January 24, 2020
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Amendment
Bill No. 2994
Amendment No. 170985
CHAMBER ACTION
Senate House
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1Representative Berfield offered the following:
2     Amendment (with title amendment)
3     On page  209, between lines 5 and 6, insert:
4     Section 167.  Paragraph (a) of subsection (3) of section
5626.2815, Florida Statutes, is amended to read:
6     626.2815  Continuing education required; application;
7exceptions; requirements; penalties.--
8     (3)(a)  Each person subject to the provisions of this
9section must, except as set forth in paragraphs (b) and (c),
10complete a minimum of 24 hours of continuing education courses
11every 2 years in basic or higher-level courses prescribed by
12this section or in other courses approved by the department.
13Each person subject to the provisions of this section must
14complete, as part of his or her required number of continuing
15education hours, 3 hours of continuing education, approved by
16the department, every 2 years on the subject matter of ethics
17and a minimum of 2 hours of continuing education, approved by
18the department, every 2 years on the subject matter of
19unauthorized entities engaging in the business of insurance. The
20scope of the topic of unauthorized entities shall include the
21Florida Nonprofit Multiple Employer Welfare Arrangement Act and
22the Employee Retirement Income Security Act, 29 U.S.C. ss. 1001
23et seq., as it relates to the provision of health insurance by
24employers to their employees and the regulation thereof.
25     Section 168.  Present subsections (15) through (17) of
26section 626.015, Florida Statutes, are renumbered as subsections
27(16) through (18), respectively, and a new subsection (15) is
28added to said section to read:
29     626.015  Definitions.--As used in this part:
30     (15)  "Personal lines agent" means a general lines agent
31who is limited to transacting business related to property and
32casualty insurance sold to individuals and families for
33noncommercial purposes.
34     Section 169.  Subsection (3) is added to section 626.022,
35Florida Statutes, to read:
36     626.022  Scope of part.--
37     (3)  Provisions of this part that apply to general lines
38agents and applicants also apply to personal lines agents and
39applicants, except where otherwise provided.
40     Section 170.  Subsection (8) is added to section 626.241,
41Florida Statutes, to read:
42     626.241  Scope of examination.--
43     (8)  An examination for licensure as a personal lines agent
44shall consist of 100 questions and shall be limited in scope to
45the kinds of business transacted under such license.
46     Section 171.  Subsection (1) of section 626.311, Florida
47Statutes, is amended to read:
48     626.311  Scope of license.--
49     (1)  Except as to personal lines agents and limited
50licenses, the applicant for license as a general lines agent or
51customer representative shall qualify for all property, marine,
52casualty, and surety lines except bail bonds which require a
53separate license under chapter 648.  The license of a general
54lines agent may also cover health insurance if health insurance
55is included in the agent's appointment by an insurer as to which
56the licensee is also appointed as agent for property or casualty
57or surety insurance.  The license of a customer representative
58shall provide, in substance, that it covers all of such classes
59of insurance that his or her appointing general lines agent or
60agency is currently so authorized to transact under the general
61lines agent's license and appointments.  No such license shall
62be issued limited to particular classes of insurance except for
63bail bonds which require a separate license under chapter 648 or
64for personal lines agents. Personal lines agents are limited to
65transacting business related to property and casualty insurance
66sold to individuals and families for noncommercial purposes.
67     Section 172.  Section 626.727, Florida Statutes, is amended
68to read:
69     626.727  Scope of this part.--This part applies only to
70general lines agents, customer representatives, service
71representatives, and managing general agents, all as defined in
72s. 626.015. Provisions of this part which apply to general lines
73agents and applicants also apply to personal lines agents and
74applicants, except where otherwise provided.
75     Section 173.  Subsection (1) of section 626.732, Florida
76Statutes, is amended to read:
77     626.732  Requirement as to knowledge, experience, or
78instruction.--
79     (1)  Except as provided in subsection (3), no applicant for
80a license as a general lines agent or personal lines agent,
81except for a chartered property and casualty underwriter (CPCU),
82other than as to a limited license as to baggage and motor
83vehicle excess liability insurance, credit property insurance,
84credit insurance, in-transit and storage personal property
85insurance, or communications equipment property insurance or
86communication equipment inland marine insurance, shall be
87qualified or licensed unless within the 4 years immediately
88preceding the date the application for license is filed with the
89department the applicant has:
90     (a)  Taught or successfully completed classroom courses in
91insurance, 3 hours of which shall be on the subject matter of
92ethics, satisfactory to the department at a school, college, or
93extension division thereof, approved by the department. To
94qualify for licensure as a personal lines agent, the applicant
95must complete a total of 52 hours of classroom courses in
96insurance;
97     (b)  Completed a correspondence course in insurance, 3
98hours of which shall be on the subject matter of ethics,
99satisfactory to the department and regularly offered by
100accredited institutions of higher learning in this state and,
101except if he or she is applying for a limited license under s.
102626.321, for licensure as a general lines agent, has had at
103least 6 months of responsible insurance duties as a
104substantially full-time bona fide employee in all lines of
105property and casualty insurance set forth in the definition of
106general lines agent under s. 626.015 or, for licensure as a
107personal lines agent, has completed at least 3 months in
108responsible insurance duties as a substantially full-time
109employee in property and casualty insurance sold to individuals
110and families for noncommercial purposes;
111     (c)  For licensure as a general lines agent, completed at
112least 1 year in responsible insurance duties as a substantially
113full-time bona fide employee in all lines of property and
114casualty insurance, exclusive of aviation and wet marine and
115transportation insurances but not exclusive of boats of less
116than 36 feet in length or aircraft not held out for hire, as set
117forth in the definition of a general lines agent under s.
