Meeting Packet - Insurance & Banking Subcommittee (March 10, 2021)
Summary
Meeting packet of the Insurance & Banking Subcommittee of The Florida House of Representatives Commerce Committee for Wednesday, March 10, 2021, 9:30 AM to 11:30 AM at Morris Hall (17 HOB). The agenda lists HB 245 Massage Therapy (Chaney), HB 701 Behavioral Health Care Services Coverage and Access (Stevenson), HB 815 Insurance (Gregory), HB 895 Consumer Finance Loans (Stevenson), HB 917 Documentary Stamp Tax Exemption (McClain) and the proposed committee substitute PCS for HB 6077 Assets of an Estate in Administration. The staff analysis of HB 245, dated 3/8/2021, says the bill authorizes a massage therapist to perform a massage therapy assessment, changes the term massage to massage therapy, has no fiscal impact on state or local government, and has an effective date of July 1, 2021.
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Insurance & Banking Subcommittee
Wednesday, March 10, 2021
9:30 AM - 11:30 AM
Morris Hall (17 HOB)
Meeting Packet
Chris Sprowls Nick DiCeglie
Speaker Chair
The Florida House of Representatives
Commerce Committee
Insurance & Banking Subcommittee
Chris Sprowls Nick DiCeglie
Speaker Chair
Meeting Agenda
Wednesday, March 10, 2021
9:30 AM – 11:30 AM
Morris Hall (17 HOB)
I. Call to Order
II. Roll Call
III. Welcome and Opening Remarks
IV. Consideration of the following bill(s):
• HB 245 Massage Therapy by Chaney
• HB 701 Behavioral Health Care Services Coverage and Access by Stevenson
• HB 815 Insurance by Gregory
• HB 895 Consumer Finance Loans by Stevenson
• HB 917 Documentary Stamp Tax Exemption by McClain
Consideration of the following proposed committee substitute(s):
• PCS for HB 6077 -- Assets of an Estate in Administration
I. Closing Remarks
II. Adjournment
303 House Office Building, 402 South Monroe Street, Tallahassee, FL 32399-1300
(850) 717-4870
HB 245
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 245 Massage Therapy
SPONSOR(S): Chaney
TIED BILLS: IDEN./SIM. BILLS: CS/SB 352
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Professions & Public Health Subcommittee 18 Y, 0 N Guzzo McElroy
2) Insurance & Banking Subcommittee Rowley Luczynski
3) Health & Human Services Committee
SUMMARY ANALYSIS
Massage practice is the manipulation of the soft tissues of the human body with the hand, foot, arm, or elbow,
and may be aided by hydrotherapy, including colonic irrigation or thermal therapy, or any electrical or
mechanical device, or the application of a chemical or herbal preparation to the human body. The Board of
Massage Therapy (Board), within the Department of Health (DOH), regulates massage practice in this state.
The bill expands the scope of practice for massage therapy by authorizing a massage therapist to perform a
massage therapy assessment to determine the course of massage therapy treatment.
Current law authorizes a massage therapist to use his or her hand, foot, arm, or elbow during the course of
massage therapy treatment. The bill authorizes a massage therapist to also use his or her knee during the
course of massage therapy treatment.
The bill also changes the term “massage” to “massage therapy” throughout statutes to standardize
terminology.
The bill has no fiscal impact on state or local government.
The bill provides an effective date of July 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h0245b.IBS
DATE: 3/8/2021
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Massage Therapy
Massage practice is the manipulation of the soft tissues of the human body with the hand, foot, arm, or
elbow, whether or not such manipulation is aided by hydrotherapy, including colonic irrigation or
thermal therapy, or any electrical or mechanical device, or the application of a chemical or herbal
preparation to the human body.1 Massage is therapeutic and a massage therapist must know anatomy
and physiology and understand the relationship between the structure and function of the tissues being
treated and the total function of the body.2
Chapter 480, F.S., entitled the “Massage Practice Act” governs the practice of massage therapy in
Florida. The Board of Massage Therapy (Board), within the Department of Health (DOH), regulates
massage practice, including massage therapists and massage establishments.3
Massage Therapist Licensure
A massage therapist is a person who administers massage for compensation.4 To qualify for licensure
as a massage therapist, an applicant must:
Be at least 18 years of age or have received a high school diploma or graduate equivalency
diploma;
Complete a course of study at a Board-approved massage school;
Undergo background screening; and
Pass an examination.5
A massage therapist is required to renew his or her license every two years and must complete 24
hours of continuing education for each renewal period.6
As of February 24, 2021, there are 38,875 actively licensed massage therapists in Florida.7
Massage Schools
A person seeking licensure as a massage therapist is required to complete a course of study at a
Board-approved massage school. The Board requires the course of study to be comprised of at least
500 hours, completed at a rate of no more than six hours per day and no more than 30 hours per week.
1 S. 480.033(3), F.S.
2 S. 480.032, F.S.
3 S. 480.035, F.S.
4 S. 480.033(4), F.S.
5 S. 480.041(1), F.S.
6 S. 480.0415, F.S., and rule 64B7-28.009, F.A.C.
7 Department of Health, FLHealthSource.gov, Public Data Portal (search by Board/Council “Board of Massage Therapy”, then by
Profession “massage therapist”, then by license status “practicing statuses only”), available at https://mqa-
internet.doh.state.fl.us/MQASearchServices/HealthCareProviders, (last visited Mar. 5, 2021).
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The education must include:
150 hours of anatomy and physiology;
100 hours of basic massage theory and history;
125 hours of clinical practicum;
76 hours of allied modalities;
15 hours of business;
15 hours of theory and practice of hydrotherapy;
10 hours of Florida laws and rules;
4 hours of professional ethics;
3 hours of HIV/AIDS education; and
2 hours of medical errors.8
In addition to the training above, a massage therapy student seeking to provide colonic irrigation9
services must be certified by the Board to provide such services. Prior to passing an exam, the student
must complete a course of study in colonic irrigation, which must include a minimum of 100 classroom
hours, consisting of:
50 hours in theory, anatomy, physiology, pathology of the colon and digestive system and
principles of colon hygiene;
45 hours of clinical practicum that includes 20 treatments; and
5 hours in sterilization techniques and equipment training.10
Colonic Irrigation Apprenticeship Training Programs
As an alternative to completing a course of study in colonic irrigation, a licensed massage therapist may
be certified to provide colonic irrigation services upon completing a colonic irrigation apprenticeship
training program.11 An apprentice must act under the direct supervision of a sponsor who is a licensed
massage therapist, certified to practice colonic irrigation, and have practiced colonic irrigation for at
least three years.12
The apprenticeship must be completed within 12 months of commencement and must consist of at
least 1,448 hours of training, including:
300 hours of anatomy;
300 hours of physiology;
20 hours of basic massage theory and history;
50 hours of theory and the practice of hydrotherapy;
25 hours of Florida Laws and Rules regulating the practice of massage therapy;
50 hours of allied modalities;
700 hours of clinical practicum; and
3 hours of HIV/AIDS instruction.13
Upon completion of the above training, the apprentice must pass a Board-approved exam.14
Effect of the Bill
8 Rule 64B7-32.003(1), F.A.C.
9 Colonic irrigation is a method of hydrotherapy used to cleanse the colon with the aid of a mechanical device and water (s. 480.033(6),
F.S.).
10 Rule 64B7-32.005(1), F.A.C.
11 S. 480.041(5)(b), F.S., and rule 64B7-29, F.A.C.
12 Rule 64B7-29.001, F.A.C.
13 Rule 64B7-29.003, F.A.C.
14 Rule 64B7-25.001(2)(d), F.A.C.
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The bill expands the scope of practice for massage therapy to include performing massage therapy
assessment. The bill defines “massage therapy assessment” as the determination of the course of
massage therapy treatment by a massage therapist. Currently, a massage therapist may perform a
massage on a patient, but there is no specific statutory authority for a massage therapist to assess the
patient to determine the course of treatment.
Current law authorizes a massage therapist to use his or her hand, foot, arm, or elbow during the
course of massage therapy treatment. The bill authorizes a massage therapist to also use his or her
knee during the course of massage therapy treatment.
The bill changes the term “massage” to “massage therapy” throughout statutes to standardize
terminology, including revising the title of ch. 480, F.S., from “Massage Practice” to “Massage Therapy
Practice.”
B. SECTION DIRECTORY:
Section 1: Renames ch. 480, F.S.
Section 2: Amends s. 480.031, F.S., relating to the “Massage Practice Act.”
Section 3: Amends s. 480.032, F.S., relating to purpose.
Section 4: Amends s. 480.033, F.S., relating to definitions.
Section 5: Amends s. 477.013, F.S., relating to definitions.
Section 6: Amends s. 477.0135, F.S., relating to exemptions.
Section 7: Amends s. 477.0265, F.S., relating to prohibited acts.
Section 8: Amends s. 480.034, F.S., relating to exemptions.
Section 9: Amends s. 480.035, F.S., relating to Board of Massage Therapy.
Section 10: Amends s. 480.041, F.S., relating to massage therapists; qualifications; licensure;
endorsement.
Section 11: Amends s. 480.043, F.S., relating to massage establishments; requisites; licensure;
inspection; human trafficking awareness training and policies.
Section 12: Amends s. 480.046, F.S., relating to grounds for disciplinary action by the board.
Section 13: Amends s. 480.0465, F.S., relating to advertisement.
Section 14: Amends s. 480.047, F.S., relating to penalties.
Section 15: Amends s. 480.052, F.S., relating to power of county or municipality to regulate massage.
Section 16: Amends s. 480.0535, F.S., relating to documents required while working in a massage
establishment.
Section 17: Amends s. 627.6407, F.S., relating to massage.
Section 18: Amends s. 627.6619, F.S., relating to massage.
Section 19: Amends s. 627.736, F.S., relating to required personal injury protection benefits;
exclusions; priority; claims.
Section 20: Amends s. 641.31, F.S., relating to health maintenance contracts.
Section 21: Amends s. 823.05, F.S., relating to places and groups engaged in certain activities
declared a nuisance; abatement and enjoinment.
Section 22: Provides an effective date of July 1, 2021.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
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DATE: 3/8/2021
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
None.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to affect county or municipal governments.
2. Other:
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 245 2021
1 A bill to be entitled
2 An act relating to massage therapy; renaming ch. 480,
3 F.S., as "Massage Therapy Practice"; amending s.
4 480.031, F.S.; conforming a provision to changes made
5 by the act; amending s. 480.032, F.S.; revising the
6 purpose of ch. 480, F.S.; amending s. 480.033, F.S.;
7 revising and providing definitions; amending ss.
8 477.013, 477.0135, 477.0265, 480.034, 480.035,
9 480.041, 480.043, 480.046, 480.0465, 480.047, 480.052,
10 480.0535, 627.6407, 627.6619, 627.736, 641.31, and
11 823.05, F.S.; conforming provisions to changes made by
12 the act; making technical changes; providing an
13 effective date.
14
15 Be It Enacted by the Legislature of the State of Florida:
16
17 Section 1. Chapter 480, Florida Statutes, entitled
18 "Massage Practice," is renamed "Massage Therapy Practice."
19 Section 2. Section 480.031, Florida Statutes, is amended
20 to read:
21 480.031 Short title.—This act shall be known and may be
22 cited as the "Massage Therapy Practice Act."
23 Section 3. Section 480.032, Florida Statutes, is amended
24 to read:
25 480.032 Purpose.—The Legislature recognizes that the
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26 practice of massage therapy is potentially dangerous to the
27 public in that massage therapists must have a knowledge of
28 anatomy and physiology and an understanding of the relationship
29 between the structure and the function of the tissues being
30 treated and the total function of the body. Massage therapy is a
31 therapeutic health care practice, and regulations are necessary
32 to protect the public from unqualified practitioners. It is
33 therefore deemed necessary in the interest of public health,
34 safety, and welfare to regulate the practice of massage therapy
35 in the this state; however, restrictions shall be imposed to the
36 extent necessary to protect the public from significant and
37 discernible danger to health and yet not in such a manner which
38 will unreasonably affect the competitive market. Further,
39 consumer protection for both health and economic matters shall
40 be afforded the public through legal remedies provided for in
41 this act.
42 Section 4. Section 480.033, Florida Statutes, is amended
43 to read:
44 480.033 Definitions.—As used in this act:
45 (1)(5) "Apprentice" means a person approved by the board
46 to study colonic irrigation under the instruction of a licensed
47 massage therapist practicing colonic irrigation.
48 (2)(1) "Board" means the Board of Massage Therapy.
49 (3)(9) "Board-approved massage therapy school" means a
50 facility that meets minimum standards for training and
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51 curriculum as determined by rule of the board and that is
52 licensed by the Department of Education pursuant to chapter 1005
53 or the equivalent licensing authority of another state or is
54 within the public school system of this state or a college or
55 university that is eligible to participate in the William L.
56 Boyd, IV, Effective Access to Student Education Grant Program.
57 (4)(6) "Colonic irrigation" means a method of hydrotherapy
58 used to cleanse the colon with the aid of a mechanical device
59 and water.
60 (5)(2) "Department" means the Department of Health.
61 (6)(11) "Designated establishment manager" means a massage
62 therapist who holds a clear and active license without
63 restriction, who is responsible for the operation of a massage
64 establishment in accordance with the provisions of this chapter,
65 and who is designated the manager by the rules or practices at
66 the establishment.
67 (7) "Establishment" or "massage establishment" means a
68 site or premises, or portion thereof, wherein a massage
69 therapist practices massage therapy.
70 (8)(10) "Establishment owner" means a person who has
71 ownership interest in a massage establishment. The term includes
72 an individual who holds a massage establishment license, a
73 general partner of a partnership, an owner or officer of a
74 corporation, and a member of a limited liability company and its
75 subsidiaries who holds a massage establishment license.
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76 (9)(8) "Licensure" means the procedure by which a person,
77 hereinafter referred to as a "practitioner," applies to the
78 board for approval to practice massage or to operate an
79 establishment.
80 (10)(4) "Massage therapist" means a person licensed as
81 required by this act, who performs administers massage therapy,
82 including massage therapy assessment, for compensation.
83 (11)(3) "Massage therapy" means the manipulation of the
84 soft tissues of the human body with the hand, foot, knee, arm,
85 or elbow, regardless of whether or not such manipulation is
86 aided by hydrotherapy, including colonic irrigation, or thermal
87 therapy; any electrical or mechanical device; or the application
88 to the human body of a chemical or herbal preparation.
89 (12) "Massage therapy assessment" means the determination
90 of the course of massage therapy treatment.
91 Section 5. Subsection (13) of section 477.013, Florida
92 Statutes, is amended to read:
93 477.013 Definitions.—As used in this chapter:
94 (13) "Skin care services" means the treatment of the skin
95 of the body, other than the head, face, and scalp, by the use of
96 a sponge, brush, cloth, or similar device to apply or remove a
97 chemical preparation or other substance, except that chemical
98 peels may be removed by peeling an applied preparation from the
99 skin by hand. Skin care services must be performed by a licensed
100 cosmetologist or facial specialist within a licensed cosmetology
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101 or specialty salon, and such services may not involve massage
102 therapy, as defined in s. 480.033 s. 480.033(3), through
103 manipulation of the superficial tissue.
