type or kind of insurance subject to the rate change, and the
  455  average statewide percentage change in rates. Underwriting
  456  files, premiums, losses, and expense statistics for the type of
  457  insurance described in this subsection shall be maintained by
  458  the insurer and subject to examination by the office. Upon
  459  examination, the office shall, in accordance with generally
  460  accepted and reasonable actuarial techniques, consider the
  461  factors in paragraphs (2)(a)–(l) and apply subsections (3)-(8)
  462  to determine if the rate is excessive, inadequate, or unfairly
  463  discriminatory.
  464         (e) A rating organization must notify the office of any
  465  changes to loss cost for the type of insurance described in this
  466  subsection no later than 30 days after the effective date of the
  467  change. The notice shall include the name of the rating
  468  organization, the type or kind of insurance subject to a loss
  469  cost change, loss costs during the immediately preceding year
  470  for the type or kind of insurance subject to the loss cost
  471  change, and the average statewide percentage change in loss
  472  cost. Loss and exposure statistics with regard to risks
  473  applicable to loss costs for a rating organization not subject
  474  to subsection (1), subsection (2), or subsection (9) shall be
  475  maintained by the rating organization and are subject to
  476  examination by the office. Upon examination, the office shall,
  477  in accordance with generally accepted and reasonable actuarial
  478  techniques, consider the rate factors in paragraphs (2)(a)-(l)
  479  and apply subsections (3)-(8) to determine if the rate is
  480  excessive, inadequate, or unfairly discriminatory.
  481         (f) In reviewing the rate, the office may require the
  482  insurer to provide at the insurer’s expense all information
  483  necessary to evaluate the condition of the company and the
  484  reasonableness of the rate according to the applicable criteria
  485  described herein.
  486         Section 6. Subsection (3) is added to section 626.9541,
  487  Florida Statutes, to read:
  488         626.9541 Unfair methods of competition and unfair or
  489  deceptive acts or practices defined.—
  490         (3) INPATIENT FACILITY NETWORK.—This section may not be
  491  construed to prohibit a Medicare supplement insurer from
  492  granting a premium credit to insureds for using an in-network
  493  inpatient facility.
  494         Section 7. Subsection (6) is added to section 627.6741,
  495  Florida Statutes, to read:
  496         627.6741 Issuance, cancellation, nonrenewal, and
  497  replacement.—
  498         (6) An insurer offering a Medicare supplement policy under
  499  this part is not prohibited from entering into an agreement
  500  through a network with inpatient facilities that agree to waive
  501  the Medicare Part A deductible in whole or in part. An insurer
  502  is not required to file a copy of the network agreement with,
  503  and such network agreements are not subject to approval of, the
  504  office.
  505         Section 8. Subsection (8) is added to section 627.6745,
  506  Florida Statutes, to read:
  507         627.6745 Loss ratio standards; public rate hearings.—
  508         (8) For an insurer that enters into a network agreement
  509  pursuant to s. 627.6741(6), the waiver of the Medicare Part A
  510  deductible and premium credit shall be factored into the
  511  insurer’s loss-ratio calculation and policy premium.
  512         Section 9.  Effective upon this act becoming a law,
  513  paragraph (b) of subsection (1) of section 628.4615, Florida
  514  Statutes, is amended to read:
  515         628.4615 Specialty insurers; acquisition of controlling
  516  stock, ownership interest, assets, or control; merger or
  517  consolidation.—
  518         (1) For the purposes of this section, the term “specialty
  519  insurer” means any person holding a license or certificate of
  520  authority as:
  521         (b) A home warranty association authorized to issue “home
  522  warranties” as those terms are defined in s. 634.301(3) and (4);
  523         Section 10. Effective upon this act becoming a law,
  524  subsection (8) of section 634.011, Florida Statutes, is amended
  525  to read:
  526         634.011 Definitions.—As used in this part, the term:
  527         (8) “Motor vehicle service agreement” or “service
  528  agreement” means any contract or agreement indemnifying the
  529  service agreement holder for the motor vehicle listed on the
  530  service agreement and arising out of the ownership, operation,
  531  and use of the motor vehicle against loss caused by failure of
  532  any mechanical or other component part, or any mechanical or
  533  other component part that does not function as it was originally
  534  intended; however, nothing in this part shall prohibit or affect
  535  the giving, free of charge, of the usual performance guarantees
  536  by manufacturers or dealers in connection with the sale of motor
  537  vehicles. Transactions exempt under s. 624.125 are expressly
  538  excluded from this definition and are exempt from the provisions
  539  of this part. Service agreements that are sold to persons other
  540  than consumers and that cover motor vehicles used for commercial
  541  purposes are excluded from this definition and are exempt from
  542  regulation under the Florida Insurance Code. The term “motor
  543  vehicle service agreement” includes any contract or agreement
  544  that provides:
  545         (a) For the coverage or protection defined in this
  546  subsection and which is issued or provided in conjunction with
  547  an additive product applied to the motor vehicle that is the
  548  subject of such contract or agreement;
  549         (b) For payment of vehicle protection expenses.
  550         1.a. “Vehicle protection expenses” means a preestablished
  551  flat amount payable for the loss of or damage to a vehicle or
  552  expenses incurred by the service agreement holder for loss or
  553  damage to a covered vehicle, including, but not limited to,
  554  applicable deductibles under a motor vehicle insurance policy;
  555  temporary vehicle rental expenses; expenses for a replacement
  556  vehicle that is at least the same year, make, and model of the
  557  stolen motor vehicle; sales taxes or registration fees for a
  558  replacement vehicle that is at least the same year, make, and
  559  model of the stolen vehicle; or other incidental expenses
  560  specified in the agreement.
  561         b. “Vehicle protection product” means a product or system
  562  installed or applied to a motor vehicle or designed to prevent
  563  the theft of the motor vehicle or assist in the recovery of the
  564  stolen motor vehicle.
  565         2. Vehicle protection expenses shall be payable in the
  566  event of loss or damage to the vehicle as a result of the
  567  failure of the vehicle protection product to prevent the theft
  568  of the motor vehicle or to assist in the recovery of the stolen
  569  motor vehicle. Vehicle protection expenses covered under the
  570  agreement shall be clearly stated in the service agreement form,
  571  unless the agreement provides for the payment of a
  572  preestablished flat amount, in which case the service agreement
  573  form shall clearly identify such amount.
  574         3. Motor vehicle service agreements providing for the
  575  payment of vehicle protection expenses shall either:
  576         a. Reimburse a service agreement holder for the following
  577  expenses, at a minimum: deductibles applicable to comprehensive
  578  coverage under the service agreement holder’s motor vehicle
  579  insurance policy; temporary vehicle rental expenses; sales taxes
  580  and registration fees on a replacement vehicle that is at least
  581  the same year, make, and model of the stolen motor vehicle; and
  582  the difference between the benefits paid to the service
  583  agreement holder for the stolen vehicle under the service
  584  agreement holder’s comprehensive coverage and the actual cost of
  585  a replacement vehicle that is at least the same year, make, and
  586  model of the stolen motor vehicle; or
  587         b. Pay a preestablished flat amount to the service
  588  agreement holder.
  589  
  590  Payments shall not duplicate any benefits or expenses paid to
  591  the service agreement holder by the insurer providing
  592  comprehensive coverage under a motor vehicle insurance policy
  593  covering the stolen motor vehicle; however, the payment of
  594  vehicle protection expenses at a preestablished flat amount of
  595  $5,000 or less does not duplicate any benefits or expenses
  596  payable under any comprehensive motor vehicle insurance policy;
  597  or
  598         (c)1. For the payment for paintless dent-removal services
  599  provided by a company whose primary business is providing such
  600  services.
  601         2. “Paintless dent-removal” means the process of removing
  602  dents, dings, and creases, including hail damage, from a vehicle
  603  without affecting the existing paint finish, but does not
  604  include services that involve the replacement of vehicle body
  605  panels or sanding, bonding, or painting.
  606         Section 11. Effective upon this act becoming a law,
  607  subsection (7) is added to section 634.031, Florida Statutes, to
  608  read:
  609         634.031 License required.—
  610         (7) Any person who violates this section commits, in
  611  addition to any other violation, a misdemeanor of the first
  612  degree, punishable as provided in s. 775.082 or s. 775.083.
  613         Section 12. Effective upon this act becoming a law,
  614  paragraph (b) of subsection (8) and paragraph (b) of subsection
  615  (11) of section 634.041, Florida Statutes, are amended to read:
  616         634.041 Qualifications for license.—To qualify for and hold
  617  a license to issue service agreements in this state, a service
  618  agreement company must be in compliance with this part, with
  619  applicable rules of the commission, with related sections of the
  620  Florida Insurance Code, and with its charter powers and must
  621  comply with the following:
  622         (8)
  623         (b) A service agreement company does not have to establish
  624  and maintain an unearned premium reserve if it purchases and
  625  maintains contractual liability insurance in accordance with the
  626  following:
  627         1. The insurance covers 100 percent of its claim exposure
  628  and is obtained from an insurer approved by the office which
  629  holds a certificate of authority to do business within this
  630  state.