118626.015, without the education requirement mentioned in
119paragraph (a) or paragraph (b) or, for licensure as a personal
120lines agent, has completed at least 6 months in responsible
121insurance duties as a substantially full-time employee in
122property and casualty insurance sold to individuals and families
123for noncommercial purposes without the education requirement in
124paragraph (a) or paragraph(b); or
125     (d)1.  For licensure as a general lines agent, completed at
126least 1 year of responsible insurance duties as a licensed and
127appointed customer representative or limited customer
128representative in commercial or personal lines of property and
129casualty insurance and 40 hours of classroom courses approved by
130the department covering the areas of property, casualty, surety,
131health, and marine insurance; or
132     2.  For licensure as a personal lines agent, completed at
133least 6 months of responsible duties as a licensed and appointed
134customer representative or limited customer representative in
135property and casualty insurance sold to individuals and families
136for noncommercial purposes and 20 hours of classroom courses
137approved by the department which are related to property and
138casualty insurance sold to individuals and families for
139noncommercial purposes;
140     (e)1.2.  For licensure as a general lines agent, completed
141at least 1 year of responsible insurance duties as a licensed
142and appointed service representative in either commercial or
143personal lines of property and casualty insurance and 80 hours
144of classroom courses approved by the department covering the
145areas of property, casualty, surety, health, and marine
146insurance; or.
147     2.  For licensure as a personal lines agent, completed at
148least 6 months of responsible insurance duties as a licensed and
149appointed service representative in property and casualty
150insurance sold to individuals and families for noncommercial
151purposes and 40 hours of classroom courses approved by the
152department related to property and casualty insurance sold to
153individuals and families for noncommercial purposes; or
154     (f)  For licensure as a personal lines agent, completed at
155least 3 years of responsible duties as a licensed and appointed
156customer representative in property and casualty insurance sold
157to individuals and families for noncommercial purposes.
158     Section 174.  The Department of Financial Services does not
159have to begin issuing licenses to personal lines agents on the
160effective date of this act if the department has not completed
161the process of incorporating necessary procedures for issuing
162personal lines licenses into its licensing systems.
163     Section 175.  Subsection (1) of section 626.747, Florida
164Statutes, is amended to read:
165     626.747  Branch agencies.--
166     (1)  Each branch place of business established by an agent
167or agency, firm, corporation, or association shall be in the
168active full-time charge of a licensed general lines agent who is
169appointed to represent one or more insurers.  Any agent or
170agency, firm, corporation, or association which has established
171one or more branch places of business shall be required to have
172at least one licensed general lines agent who is appointed to
173represent one or more insurers at each location of the agency
174including its headquarters location.
175     Section 176.  Paragraph (r) is added to subsection (6) of
176section 627.351, Florida Statutes, to read:
177     627.351  Insurance risk apportionment plans.--
178     (6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
179     (r)  A salaried employee of the corporation who performs
180policy administration services subsequent to the effectuation of
181a corporation policy is not required to be licensed as an agent
182under the provisions of s. 626.112.
183     Section 177.  Paragraphs (c) and (d) of subsection (1) of
184section 626.321, Florida Statutes, are amended to read:
185     626.321  Limited licenses.--
186     (1)  The department shall issue to a qualified individual,
187or a qualified individual or entity under paragraphs (c), (d),
188(e), and (i), a license as agent authorized to transact a
189limited class of business in any of the following categories:
190     (c)  Personal accident insurance.--License covering only
191policies of personal accident insurance covering the risks of
192travel, except as provided in subparagraph 2.  The license may
193be issued only:
194     1.  To a full-time salaried employee of a common carrier or
195a full-time salaried employee or owner of a transportation
196ticket agency and may authorize the sale of such ticket policies
197only in connection with the sale of transportation tickets, or
198to the full-time salaried employee of such an agent.  No such
199policy shall be for a duration of more than 48 hours or for the
200duration of a specified one-way trip or round trip.
201     2.  To a full-time salaried employee of a business which
202offers motor vehicles for rent or lease, or to a business entity
203office of a business which offers motor vehicles for rent or
204lease if insurance sales activities authorized by the license
205are limited to full-time salaried employees.  A business office
206licensed or a person licensed pursuant to this subparagraph may,
207as an agent of an insurer, transact insurance that provides
208coverage for accidental personal injury or death of the lessee
209and any passenger who is riding or driving with the covered
210lessee in the rental motor vehicle if the lease or rental
211agreement is for not more than 30 days, or if the lessee is not
212provided coverage for more than 30 consecutive days per lease
213period; however, if the lease is extended beyond 30 days, the
214coverage may be extended one time only for a period not to
215exceed an additional 30 days.
216     (d)  Baggage and motor vehicle excess liability insurance.-
217-
218     1.  License covering only insurance of personal effects
219except as provided in subparagraph 2.  The license may be issued
220only:
221     a.  To a full-time salaried employee of a common carrier or
222a full-time salaried employee or owner of a transportation
223ticket agency, which person is engaged in the sale or handling
224of transportation of baggage and personal effects of travelers,
225and may authorize the sale of such insurance only in connection
226with such transportation; or
227     b.  To the full-time salaried employee of a licensed
228general lines agent, a full-time salaried employee of a business
229which offers motor vehicles for rent or lease, or to a business
230office of a business entity that which offers motor vehicles for
231rent or lease if insurance sales activities authorized by the
232license are in connection with and incidental to the rental of
233a motor vehicle limited to full-time salaried employees. An
234entity applying for a license under this sub-subparagraph:
235     (I)  Is required to submit only one application for a
236license under s. 626.171. The requirements of s. 626.171(5)
237shall apply only to the officers and directors of the entity
238submitting the application.
239     (II)  Is required to obtain a license for each office,
240branch office, or place of business making use of the entity's
241business name by applying to the department for the license on a
242simplified application form developed by rule of the department
243for this purpose.
244     (III)  Is required to pay the applicable fees for a license
245as prescribed in s. 624.501, be appointed under s. 626.112, and
246pay the prescribed appointment fee under s. 624.501. A licensed
247and appointed entity shall be directly responsible and
248accountable for all acts of the licensee's employees.