104 Section 6. Paragraph (a) of subsection (1) of section
105 477.0135, Florida Statutes, is amended to read:
106 477.0135 Exemptions.—
107 (1) This chapter does not apply to the following persons
108 when practicing pursuant to their professional or occupational
109 responsibilities and duties:
110 (a) Persons authorized under the laws of this state to
111 practice medicine, surgery, osteopathic medicine, chiropractic
112 medicine, massage therapy, naturopathy, or podiatric medicine.
113 Section 7. Paragraph (f) of subsection (1) of section
114 477.0265, Florida Statutes, is amended to read:
115 477.0265 Prohibited acts.—
116 (1) It is unlawful for any person to:
117 (f) Advertise or imply that skin care services, as
118 performed under this chapter, have any relationship to the
119 practice of massage therapy as defined in s. 480.033 s.
120 480.033(3), except those practices or activities defined in s.
121 477.013.
122 Section 8. Subsection (4) of section 480.034, Florida
123 Statutes, is amended to read:
124 480.034 Exemptions.—
125 (4) An exemption granted is effective to the extent that
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126 an exempted person's practice or profession overlaps with the
127 practice of massage therapy.
128 Section 9. Subsection (2) of section 480.035, Florida
129 Statutes, is amended to read:
130 480.035 Board of Massage Therapy.—
131 (2) Five members of the board shall be licensed massage
132 therapists and shall have been engaged in the practice of
133 massage therapy for not less than 5 consecutive years prior to
134 the date of appointment to the board. The Governor shall appoint
135 each member for a term of 4 years. Two members of the board
136 shall be laypersons. Each board member shall be a high school
137 graduate or shall have received a high school equivalency
138 diploma. Each board member shall be a citizen of the United
139 States and a resident of this state for not less than 5 years.
140 The appointments are will be subject to confirmation by the
141 Senate.
142 Section 10. Subsections (1) and (4) and paragraph (b) of
143 subsection (5) of section 480.041, Florida Statutes, are amended
144 to read:
145 480.041 Massage therapists; qualifications; licensure;
146 endorsement.—
147 (1) Any person is qualified for licensure as a massage
148 therapist under this act who:
149 (a) Is at least 18 years of age or has received a high
150 school diploma or high school equivalency diploma;
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151 (b) Has completed a course of study at a board-approved
152 massage therapy school that meets standards adopted by the
153 board; and
154 (c) Has received a passing grade on a national examination
155 designated by the board.
156 (4) Upon an applicant's passing the examination and paying
157 the initial licensure fee, the department shall issue to the
158 applicant a license, valid until the next scheduled renewal
159 date, to practice massage therapy.
160 (5) The board shall adopt rules:
161 (b) Providing for educational standards, examination, and
162 certification for the practice of colonic irrigation, as defined
163 in s. 480.033 s. 480.033(6), by massage therapists.
164 Section 11. Subsection (14) of section 480.043, Florida
165 Statutes, is amended to read:
166 480.043 Massage establishments; requisites; licensure;
167 inspection; human trafficking awareness training and policies.—
168 (14) Except for the requirements of subsection (13), this
169 section does not apply to a physician licensed under chapter
170 457, chapter 458, chapter 459, or chapter 460 who employs a
171 licensed massage therapist to perform massage therapy on the
172 physician's patients at the physician's place of practice. This
173 subsection does not restrict investigations by the department
174 for violations of chapter 456 or this chapter.
175 Section 12. Paragraphs (a), (b), (c), (f), (g), (h), (i),
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176 and (o) of subsection (1) of section 480.046, Florida Statutes,
177 are amended to read:
178 480.046 Grounds for disciplinary action by the board.—
179 (1) The following acts constitute grounds for denial of a
180 license or disciplinary action, as specified in s. 456.072(2):
181 (a) Attempting to procure a license to practice massage
182 therapy by bribery or fraudulent misrepresentation.
183 (b) Having a license to practice massage therapy revoked,
184 suspended, or otherwise acted against, including the denial of
185 licensure, by the licensing authority of another state,
186 territory, or country.
187 (c) Being convicted or found guilty, regardless of
188 adjudication, of a crime in any jurisdiction which directly
189 relates to the practice of massage therapy or to the ability to
190 practice massage therapy. Any plea of nolo contendere shall be
191 considered a conviction for purposes of this chapter.
192 (f) Aiding, assisting, procuring, or advising any
193 unlicensed person to practice massage therapy contrary to the
194 provisions of this chapter or to a rule of the department or the
195 board.
196 (g) Making deceptive, untrue, or fraudulent
197 representations in the practice of massage therapy.
198 (h) Being unable to practice massage therapy with
199 reasonable skill and safety by reason of illness or use of
200 alcohol, drugs, narcotics, chemicals, or any other type of
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201 material or as a result of any mental or physical condition. In
202 enforcing this paragraph, the department shall have, upon
203 probable cause, may authority to compel a massage therapist to
204 submit to a mental or physical examination by physicians
205 designated by the department. Failure of a massage therapist to
206 submit to such examination when so directed, unless the failure
207 was due to circumstances beyond her or his control, constitutes
208 shall constitute an admission of the allegations against her or
209 him, consequent upon which a default and final order may be
210 entered without the taking of testimony or presentation of
211 evidence. A massage therapist affected under this paragraph
212 shall at reasonable intervals be afforded an opportunity to
213 demonstrate that she or he can resume the competent practice of
214 massage therapy with reasonable skill and safety to clients.
215 (i) Gross or repeated malpractice or the failure to
216 practice massage therapy with that level of care, skill, and
217 treatment which is recognized by a reasonably prudent massage
218 therapist as being acceptable under similar conditions and
219 circumstances.
220 (o) Practicing massage therapy at a site, location, or
221 place which is not duly licensed as a massage establishment,
222 except that a massage therapist, as provided by rules adopted by
223 the board rule, may provide massage therapy services, excluding
224 colonic irrigation, at the residence of a client, at the office
225 of the client, at a sports event, at a convention, or at a trade
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226 show.
227 Section 13. Section 480.0465, Florida Statutes, is amended
228 to read:
229 480.0465 Advertisement.—Each massage therapist or massage
230 establishment licensed under the provisions of this act shall
231 include the number of the license in any advertisement of
232 massage therapy services appearing in a newspaper, airwave
233 transmission, telephone directory, or other advertising medium.
234 Pending licensure of a new massage establishment under pursuant
235 to the provisions of s. 480.043(7), the license number of a
236 licensed massage therapist who is an owner or principal officer
237 of the establishment may be used in lieu of the license number
238 for the establishment.
239 Section 14. Paragraphs (a), (b), and (c) of subsection (1)
240 of section 480.047, Florida Statutes, are amended to read:
241 480.047 Penalties.—
242 (1) It is unlawful for any person to:
243 (a) Hold himself or herself out as a massage therapist or
244 to practice massage therapy unless duly licensed under this
245 chapter or unless otherwise specifically exempted from licensure
246 under this chapter.
247 (b) Operate any massage establishment unless it has been
248 duly licensed as provided herein, except that nothing herein
249 shall be construed to prevent the teaching of massage therapy in
250 this state at a board-approved massage therapy school.
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251 (c) Permit an employed person to practice massage therapy
252 unless duly licensed as provided herein.
253 Section 15. Section 480.052, Florida Statutes, is amended
254 to read:
255 480.052 Power of county or municipality to regulate
256 massage therapy.—A county or municipality, within its
257 jurisdiction, may regulate persons and establishments licensed
258 under this chapter. Such regulation shall not exceed the powers
259 of the state under this act or be inconsistent with this act.
260 This section shall not be construed to prohibit a county or
261 municipality from enacting any regulation of persons or
262 establishments not licensed pursuant to this act.
263 Section 16. Subsections (1) and (2) of section 480.0535,
264 Florida Statutes, are amended to read:
265 480.0535 Documents required while working in a massage
266 establishment.—
267 (1) In order to provide the department and law enforcement
268 agencies the means to more effectively identify, investigate,
269 and arrest persons engaging in human trafficking, a person
270 employed by a massage establishment and any person performing
271 massage therapy therein must immediately present, upon the
272 request of an investigator of the department or a law
273 enforcement officer, valid government identification while in
274 the establishment. A valid government identification for the
275 purposes of this section is:
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276 (a) A valid, unexpired driver license issued by any state,
277 territory, or district of the United States;
278 (b) A valid, unexpired identification card issued by any
279 state, territory, or district of the United States;
280 (c) A valid, unexpired United States passport;
281 (d) A naturalization certificate issued by the United
282 States Department of Homeland Security;
283 (e) A valid, unexpired alien registration receipt card
284 (green card); or
285 (f) A valid, unexpired employment authorization card
286 issued by the United States Department of Homeland Security.
287 (2) A person operating a massage establishment must:
288 (a) Immediately present, upon the request of an
289 investigator of the department or a law enforcement officer:
290 1. Valid government identification while in the
291 establishment.
292 2. A copy of the documentation specified in paragraph
293 (1)(a) for each employee and any person performing massage
294 therapy in the establishment.
295 (b) Ensure that each employee and any person performing
296 massage therapy in the massage establishment is able to
297 immediately present, upon the request of an investigator of the
298 department or a law enforcement officer, valid government
299 identification while in the establishment.
300 Section 17. Section 627.6407, Florida Statutes, is amended
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301 to read:
302 627.6407 Massage.—Any policy of health insurance that
303 provides coverage for massage shall also cover the services of
304 persons licensed to practice massage therapy pursuant to chapter
305 480, where the massage therapy, as defined in chapter 480, has
306 been prescribed by a physician licensed under chapter 458,
307 chapter 459, chapter 460, or chapter 461, as being medically
308 necessary and the prescription specifies the number of
309 treatments.
310 Section 18. Section 627.6619, Florida Statutes, is amended
311 to read:
312 627.6619 Massage.—Any policy of health insurance that
313 provides coverage for massage shall also cover the services of
314 persons licensed to practice massage therapy pursuant to chapter
315 480, where the massage therapy, as defined in chapter 480, has
316 been prescribed by a physician licensed under chapter 458,
317 chapter 459, chapter 460, or chapter 461, as being medically
318 necessary and the prescription specifies the number of
319 treatments.
320 Section 19. Paragraph (a) of subsection (1) of section
321 627.736, Florida Statutes, is amended to read:
322 627.736 Required personal injury protection benefits;
323 exclusions; priority; claims.—
324 (1) REQUIRED BENEFITS.—An insurance policy complying with
325 the security requirements of s. 627.733 must provide personal
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326 injury protection to the named insured, relatives residing in
327 the same household, persons operating the insured motor vehicle,
328 passengers in the motor vehicle, and other persons struck by the
329 motor vehicle and suffering bodily injury while not an occupant
330 of a self-propelled vehicle, subject to subsection (2) and
331 paragraph (4)(e), to a limit of $10,000 in medical and
332 disability benefits and $5,000 in death benefits resulting from
333 bodily injury, sickness, disease, or death arising out of the
334 ownership, maintenance, or use of a motor vehicle as follows:
335 (a) Medical benefits.—Eighty percent of all reasonable
336 expenses for medically necessary medical, surgical, X-ray,
337 dental, and rehabilitative services, including prosthetic
338 devices and medically necessary ambulance, hospital, and nursing
339 services if the individual receives initial services and care
340 pursuant to subparagraph 1. within 14 days after the motor
341 vehicle accident. The medical benefits provide reimbursement
342 only for:
343 1. Initial services and care that are lawfully provided,
344 supervised, ordered, or prescribed by a physician licensed under
345 chapter 458 or chapter 459, a dentist licensed under chapter
346 466, a chiropractic physician licensed under chapter 460, or an
347 advanced practice registered nurse registered under s. 464.0123
348 or that are provided in a hospital or in a facility that owns,
349 or is wholly owned by, a hospital. Initial services and care may
350 also be provided by a person or entity licensed under part III
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351 of chapter 401 which provides emergency transportation and
352 treatment.
353 2. Upon referral by a provider described in subparagraph
354 1., followup services and care consistent with the underlying
355 medical diagnosis rendered pursuant to subparagraph 1. which may
356 be provided, supervised, ordered, or prescribed only by a
357 physician licensed under chapter 458 or chapter 459, a
358 chiropractic physician licensed under chapter 460, a dentist
359 licensed under chapter 466, or an advanced practice registered
360 nurse registered under s. 464.0123, or, to the extent permitted
361 by applicable law and under the supervision of such physician,
362 osteopathic physician, chiropractic physician, or dentist, by a
363 physician assistant licensed under chapter 458 or chapter 459 or
364 an advanced practice registered nurse licensed under chapter
365 464. Followup services and care may also be provided by the
366 following persons or entities:
367 a. A hospital or ambulatory surgical center licensed under
368 chapter 395.
369 b. An entity wholly owned by one or more physicians
370 licensed under chapter 458 or chapter 459, chiropractic
371 physicians licensed under chapter 460, advanced practice
372 registered nurses registered under s. 464.0123, or dentists
373 licensed under chapter 466 or by such practitioners and the
374 spouse, parent, child, or sibling of such practitioners.
375 c. An entity that owns or is wholly owned, directly or
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376 indirectly, by a hospital or hospitals.
377 d. A physical therapist licensed under chapter 486, based
378 upon a referral by a provider described in this subparagraph.
379 e. A health care clinic licensed under part X of chapter
380 400 which is accredited by an accrediting organization whose
381 standards incorporate comparable regulations required by this
382 state, or
383 (I) Has a medical director licensed under chapter 458,
384 chapter 459, or chapter 460;
385 (II) Has been continuously licensed for more than 3 years
386 or is a publicly traded corporation that issues securities
387 traded on an exchange registered with the United States
388 Securities and Exchange Commission as a national securities
389 exchange; and
390 (III) Provides at least four of the following medical
391 specialties:
392 (A) General medicine.
393 (B) Radiography.
394 (C) Orthopedic medicine.
395 (D) Physical medicine.
396 (E) Physical therapy.
397 (F) Physical rehabilitation.
398 (G) Prescribing or dispensing outpatient prescription
399 medication.
400 (H) Laboratory services.
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401 3. Reimbursement for services and care provided in
402 subparagraph 1. or subparagraph 2. up to $10,000 if a physician
403 licensed under chapter 458 or chapter 459, a dentist licensed
404 under chapter 466, a physician assistant licensed under chapter
405 458 or chapter 459, or an advanced practice registered nurse
406 licensed under chapter 464 has determined that the injured
407 person had an emergency medical condition.
408 4. Reimbursement for services and care provided in
409 subparagraph 1. or subparagraph 2. is limited to $2,500 if a
410 provider listed in subparagraph 1. or subparagraph 2. determines
411 that the injured person did not have an emergency medical
412 condition.