  631         2. If the service agreement company does not meet its
  632  contractual obligations, the contractual liability insurance
  633  policy binds its issuer to pay or cause to be paid to the
  634  service agreement holder all legitimate claims and cancellation
  635  refunds for all service agreements issued by the service
  636  agreement company while the policy was in effect. This
  637  requirement also applies to those service agreements for which
  638  no premium has been remitted to the insurer.
  639         3. If the issuer of the contractual liability policy is
  640  fulfilling the service agreements covered by the contractual
  641  liability policy and the service agreement holder cancels the
  642  service agreement, the issuer must make a full refund of
  643  unearned premium to the consumer, subject to the cancellation
  644  fee provisions of s. 634.121(3)(5). The sales representative and
  645  agent must refund to the contractual liability policy issuer
  646  their unearned pro rata commission.
  647         4. The policy may not be canceled, terminated, or
  648  nonrenewed by the insurer or the service agreement company
  649  unless a 90-day written notice thereof has been given to the
  650  office by the insurer before the date of the cancellation,
  651  termination, or nonrenewal.
  652         5. The service agreement company must provide the office
  653  with the claims statistics.
  654  
  655  All funds or premiums remitted to an insurer by a motor vehicle
  656  service agreement company under this part shall remain in the
  657  care, custody, and control of the insurer and shall be counted
  658  as an asset of the insurer; provided, however, this requirement
  659  does not apply when the insurer and the motor vehicle service
  660  agreement company are affiliated companies and members of an
  661  insurance holding company system. If the motor vehicle service
  662  agreement company chooses to comply with this paragraph but also
  663  maintains a reserve to pay claims, such reserve shall only be
  664  considered an asset of the covered motor vehicle service
  665  agreement company and may not be simultaneously counted as an
  666  asset of any other entity.
  667         (11)
  668         (b) Notwithstanding any other requirement of this part, a
  669  service agreement company maintaining an unearned premium
  670  reserve on all service agreements in accordance with paragraph
  671  (8)(a) may offer service agreements providing vehicle protection
  672  expenses if it maintains contractual liability insurance only on
  673  all service agreements providing vehicle protection expenses and
  674  continues to maintain the 50-percent reserve for all service
  675  agreements not providing vehicle protection expenses. A service
  676  agreement company maintaining contractual liability insurance
  677  for all service agreements providing vehicle protection expenses
  678  and the 50-percent reserve for all other service agreements
  679  must, in the service agreement register as required under s.
  680  634.136(2)(4), distinguish between insured service agreements
  681  providing vehicle protection expenses and service agreements not
  682  providing vehicle protection expenses.
  683         Section 13. Effective upon this act becoming a law,
  684  paragraph (d) is added to subsection (3) of section 634.095,
  685  Florida Statutes, and subsection (7) is added to that section,
  686  to read:
  687         634.095 Prohibited acts.—Any service agreement company or
  688  salesperson that engages in one or more of the following acts
  689  is, in addition to any applicable denial, suspension,
  690  revocation, or refusal to renew or continue any appointment or
  691  license, guilty of a misdemeanor of the second degree,
  692  punishable as provided in s. 775.082 or s. 775.083:
  693         (3) Issuing or causing to be issued any advertisement
  694  which:
  695         (d) Is false, deceptive, or misleading with respect to:
  696         1. The service agreement company’s affiliation with a motor
  697  vehicle manufacturer;
  698         2. The service agreement company’s possession of
  699  information regarding a motor vehicle owner’s current motor
  700  vehicle manufacturer’s original equipment warranty;
  701         3. The expiration of a motor vehicle owner’s current motor
  702  vehicle manufacturer’s original equipment warranty; or
  703         4. Any requirement that the motor vehicle owner register
  704  for a new motor vehicle service agreement with the company in
  705  order to maintain coverage under the current motor vehicle
  706  service agreement or manufacturer’s original equipment warranty.
  707         (7)Remitting premiums received on motor vehicle service
  708  agreements sold to any person other than the licensed service
  709  agreement company that is obligated to perform under such
  710  agreement, if the agreement between such company and the
  711  salesperson requires that premiums be submitted directly to the
  712  service agreement company.
  713         Section 14. Effective upon this act becoming a law, section
  714  634.121, Florida Statutes, is amended to read:
  715         634.121 Filing of Forms, required procedures, provisions.—
  716         (1) A service agreement form or related form may not be
  717  issued or used in this state unless it has been filed with and
  718  approved by the office. Upon application for a license, the
  719  office shall require the applicant to submit for approval each
  720  brochure, pamphlet, circular, form letter, advertisement, or
  721  other sales literature or advertising communication addressed or
  722  intended for distribution. The office shall disapprove any
  723  document which is untrue, deceptive, or misleading or which
  724  contains misrepresentations or omissions of material facts.
  725         (a) After an application has been approved, a licensee is
  726  not required to submit brochures or advertisement to the office
  727  for approval; however, a licensee may not have published, and a
  728  person may not publish, any brochure or advertisement which is
  729  untrue, deceptive, or misleading or which contains
  730  misrepresentations or omissions of material fact.
  731         (b) For purposes of this section, brochures and advertising
  732  includes, but is not limited to, any report, circular, public
  733  announcement, certificate, or other printed matter or
  734  advertising material which is designed or used to solicit or
  735  induce any persons to enter into any motor vehicle service
  736  agreement.
  737         (c) The office shall disapprove any service agreement form
  738  providing vehicle protection expenses which does not clearly
  739  indicate either the method for calculating the benefit to be
  740  paid or provided to the service agreement holder or the
  741  preestablished flat amount payable pursuant to the terms of the
  742  service agreement. All service agreement forms providing vehicle
  743  protection expenses shall clearly indicate the term of the
  744  service agreement, whether new or used cars are eligible for the
  745  vehicle protection product, and that the service agreement
  746  holder may not make any claim against the Florida Insurance
  747  Guarantee Association for vehicle protection expenses. The
  748  service agreement shall be provided to a service agreement
  749  holder on a form that provides only vehicle protection expenses.
  750  A service agreement form providing vehicle protection expenses
  751  must state that the service agreement holder must have in force
  752  at the time of loss comprehensive motor vehicle insurance
  753  coverage as a condition precedent to requesting payment of
  754  vehicle protection expenses.
  755         (2) Every filing required under this section must be made
  756  not less than 30 days in advance of issuance or use. At the
  757  expiration of 30 days from the date of filing, a form so filed
  758  becomes approved unless prior thereto it has been affirmatively
  759  disapproved by written notice of the office. The office may
  760  extend by not more than an additional 15 days the period within
  761  which it may affirmatively approve or disapprove any form by
  762  giving notice of extension before the expiration of the initial
  763  30-day period. At the expiration of any period as so extended
  764  and in the absence of prior affirmative disapproval, the form
  765  becomes approved.
  766         (1)(3) Before the sale of any service agreement, written
  767  notice must be given to the prospective purchaser by the service
  768  agreement company or its agent or salesperson, on an office
  769  approved form, that purchase of the service agreement is not
  770  required in order to purchase or obtain financing for a motor
  771  vehicle.
  772         (2)(4) All motor vehicle service agreements are assignable
  773  in a consumer transaction and must contain a statement in
  774  conspicuous, boldfaced type, informing the purchaser of the
  775  service agreement of her or his right to assign it to a
  776  subsequent retail purchaser of the motor vehicle covered by the
  777  service agreement and all conditions on such right of transfer.
  778  The assignment must occur within a period of time specified in
  779  the agreement, which period may not expire earlier than 15 days
  780  after the date of the sale or transfer of the motor vehicle. The
  781  service agreement company may charge an assignment fee not to
  782  exceed $40.
  783         (3)(5)(a) Each service agreement must contain a
  784  cancellation provision. Any service agreement is cancelable by
  785  the purchaser within 60 days after purchase. The refund must be
  786  100 percent of the gross premium paid, less any claims paid on
  787  the agreement. A reasonable administrative fee may be charged
  788  not to exceed 5 percent of the gross premium paid by the
  789  agreement holder.
  790         (b) After the service agreement has been in effect for 60
  791  days, it may not be canceled by the insurer or service agreement
  792  company unless:
  793         1. There has been a material misrepresentation or fraud at
  794  the time of sale of the service agreement;
  795         2. The agreement holder has failed to maintain the motor
  796  vehicle as prescribed by the manufacturer;
  797         3. The odometer has been tampered with or disabled and the
  798  agreement holder has failed to repair the odometer; or
  799         4. For nonpayment of premium by the agreement holder, in
  800  which case the service agreement company shall provide the
  801  agreement holder notice of cancellation by certified mail.
  802  
  803  If the service agreement is canceled by the insurer or service
  804  agreement company, the return of premium must not be less than
  805  100 percent of the paid unearned pro rata premium, less any
  806  claims paid on the agreement. If, after 60 days, the service
  807  agreement is canceled by the service agreement holder, the
  808  insurer or service agreement company shall return directly to
  809  the agreement holder not less than 90 percent of the unearned
  810  pro rata premium, less any claims paid on the agreement. The
  811  service agreement company remains responsible for full refunds
  812  to the consumer on canceled service agreements. However, the
  813  salesperson and agent are responsible for the refund of the
  814  unearned pro rata commission. A service agreement company may
  815  effectuate refunds through the issuing salesperson or agent.