249
250The purchaser of baggage insurance shall be provided written
251information disclosing that the insured's homeowner's policy may
252provide coverage for loss of personal effects and that the
253purchase of such insurance is not required in connection with
254the purchase of tickets or in connection with the lease or
255rental of a motor vehicle.
256     2.  A business entity that office licensed pursuant to
257subparagraph 1., or a person licensed pursuant to subparagraph
2581. who is a full-time salaried employee of a business which
259offers motor vehicles for rent or lease, may include lessees
260under a master contract providing coverage to the lessor or may
261transact excess motor vehicle liability insurance providing
262coverage in excess of the standard liability limits provided by
263the lessor in its lease to a person renting or leasing a motor
264vehicle from the licensee's employer for liability arising in
265connection with the negligent operation of the leased or rented
266motor vehicle, provided that the lease or rental agreement is
267for not more than 30 days; that the lessee is not provided
268coverage for more than 30 consecutive days per lease period,
269and, if the lease is extended beyond 30 days, the coverage may
270be extended one time only for a period not to exceed an
271additional 30 days; that the lessee is given written notice that
272his or her personal insurance policy providing coverage on an
273owned motor vehicle may provide additional excess coverage; and
274that the purchase of the insurance is not required in connection
275with the lease or rental of a motor vehicle.  The excess
276liability insurance may be provided to the lessee as an
277additional insured on a policy issued to the licensee's
278employer.
279     3.  A business entity that office licensed pursuant to
280subparagraph 1., or a person licensed pursuant to subparagraph
2811. who is a full-time salaried employee of a business which
282offers motor vehicles for rent or lease, may, as an agent of an
283insurer, transact insurance that provides coverage for the
284liability of the lessee to the lessor for damage to the leased
285or rented motor vehicle if:
286     a.  The lease or rental agreement is for not more than 30
287days; or the lessee is not provided coverage for more than 30
288consecutive days per lease period, but, if the lease is extended
289beyond 30 days, the coverage may be extended one time only for a
290period not to exceed an additional 30 days;
291     b.  The lessee is given written notice that his or her
292personal insurance policy that provides coverage on an owned
293motor vehicle may provide such coverage with or without a
294deductible; and
295     c.  The purchase of the insurance is not required in
296connection with the lease or rental of a motor vehicle.
297     Section 178.  Subsection (2) of section 628.709, Florida
298Statutes, is amended to read:
299     628.709  Formation of a mutual insurance holding company.--
300     (2)  All of the initial shares of the capital stock of the
301insurance company which reorganized as a subsidiary insurance
302company shall be issued either to the mutual insurance holding
303company, or to an intermediate holding company which is wholly
304owned by the mutual insurance holding company. This restriction
305does not preclude the subsequent issuance of additional shares
306of stock by the subsidiary insurance company so long as the
307mutual insurance holding company at all times owns directly or
308through one or more intermediate holding companies, a majority
309of the voting shares of the capital stock of the subsidiary
310insurance company. The membership interests of the policyholders
311of the subsidiary insurance company shall become membership
312interests in the mutual insurance holding company. Policyholders
313of the subsidiary insurance company which was formerly the
314mutual insurer shall be members of the mutual insurance holding
315company in accordance with the articles of incorporation and
316bylaws of the mutual insurance holding company. At the time of
317formation, policyholders of any other subsidiary insurance
318company of the mutual insurance holding company shall not be
319members of the mutual insurance holding company unless:
320     (a)  They are policyholders of a subsidiary which was a
321mutual insurer which merged with the holding company pursuant to
322s. 628.715; or
323     (b)  They are policyholders of an affiliated stock
324insurance company, provided such policyholders were members of
325the mutual insurance company at the time the mutual insurance
326company policies were assumed by the affiliated stock insurance
327company and the assumption occurred in connection with the
328conversion.
329
330Subsequent to formation, membership shall be governed by s.
331628.727.
332     Section 179.  Subsection (6) is added to section 631.021,
333Florida Statutes, to read:
334     631.021  Jurisdiction of delinquency proceeding; venue;
335change of venue; exclusiveness of remedy; appeal.--
336     (6)  The domiciliary court acquiring jurisdiction over
337persons subject to this chapter may exercise exclusive
338jurisdiction to the exclusion of all other courts, except as
339limited by the provisions of this chapter. Upon the issuance of
340an order of conservation, rehabilitation, or liquidation, the
341Circuit Court of Leon County shall have exclusive jurisdiction
342with respect to assets or property of any insurer subject to
343such proceedings and claims against said insurer's assets or
344property.
345     Section 180.  Subsection (6) is added to section 631.041,
346Florida Statutes, to read:
347     631.041  Automatic stay; relief from stay; injunctions.--
348     (6)  The estate of an insurer in rehabilitation or
349liquidation which is injured by any willful violation of an
350applicable stay or injunction shall be entitled to actual
351damages, including costs and attorney's fees, and, in
352appropriate circumstances, the receivership court may impose
353additional sanctions.
354     Section 181.  Section 631.0515, Florida Statutes, is
355amended to read:
356     631.0515  Appointment of receiver; insurance holding
357company.--A delinquency proceeding pursuant to this chapter
358constitutes the sole and exclusive method of dissolving,
359liquidating, rehabilitating, reorganizing, conserving, or
360appointing a receiver of a Florida corporation which is not
361insolvent as defined by s. 607.01401(16); which through its
362shareholders, board of directors, or governing body is
363deadlocked in the management of its affairs; and which directly
364or indirectly owns all of the stock of a Florida domestic
365insurer. The department may petition for an order directing it
366to rehabilitate such corporation if the interests of
367policyholders or the public will be harmed as a result of the
368deadlock. The department shall use due diligence to resolve the
369deadlock. Whether or not the department petitions for an order,
370the circuit court shall not have jurisdiction pursuant to s.