413 5. Medical benefits do not include massage therapy as
414 defined in s. 480.033 or acupuncture as defined in s. 457.102,
415 regardless of the person, entity, or licensee providing massage
416 therapy or acupuncture, and a licensed massage therapist or
417 licensed acupuncturist may not be reimbursed for medical
418 benefits under this section.
419 6. The Financial Services Commission shall adopt by rule
420 the form that must be used by an insurer and a health care
421 provider specified in sub-subparagraph 2.b., sub-subparagraph
422 2.c., or sub-subparagraph 2.e. to document that the health care
423 provider meets the criteria of this paragraph. Such rule must
424 include a requirement for a sworn statement or affidavit.
425
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426 Only insurers writing motor vehicle liability insurance in this
427 state may provide the required benefits of this section, and
428 such insurer may not require the purchase of any other motor
429 vehicle coverage other than the purchase of property damage
430 liability coverage as required by s. 627.7275 as a condition for
431 providing such benefits. Insurers may not require that property
432 damage liability insurance in an amount greater than $10,000 be
433 purchased in conjunction with personal injury protection. Such
434 insurers shall make benefits and required property damage
435 liability insurance coverage available through normal marketing
436 channels. An insurer writing motor vehicle liability insurance
437 in this state who fails to comply with such availability
438 requirement as a general business practice violates part IX of
439 chapter 626, and such violation constitutes an unfair method of
440 competition or an unfair or deceptive act or practice involving
441 the business of insurance. An insurer committing such violation
442 is subject to the penalties provided under that part, as well as
443 those provided elsewhere in the insurance code.
444 Section 20. Subsection (37) of section 641.31, Florida
445 Statutes, is amended to read:
446 641.31 Health maintenance contracts.—
447 (37) All health maintenance contracts that provide
448 coverage for massage must also cover the services of persons
449 licensed to practice massage therapy pursuant to chapter 480 if
450 the massage is prescribed by a contracted physician licensed
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451 under chapter 458, chapter 459, chapter 460, or chapter 461 as
452 medically necessary and the prescription specifies the number of
453 treatments. Such massage services are subject to the same terms,
454 conditions, and limitations as those of other covered services.
455 Section 21. Subsection (3) of section 823.05, Florida
456 Statutes, is amended to read:
457 823.05 Places and groups engaged in certain activities
458 declared a nuisance; abatement and enjoinment.—
459 (3) A massage establishment as defined in s. 480.033 s.
460 480.033(7) which operates in violation of s. 480.0475 or s.
461 480.0535(2) is declared a nuisance and may be abated or enjoined
462 as provided in ss. 60.05 and 60.06.
463 Section 22. This act shall take effect July 1, 2021.
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HB 701
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 701 Behavioral Health Care Services Coverage and Access
SPONSOR(S): Stevenson
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Finance & Facilities Subcommittee 17 Y, 1 N Grabowski Lloyd
2) Insurance & Banking Subcommittee Rowley Luczynski
3) Appropriations Committee
4) Health & Human Services Committee
SUMMARY ANALYSIS
The term “behavioral health” refers to the promotion of mental health, resilience and wellbeing; the treatment of
mental and substance use disorders; and the support of those who experience and/or are in recovery from
these conditions, along with their families and communities. Mental illness affects millions of people in the
United States each year. Nearly one in five adults live with a mental illness. An estimated 49.5 percent of
adolescents aged 13-18 have a mental disorder. Substance abuse also affects millions of people in the United
States each year.
Until the late 1990s, private health insurance coverage for mental illness was generally not as comprehensive
as coverage for medical and surgical benefits. Likewise, Medicaid has not traditionally provided coverage of
mental health conditions at the same level of generosity as coverage for physical health conditions. Changes
to federal law in the past two decades have resulted in mental health parity requirements applicable to most
health insurers, health maintenance organizations, and Medicaid managed care plans. Although the federal
government is responsible for enforcing many of these requirements, the Florida Department of Financial
Services (DFS) and the Agency for Health Care Administration (AHCA) also play meaningful roles in
monitoring health plan compliance.
HB 701 requires health insurers and HMOs to provide written notice to covered individuals outlining the federal
and state requirements for coverage of behavioral health services. In addition, this notice must include the
statewide toll-free telephone number established by the Division of Consumer Services at the DFS for
reporting complaints related to the availability, affordability, and adequacy of behavioral health services.
The bill directs the DFS, in collaboration with the AHCA, to establish a system to track and monitor complaints
related to behavioral health care services submitted by insured individuals to the Division of Consumer
Services.
The bill also requires the DFS and the AHCA to provide a report to the Legislature by January 1, 2022 which
includes data on the complaints received by the Division of Consumer Services related to behavioral health
services.
The bill has no fiscal impact on state or local government.
The bill provides an effective date of July 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Behavioral Health
The term “behavioral health” refers to the promotion of mental health, resilience and wellbeing; the
treatment of mental and substance use disorders; and the support of those who experience and/or are
in recovery from these conditions, along with their families and communities. Behavioral health
conditions and the behavioral health field have historically been financed, authorized, structured,
researched, and regulated differently than other health conditions.1
Mental Illness and Substance Abuse
Mental health is a state of well-being in which the individual realizes his or her own abilities, can cope
with the normal stresses of life, can work productively and fruitfully, and is able to contribute to his or
her community.2 The primary indicators used to evaluate an individual’s mental health are:3
Emotional well-being- Perceived life satisfaction, happiness, cheerfulness, peacefulness;
Psychological well-being- Self-acceptance, personal growth including openness to new
experiences, optimism, hopefulness, purpose in life, control of one’s environment, spirituality,
self-direction, and positive relationships; and,
Social well-being- Social acceptance, beliefs in the potential of people and society as a whole,
personal self-worth and usefulness to society, and sense of community.
Mental illness is collectively all diagnosable mental disorders or health conditions that are characterized
by alterations in thinking, mood, or behavior (or some combination thereof) associated with distress or
impaired functioning.4 Thus, mental health refers to an individual’s mental state of well-being whereas
mental illness signifies an alteration of that well-being.
Mental illness affects millions of people in the United States each year. Nearly one in five adults live
with a mental illness.5 An estimated 49.5 percent of adolescents aged 13-18 have a mental disorder.6
Suicide is the tenth overall leading cause of death in the nation and the second leading cause of death
among individuals between the ages of 10 and 24.7
Substance abuse also affects millions of people in the United States each year. Substance abuse
refers to the harmful or hazardous use of psychoactive substances, including alcohol and illicit drugs.8
Substance abuse disorders occur when the chronic use of alcohol or drugs causes significant
impairment, such as health problems, disability, and failure to meet major responsibilities at work,
1 Substance Abuse and Mental Health Services Administration, “SAMHSA – Behavioral Health Integration”, available at
https://www.samhsa.gov/sites/default/files/samhsa-behavioral-health-integration.pdf (last accessed February 22, 2021).
2 World Health Organization, Mental Health: Strengthening Our Response, available at https://www.who.int/news-
room/fact-sheets/detail/mental-health-strengthening-our-response (last accessed February 22, 2021).
3 Centers for Disease Control and Prevention, Learn About Mental Health, available at
http://www.cdc.gov/mentalhealth/basics.htm (last accessed February 22, 2021).
4 Id.
5 National Institute on Mental Health, Mental Illness, https://www.nimh.nih.gov/health/statistics/mental-illness.shtml (last
accessed February 22, 2021).
6 National Institute on Mental Health, Mental Illness – Prevalence of Any Mental Disorder Among Adolescents,
https://www.nimh.nih.gov/health/statistics/mental-illness.shtml#part_155771 (last accessed February 22, 2021).
7 National Institute on Mental Health, Suicide, https://www.nimh.nih.gov/health/statistics/suicide.shtml (last accessed
February 22, 2021).
8 World Health Organization, Substance Abuse, http://www.who.int/topics/substance_abuse/en/ (last accessed February
22, 2021).
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school, or home.9 Repeated drug use leads to changes in the brain’s structure and function that can
make a person more susceptible to developing a substance abuse disorder.10 Brain imaging studies of
persons with substance abuse disorders show physical changes in areas of the brain that are critical to
judgment, decision making, learning and memory, and behavior control.11
According to the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a diagnosis of
substance abuse disorder is based on evidence of impaired control, social impairment, risky use, and
pharmacological criteria.12 The most common substance abuse disorders in the United States are from
the use of alcohol, tobacco, cannabis, stimulants, hallucinogens, and opioids.13
Mental illness and substance abuse commonly co-occur. Approximately 9.2 million adults have co-
occurring disorders.14 In fact, more than half of all adults with severe mental illness are further impaired
by substance abuse disorders (abuse or dependence related to alcohol or other drugs).15 Drug abuse
can cause individuals to experience one or more symptoms of another mental illness.16 Additionally,
individuals with mental illness may abuse drugs as a form of self-medication.17 Examples of co-
occurring disorders include the combinations of major depression with cocaine addiction, alcohol
addiction with panic disorder, alcoholism and drug addiction with schizophrenia, and borderline
personality disorder with episodic drug abuse.18
Federal Mental Health Parity Laws
Commercial Plans
Prior to 1996, private health insurance coverage for mental illness was generally not as comprehensive
as coverage for medical and surgical benefits. In response, the Mental Health Parity Act19 (MHPA) was
enacted in 1996, which requires parity of medical and surgical benefits with mental health benefits for
annual and aggregate lifetime limits of large group plans.
In 2008, Congress passed the Mental Health Parity and Addiction Equity Act20 (MHPAEA), which
generally applies to large group health plans.21 The MHPAEA expanded parity of coverage to include
financial requirements, treatment limitations, and in- and out-of-network coverage if a plan provided
coverage for mental illness. The MHPAEA also applies to the treatment of substance use
disorders.22 Like the MHPA, the MHPAEA does not require large groups to provide benefits for mental
9 Substance Abuse and Mental Health Services Administration, Substance Use Disorders,
http://www.samhsa.gov/disorders/substance-use (last accessed February 22, 2021).
10 National Institute on Drug Abuse, Drugs, Brains, and Behavior: The Science of Addiction,
https://www.drugabuse.gov/publications/drugs-brains-behavior-science-addiction/drug-abuse-addiction (last accessed
February 22, 2021).
11 Id.
12 Substance Abuse and Mental Health Services Administration, Substance Use Disorders,
http://www.samhsa.gov/disorders/substance-use (last accessed February 22, 2021).
13 Id.
14 Substance Abuse and Mental Health Services Administration, Key Substance Use and Mental Health Indicators in the
U.S.: Results from the 2018 National Survey on Drug Use and Health, (August 2019),
https://www.samhsa.gov/data/sites/default/files/cbhsq-
reports/NSDUHNationalFindingsReport2018/NSDUHNationalFindingsReport2018.pdf (last accessed February 22, 2021).
15 Psychology Today, Co-Occurring Disorders, https://www.psychologytoday.com/conditions/co-occurring-disorders (last
accessed February 22, 2021).
16 Comorbidity: Addiction and Other Mental Illnesses, National Institute on Drug Abuse, NIH Publication Number 10-5771
(September 2010), https://www.drugabuse.gov/sites/default/files/rrcomorbidity.pdf (last accessed February 22, 2021).
17 Id.
18 Id.
19 Pub. L. No. 104-204.
20 Pub. L. No. 110-343.
21 Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008;
Technical Amendment to External Review for Multi-State Plan Program, 78 FR 68239 (November 13, 2013) (codified at
26 CFR Part 54, 29 CFR Part 2590, 45 CFR Parts 146 and 147).
22 45 CFR ss. 146 and 160.
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health or substance use disorders. The MHPAEA contains a cost exemption, which allows a group
health plan to receive a waiver, exempting them from some of the key requirements, if the plan
demonstrates that costs increased at least 1 percent because of compliance.23
In 2010, the Patient Protection and Affordable Care Act24 (PPACA) amended the MHPAEA to apply the
provisions to individual health insurance coverage. The PPACA mandates that qualified health
insurance must provide coverage of 10 essential health benefits,25 including coverage for mental health
and substance use disorders for individual and small group qualified health plans. The final rule,
implementing these provisions, generally requires health insurers offering health insurance coverage in
the individual and small group markets to comply with the requirements of the MHPAEA regulations in
order to satisfy the essential health benefit requirement.26
Medicaid and CHIP
Medicaid is the health care safety net for low-income Floridians. Medicaid is a partnership of the federal
and state governments established to provide coverage for health services for eligible persons. The
program is administered by the Agency for Health Care Administration (AHCA) and financed by federal
and state funds. AHCA delegates certain functions to other state agencies, including the Department of
Children and Families, which makes eligibility determinations. Florida uses a comprehensive managed
care delivery model for primary and acute care services to serve the bulk of its Medicaid population,
known as the Statewide Medicaid Managed Care (SMMC) Managed Medical Assistance (MMA)
program.27 The MMA program was enacted in 2011 and fully implemented in 2014.
The Florida Kidcare Program was created by the Florida Legislature in 1998 in response to the federal
enactment of the State Children’s Health Insurance Program in 1997, later known more simply as the
Children’s Health Insurance Program (CHIP). The CHIP provides subsidized health insurance coverage
to uninsured children who do not qualify for Medicaid but who meet other eligibility requirements. The
state statutory authority for the Kidcare Program is found in part II of ch. 409, F.S.
Federal law requires state Medicaid programs and the CHIP to comply with mental health and
substance use disorder parity requirements. On March 30, 2016, the Centers for Medicare and
Medicaid Services (CMS) issued final regulations dictating that the parity requirements established by
the MHPAEA apply to Medicaid managed care organizations (MCOs), such as those in Florida’s MMA
program, and CHIP programs.28
The federal regulations require MCOs to comply with strict requirements associated with the
establishment of annual and lifetime dollar limits on coverage. If an MCO elects to use an annual or
lifetime dollar limit on the coverage of mental health and substance abuse disorder treatments, that limit
may not be less generous than any dollar limit on coverage for medical and surgical treatments. In
addition, MCOs must comply with requirements for non-quantitative treatment limitations and must
make available upon request the medical necessity criteria used for mental health or substance use
23 Plans and issuers that make changes to comply with MHPAEA and incur an increased cost of at least 2 percent in the
first year that MHPAEA applies to the plan or coverage or at least 1 percent in any subsequent plan year may claim an
exemption from MHPAEA based on their increased cost. If such a cost is incurred, the plan or coverage is exempt from
MHPAEA requirements for the plan or policy year following the year the cost was incurred. The plan sponsors or issuers
must notify the plan beneficiaries that MHPAEA does not apply to their coverage. These exemptions last 1 year. After
that, the plan or coverage is required to comply again; however, if the plan or coverage incurs an increased cost of at
least 1 percent in that plan or policy year, the plan or coverage could claim the exemption for the following plan or policy
year.
24 Pub. L. No.111-148, as amended by Pub. L. No. 111-152.
25 45 CFR s. 156.115.