  816         (4)(6) If the service agreement is canceled, pursuant to an
  817  order of liquidation, the salesperson or agent is responsible
  818  for refunding, and must refund, to the receiver the unearned pro
  819  rata commission.
  820         (5)(7) If a service agreement company violates any lawful
  821  order of the office or fails to meet its contractual obligations
  822  under this part, upon notice from the office, the sales
  823  representative or agent must refund to the service agreement
  824  holder the unearned pro rata commission, unless the sales
  825  representative or agent has made other arrangements,
  826  satisfactory to the office, with the service agreement holder.
  827         (6)(8) Each service agreement, which includes a copy of the
  828  application form, must be mailed or delivered to the agreement
  829  holder within 45 days after the date of purchase.
  830         (7)(9) Each service agreement form must contain in
  831  conspicuous, boldfaced type any statement or clause that places
  832  restrictions or limitations on the benefits offered or disclose
  833  such restrictions or limitations in regular type in a section of
  834  the service agreement containing a conspicuous, boldfaced type
  835  heading.
  836         (8)(10) If an insurer or service agreement company intends
  837  to use or require the use of remanufactured or used replacement
  838  parts, each service agreement form as well as all service
  839  agreement brochures must contain in conspicuous, boldfaced type
  840  a statement to that effect.
  841         (9)(11) Each service agreement form as well as all service
  842  agreement company sales brochures must clearly identify the
  843  name, address, and Florida license number of the licensed
  844  insurer or service agreement company.
  845         (10)(12) If a service agreement contains a rental car
  846  provision, it must disclose the terms and conditions of this
  847  benefit in conspicuous, boldfaced type or disclose such
  848  restrictions or limitations in regular type in a section of the
  849  service agreement containing a conspicuous, boldfaced type
  850  heading.
  851         (11) By July 1, 2011, each service agreement sold in this
  852  state must be accompanied by a written disclosure to the
  853  consumer that the rate charged for the service agreement is not
  854  subject to regulation by the office. A service agreement company
  855  may comply with this requirement by including such disclosure in
  856  its service agreement form or in a separate written notice
  857  provided to the consumer at the time of sale.
  858         Section 15. Effective upon this act becoming a law, section
  859  634.1213, Florida Statutes, is amended to read:
  860         634.1213 Noncompliant forms Grounds for disapproval.—The
  861  office may order a service agreement company to stop using
  862  disapprove any service agreement form that or service agreement
  863  company sales brochures filed under s. 634.121, or withdraw any
  864  previous approval thereof, if the form or brochure:
  865         (1) Is in any respect in violation of or does not comply
  866  with this part, any applicable provision of the Florida
  867  Insurance Code, or any applicable rule of the office commission.
  868         (2) Contains or incorporates by reference when such
  869  incorporation is otherwise permissible, any inconsistent,
  870  ambiguous, or misleading clauses, or exceptions and conditions
  871  which deceptively affect the risk purported to be assumed in the
  872  general coverage of the service agreement.
  873         (3) Has any title, heading, or other indication of its
  874  provisions which is misleading.
  875         (4) Is printed or otherwise reproduced in such manner as to
  876  render any material provision of the form substantially
  877  illegible.
  878         (5) Contains any provision which is unfair or inequitable
  879  or which encourages misrepresentation.
  880         (6) Contains any provision which makes it difficult to
  881  determine the actual insurer or service agreement company
  882  issuing the form.
  883         (7) Contains any provision for reducing claim payments due
  884  to depreciation of parts, except for marine engines.
  885         Section 16. Effective upon this act becoming a law,
  886  subsection (1) of section 634.137, Florida Statutes, is amended
  887  to read:
  888         634.137 Financial and statistical reporting requirements.—
  889         (1) By March 1 of each year, each service agreement company
  890  shall submit to the office annual financial reports on forms
  891  prescribed by the commission and furnished by the office as
  892  follows:
  893         (a) Reports for a period ending December 31 are due by
  894  March 1.
  895         (b) Reports for a period ending March 31 are due by May 15.
  896         (c) Reports for a period ending June 30 are due by August
  897  15.
  898         (d) Reports for a period ending September 30 are due by
  899  November 15.
  900         Section 17. Effective upon this act becoming a law, section
  901  634.141, Florida Statutes, is amended to read:
  902         634.141 Examination of companies.—
  903         (1) Motor vehicle service agreement companies licensed
  904  under this part may shall be subject to periodic examination by
  905  the office in the same manner and subject to the same terms and
  906  conditions as applies to insurers under part II of chapter 624.
  907  The commission may by rule establish provisions whereby a
  908  company may be exempted from examination.
  909         (2) The office shall determine whether to conduct an
  910  examination of a company by considering:
  911         (a) The amount of time that the company has been
  912  continuously licensed and operating under the same management
  913  and control.
  914         (b) The company’s history of compliance with applicable
  915  law.
  916         (c) The number of consumer complaints against the company.
  917         (d) The financial condition of the company, demonstrated by
  918  the financial reports submitted pursuant to s. 634.137.
  919         Section 18. Effective upon this act becoming a law,
  920  paragraph (b) of subsection (1) of section 634.1815, Florida
  921  Statutes, is amended to read:
  922         634.1815 Rebating; when allowed.—
  923         (1) No salesperson shall rebate any portion of his or her
  924  commission except as follows:
  925         (b) The rebate shall be in accordance with a rebating
  926  schedule filed with and approved by the salesperson with the
  927  service agreement company issuing the service agreement to which
  928  the rebate applies. The service agreement company shall maintain
  929  a copy of all rebating schedules for a period of 3 years.
  930         Section 19. Effective upon this act becoming a law,
  931  subsection (13) of section 634.282, Florida Statutes, is
  932  amended, and subsection (17) is added to that section, to read:
  933         634.282 Unfair methods of competition and unfair or
  934  deceptive acts or practices defined.—The following methods,
  935  acts, or practices are defined as unfair methods of competition
  936  and unfair or deceptive acts or practices:
  937         (13) ILLEGAL DEALINGS IN PREMIUMS; EXCESS OR REDUCED
  938  CHARGES FOR MOTOR VEHICLE SERVICE AGREEMENTS.—
  939         (a) Knowingly collecting any sum as a premium or charge for
  940  a motor vehicle service agreement, which is not then provided,
  941  or is not in due course to be provided, subject to acceptance of
  942  the risk by a service agreement company or an insurer, by a
  943  motor vehicle service agreement issued by a service agreement
  944  company or an insurer as permitted by this part.
  945         (b) Knowingly collecting as a premium or charge for a motor
  946  vehicle service agreement any sum in excess of or less than the
  947  premium or charge applicable to such motor vehicle service
  948  agreement, in accordance with the applicable classifications and
  949  rates as filed with the office, and as specified in the motor
  950  vehicle service agreement. However, there is no violation of
  951  this subsection if excess premiums or charges are refunded to
  952  the service agreement holder within 45 days after receipt of the
  953  agreement by the service agreement company or if the licensed
  954  sales representative’s commission is reduced by the amount of
  955  any premium undercharge.
  956         (17) FAILURE TO PROVIDE TERMS AND CONDITIONS PRIOR TO
  957  SALE.—Failing to provide a consumer with a complete sample copy
  958  of the terms and conditions of the service agreement prior to
  959  the time of sale upon a request for the same by the consumer. A
  960  service agreement company may comply with this subsection by
  961  providing the consumer with a sample copy of the terms and
  962  conditions of the service agreement or by directing the consumer
  963  to a website that displays a complete sample of the terms and
  964  conditions of the service agreement.
  965  
  966  No provision of this section shall be deemed to prohibit a
  967  service agreement company or a licensed insurer from giving to
  968  service agreement holders, prospective service agreement
  969  holders, and others for the purpose of advertising, any article
  970  of merchandise having a value of not more than $25.
  971         Section 20. Effective upon this act becoming a law, section
  972  634.301, Florida Statutes, as amended by section 1 of chapter
  973  2007-235, Laws of Florida, is amended to read:
  974         634.301 Definitions.—As used in this part, the term:
  975         (1) “Gross written premiums” means the total amount of
  976  premiums, paid for the entire period of the home warranty,
  977  inclusive of commissions, for which the association is obligated
  978  under home warranties issued.
  979         (2) “Home improvement” means major remodeling, enclosure of
  980  a garage, addition of a room, addition of a pool, and other like
  981  items that add value to the residential property. The term does
  982  not include normal maintenance for items such as painting,
  983  reroofing, and other like items subject to normal wear and tear.