371607.271, s. 607.274, or s. 607.277 to dissolve, liquidate, or
372appoint receivers with respect to, a Florida corporation which
373directly or indirectly owns all of the stock of a Florida
374domestic insurer and which is not insolvent as defined by s.
375607.01401(16). However, a managing general agent or holding
376company with a controlling interest in a domestic insurer in
377this state is subject to jurisdiction of the court under the
378provisions of s. 631.025.
379     Section 182.  Paragraph (a) of subsection (7) of section
380631.141, Florida Statutes, is amended to read:
381     631.141  Conduct of delinquency proceeding; domestic and
382alien insurers.--
383     (7)(a)  In connection with a delinquency proceeding, the
384department may appoint one or more special agents to act for it,
385and it may employ such counsel, clerks, and assistants as it
386deems necessary. The compensation of the special agents,
387counsel, clerks, or assistants and all expenses of taking
388possession of the insurer and of conducting the proceeding shall
389be fixed by the receiver, subject to the approval of the court,
390and shall be paid out of the funds or assets of the insurer.
391Such expenses are administrative expenses and are recoverable by
392the receiver in any actions in which the receiver is authorized
393or entitled to recover its administrative expenses. Within the
394limits of duties imposed upon them, special agents shall possess
395all the powers given to and, in the exercise of those powers,
396shall be subject to all duties imposed upon the receiver with
397respect to such proceeding.
398     Section 183.  Section 631.205, Florida Statutes, is amended
399to read:
400     631.205  Reinsurance proceeds.--All reinsurance proceeds
401payable under a contract of reinsurance to which the insolvent
402insurer is a party are to be paid directly to the domiciliary
403receiver as general assets of the receivership estate unless the
404reinsurance contract contains a clause which specifically names
405the insolvent insurer's insured as a direct beneficiary of the
406reinsurance contract. The entry of an order of conservation,
407rehabilitation, or liquidation shall not be deemed an
408anticipatory breach of any reinsurance contract, nor shall
409insolvency or notice of insolvency be grounds for retroactive
410revocation or retroactive cancellation of any reinsurance
411contracts by the reinsurer.
412     Section 184.  Section 631.206, Florida Statutes, is created
413to read:
414     631.206  Arbitration.--If an insurer in receivership has
415entered into an agreement containing an arbitration provision
416for resolution of disputes, that provision is void and shall be
417replaced by operation of law with the following provision:
418
419Any controversy or claim arising out of or relating to this
420contract, or the breach thereof, shall be settled by arbitration
421pursuant to the American Arbitration Association Commercial
422Arbitration Rules and chapter 682, Florida Statutes, and
423judgment on the award rendered by the arbitrators shall be
424entered by the receivership court. Venue shall be in Leon
425County, Florida. Disputes shall be submitted to a panel of three
426arbitrators, one to be chosen by each party and the third by the
427two so chosen. Arbitrators shall be selected from a list of
428potential qualified arbitrators with 10 years' experience
429involving the insurance industry. If the parties do not agree
430upon the qualifications of a mediator, each party shall select
431its mediator from a list of potential mediators approved by the
432receivership court.
433     Section 185.  Subsection (1) of section 631.261, Florida
434Statutes, is amended, and subsection (4) is added to said
435section, to read:
436     631.261  Voidable transfers.--
437     (1)(a)  Any transfer of, or lien upon, the property of an
438insurer or affiliate which is made or created within 4 months
439prior to the commencement of any delinquency proceeding under
440this chapter which gives with the intent of giving to any
441creditor of the insurer a preference or enables of enabling the
442creditor to obtain a greater percentage of her or his debt than
443any other creditor of the same class, and which is accepted by
444such creditor having reasonable cause to believe that such
445preference will occur, shall be voidable.
446     (b)  Any transfer of, or lien upon, the property of an
447insurer or affiliate which is made or created between 4 months
448and 1 year prior to the commencement of any delinquency
449proceeding under this chapter is void if such transfer or lien
450inured to the benefit of a director, officer, employee,
451stockholder, member, subscriber, affiliate, managing general
452agent, or insider or any relative of any director, officer,
453employee, stockholder, member, subscriber, affiliate, managing
454general agent, or insider.
455     (4)  For purposes of this section, a transfer is not made
456or created until the insurer or affiliate has acquired rights in
457the property transferred.
458     Section 186.  Subsection (2) of section 631.262, Florida
459Statutes, is amended to read:
460     631.262  Transfers prior to petition.--
461     (2)  Transfers shall be deemed to have been made or
462suffered, or obligations incurred, when perfected according to
463the following criteria:
464     (a)  A transfer of property other than real property shall
465be deemed to be made or suffered when it becomes so far
466perfected that no subsequent lien obtainable by legal or
467equitable proceedings on a simple contract could become superior
468to the rights of the transferee.;
469     (b)  A transfer of real property shall be deemed to be made
470or suffered when it becomes so far perfected that no subsequent
471bona fide purchaser from the insurer could obtain rights
472superior to the rights of the transferee.;
473     (c)  A transfer which creates an equitable lien shall not
474be deemed to be perfected if there are available means by which
475a legal lien could be created.;
476     (d)  Any transfer not perfected prior to the filing of a
477petition in a delinquency proceeding shall be deemed to be made
478immediately before the filing of a successful petition.;
479     (e)  For the purposes of this section, a transfer is not
480made until the insurer or affiliate has acquired rights in the
481property transferred.
482     (f)(e)  Paragraphs (a)-(e) (a)-(d) apply whether or not
483there are or were creditors who might have obtained any liens or
484persons who might have become bona fide purchasers.
485     Section 187.  Subsection (6) is added to section 631.263,
486Florida Statutes, to read:
487     631.263  Transfers after petition.--
488     (6)  For the purposes of this section, a transfer is not
489made until the insurer or affiliate has acquired rights in the
490property transferred.