26 See 45 CFR 147.150 and 156.115 (78 FR 12834, Feb. 25, 2013).
27 S. 409.964, F.S.
28 Medicaid and Children's Health Insurance Programs; Mental Health Parity and Addiction Equity Act of 2008; the
Application of Mental Health Parity Requirements to Coverage Offered by Medicaid Managed Care Organizations, the
Children's Health Insurance Program (CHIP), and Alternative Benefit Plans, 81 FR 18389 (March 30, 2016)(codified at 42
CFR Parts 438, 440, 456, 457).
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disorders and the rationale for denials of reimbursement for mental health or substance use disorder
benefits.29
State Regulation of Mental Health Coverage
Office of Insurance Regulation
The regulatory oversight of health insurance is generally reserved to the states, except when explicitly
preempted by federal law. In Florida, the Office of Insurance Regulation (OIR) is responsible for all
activities concerning insurers and other risk bearing entities, including licensing, rates, policy forms,
market conduct, claims, issuance of certificates of authority, solvency, viatical settlements, premium
financing, and administrative supervision, as provided under the Florida Insurance Code.30
All health insurance policies issued in Florida, with the exception of certain self-insured policies,31 must
meet certain requirements that are detailed throughout the Florida Insurance Code. Chapter 627, F.S.,
sets parameters and requirements for health insurance policies and ch. 641, F.S., provides
requirements for health plans issued by health maintenance organizations (HMOs). At a minimum,
insurance policies must specify premium rates, services covered, and effective dates. Insurers must
document the time when a policy takes effect and the period during which the policy remains in effect.32
The OIR reviews health insurance policies and contracts for compliance with the MHPAEA.33 The OIR
communicates any violations of the MHPAEA to the insurer or HMO. If the insurer or HMO fails to
correct the issue, the OIR would refer the issue to the appropriate federal regulator as a possible
violation of federal law.34
Department of Financial Services
The Florida Department of Financial Services (DFS) includes several divisions and offices that
supplement the work of the OIR. The Division of Consumer Services deals with consumer issues and
complaints related to the jurisdiction of the DFS and the OIR. The Division:
Receives inquiries and complaints from consumers;
Prepares and disseminates information as the DFS deems appropriate to inform or assist
consumers;
Provides direct assistance and advocacy for consumers; and
Reports potential violations of law or applicable rules by a person or entity licensed by the DFS or
the OIR to the appropriate division within the DFS or the OIR, as applicable.35
Specifically, the Division is responsible for receiving consumer complaints related to the PPACA, and
by extension, the MHPAEA.36
Agency for Healthcare Administration
The AHCA is charged with ensuring that plans participating in the MMA program are compliant with
federal parity regulations. The current SMMC contract contains a requirement that the MCOs must
comply with the federal rule, including any non-quantitative limits that the MCOs may impose through
29 Id.
30 S. 20.121(3)(a)1., F.S. The OIR’s commissioner is the agency head for purposes of final agency action, and its
rulemaking body is the Financial Services Commission (the Governor and the Cabinet). The Florida Insurance Code
includes chapters 624-632, 634, 635, 636, 641, 642, 648, and 651, F.S.
31 29 U.S.C. 18 § 1001 et seq. ERISA regulates certain self-insured plans, which represent approximately 50 percent of
the insureds in Florida. These plans cannot be regulated by state law.
32 S. 627.413(1)(d), F.S.
33 S. 624.26, F.S.
34 Id.
35 S. 20.121(2)(h), F.S.
36 S. 624.26, F.S.
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their credentialing, authorization, contracting, provider reimbursement, standards for accessing out-of-
network providers, or other practices.37 To assist the MCOs in their efforts to achieve compliance, the
state has directed the MCOs to the reference materials provided by CMS in the Parity Compliance
Toolkit and Implementation Roadmap, which are publically available on the CMS website.38 The AHCA
has several existing avenues for monitoring MCOs’ compliance with parity, including, but not limited to,
the review of new or revised MCO policies and procedures (including utilization management),
monitoring of provider and recipient complaints submitted to the Medicaid Complaint Operations
Center, and monthly submission to AHCA by the MCOs of complaint, grievance, and appeals reporting.
Effect of Proposed Changes
HB 701 establishes new communication duties for health insurance plans and HMOs, while creating
data collection and reporting requirements for the DFS and the AHCA.
The bill requires health insurers and HMOs to provide written notice to covered individuals outlining the
federal and state requirements for coverage of behavioral health services. In addition, this notice must
include the statewide toll-free telephone number established by the Division of Consumer Services at
the DFS for reporting complaints related to the availability, affordability, and adequacy of behavioral
health services.
The bill directs the DFS, in collaboration with the AHCA, to establish a system to track and monitor
complaints related to behavioral health care services submitted by insured individuals to the Division of
Consumer Services.
The bill also requires the DFS and the AHCA to provide a report to the Legislature by January 1, 2022
which includes data on the complaints received by the Division of Consumer Services related to
behavioral health services. At a minimum, the report must indicate the number of complaints received,
the cause of such complaints, and whether the complaints were resolved within a timely manner.
The bill provides an effective date of July 1, 2021.
B. SECTION DIRECTORY:
Section 1: Creates s. 624.36, F.S.; relating to coverage of and access to behavioral health care
services; tracking and monitoring of complaints; reporting.
Section 2: Creates a one-time reporting requirement.
Section 3: Provides an effective date of July 1, 2021.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
37 Agency for Health Care Administration, 2018-2023 Model Health Plan Contract: Exhibit II-A – Managed Medical
Assistance Program, October 1, 2020, https://ahca.myflorida.com/medicaid/statewide_mc/model_health_FY18-23.shtml
(last accessed February 23, 2021).
38 See CMS, Parity Compliance Toolkit Applying Mental Health and Substance Use Disorder Parity Requirements to
Medicaid and Children’s Health Insurance Program, (Jan. 17, 2017),
https://www.medicaid.gov/medicaid/benefits/downloads/bhs/parity-toolkit.pdf (last accessed February 25, 2021).
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2. Expenditures:
Requiring the DFS and ACHA to establish a system to track and monitor complaints regarding the
adequacy of coverage and access to behavioral health care services may require an indeterminate
state expenditure.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
None.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
DFS has concerns about the costs associated with establishing a system to track and monitor complaints.
DFS has indicated that its existing system of tracking and monitoring complaints is adequate and the bill
sponsor has indicated an intent to address this issue.
It is unclear how often insurers and HMOs would be required to provide the written notice to their insureds,
subscribers, and enrollees. The bill sponsor has indicated an intent to address the frequency of the notice
requirement.
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DATE: 3/8/2021
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 701 2021
1 A bill to be entitled
2 An act relating to behavioral health care services
3 coverage and access; creating s. 624.36, F.S.;
4 requiring the Department of Financial Services, in
5 collaboration with the Agency for Health Care
6 Administration, to establish a system for tracking and
7 monitoring complaints made to the Division of Consumer
8 Services of the department regarding coverage of and
9 access to behavioral health care services; requiring
10 that insurers and health maintenance organizations
11 provide written notice to certain persons which
12 includes specified information; requiring the
13 department and agency to submit a report containing
14 certain data to the Governor and Legislature by a
15 specified date; providing an effective date.
16
17 Be It Enacted by the Legislature of the State of Florida:
18
19 Section 1. Section 624.36, Florida Statutes, is created to
20 read:
21 624.36 Coverage of and access to behavioral health care
22 services; tracking and monitoring of complaints; reporting.—
23 (1) The department, in collaboration with the Agency for
24 Health Care Administration, shall establish a system to track
25 and monitor complaints made by insureds covered under individual
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 701 2021
26 or group health insurance policies and subscribers of health
27 maintenance organizations, including enrollees, to the Division
28 of Consumer Services of the department regarding the adequacy of
29 coverage of and access to behavioral health care services.
30 (2) Insurers and health maintenance organizations shall
31 provide written notice to insureds, subscribers, and enrollees
32 which includes the federal and state requirements for coverage
33 of behavioral health care services. Such notice must also
34 include the statewide toll-free telephone number of the Division
35 of Consumer Services of the department for receiving and logging
36 complaints, which may include, but need not be limited to, the
37 challenges of locating and accessing behavioral health care
38 services, the inflated expense of receiving such services, and
39 any other complaints regarding the adequacy of services.
40 Section 2. By January 1, 2022, the Department of Financial
41 Services and the Agency for Health Care Administration shall
42 jointly submit a report to the Governor, the President of the
43 Senate, and the Speaker of the House of Representatives which
44 contains data relating to complaints made by insureds covered
45 under individual or group health insurance policies and
46 subscribers of health maintenance organizations, including
47 enrollees, to the Division of Consumer Services of the
48 department regarding the adequacy of coverage of and access to
49 behavioral health care services, as described in s. 624.36,
50 Florida Statutes. The report must include, but is not limited
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HB 701 2021
51 to, the number of complaints, the cause of such complaints, and
52 whether the complaints were resolved within a timely manner.
53 Section 3. This act shall take effect July 1, 2021.
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hb0701-00
INSURANCE & BANKING SUBCOMMITTEE
HB 701 by Rep. Stevenson
Behavioral Health Care Services Coverage and Access
AMENDMENT SUMMARY
March 10, 2021
Amendment 1 by Rep. Stevenson: The amendment removes language from the bill providing
that the Department of Financial Services, in collaboration with the Agency for Health Care
Administration, shall establish a system to track and monitor complaints. The amendment
provides greater details on the information that DFS’s report to the Governor and Legislature
must include and requires that DFS make certain information available on its website.
Additionally, the amendment requires that insurers and health maintenance organizations
disclose specified information on their websites. This amendment generally conforms the bill to
the intended amendment of the Senate companion bill.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 701 (2021)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Insurance & Banking
2 Subcommittee
3 Representative Stevenson offered the following:
4
5 Amendment (with title amendment)
6 Remove lines 22-53 and insert:
7 services; complaints; reporting.—
8 (1) By January 31, 2022, the department shall submit a
9 report to the Governor, the President of the Senate, and the
10 Speaker of the House of Representatives relating to the
11 disposition of complaints received from insureds and subscribers
12 of insurers or health maintenance organizations regulated by the
13 office relating to the access and affordability of behavioral
14 health care services and benefits during the prior calendar
15 year. At a minimum, the report must include all of the following
16 information:
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Page 1 of 4
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 701 (2021)
Amendment No. 1
17 (a) The total number of complaints received.
18 (b) The nature of complaints, including, but not limited
19 to, concerns related to access to in-network providers or
20 facilities; access to inpatient or outpatient services;
21 availability of specialists; affordability of services;
22 equivalency of behavioral health care benefits with respect to
23 medical and surgical benefits; quality of care; and denial of
24 services, including the types of services denied and the stated
25 reason for the denials.
26 (c) The disposition of complaints.
27 (d) Any recommendations made by the department to the
28 Legislature for ensuring access to and the affordability of
29 behavioral health care services to insureds and subscribers.
30 (2) The department shall make available on its website a
31 description of behavioral health care benefits required to be
32 made available pursuant to s. 627.668 and federal law for
33 individual and group policies and contracts.
34 Section 2. Section 627.4215, Florida Statutes, is created
35 to read:
36 627.4215 Disclosures to policyholders; coverage of mental
37 and nervous disorders.—
38 (1) An insurer shall make all of the following information
39 available on its website:
40 (a) The federal and state requirements for coverage of
41 behavioral health care services.
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Page 2 of 4
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 701 (2021)
Amendment No. 1
42 (b) Contact information for the Division of Consumer
43 Services of the Department of Financial Services, including a
44 hyperlink, for consumers to submit inquiries or complaints
45 relating to insurer products or services regulated by the
46 department or the office.
47 (2) On an annual basis, an insurer shall provide written
48 notice to insureds which must include a description of the
49 federal and state requirements for coverage of behavioral health
50 care services. Such notice must also include the website address
51 and statewide toll-free telephone number of the Division of
52 Consumer Services of the department for receiving and logging
53 complaints.
54 Section 3. Section 641.31085, Florida Statutes, is created
55 to read:
56 641.31085 Disclosures to subscribers; coverage of mental
57 and nervous disorders.—
58 (1) A health maintenance organization shall make all of the
59 following information available on its website:
60 (a) The federal and state requirements for coverage of
61 behavioral health care services.
62 (b) Contact information for the Division of Consumer
63 Services of the Department of Financial Services, including a
64 hyperlink, for consumers to submit inquiries or complaints
65 relating to health maintenance organization products or services
66 regulated by the department or the office.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 701 (2021)
Amendment No. 1
67 (2) On an annual basis, a health maintenance organization
68 shall provide written notice to subscribers which must include a
69 description of the federal and state requirements for coverage
70 of behavioral health care services. Such notice must also
71 include the website address and statewide toll-free telephone
72 number of the Division of Consumer Services of the department
73 for receiving and logging complaints.
74 Section 4. This act shall take effect October 1, 2021.
75 -----------------------------------------------------
76 T I T L E A M E N D M E N T
77 Remove lines 4-15 and insert:
78 requiring the Department of Financial Services to submit a
79 specified report to the Governor and Legislature by a specified
80 date; specifying the minimum information the report must
81 contain; requiring the department to make certain information
82 available on its website; creating ss. 627.4215 and 641.31085,
83 F.S.; requiring insurers and health maintenance organizations,
84 respectively, to disclose specified information on their
85 websites; requiring insurers and health maintenance
86 organizations, respectively, to annually provide certain written
87 notices to insureds or subscribers; providing an effective date.
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Page 4 of 4
HB 815
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 815 Insurance
SPONSOR(S): Gregory
TIED BILLS: IDEN./SIM. BILLS: SB 742
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee Rowley Luczynski
2) State Administration & Technology
Appropriations Subcommittee
3) Commerce Committee
SUMMARY ANALYSIS
The bill makes the following changes regarding insurance:
Florida Hurricane Catastrophe Fund (FHCF) Coverage – Modifies when collateral protection insurance is
eligible for FHCF coverage.
Service of Process – Currently, legal service of process on an insurer is perfected on the date documents are
served on the Department of Financial Services (DFS). The bill provides that service of process is perfected
when process served on DFS is delivered to the insurer or DFS has notified the insurer of its availability online.
Loss Run Statements – Makes clarifying changes to the statutes that provide a framework for insurers to
respond to loss run statement requests and eliminates a conflict between these statutes and a statute specific
to health insurance loss run statements.
Hurricane Modeling – Current law regarding the use of hurricane loss models prescribes how approved models
affect the Office of Insurance Regulation’s (OIR) approval of a rate filing. The bill establishes that an insurer may
use a weighted or straight average of approved hurricane models in a rate filing.
Mitigation Credits in Residential Property Insurance Rate Filings – Makes the use of building code
enforcement rating factors in rating plans optional and allows insurers to give mitigation credit for evaluation by,
and compliance with, standards developed by an independent, not-for-profit, scientific research organization.
Workers’ Compensation Insurance Reporting Requirements – Provides for a new factor in the determination
and fixing of workers’ compensation and employer’s liability insurance rates.