  984         (2)(3) “Home warranty” or “warranty” means any contract or
  985  agreement:
  986         (a) Offered in connection with the sale of residential
  987  property;
  988         (b) Offered in connection with a loan of $5,000 or more
  989  which is secured by residential property that is the subject of
  990  the warranty, but not in connection with the sale of such
  991  property;
  992         (c) Offered in connection with a home improvement of $7,500
  993  or more for residential property that is the subject of the
  994  warranty, but not in connection with the sale of such property;
  995  or
  996         (d) Offered in connection with a home inspection service as
  997  defined under s. 468.8311(4) or a mold assessment as defined
  998  under s. 468.8411(3);
  999  
 1000  whereby a person undertakes to indemnify the warranty holder
 1001  against the cost of repair or replacement, or actually furnishes
 1002  repair or replacement, of any structural component or appliance
 1003  of a home, necessitated by wear and tear or an inherent defect
 1004  of any such structural component or appliance or necessitated by
 1005  the failure of an inspection to detect the likelihood of any
 1006  such loss. However, this part does not prohibit the giving of
 1007  usual performance guarantees by either the builder of a home or
 1008  the manufacturer or seller of an appliance, as long as no
 1009  identifiable charge is made for such guarantee. This part does
 1010  not permit the provision of indemnification against
 1011  consequential damages arising from the failure of any structural
 1012  component or appliance of a home, which practice constitutes the
 1013  transaction of insurance subject to all requirements of the
 1014  insurance code. This part does not apply to service contracts
 1015  entered into between consumers and nonprofit organizations or
 1016  cooperatives the members of which consist of condominium
 1017  associations and condominium owners and which perform repairs
 1018  and maintenance for appliances or maintenance of the residential
 1019  property. This part does not apply to a contract or agreement
 1020  offered in connection with a sale of residential property by a
 1021  warranty association in compliance with part III, provided such
 1022  contract or agreement only relates to the systems and appliances
 1023  of the covered residential property and does not cover any
 1024  structural component of the residential property.
 1025         (3)(4) “Home warranty association” means any corporation or
 1026  any other organization, other than an authorized insurer,
 1027  issuing home warranties.
 1028         (4)(5) “Impaired” means having liabilities in excess of
 1029  assets.
 1030         (5)(6) “Insolvent” means the inability of a corporation to
 1031  pay its debts as they become due in the usual course of its
 1032  business.
 1033         (6)(7) “Insurance code” means the Florida Insurance Code.
 1034         (7)(8) “Insurer” means any property or casualty insurer
 1035  duly authorized to transact such business in this state.
 1036         (8)(9) “Listing period” means the period of time
 1037  residential property is listed for sale with a licensed real
 1038  estate broker, beginning on the date the residence is first
 1039  listed for sale and ending on either the date the sale of the
 1040  residence is closed, the date the residence is taken off the
 1041  market, or the date the listing contract with the real estate
 1042  broker expires.
 1043         (9)(10) “Net assets” means the amount by which the total
 1044  statutory assets of an association exceed the total liabilities
 1045  of the association.
 1046         (10)(11) “Person” includes an individual, company,
 1047  corporation, association, insurer, agent, and every other legal
 1048  entity.
 1049         (11)(12) “Premium” means the total consideration received,
 1050  or to be received, by an insurer or home warranty association
 1051  for or related to the issuance and delivery of any binder or
 1052  warranty, including any charges designated as assessments or
 1053  fees for policies, surveys, inspections, or service or any other
 1054  charges.
 1055         (12)(13) “Sales representative” means any person with whom
 1056  an insurer or home inspection or warranty association has a
 1057  contract and who is utilized by such insurer or association for
 1058  the purpose of selling or issuing home warranties. The term
 1059  includes all employees of an insurer or association engaged
 1060  directly in the sale or issuance of home warranties.
 1061         (13)(14) “Structural component” means the roof, plumbing
 1062  system, electrical system, foundation, basement, walls,
 1063  ceilings, or floors of a home.
 1064         Section 21. Effective upon this act becoming a law,
 1065  subsection (4) is added to section 634.303, Florida Statutes, to
 1066  read:
 1067         634.303 License required.—
 1068         (4) Any person who provides, offers to provide, or holds
 1069  oneself out as providing or offering to provide home warranties
 1070  in this state or from this state without holding a subsisting
 1071  license commits, in addition to any other violation, a
 1072  misdemeanor of the first degree, punishable as provided in s.
 1073  775.082 or s. 775.083.
 1074         Section 22. Effective upon this act becoming a law,
 1075  paragraph (f) of subsection (2) of section 634.308, Florida
 1076  Statutes, is amended to read:
 1077         634.308 Grounds for suspension or revocation of license.—
 1078         (2) The license of any home warranty association shall be
 1079  suspended, revoked, or not renewed if it is determined that such
 1080  association:
 1081         (f) Has issued warranty contracts which renewal contracts
 1082  provide that the cost of renewal exceeds the then-current cost
 1083  for new warranty contracts, unless the increase is supported by
 1084  the claims history or claims cost data, or impose a fee for
 1085  inspection of the premises.
 1086         Section 23. Effective upon this act becoming a law, section
 1087  634.312, Florida Statutes, is amended to read:
 1088         634.312 Forms; required provisions and procedures Filing;
 1089  approval of forms.—
 1090         (1) No warranty form or related form shall be issued or
 1091  used in this state unless it has been filed with and approved by
 1092  the office. Also upon application for a license, the office
 1093  shall require the applicant to submit for approval each
 1094  brochure, pamphlet, circular, form letter, advertisement, or
 1095  other sales literature or advertising communication addressed or
 1096  intended for distribution. Approval of the application
 1097  constitutes approval of such documents, unless the applicant has
 1098  consented otherwise in writing. The office shall disapprove any
 1099  document which is untrue, deceptive, or misleading or which
 1100  contains misrepresentations or omissions of material facts.
 1101         (a) After an application has been approved, a licensee is
 1102  not required to submit brochures or advertisement to the office
 1103  for approval; however, a licensee may not have published, and a
 1104  person may not publish, any brochure or advertisement which is
 1105  untrue, deceptive, or misleading or which contains
 1106  misrepresentations or omissions of material fact.
 1107         (b) For purposes of this section, brochures and advertising
 1108  includes, but is not limited to, any report, circular, public
 1109  announcement, certificate, or other printed matter or
 1110  advertising material which is designed or used to solicit or
 1111  induce any persons to enter into any home warranty agreement.
 1112         (2) Every such filing shall be made not less than 30 days
 1113  in advance of issuance or use. At the expiration of 30 days from
 1114  date of filing, a form so filed shall be deemed approved unless
 1115  prior thereto it has been affirmatively approved or disapproved
 1116  by written order of the office.
 1117         (3) The office shall not approve any such form that imposes
 1118  a fee for inspection of the premises.
 1119         (1)(4) All home warranty contracts are assignable in a
 1120  consumer transaction and must contain a statement informing the
 1121  purchaser of the home warranty of her or his right to assign it,
 1122  at least within 15 days from the date the home is sold or
 1123  transferred, to a subsequent retail purchaser of the home
 1124  covered by the home warranty and all conditions on such right of
 1125  transfer. The home warranty company may charge an assignment fee
 1126  not to exceed $40. Home warranty assignments include, but are
 1127  not limited to, the assignment from a home builder who purchased
 1128  the home warranty to a subsequent home purchaser.
 1129         (2)(5) Subject to the insurer’s or home warranty
 1130  association’s requirement as to payment of premium, every home
 1131  warranty shall be mailed or delivered to the warranty holder not
 1132  later than 45 days after the effectuation of coverage, and the
 1133  application is part of the warranty contract document.
 1134         (3)(6) All home warranty contracts must state in
 1135  conspicuous, boldfaced type that the home warranty may not
 1136  provide listing period coverage free of charge.
 1137         (4)(7) All home warranty contracts must disclose any
 1138  exclusions, restrictions, or limitations on the benefits offered
 1139  or the coverage provided by the home warranty contract in
 1140  boldfaced type, and must contain, in boldfaced type, a statement
 1141  on the front page of the contract substantially similar to the
 1142  following: “Certain items and events are not covered by this
 1143  contract. Please refer to the exclusions listed on page .... of
 1144  this document.”
 1145         (5)(8) Each home warranty contract shall contain a
 1146  cancellation provision. Any home warranty agreement may be
 1147  canceled by the purchaser within 10 days after purchase. The
 1148  refund must be 100 percent of the gross premium paid, less any
 1149  claims paid on the agreement. A reasonable administrative fee
 1150  may be charged, not to exceed 5 percent of the gross premium
 1151  paid by the warranty agreement holder. After the home warranty
 1152  agreement has been in effect for 10 days, if the contract is
 1153  canceled by the warranty holder, a return of premium shall be
 1154  based upon 90 percent of unearned pro rata premium less any
 1155  claims that have been paid. If the contract is canceled by the
 1156  association for any reason other than for fraud or
 1157  misrepresentation, a return of premium shall be based upon 100
 1158  percent of unearned pro rata premium, less any claims paid on
 1159  the agreement.
 1160         (6) By July 1, 2011, each home warranty contract sold in
 1161  this state must be accompanied by a written disclosure to the
 1162  consumer that the rate charged for the contract is not subject
 1163  to regulation by the office. A home warranty association may
 1164  comply with this requirement by including such disclosure in its
 1165  home warranty contract form or in a separate written notice
 1166  provided to the consumer at the time of sale.
 1167         Section 24. Effective upon this act becoming a law, section
 1168  634.3123, Florida Statutes, is amended to read:
 1169         634.3123 Noncompliant Grounds for disapproval of forms.—The
 1170  office may order a home warranty association to stop using any
 1171  contract shall disapprove any form that filed under s. 634.312
 1172  or withdraw any previous approval if the form:
 1173         (1) Is in violation of or does not comply with this part.