491     Section 188.  Subsection (3) of section 631.54, Florida
492Statutes, is amended to read:
493     631.54  Definitions.--As used in this part:
494     (3)  "Covered claim" means an unpaid claim, including one
495of unearned premiums, which arises out of, and is within the
496coverage, and not in excess of, the applicable limits of an
497insurance policy to which this part applies, issued by an
498insurer, if such insurer becomes an insolvent insurer after
499October 1, 1970, and the claimant or insured is a resident of
500this state at the time of the insured event or the property from
501which the claim arises is permanently located in this state.
502"Covered claim" shall not include:
503     (a)  Any amount due any reinsurer, insurer, insurance pool,
504or underwriting association, sought directly or indirectly
505through a third party, as subrogation, contribution,
506indemnification, or otherwise; or
507     (b)  Any claim that would otherwise be a covered claim
508under this part that has been rejected by any other state
509guaranty fund on the grounds that an insured's net worth is
510greater than that allowed under that state's guaranty law .
511Member insurers shall have no right of subrogation,
512contribution, indemnification, or otherwise, sought directly or
513indirectly through a third party, against the insured of any
514insolvent member.
515     Section 189.  Subsection (2) of section 631.904, Florida
516Statutes, is amended to read:
517     631.904  Definitions.--As used in this part, the term:
518     (2)  "Covered claim" means an unpaid claim, including a
519claim for return of unearned premiums, which arises out of, is
520within the coverage of, and is not in excess of the applicable
521limits of, an insurance policy to which this part applies, which
522policy was issued by an insurer and which claim is made on
523behalf of a claimant or insured who was a resident of this state
524at the time of the injury. The term "covered claim" does not
525include any amount sought as a return of premium under any
526retrospective rating plan; any amount due any reinsurer,
527insurer, insurance pool, or underwriting association, as
528subrogation recoveries or otherwise; any claim that would
529otherwise be a covered claim that has been rejected by any other
530state guaranty fund on the grounds that the insured's net worth
531is greater than that allowed under that state's guaranty fund or
532liquidation law, except this exclusion from the definition of
533covered claim shall not apply to claims of employers who, prior
534to April 30, 2004, entered into an agreement with the
535corporation preserving the employer's right to seek coverage of
536claims rejected by another state's guaranty fund; or any return
537of premium resulting from a policy that was not in force on the
538date of the final order of liquidation. Member insurers have no
539right of subrogation against the insured of any insolvent
540insurer. This provision shall be applied retroactively to cover
541claims of an insolvent self-insurance fund resulting from
542accidents or losses incurred prior to January 1, 1994,
543regardless of the date the petition in circuit court was filed
544alleging insolvency and the date the court entered an order
545appointing a receiver.
546     Section 190.  Section 634.1815, Florida Statutes, is
547created to read:
548     634.1815  Rebating; when allowed.--
549     (1)  No salesperson shall rebate any portion of his or her
550commission except as follows:
551     (a)  The rebate shall be available to all consumers in the
552same actuarial class.
553     (b)  The rebate shall be in accordance with a rebating
554schedule filed by the salesperson with the service agreement
555company issuing the service agreement to which the rebate
556applies. The service agreement company shall maintain a copy of
557all rebating schedules for a period of 3 years.
558     (c)  The rebating schedule shall be uniformly applied so
559all consumers who purchase the same service agreement through
560the salesperson for the same coverage shall receive the same
561percentage rebate.
562     (d)  The rebate schedule shall be prominently displayed in
563public view in the salesperson's place of business, and a copy
564shall be made available to consumers on request at no charge.
565     (e)  The age, sex, place of residence, race, nationality,
566ethnic origin, marital status, or occupation of the consumer
567shall not be used in determining the percentage of the rebate or
568whether a rebate is available.
569     (2)  No rebate shall be withheld or limited in amount based
570on factors which are unfairly discriminatory.
571     (3)  No rebate shall be given which is not reflected on the
572rebate schedule.
573     (4)  No rebate shall be refused or granted based upon the
574purchase of or failure to purchase collateral business.
575     Section 191.  Section 634.3205, Florida Statutes, is
576created to read:
577     634.3205  Rebating; when allowed.--
578     (1)  No sales representative shall rebate any portion of
579his or her commission except as follows:
580     (a)  The rebate shall be available to all consumers in the
581same actuarial class.
582     (b)  The rebate shall be in accordance with a rebating
583schedule filed by the sales representative with the home
584warranty association issuing the home warranty to which the
585rebate applies. The home warranty association shall maintain a
586copy of all rebating schedules for a period of 3 years.
587     (c)  The rebating schedule shall be uniformly applied so
588all consumers who purchase the same home warranty through the
589sales representative for the same coverage shall receive the
590same percentage rebate.
591     (d)  The rebate schedule shall be prominently displayed in
592public view in the sales representative's place of business, and
593a copy shall be made available to consumers on request at no
594charge.
595     (e)  The age, sex, place of residence, race, nationality,
596ethnic origin, marital status, or occupation of the consumer
597shall not be used in determining the percentage of the rebate or
598whether a rebate is available.
599     (2)  No rebate shall be withheld or limited in amount based
600on factors which are unfairly discriminatory.
601     (3)  No rebate shall be given which is not reflected on the
602rebate schedule.
603     (4)  No rebate shall be refused or granted based upon the
604purchase of or failure to purchase collateral business.
605     Section 192.  Subsection (8) is added to section 634.406,
606Florida Statutes, to read:
607     634.406  Financial requirements.--
608     (8)  An association licensed under this part and holding no
609other license under part I or part II of this chapter is not
610required to establish an unearned premium reserve or maintain
611contractual liability insurance and may allow its premiums to
612exceed the ratio to net assets limitation of this section if the
613association complies with the following:
614     (a)  The association or, if the association is a direct or
615indirect wholly owned subsidiary of a parent corporation, its
616parent corporation has, and maintains at all times, a minimum
617net worth of at least $100 million and provides the office with
618the following:
619     1.  A copy of the association's annual audited financial
620statements or the audited consolidated financial statements of
621the association's parent corporation, prepared by an independent
622certified public accountant in accordance with generally
623accepted accounting principles, which clearly demonstrate the
624net worth of the association or its parent corporation to be
625$100 million and a quarterly written certification to the office
626that such entity continues to maintain the net worth required
627under this paragraph.