Citizens Property Insurance Corporation – Allows Citizens the option to insure residential condominiums
under commercial residential wind only coverage if the units are intended for residential use, but are rented on
a short-term basis.
Replacement Cost Coverage and Law and Ordinance Coverage – Clarifies the laws and ordinances that
are applicable to a particular covered loss are those that were enacted on or before the date of that loss. It also
provides that an insured has the later of, no less than two years from the date of the loss, or one year from the
notice of the claim, to request reimbursement from the insurer for replacement costs.
Export of Flood Coverage to Surplus Lines – Reenacts the exemption from diligent search efforts when an
agent is placing flood insurance on the surplus lines market.
Assignment Agreements – Expands the scope of services covered under the definition of “assignment
agreement” and changes notification requirements.
Agent Licensing – Allows licensed general or personal lines agents to sell service agreements or warranties
without salesperson or sales representative licenses. It expands the definition of a “company employee
adjuster” to include licensed all-lines adjusters appointed and employed by insurers’ affiliate.
The bill has no impact on state or local government revenues or expenditures. It has an unknown direct
economic impact on the private sector.
Except where otherwise provided, the bill is effective on July 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0815.IBS
DATE: 3/8/2021
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Hurricane Catastrophe Fund – Collateral Protection Insurance
The Florida Hurricane Catastrophe Fund (FHCF) is a tax-exempt trust fund created by the Legislature
in 1993 as a form of reinsurance for residential property losses.1 The FHCF is administered by the
State Board of Administration and reimburses property insurers for a selected percentage of hurricane
losses to residential property above the insurer’s retention (deductible).2 As a condition of doing
business in Florida, property insurers are required to enter into reimbursement contracts with the
FHCF. The purpose of the FHCF is to protect and advance the state's interest in maintaining insurance
capacity in Florida by providing reimbursements to insurers for a portion of their catastrophic hurricane
losses.
The FHCF reimburses its participating insurers for losses on covered policies, subject to limitations.3
Covered policies include collateral protection insurance4 policies covering personal residences that
protect both the borrower’s and the lender’s financial interests, in an amount at least equal to the
coverage for the dwelling in place under the lapsed homeowner’s policy, if such policy meets certain
statutory conditions.5
Collateral protection insurance is placed by an insurer when a borrower’s policy on the property has
lapsed. Sometimes, the insurer is unable to obtain correct information from the homeowner and places
coverage at an amount other than the amount of the homeowner’s lapsed policy. This can create a
discrepancy between the coverage in place and the amount of the homeowner’s lapsed policy, which
makes the policy ineligible for FHCF coverage.
Effect of the Bill
The bill amends the conditions for which a collateral protection insurance policy can be considered a
“covered policy” and thus eligible for FHCF coverage. The bill provides that a collateral protection
insurance policy is eligible for coverage if it is placed for the amount of the last known coverage, the
amount the homeowner was notified of, or the amount that the homeowner requests, in addition to the
current law requirement that it also protects the homeowner’s interest.
Service of Process
The law provides for the designation of a public officer, board, agency, or commission as the agent for
service of process on a person, firm, or corporation in Florida.6 The Chief Financial Officer (CFO) is
designated as the agent for service of process on insurers and other specific entities or persons
licensed by the Department of Financial Services (DFS) and the Office of Insurance Regulation (OIR).7
Service of process on the CFO is made by mail, personal service, or via the e-portal.8
1 S. 215.555, F.S.
2 Id.
3 S. 215.555(1)(d), F.S.
4 “Collateral protection insurance” means commercial property insurance under which a creditor is the primary beneficiary
and policyholder and which protects or covers an interest of the creditor arising out of a credit transaction secured by real
or personal property. Initiation of such coverage is triggered by the mortgagor’s failure to maintain insurance coverage as
required by the mortgage or other lending document. Collateral protection insurance is not residential coverage. S.
624.6085, F.S.
5 S. 215.555(2)(c), F.S.
6 S. 48.151, F.S.
7 Id.
8 Id.; Florida Department of Financial Services, https://www.myfloridacfo.com/division/generalcounsel/service-of-process/
(last visited March 7, 2021).
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After receiving service of process, the CFO is required to promptly send a copy by registered or
certified mail, or by any other verifiable means, to the person designated by the insurer to receive the
process.9 “Verifiable means” includes making the documents available by electronic transmission from
a secure website established by DFS.10 If the documents are made available electronically, the CFO is
required to send a notice of receipt of process to the person designated by the insurer to receive legal
process.11 The notice must state the date and manner in which the copy of the process was made
available and contain a hyperlink to obtain a copy of the process.12
Service is considered perfected on an insurer when the CFO is served with process.13 Although an
insurer is not required to respond to a lawsuit except within 20 days after the date the CFO sends or
makes available a copy of the process, the triggering date for other legal deadlines is the date the CFO
is served with process.14 This can create problems for an insurer when there is a delay between the
time the CFO is served and the time the CFO notifies the insurer of the process.
Effect of the Bill
The bill provides that service of process is perfected on an insurer when the process served on the
CFO is delivered to the insurer or the insurer is notified that a copy of the process is available on DFS’s
website.
Company Employee Adjuster
The Department of Financial Services, through its Division of Insurance Agent and Agency Services,
regulates the licensure of insurance adjusters.15 An adjuster may be licensed as either an “all-lines
adjuster” or a “public adjuster.”16 A company employee adjuster is “a person licensed as an all-lines
adjuster who is appointed and employed on an insurer’s staff of adjusters or a wholly owned subsidiary
of the insurer, and who undertakes on behalf of such insurer or other insurers under common control or
ownership to ascertain and determine the amount of any claim, loss, or damage payable under a
contract of insurance, or undertakes to effect settlement of such claim, loss, or damage.”17
Effect of the Bill
The bill expands the definition of a “company employee adjuster” to include a licensed all-lines adjuster
who is appointed and employed by an insurer’s affiliate.
Loss Run Statements
A loss run statement18 is a report from an insurer that shows how many claims a specific insured has
filed under that insured’s policy during a particular period of time.19 This report can be provided to a
prospective insurer when an insured is shopping for a new insurance policy.20 The prospective insurer
9 S. 624.423, F.S.
10 S. 624.307(9), F.S.
11 Id.
12 Id.
13 S. 624.423(3), F.S.
14 S. 624.423(2), F.S.
15 Division of Insurance Agent and Agency Services, https://myfloridacfo.com/Division/Agents/ (last visited March 3, 2021).
16 S. 626.864, F.S. An individual may be licensed as either an all-lines adjuster or a public adjuster, but not both. An all-
lines adjuster may be appointed as one, but no more than one at a time, of the following: independent adjuster, public
adjuster apprentice, or company employee adjuster.
17 S. 626.856, F.S.
18 Loss run statements are also referred to as loss runs or loss run reports.
19 Insureon, https://www.insureon.com/insurance-glossary/loss-runs (last visited Mar. 4, 2021).
20 Id.
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can use the loss run statement to review the types, frequency, and dollar value of prior claims in order
to determine whether to write a policy for the prospective insured and what premium to charge for that
policy.21 Prospective insurers often want to review loss run statements showing a loss run history from
three to five years to make decisions about writing insurance policies.22
While insureds may request loss run statements for any line of insurance, insureds seeking new
general liability, business owner’s, commercial property, commercial auto insurance, or workers’
compensation insurance, often request them to shop for new insurance23 upon cancellation or
nonrenewal of a policy by an insurer or when the insured chooses to shop for new insurance at the time
a policy is up for renewal. Some insurers, especially those providing commercial lines coverage or
workers’ compensation insurance, have existing loss runs systems that allow their insureds to log into a
portal and to obtain their own detailed reports on claims.24 However, other insurers, in these and other
lines of insurance, may provide insureds with loss run statements that they have created upon request
or direct the insureds to obtain such statements from their agents of record.
Statutes enacted in 2020 established a statutory framework regarding when and how insurers must
provide loss run statements to insureds. Pursuant to these statutes, for all lines of insurance written on
the admitted and surplus lines markets, insurers must provide a loss run statement with a 5-year loss
history within 15 days of receiving an insured’s written request.25 In the event of a request for a loss run
statement regarding a personal lines policy, an insurer may provide the insured information about how
to obtain a loss run statement at no charge through a consumer reporting agency.26 However, the
insured may still ask the insurer for a loss run statement even after receiving information from a
consumer reporting agency.27
Effect of the Bill
The bill amends the statutes regarding loss run statements that were enacted in 2020, so that they
better reflect existing industry standards. It revises the number of years of loss history that an insurer
must provide from a minimum of 5 years to a minimum of 3 years to reflect the fact that many insurers
were routinely providing insureds with a 3-year history upon request before the 2020 statutes were
enacted. The bill requires that if a personal lines insured asks an insurer for a loss run statement after
receiving information from a consumer reporting agency, the insurer must provide that statement within
15 days. It establishes that sections 626.9202 and 627.444, F.S., regarding loss run statements, do not
apply to life insurers.28
The bill also resolves a conflict between the newly enacted statutes and an existing statute regarding
loss run statements for group health insurance policies by repealing the health-insurance-specific
statute.29 It establishes that, as applied to group health insurance, a loss run statement also includes
premiums paid, number of insured on a monthly basis, and dependent status. The bill clarifies that for
group health insurance, only plan sponsors, not individual employees covered by the group policy, may
request a loss run statement.
Rate Disapprovals Based Upon Hurricane Modeling
21 Id.
22 Id.
23 Id.
24 See, e.g., MSIG Loss Runs, https://www.msigusa.com/loss-runs/ and StarStone,
http://myaccount.starstoneworkcomp.com/index.htm (last visited Mar. 4, 2021).
25 See ss. 626.9202 and 627.444, F.S.
26 S. 627.444(2)(b), F.S.
27 Id.
28 Because loss run statements are used to shop for new insurance and life insurance claims are only made after the
death of an insured, a loss run statement is not necessary for this type of policy.
29 See s. 627.6647, F.S.
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The law governing OIR’s review and approval of residential property insurance rate filings requires that
a rate filing account for mitigation measures that policyholders undertake to reduce hurricane losses.30
It sets forth the criteria under which OIR may disapprove rate filings, including disapproval of rates that
are determined to be excessive, inadequate, or unfairly discriminatory.31 The law also establishes
criteria for the Florida Commission on Hurricane Loss Projection Methodology’s (Commission)
consideration and approval of hurricane loss models and prescribes how those models affect OIR’s
approval of property insurance rate filings.32
Effect of the Bill
The bill provides parameters for OIR’s approval or disapproval of rate filings by providing that, with
respect to residential property insurance rate filings, the rate filing may use a modeling indication that is
the weighted or straight average of two or more models found to be accurate or reliable by the
Commission.
Mitigation Credits in Residential Property Insurance Rate Filings
Current law requires residential property insurers to include “positive and negative rate factors that
reflect the manner in which building code enforcement in a particular jurisdiction addresses risk of wind
damage” in their rate filing that are filed for approval by OIR.33 Insurers utilize factors from statewide
organizations’ building code rating factor plans that evaluate how building code enforcement in
particular jurisdictions evaluate risk.34 Often times these ratings are flawed and not an accurate
depiction of actual building code enforcement activity in a jurisdiction.
Since 2003, residential property insurers have been required to provide credits, discounts, and other
rate differentials to reduce insurance premiums for properties with mitigation features.35 Mitigation
features are construction techniques used or items installed to protect a structure against windstorm
damage and loss.36
Code-plus programs help property owners avoid or reduce damage cause by natural hazards and other
risks by implementing additional levels of resilience to hazard beyond those require by building codes.37
Presently, insurers are unable to submit rating plans for review and approval by OIR that include
mitigation credits for those insureds that are evaluated by, and comply with, code-plus standards
established by independent, not-for-profit, scientific research organizations.38
Effect of the Bill
The bill allows insurers the option to include the building code enforcement rating factor within their
rating formula rather than requiring them to include it. Therefore, they will no longer be required to use
rating factors that may be flawed. The bill also allows insurers to file a rating plan with OIR in which it
offers additional windstorm mitigation credits based on standards established by an independent, not-
for-profit, scientific research organization (the rating plan). Additionally the bill contains a provision that
allows insurers to require that insureds who elect to construct or retrofit a structure to receive premium
discounts, credits, or rate reductions allowed under the rating plan provide evidence of compliance with
mitigation standards prior to receiving the discounts, credits, or rate reductions.
30 S. 627.062(2)(j), F.S.
31 S. 627.062, F.S.
32 Ss. 627.0628–627.06281, F.S.
33 S. 627.0629(2)(b), F.S.
34 See, e.g., ISO Mitigation, How Do Building Code Effectiveness Classifications Affect Insurance Pricing?,
https://www.isomitigation.com/bcegs/how-do-building-code-effectiveness-classifications-affect-insurance-pricing/ (last
visited Mar. 6, 2021). The Insurance Service Office (ISO) has a program known as Building Code Effectiveness Grading
Schedule (BCEGS®), which provides these rating factors.
35 See s. 627.0629, F.S.
36 Examples of mitigation features include hurricane shutters, a hip roof, or a specific type of roof covering.
37 Whole Building Design Guide, Code-Plus Programs For Disaster Resistance, https://www.wbdg.org/resources/code-
plus-programs-disaster-resistance (last visited Mar. 6, 2021).
38 See, e.g., Institute for Business & Home Safety, https://ibhs.org/ (last visited Mar. 6, 2021).
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Workers’ Compensation Insurance Reporting Requirements
Workers’ compensation insurance carriers are required to record and report certain loss, expense, and
claims experience to aid OIR in making determinations concerning the adequacy of workers’
compensation experience for ratemaking purposes.39 Additionally, carriers are required to provide the
following information annually on both Florida experience and nationwide experience separately:
Payrolls by classification;
Manual premiums by classification;
Standard premiums by classification;
Losses by classification and injury type; and
Expenses.
Carriers satisfy these requirements by providing their data to the National Council on Compensation
Insurance, Inc. (NCCI). When a carrier goes into receivership due to insolvency, they cease reporting
to NCCI and, therefore, their data is no longer reported to OIR.
Effect of the Bill
The bill provides for a new factor in the determination and fixing of workers’ compensation and
employer’s liability insurance rates. This factor represents the loss experience of insurers whose data is
missing due to insolvency. Insurers may use prior reported data for such insurers and all other relevant
information to assess the impact on rates.
Citizens Property Insurance Corporation
Citizens Property Insurance Corporation (Citizens) is a state-created, not-for-profit, tax-exempt
governmental entity that provides property insurance coverage to those unable to find coverage in the
admitted market. Citizens offers property insurance in three separate accounts: the personal lines
account; the commercial lines account; and the coastal account. The commercial lines account offers
commercial lines residential and nonresidential policies. Currently, residential condominiums are
ineligible for coverage as “commercial residential” if 50 percent or more of the units are rented more
than eight times in a calendar year for a rental agreement period of less than 30 days.40
Effect of the Bill
The bill allows Citizens the option to insure residential condominiums under commercial residential
wind only coverage if the units are intended for residential use, but are rented on a short-term basis.