 1174         (2) Contains or incorporates by reference, when such
 1175  incorporation is otherwise permissible, any inconsistent,
 1176  ambiguous, or misleading clauses or exceptions or conditions
 1177  which deceptively affect the risk purported to be assumed in the
 1178  general coverage of the contract.
 1179         (3) Has any title, heading, or other indication of its
 1180  provisions which is misleading.
 1181         (4) Is printed or otherwise reproduced in such a manner as
 1182  to render any material provision of the form illegible.
 1183         (5) Provides that the cost of renewal exceeds the then
 1184  current cost for new warranty contracts, unless the increase is
 1185  supported by the claims history or claims cost data, or impose a
 1186  fee for inspection of the premises.
 1187         Section 25. Effective upon this act becoming a law, section
 1188  634.314, Florida Statutes, is amended to read:
 1189         634.314 Examination of associations.—
 1190         (1) Home warranty associations licensed under this part may
 1191  shall be subject to periodic examinations by the office, in the
 1192  same manner and subject to the same terms and conditions as
 1193  apply to insurers under part II of chapter 624 of the insurance
 1194  code.
 1195         (2) The office shall determine whether to conduct an
 1196  examination of a home warranty association by considering:
 1197         (a) The amount of time that the association has been
 1198  continuously licensed and operating under the same management
 1199  and control.
 1200         (b) The association’s history of compliance with applicable
 1201  law.
 1202         (c) The number of consumer complaints against the
 1203  association.
 1204         (d) The financial condition of the association,
 1205  demonstrated by the financial reports submitted pursuant to s.
 1206  634.313.
 1207         Section 26. Effective upon this act becoming a law,
 1208  paragraph (b) of subsection (1) of section 634.3205, Florida
 1209  Statutes, is amended to read:
 1210         634.3205 Rebating; when allowed.—
 1211         (1) No sales representative shall rebate any portion of his
 1212  or her commission except as follows:
 1213         (b) The rebate shall be in accordance with a rebating
 1214  schedule filed with and approved by the sales representative
 1215  with the home warranty association issuing the home warranty to
 1216  which the rebate applies. The home warranty association shall
 1217  maintain a copy of all rebating schedules for a period of 3
 1218  years.
 1219         Section 27. Effective upon this act becoming a law,
 1220  subsection (8) of section 634.336, Florida Statutes, is amended,
 1221  and subsection (9) is added to that section, to read:
 1222         634.336 Unfair methods of competition and unfair or
 1223  deceptive acts or practices defined.—The following methods,
 1224  acts, or practices are defined as unfair methods of competition
 1225  and unfair or deceptive acts or practices:
 1226         (8) COERCION OF DEBTORS.—When a home warranty is sold as
 1227  authorized by s. 634.301(3)(b):
 1228         (a) Requiring, as a condition precedent or condition
 1229  subsequent to the lending of the money or the extension of the
 1230  credit or any renewal thereof, that the person to whom such
 1231  credit is extended purchase a home warranty; or
 1232         (b) Failing to provide the advice required by s. 634.344.
 1233         (9) FAILURE TO PROVIDE TERMS AND CONDITIONS PRIOR TO SALE.
 1234  Failing to provide a consumer with a complete sample copy of the
 1235  terms and conditions of the home warranty contract prior to the
 1236  time of sale upon a request for the same by the consumer. A home
 1237  warranty association may comply with this subsection by
 1238  providing the consumer with a sample copy of the terms and
 1239  conditions of the home warranty contract or by directing the
 1240  consumer to a website that displays a complete sample of the
 1241  terms and conditions of the contract.
 1242         Section 28. Effective upon this act becoming a law, section
 1243  634.344, Florida Statutes, is amended to read:
 1244         634.344 Coercion of debtor prohibited.—
 1245         (1) When a home warranty is sold in connection with the
 1246  lending of money as authorized by s. 634.301(3)(b), a no person
 1247  may not require, as a condition precedent or condition
 1248  subsequent to the lending of the money or the extension of the
 1249  credit or any renewal thereof, that the person to whom such
 1250  money or credit is extended purchase a home warranty.
 1251         (2) When a home warranty is purchased in connection with
 1252  the lending of money as authorized by s. 634.301(3)(b), the
 1253  insurer or home warranty association or the sales representative
 1254  of the insurer or home warranty association shall advise the
 1255  borrower or purchaser in writing that Florida law prohibits the
 1256  lender from requiring the purchase of a home warranty as a
 1257  condition precedent or condition subsequent to the making of the
 1258  loan.
 1259         Section 29. Effective upon this act becoming a law,
 1260  subsection (5) of section 634.401, Florida Statutes, is amended
 1261  to read:
 1262         634.401 Definitions.—As used in this part, the term:
 1263         (5) “Indemnify” means to undertake repair or replacement of
 1264  a consumer product, or pay compensation for such repair or
 1265  replacement by cash, check, store credit, gift card, or other
 1266  similar means, in return for the payment of a segregated
 1267  premium, when such consumer product suffers operational failure.
 1268         Section 30. Effective upon this act becoming a law,
 1269  subsection (5) is added to section 634.403, Florida Statutes, to
 1270  read:
 1271         634.403 License required.—
 1272         (5) Any person who provides, offers to provide, or holds
 1273  oneself out as providing or offering to provide a service
 1274  warranty in this state or from this state without holding a
 1275  subsisting license commits, in addition to any other violation,
 1276  a misdemeanor of the first degree, punishable as provided in s.
 1277  775.082 or s. 775.083.
 1278         Section 31. Effective upon this act becoming a law,
 1279  paragraph (e) of subsection (3) of section 634.406, Florida
 1280  Statutes, is amended to read:
 1281         634.406 Financial requirements.—
 1282         (3) An association will not be required to establish an
 1283  unearned premium reserve if it has purchased contractual
 1284  liability insurance which demonstrates to the satisfaction of
 1285  the office that 100 percent of its claim exposure is covered by
 1286  such policy. The contractual liability insurance shall be
 1287  obtained from an insurer that holds a certificate of authority
 1288  to do business within the state. For the purposes of this
 1289  subsection, the contractual liability policy shall contain the
 1290  following provisions:
 1291         (e) In the event the issuer of the contractual liability
 1292  policy is fulfilling the service warranty covered by policy and
 1293  in the event the service warranty holder cancels the service
 1294  warranty, it is the responsibility of the contractual liability
 1295  policy issuer to effectuate a full refund of unearned premium to
 1296  the consumer. This refund shall be subject to the cancellation
 1297  fee provisions of s. 634.414(3). The salesperson or agent shall
 1298  refund to the contractual liability policy issuer the unearned
 1299  pro rata commission.
 1300         Section 32. Effective upon this act becoming a law, section
 1301  634.414, Florida Statutes, is amended to read:
 1302         634.414 Forms; required provisions Filing; approval of
 1303  forms.—
 1304         (1) No service warranty form or related form shall be
 1305  issued or used in this state unless it has been filed with and
 1306  approved by the office. Upon application for a license, the
 1307  office shall require the applicant to submit for approval each
 1308  brochure, pamphlet, circular, form letter, advertisement, or
 1309  other sales literature or advertising communication addressed or
 1310  intended for distribution. The office shall disapprove any
 1311  document which is untrue, deceptive, or misleading or which
 1312  contains misrepresentations or omissions of material facts.
 1313         (a) After an application has been approved, a licensee is
 1314  not required to submit brochures or advertisement to the office
 1315  for approval; however, a licensee may not have published, and a
 1316  person may not publish, any brochure or advertisement which is
 1317  untrue, deceptive, or misleading or which contains
 1318  misrepresentations or omissions of material fact.
 1319         (b) For purposes of this section, brochures and advertising
 1320  includes, but is not limited to, any report, circular, public
 1321  announcement, certificate, or other printed matter or
 1322  advertising material which is designed or used to solicit or
 1323  induce any persons to enter into any service warranty agreement.
 1324         (2) Each filing shall be made not less than 30 days in
 1325  advance of its issuance or use. At the expiration of 30 days
 1326  from date of filing, a form so filed shall be deemed approved
 1327  unless prior thereto it has been affirmatively disapproved by
 1328  written order of the office.
 1329         (1)(3) Each service warranty contract shall contain a
 1330  cancellation provision. If In the event the contract is canceled
 1331  by the warranty holder, return of premium shall be based upon no
 1332  less than 90 percent of unearned pro rata premium less any
 1333  claims that have been paid or less the cost of repairs made on
 1334  behalf of the warranty holder. If In the event the contract is
 1335  canceled by the association, return of premium shall be based
 1336  upon 100 percent of unearned pro rata premium, less any claims
 1337  paid or the cost of repairs made on behalf of the warranty
 1338  holder.
 1339         (2) By July 1, 2011, each service warranty contract sold in
 1340  this state must be accompanied by a written disclosure to the
 1341  consumer that the rate charged for the contract is not subject
 1342  to regulation by the office. A service warranty association may
 1343  comply with this requirement by including such disclosure in its
 1344  service warranty contract form or in a separate written notice
 1345  provided to the consumer at the time of sale.
 1346         (4) The name of the service warranty association issuing
 1347  the contract must be more prominent than any other company name
 1348  or program name on the service warranty form or sales brochure.