628     2.  The association's, or its parent corporation's, Form
62910K, Form 10Q, or Form 20F as filed with the United States
630Securities and Exchange Commission or such other documents
631required to be filed with a recognized stock exchange, which
632shall be provided on a quarterly and annual basis within 10 days
633after the last date each such report must be filed with the
634Securities and Exchange Commission, the National Association of
635Security Dealers Automated Quotation system, or other recognized
636stock exchange.
637
638Failure to timely file the documents required under this
639paragraph may, at the discretion of the office, subject the
640association to suspension or revocation of its license under
641this part. An association or parent corporation demonstrating
642compliance with subparagraph 1. and subparagraph 2. must
643maintain outstanding debt obligations, if any, rated in the top
644four rating categories by a recognized rating service.
645     (b)  If the net worth of a parent corporation is used to
646satisfy the net worth provisions of paragraph (a), the following
647provisions must be met:
648     1.  The parent corporation must guarantee all service
649warranty obligations of the association, wherever written, on a
650form approved in advance by the office. No cancellation,
651termination, or modification of the guarantee shall become
652effective unless the parent corporation provides the office
653written notice at least 90 days before the effective date of the
654cancellation, termination, or modification and the office
655approves the request in writing. Prior to the effective date of
656cancellation, termination, or modification of the guarantee, the
657association must demonstrate to the satisfaction of the office
658compliance with all applicable provisions of this part,
659including whether the association will meet the requirements of
660this section by the purchase of contractual liability insurance,
661establishing required reserves, or other method allowed under
662this section. If the association or parent corporation does not
663demonstrate to the satisfaction of the office compliance with
664all applicable provisions of this part, it shall immediately
665cease writing new and renewal business upon the effective date
666of the cancellation, termination, or modification.
667     2.  The association must maintain at all times net assets
668of at least $750,000.
669     Section 193.  Section 634.4225, Florida Statutes, is
670created to read:
671     634.4225  Rebating; when allowed.--
672     (1)  No sales representative shall rebate any portion of
673his or her commission except as follows:
674     (a)  The rebate shall be available to all consumers in the
675same actuarial class.
676     (b)  The rebate shall be in accordance with a rebating
677schedule filed by the sales representative with the association
678issuing the service warranty to which the rebate applies. The
679association shall maintain a copy of all rebating schedules for
680a period of 3 years.
681     (c)  The rebating schedule shall be uniformly applied so
682all consumers who purchase the same service warranty through the
683sales representative for the same coverage shall receive the
684same percentage rebate.
685     (d)  The rebate schedule shall be prominently displayed in
686public view in the sales representative's place of business, and
687a copy shall be made available to consumers on request at no
688charge.
689     (e)  The age, sex, place of residence, race, nationality,
690ethnic origin, marital status, or occupation of the consumer
691shall not be used in determining the percentage of the rebate or
692whether a rebate is available.
693     (2)  No rebate shall be withheld or limited in amount based
694on factors which are unfairly discriminatory.
695     (3)  No rebate shall be given which is not reflected on the
696rebate schedule.
697     (4)  No rebate shall be refused or granted based upon the
698purchase of or failure to purchase collateral business.
699     Section 194.  Subsection (2) of section 624.4072, Florida
700Statutes, is amended to read:
701     624.4072  Minority-owned property and casualty insurers;
702limited exemption for taxation and assessments.--
703     (2)  Subsection (1) applies only to personal lines and
704commercial lines residential property insurance policies as
705defined in s. 627.4025, and applies only to an insurer that has
706employees in this state and has a home office or a regional
707office in this state.  With respect to any tax year or
708assessment year, beginning with the original enactment of this
709section, the exemptions provided by subsection (1) apply only if
710during the year an average of at least 10 percent of the
711insurer's Florida residential property policies in force
712included coverage of covered properties located in enterprise
713zones designated pursuant to s. 290.0065.
714     Section 195.  Subsection (1) of section 627.0629, Florida
715Statutes, is amended to read:
716     627.0629  Residential property insurance; rate filings.--
717     (1)(a)  Effective June 1, 2002, a rate filing for
718residential property insurance must include actuarially
719reasonable discounts, credits, or other rate differentials, or
720appropriate reductions in deductibles, for properties on which
721fixtures or construction techniques demonstrated to reduce the
722amount of loss in a windstorm have been installed or
723implemented. The fixtures or construction techniques shall
724include, but not be limited to, fixtures or construction
725techniques which enhance roof strength, roof covering
726performance, roof-to-wall strength, wall-to-floor-to-foundation
727strength, opening protection, and window, door, and skylight
728strength. Credits, discounts, or other rate differentials for
729fixtures and construction techniques which meet the minimum
730requirements of the Florida Building Code must be included in
731the rate filing. All insurance companies must make a rate filing
732which includes the credits, discounts, or other rate
733differentials by February 28, 2003.
734     (b)  An insurer may petition the office for a hardship
735exemption from the requirements of this section. In applying for
736such an exemption, the insurer must demonstrate:
737     1.a.  That the number of policies written is insufficient
738or of insufficient size to determine the appropriate credit,
739discount, or other rate differential or reduction in
740deductibles; or
741     b.  That the premium derived from the number of policies
742written is so low as to render any credit, discount, or other
743rate differential or appropriate reduction in deductibles not
744cost-effective;
745     3.  That the cost of complying is greater to the insurer
746than the resultant likely savings by virtue of any such credit,
747discount, or other rate differential or appropriate reduction in
748deductibles due to the actuarially demonstrated or actual small
749number of policyholders likely to qualify for or qualifying for
750the discount, credit, or other rate differential or appropriate
751reduction in deductibles;
752     4.  That the type and condition of the market generally and
753specifically to the insurer is such that the discount, credit,
754or other rate differential or appropriate reduction in
755deductibles is not actuarially justified;
756     5.  That granting the exemption is in the best interest of
757the insurer; and
758     6.  That granting the exemption will not place the insurer
759in an unfair competitive position with respect to other insurers
760in the marketplace.