Replacement Cost Coverage and Law and Ordinance Coverage
The law requires insurers to offer homeowner’s insurance policies providing that any loss will be
adjusted on the basis of replacement costs to the dwelling.41 Replacement cost is usually defined in a
policy as the cost to repair or replace damaged property with materials of like kind and quality, without
any deduction for depreciation.42 For a dwelling, an insurer must initially pay at least the actual cash
value of the insured loss, less any applicable deductible, and then pay any remaining amounts (i.e.,
39 S. 627.914, F.S.
40 S. 627.351(6), F.S.
41 S. 627.7011, F.S.
42 National Association of Insurance Commissioners, Glossary of Insurance Terms,
https://content.naic.org/consumer_glossary.htm (last visited Mar. 3, 2021).
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replacement costs) only as to repairs and expenses that are actually incurred.43 Currently, there is no
timeframe in which an insured must request reimbursement for replacement cost.
Insurers must also offer replacement cost coverage that includes law and ordinance coverage, which
covers the additional costs incurred in repairing a home to bring it into compliance with new laws and
ordinances that were not in effect when the home was originally built. The law provides that law and
ordinance coverage may be limited to either 25 percent or 50 percent of the dwelling unit.44 Law and
ordinance coverage assists in paying for increased construction costs as a result of newer building
code enforcement or ordinances when repairing or replacing a dwelling after a covered loss.
Effect of the Bill
The bill clarifies that for purposes of law and ordinance coverage, the applicable laws and ordinances
are those which were enacted on or before the time of a covered loss. The bill also provides that an
insured has no less than 2 years from the date of the loss or 1 year from the notice of the claim,
whichever occurs later, to repair or replace the property to be eligible to receive the costs to repair a
dwelling that are above actual cash value or the costs to replace personal property that are above
actual cash value.
Surplus Lines
Surplus lines insurance refers to a category of insurance for risks that the admitted market is unable or
unwilling to provide coverage.45 There are three basic categories of surplus lines risks:
Specialty risks that have unusual underwriting characteristics or underwriting characteristics that
admitted insurers view as undesirable;
Niche risks for which admitted carriers do not have a filed policy form or rate; and
Capacity risks that are risks where an insured needs higher coverage limits than those that are
available in the admitted market.
Surplus lines insurers are not “authorized” insurers as defined in the Florida Insurance Code, which
means they do not obtain a certificate of authority from OIR to transact insurance in Florida.46 Rather,
surplus lines insurers are “unauthorized” insurers that may transact surplus lines insurance, if they are
made eligible by OIR.47
The Florida Surplus Lines Service Office (FSLSO) is a self-regulating, nonprofit association of approved
unauthorized insurers established by the Legislature in 1997.48 The FSLSO was created to protect
consumers seeking surplus line insurance in the state, monitor marketplace compliance, and protect
state revenues.49 All licensed surplus lines agents are deemed to be members of the FSLSO.50 The
FSLSO operates under the supervision of a nine-member board of governors, which has oversight
responsibilities for the Florida surplus lines market.
“To export” a policy51 means to place it with an unauthorized insurer under the Surplus Lines Law.52
Unless an exception applies, the insurance agent must make a diligent effort to procure the desired
coverage from admitted insurers before the agent can place insurance in the surplus lines market.53
43 S. 627.7011(3)(a), F.S.
44 S. 627.7011(1), F.S.
45 S. 626.921, F.S.
46 S. 624.09, F.S.
47 Id.
48 S. 626.921, F.S.
49 Id.
50 S. 626.921(2), F.S.
51 S. 626.914(3), F.S.
52 Sections 626.913 – 626.937, F.S., constitute the “Surplus Lines Law.”
53 S. 626.916(1)(a), F.S.
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“Diligent effort” means, subject to certain exceptions, seeking coverage from and being rejected by at
least three authorized insurers in the admitted market.54
Effect of the Bill
The bill allows surplus lines agents to export flood coverage to eligible surplus lines insurers without
meeting the diligent effort requirement.
Assignment Agreements
An assignment is the voluntary transfer of the rights of one party under a contract to another party.
Current law generally allows an insurance policyholder to assign the benefits of the policy, such as the
right to be paid, to another party. This assignment is often called an “assignment of benefits” or “AOB”.
An “assignment agreement” is an instrument that assigns or transfers post-loss benefits under a
residential or commercial property insurance policy to or from a person who protects, repairs, restores,
or replaces property or mitigates against further property damage.55
Once an assignment is made, the assignee can take action to enforce the contract. Accordingly, if the
benefits are assigned and the insurer refuses to pay, the assignee may file a lawsuit against the
insurer. An assignee must give an insurer and the assignor prior written notice of at least 10 business
days before filing suit on a claim.56 The notice may not be served before the insurer has made a
determination of coverage.57 The notice must specify the damages in dispute, the amount claimed, and
a pre-suit settlement demand, and must include an itemized, detailed written invoice or estimate of the
work performed or to be performed.58
The law requires that pre-suit notice be sent by certified mail, return receipt requested, or by electronic
delivery, but does not specify the mailing address or e-mail address where it must be sent. This may
delay receipt of notice and thus reduce an insurer’s actual time to respond.
Effect of the Bill
The bill expands the scope of services covered under the definition of “assignment agreement.” The bill
adds inspection services to the scope of services covered by an “assignment agreement” and specifies
that the list of services enumerated in the statute is not exhaustive. Additionally, the bill requires that
notice of intent to initiate litigation, sent by certified mail, be sent to the name and mailing address
specified by the insurer in the policy forms and that notice sent electronically be sent to the e-mail
address designated by the insurer in the policy forms.
Agent Licensing
General Lines Agent
A general lines agent59 is one who sells the following lines of insurance: property;60 casualty,61 including
commercial liability insurance underwritten by a risk retention group, a commercial self-insurance
54 If the cost to replace a residential dwelling is $700,000 or more, then only one coverage rejection is needed prior to
export. S. 626.914(4), F.S.
55 S. 627.7152(1)(b), F.S.
56 S. 627.7152(9)(a), F.S.
57 Id.
58 Id.
59 S. 626.015(5), F.S.
60 S. 624.604, F.S.
61 S. 624.605, F.S.
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fund,62 or a workers’ compensation self-insurance fund;63 surety;64 health;65 and, marine.66 The general
lines agent may only transact health insurance for an insurer that the general lines agent also
represents for property and casualty insurance. If the general lines agent wishes to represent health
insurers that are not also property and casualty insurers, they must be licensed as a health insurance
agent.67
Personal Lines Agent
A personal lines agent is a general lines agent who is limited to transacting business related to property
and casualty insurance sold to individuals and families for noncommercial purposes.68
Motor Vehicle Servicing Agreements
Motor vehicle service agreements provide vehicle owners with protection when the manufacturer’s
warranty expires. A motor vehicle service agreement indemnifies the vehicle owner (or holder of the
agreement) against loss caused by failure of any mechanical or other component part, or any
mechanical or other component part that does not function as it was originally intended. Motor vehicle
service agreements can only be sold by a licensed and appointed salesperson. Salespersons are
licensed in the same manner as insurance representatives under ch. 626, F.S., with some exceptions
to the requirements applied to insurance representatives.
Service Warranty Associations
Service warranty associations are entities, other than insurers, which issue service warranties. A
service warranty is an agreement or maintenance service contract equal to or greater than 1 year in
length to repair, replace, or maintain a consumer product, or for indemnification for repair, replacement,
or maintenance, for operational or structural failure due to a defect in materials or workmanship, normal
wear and tear, power surge, or accidental damage from handling in return for the payment of a
segregated charge by the consumer.69 No person or entity shall solicit, negotiate, advertise, or
effectuate service warranty contracts in this state unless such person or entity is licensed and
appointed as a sales representative.70
Home Warranty Contracts
A home warranty association is any corporation or any other organization, other than an authorized
insurer, issuing home warranties. A home warranty is any contract or agreement whereby a person
undertakes to indemnify the warranty holder against the cost of repair or replacement, or actually
furnishes repair or replacement, of any structural component or appliance of a home, necessitated by
wear and tear or an inherent defect of any such structural component or appliance or necessitated by
the failure of an inspection to detect the likelihood of any such loss. No person may solicit, negotiate, or
effectuate home warranty contracts for remuneration in this state unless such person is licensed and
appointed as a sales representative.71
62 S. 624.462, F.S.
63 S. 624.4621, F.S.
64 S. 626.606, F.S.
65 Ss. 624.603 and 627.6482, F.S.
66 S. 624.607, F.S.
67 S. 626.829, F.S.
68 S. 626.015(17), F.S.
69 S. 634.401(13).
70 S. 634.419, F.S. A “sales representative” is any person, retail store, corporation, partnership, or sole proprietorship
utilized by an insurer or service warranty association for the purpose of selling or issuing service warranties. However, in
the case of service warranty associations selling service warranties from one or more business locations, the person in
charge of each location may be considered the sales representative. S. 634.401(12), F.S.
71 S. 634.317, F.S. “Sales representative” is any person with whom an insurer or home inspection or warranty association
has a contract and who is utilized by such insurer or association for the purpose of selling or issuing home warranties. The
term includes all employees of an insurer or association engaged directly in the sale or issuance of home warranties. S.
634.301(12), F.S
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Effect of the Bill
The bill allows a licensed general lines agent or licensed personal lines agent to advertise, solicit,
negotiate, or sell motor vehicle service agreements, home warranty contracts, or service warranty
contracts without being separately licensed as a sales representative or insurance representative, as
applicable.
B. SECTION DIRECTORY:
Section 1. Amends s. 215.555, F.S., relating to Florida Hurricane Catastrophe Fund.
Section 2. Amends s. 624.423, F.S., relating to serving process.
Section 3. Amends s. 626.856, F.S., relating to “company employee adjuster” defined.
Section 4. Amends s. 626.9202, F.S., relating to loss run statements for all lines of insurance.
Section 5. Amends s. 627.062, F.S., relating to rate standards.
Section 6. Amends s. 627.0629, F.S., relating to residential property insurance; rate filings.
Section 7. Amends s. 627.072, F.S., relating to making and use of rates.
Section 8. Amends s. 627.351, F.S., relating to insurance risk apportionment plans.
Section 9. Amends s. 627.444, F.S., relating to loss run statements for all lines of insurance.
Section 10. Repeals s. 627.6647, F.S., relating to insurance risk apportionment plans.
Section 11. Amends s. 627.7011, F.S., relating to homeowners’ policies; offer of replacement cost
coverage and law and ordinance coverage.
Section 12. Amends s. 627.715, F.S., relating to flood insurance.
Section 13. Amends s. 627.7152, F.S., relating to assignment agreements.
Section 14. Amends s. 634.171, F.S., relating to salesperson to be licensed and appointed.
Section 15. Amends s. 634.317, F.S., relating to license and appointment required.
Section 16. Amends s. 634.419, F.S., relating to license and appointment required.
Section 17. Reenacts s. 627.7153, F.S., relating to policies restricting assignment of post-loss benefits
under a property insurance policy.
Section 18. Provides an effective date of July 1, 2021, except as otherwise provided.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
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2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
OIR has indicated the bill may have positive economic impacts for policyholders, who may benefit from
lower collateral protection insurance costs if more policies are eligible for coverage from the FHCF.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not Applicable. The bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 815 2021
1 A bill to be entitled
2 An act relating to insurance; amending s. 215.555,
3 F.S.; redefining the term "covered policy" under the
4 Florida Hurricane Catastrophe Fund in relation to
5 certain collateral protection insurance policies;
6 amending s. 624.423, F.S.; specifying when service of
7 process is valid and binding upon insurers; amending
8 s. 626.856, F.S.; revising the definition of the term
9 "company employee adjuster"; amending s. 626.9202,
10 F.S.; revising the definition of the term "loss run
11 statement"; specifying the entities that must receive
12 requests for loss run statements; specifying that
13 insurers must provide loss run statements under
14 certain circumstances; revising the required claims
15 history in loss run statements; providing
16 applicability; limiting loss run statement requests
17 with respect to group health insurance policies to
18 group policyholders; amending s. 627.062, F.S.;
19 authorizing a rate filing for homeowners' insurance to
20 use a specified modeling indication; amending s.
21 627.0629, F.S.; authorizing, rather than requiring,
22 rate filings for certain residential property
23 insurance to include certain rate factors; authorizing
24 insurers to file certain insurance rating plans based
25 on certain windstorm mitigation construction
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26 standards; authorizing insurers to require
27 policyholders to provide evidence of compliance with
28 mitigation standards under certain conditions;
29 amending s. 627.072, F.S.; providing a ratemaking
30 factor for workers' compensation and employer's
31 liability insurance; amending s. 627.351, F.S.;
32 revising conditions for determining the ineligibility
33 of condominiums for wind-only coverage; amending s.
34 627.444, F.S.; revising the definition of the term
35 "loss run statement"; specifying the entities that
36 must receive requests for loss run statements;
37 specifying that insurers must provide loss run
38 statements under certain circumstances; revising the
39 required claims history in loss run statements;
40 providing applicability; limiting loss run statement
41 requests with respect to group health insurance
42 policies to group policyholders; repealing s.
43 627.6647, F.S., relating to the release of information
44 required for bid to group health insurance
45 policyholders; amending s. 627.7011, F.S.; revising
46 conditions for inclusion of costs for law and
47 ordinance coverage in loss adjustments under certain
48 homeowners' policies; revising the timeframes of
49 repairs of dwellings and replacement of personal
50 property for which the insurer must pay when property
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51 is insured on the basis of replacement costs; amending
52 s. 627.715, F.S.; providing an exemption from a
53 diligent effort requirement for agents exporting
54 contracts or endorsements providing flood coverage;
55 amending s. 627.7152, F.S.; revising the definition of
56 the term "assignment agreement"; specifying the
57 addresses to which a notice of intent must be served;
58 amending ss. 634.171, 634.317, and 634.419, F.S.;
59 authorizing licensed personal lines or general lines
60 agents to solicit, negotiate, advertise, or sell motor
61 vehicle service agreements, home warranty contracts,
62 and service warranties, respectively, without a sales
63 representative license; reenacting s. 627.7153(1) and
64 (2)(d), F.S., relating to policies restricting
65 assignment of post-loss benefits under a property
66 insurance policy, to incorporate the amendment made by
67 the act to s. 627.7152, F.S., in references thereto;
68 providing effective dates.