 1349         Section 33. Effective upon this act becoming a law, section
 1350  634.4145, Florida Statutes, is amended to read:
 1351         634.4145 Noncompliant Grounds for disapproval of forms.—The
 1352  office may order a service warranty association to stop using
 1353  any contract shall disapprove any form that filed under s.
 1354  634.414 if the form:
 1355         (1) Violates this part;
 1356         (2) Is misleading in any respect;
 1357         (3) Is reproduced so that any material provision is
 1358  substantially illegible; or
 1359         (4) Contains provisions which are unfair or inequitable or
 1360  which encourage misrepresentation.
 1361         Section 34. Effective upon this act becoming a law, section
 1362  634.415, Florida Statutes, is amended to read:
 1363         634.415 Tax on premiums; annual statement; reports;
 1364  quarterly statements.—
 1365         (1) In addition to the license fees provided in this part
 1366  for service warranty associations and license taxes as provided
 1367  in the insurance code as to insurers, each such association and
 1368  insurer shall, annually on or before March 1, file with the
 1369  office its annual statement, in the form prescribed by the
 1370  commission, showing all premiums or assessments received by it
 1371  in connection with the issuance of service warranties in this
 1372  state during the preceding calendar year and using accounting
 1373  principles which will enable the office to ascertain whether the
 1374  financial requirements set forth in s. 634.406 have been
 1375  satisfied.
 1376         (2) The gross amount of premiums and assessments is subject
 1377  to the sales tax imposed by s. 212.0506.
 1378         (3) The office may levy a fine of up to $100 a day for each
 1379  day an association neglects to file the annual statement in the
 1380  form and within the time provided by this part. The amount of
 1381  the fine shall be established by rules adopted by the
 1382  commission. The office shall deposit all sums collected by it
 1383  under this section to the credit of the Insurance Regulatory
 1384  Trust Fund.
 1385         (4) In addition to an annual statement, the office may
 1386  require of licensees, under oath and in the form prescribed by
 1387  it, quarterly statements or special reports which it deems
 1388  necessary to the proper supervision of licensees under this
 1389  part. For manufacturers as defined in s. 634.401, the office
 1390  shall require only the annual audited financial statements of
 1391  the warranty operations and corporate reports as filed by the
 1392  manufacturer with the Securities and Exchange Commission,
 1393  provided that the office may require additional reporting by
 1394  manufacturers upon a showing by the office that annual reporting
 1395  is insufficient to protect the interest of purchasers of service
 1396  warranty agreements in this state or fails to provide sufficient
 1397  proof of the financial status required by this part.
 1398         (4)(5) The office may suspend or revoke the license of a
 1399  service warranty association failing to file its annual
 1400  statement or quarterly report when due.
 1401         (5)(6) The commission may by rule require each service
 1402  warranty association to submit to the office, as the commission
 1403  may designate, all or part of the information contained in the
 1404  financial statements and reports required by this section in a
 1405  computer-readable form compatible with the electronic data
 1406  processing system specified by the office.
 1407         Section 35. Effective upon this act becoming a law, section
 1408  634.416, Florida Statutes, is amended to read:
 1409         634.416 Examination of associations.—
 1410         (1)(a) Service warranty associations licensed under this
 1411  part may be are subject to periodic examination by the office,
 1412  in the same manner and subject to the same terms and conditions
 1413  that apply to insurers under part II of chapter 624.
 1414         (b) The office shall determine whether to conduct an
 1415  examination of a service warranty association by considering:
 1416         1. The amount of time that the association has been
 1417  continuously licensed and operating under the same management
 1418  and control.
 1419         2. The association’s history of compliance with applicable
 1420  law.
 1421         3. The number of consumer complaints against the
 1422  association.
 1423         4. The financial condition of the association, demonstrated
 1424  by the financial reports submitted pursuant to s. 634.313.
 1425         (2)However, The rate charged a service warranty
 1426  association by the office for examination may be adjusted to
 1427  reflect the amount collected for the Form 10-K filing fee as
 1428  provided in this section.
 1429         (3) On or before May 1 of each year, an association may
 1430  submit to the office the Form 10-K, as filed with the United
 1431  States Securities and Exchange Commission pursuant to the
 1432  Securities Exchange Act of 1934, as amended. Upon receipt and
 1433  review of the most current Form 10-K, the office may waive the
 1434  examination requirement; if the office determines not to waive
 1435  the examination, such examination will be limited to that
 1436  examination necessary to ensure compliance with this part. The
 1437  Form 10-K shall be accompanied by a filing fee of $2,000 to be
 1438  deposited into the Insurance Regulatory Trust Fund.
 1439         (4)(2) The office is not required to examine an association
 1440  that has less than $20,000 in gross written premiums as
 1441  reflected in its most recent annual statement. The office may
 1442  examine such an association if it has reason to believe that the
 1443  association may be in violation of this part or is otherwise in
 1444  an unsound financial condition. If the office examines an
 1445  association that has less than $20,000 in gross written
 1446  premiums, the examination fee may not exceed 5 percent of the
 1447  gross written premiums of the association.
 1448         Section 36. Effective upon this act becoming a law,
 1449  paragraph (b) of subsection (1) of section 634.4225, Florida
 1450  Statutes, is amended to read:
 1451         634.4225 Rebating; when allowed.—
 1452         (1) No sales representative shall rebate any portion of his
 1453  or her commission except as follows:
 1454         (b) The rebate shall be in accordance with a rebating
 1455  schedule filed with and approved by the sales representative
 1456  with the association issuing the service warranty to which the
 1457  rebate applies. The association shall maintain a copy of all
 1458  rebating schedules for a period of 3 years.
 1459         Section 37. Effective upon this act becoming a law,
 1460  subsection (9) is added to section 634.436, Florida Statutes, to
 1461  read:
 1462         634.436 Unfair methods of competition and unfair or
 1463  deceptive acts or practices defined.—The following methods,
 1464  acts, or practices are defined as unfair methods of competition
 1465  and unfair or deceptive acts or practices:
 1466         (9) FAILURE TO PROVIDE TERMS AND CONDITIONS PRIOR TO SALE.
 1467  Failing to provide a consumer with a complete sample copy of the
 1468  terms and conditions of the service warranty prior to before the
 1469  time of sale upon a request for the same by the consumer. A
 1470  service warranty association may comply with this subsection by
 1471  providing the consumer with a sample copy of the terms and
 1472  conditions of the warranty contract or by directing the consumer
 1473  to a website that displays a complete sample of the terms and
 1474  conditions of the contract.
 1475         Section 38. Effective upon this act becoming a law,
 1476  subsections (2), (3), (4), and (5) of section 634.136, Florida
 1477  Statutes, are amended to read:
 1478         634.136 Office records required.—Each licensed motor
 1479  vehicle service contract company, as a minimum requirement for
 1480  permanent office records, shall maintain:
 1481         (2) Memorandum journals showing the blank service agreement
 1482  forms issued to the company salespersons and recording the
 1483  delivery of the forms to the dealer.
 1484         (3) Memorandum journals showing the service contract forms
 1485  received by the motor vehicle dealers and indicating the
 1486  disposition of the forms by the dealer.
 1487         (2)(4) A detailed service agreement register, in numerical
 1488  order by service agreement number, of agreements in force, which
 1489  register shall include the following information: service
 1490  agreement number, date of issue, issuing dealer, name of
 1491  agreement holder, whether the agreement is covered by
 1492  contractual liability insurance or the unearned premium reserve
 1493  account, description of motor vehicle, service agreement period
 1494  and mileage, gross premium, commission to salespersons,
 1495  commission to dealer, and net premium.
 1496         (3)(5) A detailed claims register, in numerical order by
 1497  service agreement number, which register shall include the
 1498  following information: service agreement number, date of issue,
 1499  date of claim, type of claim, issuing dealer, amount of claim,
 1500  date claim paid, and, if applicable, disposition other than
 1501  payment and reason therefor.
 1502         Section 39. Effective upon this act becoming a law,
 1503  subsections (4) and (5) of section 634.313, Florida Statutes,
 1504  are amended to read:
 1505         634.313 Tax on premiums; annual statement; reports.—
 1506         (4) In addition to an annual statement, the office may
 1507  require of licensees, under oath and in the form prescribed by
 1508  it, such additional regular or special reports as it may deem
 1509  necessary to the proper supervision of licensees under this
 1510  part.
 1511         (4)(5) The commission may by rule require each home
 1512  warranty association to submit to the office, as the commission
 1513  may designate, all or part of the information contained in the
 1514  financial reports required by this section in a computer
 1515  readable form compatible with the electronic data processing
 1516  system specified by the office.
 1517         Section 40. Effective upon this act becoming a law,
 1518  sections 634.1216 and 634.3126, Florida Statutes, are repealed.
 1519         Section 41. This act may be cited as the “Safeguard Our
 1520  Seniors Act.”
 1521         Section 42. Paragraph (a) of subsection (1) of section
 1522  624.310, Florida Statutes, is amended to read:
 1523         624.310 Enforcement; cease and desist orders; removal of
 1524  certain persons; fines.—
 1525         (1) DEFINITIONS.—For the purposes of this section, the
 1526  term:
 1527         (a) “Affiliated party” means any person who directs or
 1528  participates in the conduct of the affairs of a licensee and who
 1529  is:
 1530         1. A director, officer, employee, trustee, committee
 1531  member, or controlling stockholder of a licensee or a subsidiary
 1532  or service corporation of the licensee, other than a controlling
 1533  stockholder which is a holding company, or an agent of a
 1534  licensee or a subsidiary or service corporation of the licensee;
 1535         2. A person who has filed or is required to file a
 1536  statement or any other information required to be filed under s.