761
762The office may grant the exemption upon its determination that
763the conditions and standards set forth in this paragraph have
764been met. The exemption is valid for 3 years after the date
765granted. With respect to any petition for renewal of the
766exemption, the chief executive officer of the insurer must
767certify that there has been no material change in the conditions
768under which the exemption was granted.
769     Section 196.  Section 627.066, Florida Statutes, is
770repealed.
771     Section 197.  Paragraph (d) of subsection (2) of section
772627.0651, Florida Statutes, is amended to read:
773     627.0651  Making and use of rates for motor vehicle
774insurance.--
775     (2)  Upon receiving notice of a rate filing or rate change,
776the office shall review the rate or rate change to determine if
777the rate is excessive, inadequate, or unfairly discriminatory.
778In making that determination, the office shall in accordance
779with generally accepted and reasonable actuarial techniques
780consider the following factors:
781     (d)  Investment income reasonably expected by the insurer,
782consistent with the insurer's investment practices, from
783investable premiums anticipated in the filing, plus any other
784expected income from currently invested assets representing the
785amount expected on unearned premium reserves and loss reserves.  
786Such investment income shall not include income from invested
787surplus.  The commission may adopt rules utilizing reasonable
788techniques of actuarial science and economics to specify the
789manner in which insurers shall calculate investment income
790attributable to motor vehicle insurance policies written in this
791state and the manner in which such investment income is used in
792the calculation of insurance rates.  Such manner shall
793contemplate the use of a positive underwriting profit allowance
794in the rates that will be compatible with a reasonable rate of
795return plus provisions for contingencies. The total of the
796profit and contingency factor as specified in the filing shall
797be utilized in computing excess profits in conjunction with s.
798627.066. In adopting such rules, the commission shall in all
799instances adhere to and implement the provisions of this
800paragraph.
801     Section 198.  Subsection (4) of section 628.6017, Florida
802Statutes, is amended to read:
803     628.6017  Converting assessable mutual insurer.--
804     (4)  An assessable mutual insurer becoming a stock insurer
805or a nonassessable mutual insurer shall not be subject to s.
806627.215 or s. 627.351(5) for 5 years following authorization of
807the conversion by the office. However, the converted stock
808insurer or nonassessable mutual insurer shall file all necessary
809data required by s. 627.215. Such amounts otherwise subject to
810s. 627.215(10) shall be maintained as surplus as to
811policyholders and not be available for dividends for a period of
8125 years.
813     Section 199.  Effective upon this act becoming a law, and
814contingent upon the enactment of SB 2910, HB 1629, or similar
815legislation, subsection (20) of section 627.64872, Florida
816Statutes, is created to read:
817     627.64872  Florida Health Insurance Plan.--
818     (20)  COMBINING MEMBERSHIP OF THE FLORIDA COMPREHENSIVE
819HEALTH ASSOCIATION.--
820     (a)1.  Upon implementation of the Florida Health Insurance
821Plan, the Florida Comprehensive Health Association, as specified
822in s. 627.6488, is abolished as a separate nonprofit entity and
823shall be subsumed under the Board of Directors of the Florida
824Health Insurance Plan. All individuals actively enrolled in the
825Florida Comprehensive Health Association shall be enrolled in
826the plan subject to its rules and requirements, except as
827otherwise specified in this section. Maximum lifetime benefits
828paid to an individual in the plan may not exceed the amount
829established under subsection (16), and benefits previously paid
830for any individual by the Florida Comprehensive Health
831Association shall be used in the determination of the total
832lifetime benefits paid under the plan.
833     2.  All persons enrolled in the Florida Comprehensive
834Health Association upon implementation of the Florida Health
835Insurance Plan are eligible only for the benefits authorized
836under subsection (16). Persons identified by this section shall
837convert to the benefits authorized under subsection (16) no
838later than January 1, 2005.
839     3.  Except as otherwise provided in this section, the
840Florida Comprehensive Health Association shall operate under the
841existing plan of operation without modification until the
842adoption of the new plan of operation for the Florida Health
843Insurance Plan.
844     (b)  As a condition of doing business in this state, an
845insurer shall pay an assessment to the board in the amount
846prescribed by this paragraph. For operating losses incurred on
847or after July 1, 2004, by persons previously enrolled in the
848Florida Comprehensive Health Association, each insurer shall
849annually be assessed by the board in the following calendar year
850a portion of such incurred operating losses of the plan. Such
851portion shall be determined by multiplying such operating losses
852by a fraction, the numerator of which equals the insurer's
853earned premium pertaining to direct writings of health insurance
854in the state during the calendar year proceeding that for which
855the assessment is levied, and the denominator of which equals
856the total of all such premiums earned by participating insurers
857in the state during such calendar year. For the purposes of this
858section only, the term "health insurance" means any hospital and
859medical expense incurred policy, minimum premium plan, stop-loss
860coverage, health maintenance organization contract, prepaid
861health clinic contract, multiple-employer welfare arrangement
862contract, or fraternal benefit society health benefits contract,
863whether sold as an individual or group policy or contract. The
864term does not include any policy covering medical payment
865coverage or personal injury protection coverage in a motor
866vehicle policy, coverage issued as a supplement to liability
867insurance, or workers' compensation.