69
70 Be It Enacted by the Legislature of the State of Florida:
71
72 Section 1. Effective June 1, 2021, paragraph (c) of
73 subsection (2) of section 215.555, Florida Statutes, is amended
74 to read:
75 215.555 Florida Hurricane Catastrophe Fund.—
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76 (2) DEFINITIONS.—As used in this section:
77 (c) "Covered policy" means any insurance policy covering
78 residential property in this state, including, but not limited
79 to, any homeowner, mobile home owner, farm owner, condominium
80 association, condominium unit owner, tenant, or apartment
81 building policy, or any other policy covering a residential
82 structure or its contents issued by any authorized insurer,
83 including a commercial self-insurance fund holding a certificate
84 of authority issued by the Office of Insurance Regulation under
85 s. 624.462, the Citizens Property Insurance Corporation, and any
86 joint underwriting association or similar entity created under
87 law. The term "covered policy" includes any collateral
88 protection insurance policy covering personal residences which
89 protects both the borrower's and the lender's financial
90 interests, in an amount at least equal to the coverage amount
91 for the dwelling in place under the lapsed homeowner's policy,
92 the coverage amount that the homeowner has been notified of, or
93 the coverage amount the homeowner requests from the collateral
94 protection insurer, if such collateral protection insurance
95 policy can be accurately reported as required in subsection (5).
96 Additionally, covered policies include policies covering the
97 peril of wind removed from the Florida Residential Property and
98 Casualty Joint Underwriting Association or from the Citizens
99 Property Insurance Corporation, created under s. 627.351(6), or
100 from the Florida Windstorm Underwriting Association, created
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101 under s. 627.351(2), by an authorized insurer under the terms
102 and conditions of an executed assumption agreement between the
103 authorized insurer and such association or Citizens Property
104 Insurance Corporation. Each assumption agreement between the
105 association and such authorized insurer or Citizens Property
106 Insurance Corporation must be approved by the Office of
107 Insurance Regulation before the effective date of the
108 assumption, and the Office of Insurance Regulation must provide
109 written notification to the board within 15 working days after
110 such approval. "Covered policy" does not include any policy that
111 excludes wind coverage or hurricane coverage or any reinsurance
112 agreement and does not include any policy otherwise meeting this
113 definition which is issued by a surplus lines insurer or a
114 reinsurer. All commercial residential excess policies and all
115 deductible buy-back policies that, based on sound actuarial
116 principles, require individual ratemaking shall be excluded by
117 rule if the actuarial soundness of the fund is not jeopardized.
118 For this purpose, the term "excess policy" means a policy that
119 provides insurance protection for large commercial property
120 risks and that provides a layer of coverage above a primary
121 layer insured by another insurer.
122 Section 2. Effective upon this act becoming a law,
123 subsection (3) of section 624.423, Florida Statutes, is amended
124 to read:
125 624.423 Serving process.—
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126 (3) Service of process is valid and binding upon the
127 insurer on the date process served upon the Chief Financial
128 Officer is delivered to the insurer and sent or the insurer has
129 been notified such information has been made available on a
130 secured network in accordance with this section and s.
131 624.307(9) shall for all purposes constitute valid and binding
132 service thereof upon the insurer.
133 Section 3. Section 626.856, Florida Statutes, is amended
134 to read:
135 626.856 "Company employee adjuster" defined.—A "company
136 employee adjuster" means a person licensed as an all-lines
137 adjuster who is appointed and employed on an insurer's staff of
138 adjusters, by an affiliate, or by a wholly owned subsidiary of
139 the insurer, and who undertakes on behalf of such insurer or
140 other insurers under common control or ownership to ascertain
141 and determine the amount of any claim, loss, or damage payable
142 under a contract of insurance, or undertakes to effect
143 settlement of such claim, loss, or damage.
144 Section 4. Effective upon this act becoming a law,
145 subsections (1), (2), and (4) of section 626.9202, Florida
146 Statutes, are amended, and subsections (7) and (8) are added to
147 that section, to read:
148 626.9202 Loss run statements for all lines of insurance.—
149 (1) As used in this section, the term:
150 (a) "Loss run statement" means a report that contains the
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151 policy number, the period of coverage, the number of claims, the
152 paid losses on each claim all claims, and the date of each loss.
153 The term does not include supporting claim file documentation,
154 including, but not limited to, copies of claim files,
155 investigation reports, evaluation statements, insureds'
156 statements, and documents protected by a common law or statutory
157 privilege. As applied to group health insurance, the term means
158 a report that also contains premiums paid, number of insureds on
159 a monthly basis, and dependent status.
160 (b) "Provide" means to electronically send a document or
161 to allow access through an electronic portal to view or generate
162 a document.
163 (2) Notwithstanding any other law, an insurer shall
164 provide to an insured within 15 calendar days after an
165 individual or entity designated by the insurer receives receipt
166 of the insured's written request, either:
167 (a) A loss run statement; or
168 (b) For personal lines of insurance, information on how to
169 obtain a loss run statement at no charge through a consumer
170 reporting agency. However, this section does not prohibit an
171 insured from requesting a loss run statement after receiving
172 information from a consumer reporting agency, in which case the
173 insurer must then provide such loss run statement within 15
174 calendar days after the individual or entity designated by the
175 insurer receives the insured's subsequent written request.
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176 (4) A loss run statement provided pursuant to this section
177 must contain a claims history with the insurer for the preceding
178 3 5 years or, if the claims history is less than 3 5 years, a
179 complete claims history with the insurer.
180 (7) This section does not apply to a life insurer as
181 defined in s. 624.602.
182 (8) For group health insurance, only the group
183 policyholder may request and be provided a loss run statement
184 pursuant to this section.
185 Section 5. Paragraph (j) of subsection (2) of section
186 627.062, Florida Statutes, is amended to read:
187 627.062 Rate standards.—
188 (2) As to all such classes of insurance:
189 (j) With respect to residential property insurance rate
190 filings, the rate filing:
191 1. Must account for mitigation measures undertaken by
192 policyholders to reduce hurricane losses.
193 2. May use a modeling indication that is the weighted or
194 straight average of two or more models found by the commission
195 to be accurate or reliable pursuant to s. 627.0628.
196
197 The provisions of this subsection do not apply to workers'
198 compensation, employer's liability insurance, and motor vehicle
199 insurance.
200 Section 6. Paragraph (b) of subsection (2) of section
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201 627.0629, Florida Statutes, is amended, and subsection (9) is
202 added to that section, to read:
203 627.0629 Residential property insurance; rate filings.—
204 (2)
205 (b) A rate filing for residential property insurance made
206 more than 150 days after approval by the office of a building
207 code rating factor plan submitted by a statewide rating
208 organization may shall include positive and negative rate
209 factors that reflect the manner in which building code
210 enforcement in a particular jurisdiction addresses risk of wind
211 damage. The rate filing must shall include variations from
212 standard rate factors on an individual basis based on inspection
213 of a particular structure by a licensed home inspector. If an
214 inspection is requested by the insured, the insurer may require
215 the insured to pay the reasonable cost of the inspection. This
216 paragraph applies to structures constructed or renovated after
217 the implementation of this paragraph.
218 (9) An insurer may file with the office a personal lines
219 residential property insurance rating plan that provides
220 justified premium discounts, credits, or other rate
221 differentials based on windstorm mitigation construction
222 standards developed by an independent, not-for-profit,
223 scientific research organization. The insurer may require a
224 policyholder who elects to construct or retrofit the structure,
225 in whole or in part, for windstorm mitigation purposes to
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226 present to the insurer evidence of compliance with the
227 mitigation standards before receiving any premium discount,
228 credit, or rate reduction allowed under the rating plan.
229 Section 7. Subsection (1) of section 627.072, Florida
230 Statutes, is amended to read:
231 627.072 Making and use of rates.—
232 (1) As to workers' compensation and employer's liability
233 insurance, the following factors shall be used in the
234 determination and fixing of rates:
235 (a) The past loss experience and prospective loss
236 experience within and outside this state;
237 (b) The impact resulting from the past loss experience and
238 prospective loss experience for insurers whose data are missing
239 from statewide experience due to insolvency. Prior reported data
240 for such insurers and all other relevant information may be used
241 to assess the impact on rates;
242 (c)(b) The conflagration and catastrophe hazards;
243 (d)(c) A reasonable margin for underwriting profit and
244 contingencies;
245 (e)(d) Dividends, savings, or unabsorbed premium deposits
246 allowed or returned by insurers to their policyholders, members,
247 or subscribers;
248 (f)(e) Investment income on unearned premium reserves and
249 loss reserves;
250 (g)(f) Past expenses and prospective expenses, both those
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251 countrywide and those specifically applicable to this state; and
252 (h)(g) All other relevant factors, including judgment
253 factors, within and outside this state.
254 Section 8. Paragraph (a) of subsection (6) of section
255 627.351, Florida Statutes, is amended to read:
256 627.351 Insurance risk apportionment plans.—
257 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
258 (a) The public purpose of this subsection is to ensure
259 that there is an orderly market for property insurance for
260 residents and businesses of this state.
261 1. The Legislature finds that private insurers are
262 unwilling or unable to provide affordable property insurance
263 coverage in this state to the extent sought and needed. The
264 absence of affordable property insurance threatens the public
265 health, safety, and welfare and likewise threatens the economic
266 health of the state. The state therefore has a compelling public
267 interest and a public purpose to assist in assuring that
268 property in the state is insured and that it is insured at
269 affordable rates so as to facilitate the remediation,
270 reconstruction, and replacement of damaged or destroyed property
271 in order to reduce or avoid the negative effects otherwise
272 resulting to the public health, safety, and welfare, to the
273 economy of the state, and to the revenues of the state and local
274 governments which are needed to provide for the public welfare.
275 It is necessary, therefore, to provide affordable property
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276 insurance to applicants who are in good faith entitled to
277 procure insurance through the voluntary market but are unable to
278 do so. The Legislature intends, therefore, that affordable
279 property insurance be provided and that it continue to be
280 provided, as long as necessary, through Citizens Property
281 Insurance Corporation, a government entity that is an integral
282 part of the state, and that is not a private insurance company.
283 To that end, the corporation shall strive to increase the
284 availability of affordable property insurance in this state,
285 while achieving efficiencies and economies, and while providing
286 service to policyholders, applicants, and agents which is no
287 less than the quality generally provided in the voluntary
288 market, for the achievement of the foregoing public purposes.
289 Because it is essential for this government entity to have the
290 maximum financial resources to pay claims following a
291 catastrophic hurricane, it is the intent of the Legislature that
292 the corporation continue to be an integral part of the state and
293 that the income of the corporation be exempt from federal income
294 taxation and that interest on the debt obligations issued by the
295 corporation be exempt from federal income taxation.
296 2. The Residential Property and Casualty Joint
297 Underwriting Association originally created by this statute
298 shall be known as the Citizens Property Insurance Corporation.
299 The corporation shall provide insurance for residential and
300 commercial property, for applicants who are entitled, but, in
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301 good faith, are unable to procure insurance through the
302 voluntary market. The corporation shall operate pursuant to a
303 plan of operation approved by order of the Financial Services
304 Commission. The plan is subject to continuous review by the
305 commission. The commission may, by order, withdraw approval of
306 all or part of a plan if the commission determines that
307 conditions have changed since approval was granted and that the
308 purposes of the plan require changes in the plan. For the
309 purposes of this subsection, residential coverage includes both
310 personal lines residential coverage, which consists of the type
311 of coverage provided by homeowner, mobile home owner, dwelling,
312 tenant, condominium unit owner, and similar policies; and
313 commercial lines residential coverage, which consists of the
314 type of coverage provided by condominium association, apartment
315 building, and similar policies.
316 3. With respect to coverage for personal lines residential
317 structures:
318 a. Effective January 1, 2014, a structure that has a
319 dwelling replacement cost of $1 million or more, or a single
320 condominium unit that has a combined dwelling and contents
321 replacement cost of $1 million or more, is not eligible for
322 coverage by the corporation. Such dwellings insured by the
323 corporation on December 31, 2013, may continue to be covered by
324 the corporation until the end of the policy term. The office
325 shall approve the method used by the corporation for valuing the
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326 dwelling replacement cost for the purposes of this subparagraph.
327 If a policyholder is insured by the corporation before being
328 determined to be ineligible pursuant to this subparagraph and
329 such policyholder files a lawsuit challenging the determination,
330 the policyholder may remain insured by the corporation until the
331 conclusion of the litigation.
332 b. Effective January 1, 2015, a structure that has a
333 dwelling replacement cost of $900,000 or more, or a single
334 condominium unit that has a combined dwelling and contents
335 replacement cost of $900,000 or more, is not eligible for
336 coverage by the corporation. Such dwellings insured by the
337 corporation on December 31, 2014, may continue to be covered by
338 the corporation only until the end of the policy term.
339 c. Effective January 1, 2016, a structure that has a
340 dwelling replacement cost of $800,000 or more, or a single
341 condominium unit that has a combined dwelling and contents
342 replacement cost of $800,000 or more, is not eligible for
343 coverage by the corporation. Such dwellings insured by the
344 corporation on December 31, 2015, may continue to be covered by
345 the corporation until the end of the policy term.
346 d. Effective January 1, 2017, a structure that has a
347 dwelling replacement cost of $700,000 or more, or a single
348 condominium unit that has a combined dwelling and contents
349 replacement cost of $700,000 or more, is not eligible for
350 coverage by the corporation. Such dwellings insured by the
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351 corporation on December 31, 2016, may continue to be covered by
352 the corporation until the end of the policy term.
353
354 The requirements of sub-subparagraphs b.-d. do not apply in
355 counties where the office determines there is not a reasonable
356 degree of competition. In such counties a personal lines
357 residential structure that has a dwelling replacement cost of
358 less than $1 million, or a single condominium unit that has a
359 combined dwelling and contents replacement cost of less than $1
360 million, is eligible for coverage by the corporation.
361 4. It is the intent of the Legislature that policyholders,
362 applicants, and agents of the corporation receive service and
363 treatment of the highest possible level but never less than that
364 generally provided in the voluntary market. It is also intended
365 that the corporation be held to service standards no less than
366 those applied to insurers in the voluntary market by the office
367 with respect to responsiveness, timeliness, customer courtesy,
368 and overall dealings with policyholders, applicants, or agents
369 of the corporation.
370 5.a. Effective January 1, 2009, a personal lines
371 residential structure that is located in the "wind-borne debris
372 region," as defined in s. 1609.2, International Building Code
373 (2006), and that has an insured value on the structure of
374 $750,000 or more is not eligible for coverage by the corporation
375 unless the structure has opening protections as required under
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376 the Florida Building Code for a newly constructed residential
377 structure in that area. A residential structure is deemed to
378 comply with this sub-subparagraph if it has shutters or opening
379 protections on all openings and if such opening protections
380 complied with the Florida Building Code at the time they were
381 installed.
382 b. Any major structure, as defined in s. 161.54(6)(a),
383 that is newly constructed, or rebuilt, repaired, restored, or
384 remodeled to increase the total square footage of finished area
385 by more than 25 percent, pursuant to a permit applied for after
386 July 1, 2015, is not eligible for coverage by the corporation if
387 the structure is seaward of the coastal construction control
388 line established pursuant to s. 161.053 or is within the Coastal
389 Barrier Resources System as designated by 16 U.S.C. ss. 3501-
390 3510.
391 6. With respect to wind-only coverage for commercial lines
392 residential condominiums, effective July 1, 2014, a condominium
393 may shall be deemed ineligible for coverage when if 50 percent
394 or more of the units are rented more than eight times in a
395 calendar year for a rental agreement period of less than 30
396 days.