 1537  628.461 or s. 628.4615;
 1538         3. A stockholder, other than a stockholder that is a
 1539  holding company of the licensee, who participates in the conduct
 1540  of the affairs of the licensee; or
 1541         4. An independent contractor who:
 1542         a. Renders a written opinion required by the laws of this
 1543  state under her or his professional credentials on behalf of the
 1544  licensee, which opinion is reasonably relied on by the
 1545  department or office in the performance of its duties; or
 1546         b. Affirmatively and knowingly conceals facts, through a
 1547  written misrepresentation to the department or office, with
 1548  knowledge that such misrepresentation:
 1549         (I) Constitutes a violation of the insurance code or a
 1550  lawful rule or order of the department, commission, or office;
 1551  and
 1552         (II) Directly and materially endangers the ability of the
 1553  licensee to meet its obligations to policyholders; or.
 1554         5. A third-party marketer who aids or abets a licensee in a
 1555  violation of the insurance code relating to the sale of an
 1556  annuity to a person 65 years of age or older.
 1557  
 1558  For the purposes of this subparagraph, any representation of
 1559  fact made by an independent contractor on behalf of a licensee,
 1560  affirmatively communicated as a representation of the licensee
 1561  to the independent contractor, shall not be considered a
 1562  misrepresentation by the independent contractor.
 1563         Section 43. Section 624.46223, Florida Statutes, is created
 1564  to read:
 1565         624.46223 Notice of intent to withdraw.—Any association,
 1566  fund, or pool authorized by state law and created for the
 1567  purpose of forming a risk-management mechanism or providing self
 1568  insurance for public entities in this state may not require its
 1569  members to provide more than 45 days’ notice of the member’s
 1570  intention to withdraw as a prerequisite for withdrawing from the
 1571  association, fund, or pool.
 1572         Section 44. Paragraph (j) of subsection (2) of section
 1573  626.221, Florida Statutes, is amended to read:
 1574         626.221 Examination requirement; exemptions.—
 1575         (2) However, no such examination shall be necessary in any
 1576  of the following cases:
 1577         (j) An applicant for license as a customer representative
 1578  who has earned the designation of Accredited Advisor in
 1579  Insurance (AAI) from the Insurance Institute of America, the
 1580  designation of Certified Insurance Counselor (CIC) from the
 1581  Society of Certified Insurance Service Counselors, the
 1582  designation of Accredited Customer Service Representative (ACSR)
 1583  from the Independent Insurance Agents of America, the
 1584  designation of Certified Professional Service Representative
 1585  (CPSR) from the National Foundation for Certified Professional
 1586  Service Representatives, the designation of Certified Insurance
 1587  Service Representative (CISR) from the Society of Certified
 1588  Insurance Service Representatives, or the designation of
 1589  Certified Insurance Representative (CIR) from the National
 1590  Association of Christian Catastrophe Insurance Adjusters. Also,
 1591  an applicant for license as a customer representative who has
 1592  earned an associate degree or bachelor’s degree from an
 1593  accredited college or university with at least 9 academic hours
 1594  of property and casualty insurance curriculum, or the
 1595  equivalent, or has earned the designation of Certified Customer
 1596  Service Representative (CCSR) from the Florida Association of
 1597  Insurance Agents, or the designation of Registered Customer
 1598  Service Representative (RCSR) from a regionally accredited
 1599  postsecondary institution in this state, or the designation of
 1600  Professional Customer Service Representative (PCSR) from the
 1601  Professional Career Institute, whose curriculum has been
 1602  approved by the department and whose curriculum includes
 1603  comprehensive analysis of basic property and casualty lines of
 1604  insurance and testing at least equal to that of standard
 1605  department testing for the customer representative license. The
 1606  department shall adopt rules establishing standards for the
 1607  approval of curriculum.
 1608         Section 45. Subsection (13) of section 626.025, Florida
 1609  Statutes, is amended to read:
 1610         626.025 Consumer protections.—To transact insurance, agents
 1611  shall comply with consumer protection laws, including the
 1612  following, as applicable:
 1613         (13) The prohibition against the designation of a life
 1614  insurance agent or his or her family member as the beneficiary
 1615  of life insurance policy sold to an individual other than a
 1616  family member under s. 626.798.
 1617         Section 46. Paragraph (k) of subsection (3) of section
 1618  626.2815, Florida Statutes, is amended to read:
 1619         626.2815 Continuing education required; application;
 1620  exceptions; requirements; penalties.—
 1621         (3)
 1622         (k) Any person who holds a license to solicit or sell life
 1623  insurance in this state must complete a minimum of 3 hours in
 1624  continuing education, approved by the department, on the subject
 1625  of suitability in annuity and life insurance transactions. This
 1626  requirement does not apply to an agent who does not have any
 1627  active life insurance or annuity contracts. In applying this
 1628  exemption, the department may require the filing of a
 1629  certification attesting that the agent has not sold life
 1630  insurance or annuities during the continuing education
 1631  compliance cycle in question and does not have any active life
 1632  insurance or annuity contracts. A licensee may use the hours
 1633  obtained under this paragraph to satisfy the requirement for
 1634  continuing education in ethics under paragraph (a).
 1635         Section 47. Subsection (13) is added to section 626.621,
 1636  Florida Statutes, to read:
 1637         626.621 Grounds for discretionary refusal, suspension, or
 1638  revocation of agent’s, adjuster’s, customer representative’s,
 1639  service representative’s, or managing general agent’s license or
 1640  appointment.—The department may, in its discretion, deny an
 1641  application for, suspend, revoke, or refuse to renew or continue
 1642  the license or appointment of any applicant, agent, adjuster,
 1643  customer representative, service representative, or managing
 1644  general agent, and it may suspend or revoke the eligibility to
 1645  hold a license or appointment of any such person, if it finds
 1646  that as to the applicant, licensee, or appointee any one or more
 1647  of the following applicable grounds exist under circumstances
 1648  for which such denial, suspension, revocation, or refusal is not
 1649  mandatory under s. 626.611:
 1650         (13) Has been the subject of or has had a license, permit,
 1651  appointment, registration, or other authority to conduct
 1652  business subject to any decision, finding, injunction,
 1653  suspension, prohibition, revocation, denial, judgment, final
 1654  agency action, or administrative order by any court of competent
 1655  jurisdiction, administrative law proceeding, state agency,
 1656  federal agency, national securities, commodities, or option
 1657  exchange, or national securities, commodities, or option
 1658  association involving a violation of any federal or state
 1659  securities or commodities law or any rule or regulation adopted
 1660  thereunder, or a violation of any rule or regulation of any
 1661  national securities, commodities, or options exchange or
 1662  national securities, commodities, or options association.
 1663         Section 48. Subsection (3) of section 626.641, Florida
 1664  Statutes, is amended to read:
 1665         626.641 Duration of suspension or revocation.—
 1666         (3)(a) If any of an individual’s licenses as an agent or
 1667  customer representative, or the eligibility to hold such license
 1668  or licenses has same, as to the same individual have been
 1669  revoked at two separate times, the department may shall not
 1670  thereafter grant or issue any license under this code as to such
 1671  individual.
 1672         (b) If a license as an agent or customer representative or
 1673  the eligibility to hold such a license has been revoked
 1674  resulting from the solicitation or sale of an insurance product
 1675  to a person 65 years of age or older, the department may not
 1676  thereafter grant or issue any license under this code to such
 1677  individual.
 1678         Section 49. Section 626.798, Florida Statutes, is amended
 1679  to read:
 1680         626.798 Life agent as beneficiary; prohibition.—No life
 1681  agent shall, with respect to the placement of life insurance
 1682  coverage with a life insurer covering the life of a person who
 1683  is not a family member of the agent, handle in his or her
 1684  capacity as a life agent the placement of such coverage when the
 1685  agent placing the coverage or a family member of such agent
 1686  receives a commission therefor and is the named beneficiary
 1687  under the life insurance policy, unless the life agent or family
 1688  member has an insurable interest in the life of such person.
 1689  However, the agent or a family member of such agent may not be
 1690  designated as a trustee or guardian or be granted power of
 1691  attorney unless he or she is a family member of the policy owner
 1692  or insured, or is a bank or trust company duly authorized to act
 1693  as a fiduciary. For the purposes of this section, the phrase
 1694  “not a family member,” with respect to a life agent, means an
 1695  individual who is not related to the life agent as father,
 1696  mother, son, daughter, brother, sister, grandfather,
 1697  grandmother, uncle, aunt, first cousin, nephew, niece, husband,
 1698  wife, father-in-law, mother-in-law, brother-in-law, sister-in
 1699  law, stepfather, stepmother, stepson, stepdaughter, stepbrother,
 1700  stepsister, half brother, or half sister. For the purposes of
 1701  this section, the term “insurable interest” means that the life
 1702  agent has an actual, lawful, and substantial economic interest
 1703  in the safety and preservation of the life of the insured or a
 1704  reasonable expectation of benefit or advantage from the
 1705  continued life of the insured.