868     Section 200.  Section 624.428, Florida Statutes, is amended
869to read:
870     624.428  Licensed agent law, life and health insurances.--
871     (1)  No life insurer shall deliver or issue for delivery in
872this state any policy of life insurance, master group life
873insurance contract, master credit life policy or agreement,
874annuity contract, or contract or policy of health insurance,
875unless the application for such policy or contract is taken by,
876and the delivery of such policy or contract is made through, a
877resident or nonresident an insurance agent of the insurer duly
878licensed and appointed under the law of this state, who shall
879receive the usual commission due to an agent from such insurer.
880     (2)  Each such insurer shall maintain a licensed and
881appointed resident or nonresident agent at all times for the
882purpose of and through whom policies or contracts issued or
883delivered in this state shall be serviced.
884     (3)  This section does not apply to policies of insurance
885or annuity contracts on nonresidents which are applied for
886outside, and delivered in, the state or to reissuance of
887insurance policies or endorsements thereto which are part of a
888mass reissuance of such policies or endorsements and do not
889involve a change of premium or payment of agent's commissions.
890     Section 201.  Section 627.0915, Florida Statutes, is
891amended to read:
892     627.0915  Rate filings; workers' compensation, drug-free
893workplace, and safe employers.-
894     (1)  The office shall approve rating plans for workers'
895compensation and employer's liability insurance that give
896specific identifiable consideration in the setting of rates to
897employers that either implement a drug-free workplace program
898pursuant to s. 440.102 and rules adopted under such section by
899the commission or implement a safety program pursuant to
900provisions of the rating plan or implement both a drug-free
901workplace program and a safety program. The plans must be
902actuarially sound and must state the savings anticipated to
903result from such drug-testing and safety programs.
904     (2)  An insurer offering a rate plan approved under this
905section shall notify the employer at the time of a written offer
906of insurance and at the time of each renewal of the policy of
907the availability of the premium discount where a drug fee
908workplace plan is used by the employer pursuant to s. 440.102
909and related rules. The Financial Services Commission may adopt
910rules to implement the provisions of this subsection.
911
912================ T I T L E  A M E N D M E N T =============
913     On page 16, line 1, after the semicolon, insert:
914amending s. 626.2815, F.S.; deleting certain minimum continuing
915education requirements; amending s. 626.015, F.S.; defining the
916term "personal lines agent";  amending s. 626.022, F.S.;
917providing for application; amending s. 626.241, F.S.; limiting
918the scope of personal lines agent examinations; amending s.
919626.311, F.S.; limiting the types of business that may be
920transacted by personal lines agents; amending s. 626.727, F.S.;
921providing that certain provisions apply to personal lines
922agents; amending s. 626.732, F.S.; revising certain education
923and experience requirements for personal lines agents; amending
924s. 626.747, F.S.; requiring branch agencies to have certain
925licensed agents at each location; amending s. 627.351, F.S.;
926providing that certain employees of the Citizens' Property
927Insurance Corporation need not be licensed as agents; providing
928that the act does not require the Department of Financial
929Services to begin issuing certain licenses by the effective date
930of the act, under specified conditions; amending s. 626.321,
931F.S.; limiting the types of business that may be transacted by
932personal lines agents; amending s. 628.709, F.S.; revising
933membership criteria for mutual insurance holding companies
934relating to policyholders of subsidiary insurance companies;
935amending s. 631.021, F.S.; authorizing certain domiciliary
936courts to exercise exclusive jurisdiction over certain persons
937under certain circumstances; specifying the Circuit Court of
938Leon County as having exclusive jurisdiction over certain
939proceedings and claims; amending s. 631.041, F.S.; entitling the
940estates of certain injured insurers to actual damages;
941authorizing a receivership court to impose additional sanctions;
942amending s. 631.0515, F.S.; subjecting certain managing general
943agents or holding companies to court jurisdiction under certain
944circumstances; amending s. 631.141, F.S.; specifying certain
945expenses as administrative and recoverable by a receiver in
946certain proceedings; amending s. 631.205, F.S.; specifying that
947entry of certain orders does not constitute anticipatory breach
948of certain contracts or serve as grounds for certain adverse
949contract actions by a reinsurer; creating s. 631.206, F.S.;
950voiding certain contractual arbitration provisions by insurers
951in receivership; specifying a replacement arbitration provision;
952amending s. 631.261, F.S.; voiding certain transfers or liens
953made by certain persons prior to certain delinquency
954proceedings; specifying a criterion for making certain
955transfers; amending ss. 631.262 and 631.263, F.S.; specifying a
956criterion for making certain transfers; amending ss. 631.54 and
957631.904, F.S.; revising the definition of covered claim;
958excluding certain claims rejected by another state's guaranty
959fund under certain circumstances; providing an exception;
960denying member insurers any right to indemnification or
961contribution sought through third parties; creating s. 634.1815,
962F.S.; providing conditions under which a salesperson of a motor
963vehicle service agreement company may rebate his or her
964commission; creating s. 634.3205, F.S.; providing conditions
965under which a sales representative of a home warranty
966association may rebate his or her commission; amending s.
967634.406, F.S.; providing conditions under which a service
968warranty association is exempt from certain premium reserve and
969liability insurance requirements and may allow premiums to
970exceed certain limits; creating s. 634.4225, F.S.; providing
971conditions under which a sales representative of a service
972warranty association may rebate his or her commission; amending
973s. 624.4072, F.S.; specifying applicability of certain
974exemptions for minority-owned property and casualty insurers;
975amending s. 627.0629, F.S.; authorizing an exemption for certain
976insurers under certain circumstances; repealing s. 627.066,
977F.S., relating to insurance profits; amending ss. 627.0651 and
978628.6017, F.S., to conform; creating s. 627.64872(20), F.S.;
979defining the term "health insurance" for purposes of this
980section; creating s. 17.0416, F.S.; amending s. 624.428, F.S.;
981clarifying provisions relating to resident agent requirements
982for insurers issuing specified types of life insurance policies;
983amending s. 627.0915, F.S.; providing for notice by insurers to
984employers of the availability of premium discounts where drug
985free workplace programs are used; authorizing the Financial
986Services Commission to adopt rules;


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