 1706         Section 50. Paragraphs (a) and (b) of subsection (3) of
 1707  section 626.9521, Florida Statutes, are amended, and subsections
 1708  (4) and (5) are added to that section, to read:
 1709         626.9521 Unfair methods of competition and unfair or
 1710  deceptive acts or practices prohibited; penalties.—
 1711         (3)(a) If a person violates s. 626.9541(1)(l), the offense
 1712  known as “twisting,” or violates s. 626.9541(1)(aa), the offense
 1713  known as “churning,” the person commits a misdemeanor of the
 1714  first degree, punishable as provided in s. 775.082, and an
 1715  administrative fine not greater than $5,000 shall be imposed for
 1716  each nonwillful violation or an administrative fine not greater
 1717  than $75,000 $40,000 shall be imposed for each willful
 1718  violation. To impose an administrative fine for a willful
 1719  violation criminal penalties under this paragraph, the practice
 1720  of “churning” or “twisting” must involve fraudulent conduct.
 1721         (b) If a person violates s. 626.9541(1)(ee) by willfully
 1722  submitting fraudulent signatures on an application or policy
 1723  related document, the person commits a felony of the third
 1724  degree, punishable as provided in s. 775.082, and an
 1725  administrative fine not greater than $5,000 shall be imposed for
 1726  each nonwillful violation or an administrative fine not greater
 1727  than $75,000 $40,000 shall be imposed for each willful
 1728  violation.
 1729         (4) A licensee must make all reasonable efforts to
 1730  ascertain the consumer’s age at the time an insurance
 1731  application is completed.
 1732         (5) If a consumer who is a senior citizen is a victim, a
 1733  video deposition of the victim may be used for any purpose in
 1734  any administrative proceeding conducted pursuant to chapter 120
 1735  if all parties are given proper notice of the deposition in
 1736  accordance with the Florida Rules of Civil Procedure.
 1737         Section 51. Subsection (4) of section 626.99, Florida
 1738  Statutes, is amended to read:
 1739         626.99 Life insurance solicitation.—
 1740         (4) DISCLOSURE REQUIREMENTS.—
 1741         (a) The insurer shall provide to each prospective purchaser
 1742  a buyer’s guide and a policy summary prior to accepting the
 1743  applicant’s initial premium or premium deposit, unless the
 1744  policy for which application is made provides an unconditional
 1745  refund for a period of at least 14 days, or unless the policy
 1746  summary contains an offer of such an unconditional refund., In
 1747  these instances, which event the buyer’s guide and policy
 1748  summary must be delivered with the policy or prior to delivery
 1749  of the policy.
 1750         (b) With respect to fixed and variable annuities, the
 1751  insurer shall provide to each prospective purchaser a buyer’s
 1752  guide to annuities and a contract summary as provided in the
 1753  National Association of Insurance Commissioners (NAIC) Model
 1754  Annuity and Deposit Fund Regulation and the policy must provide
 1755  an unconditional refund for a period of at least 14 days. For
 1756  fixed annuities, the buyer’s guide shall be in the form as
 1757  provided by the National Association of Insurance Commissioners
 1758  (NAIC) Annuity Disclosure Model Regulation, until such time as a
 1759  buyer’s guide is developed by the department, at which time the
 1760  department guide must be used. For variable annuities, a policy
 1761  summary may be used, which may be contained in a prospectus,
 1762  until such time as a buyer’s guide is developed by NAIC or the
 1763  department, at which time one of those guides must be used. If
 1764  the prospective owner of an annuity contract is 65 years of age
 1765  or older:
 1766         1. An unconditional refund of premiums paid for a fixed
 1767  annuity contract, including any contract fees or charges, must
 1768  be available for a period of 21 days; and
 1769         2. An unconditional refund for variable or market value
 1770  annuity contracts must be available for a period of 21 days. The
 1771  unconditional refund shall be equal to the cash surrender value
 1772  provided in the annuity contract, plus any fees or charges
 1773  deducted from the premiums or imposed under the contract. This
 1774  subparagraph does not apply if the prospective owner is an
 1775  accredited investor, as defined in Regulation D as adopted by
 1776  the United States Securities and Exchange Commission.
 1777         (c) The insurer shall attach a cover page to any annuity
 1778  policy informing the purchaser of the unconditional refund
 1779  period prescribed in paragraph (b). The cover page must also
 1780  provide contact information for the issuing company and the
 1781  selling agent, the department’s toll-free help line, and any
 1782  other information required by the department by rule. The cover
 1783  page is part of the policy and is subject to review by the
 1784  office pursuant to s. 627.410.
 1785         (d)(b) The insurer shall provide a buyer’s guide and a
 1786  policy summary to any prospective purchaser upon request.
 1787         Section 52. Subsections (3) and (5) of section 627.4554,
 1788  Florida Statutes, as amended by section 9 of chapter 2008-237,
 1789  Laws of Florida, are amended, present subsection (9) of that
 1790  section is renumbered as subsection (10), and a new subsection
 1791  (9) is added to that section, to read:
 1792         627.4554 Annuity investments by seniors.—
 1793         (3) DEFINITIONS.—For purposes of this section, the term:
 1794         (a) “Annuity contract” means a fixed annuity, equity
 1795  indexed annuity, fixed equity indexed annuity, or variable
 1796  annuity that is individually solicited, whether the product is
 1797  classified as an individual annuity or a group annuity.
 1798         (b) “Accredited investor” means any person who comes within
 1799  any of the following categories, or who the issuer reasonably
 1800  believes comes within any of the following categories, at the
 1801  time of the sale of an annuity to that person:
 1802         1. The person’s net worth or joint net worth with his or
 1803  her spouse, at the time of the purchase, exceeds $1 million; or
 1804         2. The person had an individual income in excess of
 1805  $200,000 in each of the 2 most recent years, or joint income
 1806  with his or her spouse in excess of $300,000 in each of those
 1807  years, and has a reasonable expectation of reaching the same
 1808  income level in the current year.
 1809         (c)(b) “Recommendation” means advice provided by an
 1810  insurance agent, or an insurer if no insurance agent is
 1811  involved, to an individual senior consumer which results in a
 1812  purchase or exchange of an annuity in accordance with that
 1813  advice.
 1814         (d)(c) “Senior consumer” means a person 65 years of age or
 1815  older. In the event of a joint purchase by more than one party,
 1816  a purchaser is considered to be a senior consumer if any of the
 1817  parties is age 65 or older.
 1818         (5) MITIGATION OF RESPONSIBILITY.—
 1819         (a) The office may order an insurer to take reasonably
 1820  appropriate corrective action, including rescission of the
 1821  policy or contract and a full refund of the premiums paid or the
 1822  accumulation value, whichever is greater, for any senior
 1823  consumer harmed by a violation of this section by the insurer or
 1824  the insurer’s insurance agent.
 1825         (b) The department may order:
 1826         1. An insurance agent to take reasonably appropriate
 1827  corrective action, including monetary restitution of penalties
 1828  or fees incurred by the senior consumer, for any senior consumer
 1829  harmed by a violation of this section by the insurance agent.
 1830         2. A managing general agency or insurance agency that
 1831  employs or contracts with an insurance agent to sell or solicit
 1832  the sale of annuities to senior consumers to take reasonably
 1833  appropriate corrective action for any senior consumer harmed by
 1834  a violation of this section by the insurance agent.
 1835         (c) The department shall, in addition to any other penalty
 1836  authorized under chapter 626, order an insurance agent to pay
 1837  restitution to any senior consumer who has been deprived of
 1838  money by the agent’s misappropriation, conversion, or unlawful
 1839  withholding of monies belonging to the senior consumer in the
 1840  course of a transaction involving annuities. The amount of
 1841  restitution required to be paid pursuant to this paragraph may
 1842  not exceed the amount misappropriated, converted, or unlawfully
 1843  withheld. This paragraph does not limit or restrict a person’s
 1844  right to seek other remedies as provided by law.
 1845         (d)(c) Any applicable penalty under the Florida Insurance
 1846  Code for a violation of paragraph (4)(a), paragraph (4)(b), or
 1847  subparagraph (4)(c)2. may be reduced or eliminated, according to
 1848  a schedule adopted by the office or the department, as
 1849  appropriate, if corrective action for the senior consumer was
 1850  taken promptly after a violation was discovered.
 1851         (9) PROHIBITED CHARGES.—An annuity contract issued to a
 1852  senior consumer may not contain a surrender or deferred sales
 1853  charge for a withdrawal of money from an annuity exceeding 10
 1854  percent of the amount withdrawn. The charge shall be reduced so
 1855  that no surrender or deferred sales charge exists after the end
 1856  of the 10th policy year or 10 years after the premium is paid,
 1857  whichever is later. This subsection does not apply to annuities
 1858  purchased by an accredited investor or to those annuities
 1859  specified in paragraph (7)(b).
 1860         Section 53. Except as otherwise expressly provided in this
 1861  act and except for this section, which shall take effect
 1862  becoming a law, this act shall take effect January 1, 2011.

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