397 Section 9. Effective upon this act becoming a law,
398 subsections (1), (2), and (4) of section 627.444, Florida
399 Statutes, are amended, and subsections (7) and (8) are added to
400 that section, to read:
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401 627.444 Loss run statements for all lines of insurance.—
402 (1) As used in this section, the term:
403 (a) "Loss run statement" means a report that contains the
404 policy number, the period of coverage, the number of claims, the
405 paid losses on each claim all claims, and the date of each loss.
406 The term does not include supporting claim file documentation,
407 including, but not limited to, copies of claim files,
408 investigation reports, evaluation statements, insureds'
409 statements, and documents protected by a common law or statutory
410 privilege. As applied to group health insurance, the term means
411 a report that also contains premiums paid, number of insureds on
412 a monthly basis, and dependent status.
413 (b) "Provide" means to electronically send a document or
414 to allow access through an electronic portal to view or generate
415 a document.
416 (2) Notwithstanding any other law, an insurer shall
417 provide to an insured within 15 calendar days after an
418 individual or entity designated by the insurer receives receipt
419 of the insured's written request, either:
420 (a) A loss run statement; or
421 (b) For personal lines of insurance, information on how to
422 obtain a loss run statement at no charge through a consumer
423 reporting agency. However, this section does not prohibit an
424 insured from requesting a loss run statement after receiving
425 information from a consumer reporting agency, in which case the
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426 insurer must then provide such loss run statement within 15
427 calendar days after the individual or entity designated by the
428 insurer receives the insured's subsequent written request.
429 (4) A loss run statement provided pursuant to this section
430 must contain a claims history with the insurer for the preceding
431 3 5 years or, if the claims history is less than 3 5 years, a
432 complete claims history with the insurer.
433 (7) This section does not apply to a life insurer as
434 defined in s. 624.602.
435 (8) For group health insurance, only the group
436 policyholder may request and be provided a loss run statement
437 pursuant to this section.
438 Section 10. Section 627.6647, Florida Statutes, is
439 repealed.
440 Section 11. Paragraph (b) of subsection (1) and subsection
441 (3) of section 627.7011, Florida Statutes, are amended to read:
442 627.7011 Homeowners' policies; offer of replacement cost
443 coverage and law and ordinance coverage.—
444 (1) Prior to issuing a homeowner's insurance policy, the
445 insurer must offer each of the following:
446 (b) A policy or endorsement providing that, subject to
447 other policy provisions, any loss that is repaired or replaced
448 at any location will be adjusted on the basis of replacement
449 costs to the dwelling not exceeding policy limits, rather than
450 actual cash value, and also including costs necessary to meet
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451 applicable laws and ordinances enacted on or before the time of
452 loss which regulate regulating the construction, use, or repair
453 of any property or require requiring the tearing down of any
454 property, including the costs of removing debris. However,
455 additional costs necessary to meet applicable laws and
456 ordinances may be limited to 25 percent or 50 percent of the
457 dwelling limit, as selected by the policyholder, and such
458 coverage applies only to repairs of the damaged portion of the
459 structure unless the total damage to the structure exceeds 50
460 percent of the replacement cost of the structure.
461
462 An insurer is not required to make the offers required by this
463 subsection with respect to the issuance or renewal of a
464 homeowner's policy that contains the provisions specified in
465 paragraph (b) for law and ordinance coverage limited to 25
466 percent of the dwelling limit, except that the insurer must
467 offer the law and ordinance coverage limited to 50 percent of
468 the dwelling limit. This subsection does not prohibit the offer
469 of a guaranteed replacement cost policy.
470 (3) In the event of a loss for which a dwelling or
471 personal property is insured on the basis of replacement costs:
472 (a) For a dwelling, the insurer must initially pay at
473 least the actual cash value of the insured loss, less any
474 applicable deductible. The insurer shall pay any remaining
475 amounts necessary to perform such repairs as work is performed
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476 and expenses are incurred. The insured has not less than 2 years
477 from the date of loss or 1 year from the notice of the claim,
478 whichever occurs later, to request reimbursement from the
479 insurer for work to be performed and expenses incurred. If a
480 total loss of a dwelling occurs, the insurer shall pay the
481 replacement cost coverage without reservation or holdback of any
482 depreciation in value, pursuant to s. 627.702.
483 (b) For personal property:
484 1. The insurer must offer coverage under which the insurer
485 is obligated to pay the replacement cost without reservation or
486 holdback for any depreciation in value, whether or not the
487 insured replaces the property.
488 2. The insurer may also offer coverage under which the
489 insurer may limit the initial payment to the actual cash value
490 of the personal property to be replaced, require the insured to
491 provide receipts for the purchase of the property financed by
492 the initial payment, use such receipts to make the next payment
493 requested by the insured for the replacement of insured
494 property, and continue this process until the insured remits all
495 receipts up to the policy limits for replacement costs. The
496 insured has not less than 2 years from the date of loss or 1
497 year from the notice of the claim, whichever occurs later, to
498 request reimbursement from the insurer for expenses incurred.
499 The insurer must provide clear notice of this process before the
500 policy is bound. A policyholder must be provided an actuarially
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501 reasonable premium credit or discount for this coverage. The
502 insurer may not require the policyholder to advance payment for
503 the replaced property.
504 Section 12. Effective upon this act becoming a law,
505 present subsections (4) through (10) of section 627.715, Florida
506 Statutes, are redesignated as subsections (5) through (11),
507 respectively, and a new subsection (4) is added to that section,
508 to read:
509 627.715 Flood insurance.—An authorized insurer may issue
510 an insurance policy, contract, or endorsement providing personal
511 lines residential coverage for the peril of flood or excess
512 coverage for the peril of flood on any structure or the contents
513 of personal property contained therein, subject to this section.
514 This section does not apply to commercial lines residential or
515 commercial lines nonresidential coverage for the peril of flood.
516 An insurer may issue flood insurance policies, contracts,
517 endorsements, or excess coverage on a standard, preferred,
518 customized, flexible, or supplemental basis.
519 (4) An agent may export a contract or an endorsement
520 providing flood coverage to an eligible surplus lines insurer
521 without making a diligent effort to seek such coverage from
522 three or more authorized insurers under s. 626.916(1)(a).
523 Section 13. Effective upon this act becoming a law,
524 paragraph (b) of subsection (1) and paragraph (a) of subsection
525 (9) of section 627.7152, Florida Statutes, are amended to read:
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526 627.7152 Assignment agreements.—
527 (1) As used in this section, the term:
528 (b) "Assignment agreement" means any instrument by which
529 post-loss benefits under a residential property insurance policy
530 or commercial property insurance policy, as that term is defined
531 in s. 627.0625(1), are assigned or transferred, or acquired in
532 any manner, in whole or in part, to or from a person providing
533 services, including, but not limited to, scopes of service, to
534 inspect, protect, repair, restore, or replace property or to
535 mitigate against further damage to the property.
536 (9)(a) An assignee must provide the named insured,
537 insurer, and the assignor, if not the named insured, with a
538 written notice of intent to initiate litigation before filing
539 suit under the policy. Such notice must be served by certified
540 mail, return receipt requested, to the name and mailing address
541 designated by the insurer in the policy forms, or by electronic
542 delivery at the e-mail address designated by the insurer in the
543 policy forms at least 10 business days before filing suit, but
544 may not be served before the insurer has made a determination of
545 coverage under s. 627.70131. The notice must specify the damages
546 in dispute, the amount claimed, and a presuit settlement demand.
547 Concurrent with the notice, and as a precondition to filing
548 suit, the assignee must provide the named insured, insurer, and
549 the assignor, if not the named insured, a detailed written
550 invoice or estimate of services, including itemized information
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551 on equipment, materials, and supplies; the number of labor
552 hours; and, in the case of work performed, proof that the work
553 has been performed in accordance with accepted industry
554 standards.
555 Section 14. Section 634.171, Florida Statutes, is amended
556 to read:
557 634.171 Salesperson to be licensed and appointed;
558 exemptions.—Salespersons for motor vehicle service agreement
559 companies and insurers shall be licensed, appointed, renewed,
560 continued, reinstated, or terminated as prescribed in chapter
561 626 for insurance representatives in general. However, they
562 shall be exempt from all other provisions of chapter 626
563 including fingerprinting, photo identification, education, and
564 examination provisions. License, appointment, and other fees
565 shall be those prescribed in s. 624.501. A licensed and
566 appointed salesperson shall be directly responsible and
567 accountable for all acts of her or his employees and other
568 representatives. Each service agreement company or insurer
569 shall, on forms prescribed by the department, within 30 days
570 after termination of the appointment, notify the department of
571 such termination. An No employee or salesperson of a motor
572 vehicle service agreement company or insurer may not directly or
573 indirectly solicit or negotiate insurance contracts, or hold
574 herself or himself out in any manner to be an insurance agent,
575 unless so qualified, licensed, and appointed therefor under the
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576 Florida Insurance Code. A licensed personal lines or general
577 lines agent is not required to be licensed as a salesperson
578 under this section to solicit, negotiate, advertise, or sell
579 motor vehicle service agreements. A motor vehicle service
580 agreement company is not required to be licensed as a
581 salesperson to solicit, sell, issue, or otherwise transact the
582 motor vehicle service agreements issued by the motor vehicle
583 service agreement company.
584 Section 15. Section 634.317, Florida Statutes, is amended
585 to read:
586 634.317 License and appointment required; exemptions.—A No
587 person may not solicit, negotiate, or effectuate home warranty
588 contracts for remuneration in this state unless such person is
589 licensed and appointed as a sales representative. A licensed and
590 appointed sales representative shall be directly responsible and
591 accountable for all acts of the licensee's employees. A licensed
592 personal lines or general lines agent is not required to be
593 licensed as a sales representative under this section to
594 solicit, negotiate, advertise, or sell home warranty contracts.
595 Section 16. Section 634.419, Florida Statutes, is amended
596 to read:
597 634.419 License and appointment required; exemptions.—A No
598 person or entity may not shall solicit, negotiate, advertise, or
599 effectuate service warranty contracts in this state unless such
600 person or entity is licensed and appointed as a sales
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601 representative. Sales representatives shall be responsible for
602 the actions of persons under their supervision. However, a
603 service warranty association licensed as such under this part is
604 shall not be required to be licensed and appointed as a sales
605 representative to solicit, negotiate, advertise, or effectuate
606 its products. A licensed personal lines or general lines agent
607 is not required to be licensed as a sales representative under
608 this section to solicit, negotiate, advertise, or sell service
609 warranties.
610 Section 17. Effective upon this act becoming a law, for
611 the purpose of incorporating the amendment made by this act to
612 section 627.7152, Florida Statutes, in references thereto,
613 subsection (1) and paragraph (d) of subsection (2) of section
614 627.7153, Florida Statutes, are reenacted to read:
615 627.7153 Policies restricting assignment of post-loss
616 benefits under a property insurance policy.—
617 (1) As used in this section, the term "assignment
618 agreement" has the same meaning as provided in s. 627.7152.
619 (2) An insurer may make available a policy that restricts
620 in whole or in part an insured's right to execute an assignment
621 agreement only if all of the following conditions are met:
622 (d) Each restricted policy include on its face the
623 following notice in 18-point uppercase and boldfaced type:
624
625 THIS POLICY DOES NOT ALLOW THE UNRESTRICTED ASSIGNMENT
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626 OF POST-LOSS INSURANCE BENEFITS. BY SELECTING THIS
627 POLICY, YOU WAIVE YOUR RIGHT TO FREELY ASSIGN OR
628 TRANSFER THE POST-LOSS PROPERTY INSURANCE BENEFITS
629 AVAILABLE UNDER THIS POLICY TO A THIRD PARTY OR TO
630 OTHERWISE FREELY ENTER INTO AN ASSIGNMENT AGREEMENT AS
631 THE TERM IS DEFINED IN SECTION 627.7152 OF THE FLORIDA
632 STATUTES.
633 Section 18. Except as otherwise expressly provided in this
634 act, and except for this section, which shall take effect upon
635 this act becoming a law, this act shall take effect July 1,
636 2021.
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HB 815 by Rep. Gregory
Insurance
AMENDMENT SUMMARY
March 10, 2021
Amendment 1 by Rep. Gregory: The amendment makes the following changes to the bill:
• Authorizes an association, trust, or pool created for the purpose of forming or managing
a risk management mechanism or providing self-insurance for a public entity to establish
a quorum and conduct public business through communication media technology.
• Adds the designation of Insurance Customer Service Representative (ICSR) from
Statewide Insurance Associates LLC to the list of several designations, one of which
meets a required qualification for an applicant for licensure as a customer representative
if earned within 4 years preceding the date of filing an application for licensure.
• Restores language in two statutes relating to loss run statements by replacing “each
claim” with “all claims” in order to ensure that protected medical information is not
inadvertently disclosed on a loss run statement.
• Moves a new provision in the bill that a residential property insurance filing may use a
weighted or straight average of two or more models found by the Florida Commission on
Hurricane Loss Projection Methodology to be accurate or reliable to a more appropriate
location in the same section.
• Makes a modification to a provision in the bill allowing an insurer to file a rating plan with
rate differentials based on windstorm mitigation construction standards to add that the
standards must meet the requirements of the rate filing statute.
• Authorizes an insurer to electronically transmit policy documents and claims
communications to an insured, provided the policy is sold in a wholly electronic manner
and the insurer provides a disclosure to the insured or policyholder at the time of sale.
• Deletes the requirement that an insured request reimbursement from an insurer for the
difference between actual cash value and replacement costs by the latter of no less than
two years from the date of the loss or one year from the notice of the claim.
• Provides that fees charged by a public adjuster are not included in the definition of
“assignment agreement.”
• Revises the notice requirements for certain motor vehicle policies that do not provide
coverage for bodily injury and property damage liability and deletes a requirement that
such policies be rubber stamped. By removing the rubber stamp requirement, the notice
of limited coverage for such policies can be provided to policyholders electronically.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 815 (2021)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Insurance & Banking
2 Subcommittee
3 Representative Gregory offered the following:
4
5 Amendment (with title amendment)
6 Remove lines 133-554 and insert:
7 Section 3. Section 624.46227, Florida Statutes, is created
8 to read:
9 624.46227 Meeting requirements.—Any association, trust, or
10 pool authorized by state law and created for the purpose of
11 forming a risk management mechanism or providing self-insurance
12 for public entities in this state may establish a quorum and
13 conduct public business through communication media technology.
14 Section 4. Subsection (3) of section 626.7351, Florida
15 Statutes, is amended to read:
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Amendment No. 1
16 626.7351 Qualifications for customer representative's
17 license.—The department shall not grant or issue a license as
18 customer representative to any individual found by it to be
19 untrustworthy or incompetent, or who does not meet each of the
20 following qualifications:
21 (3) Within 4 years preceding the date that the application
22 for license was filed with the department, the applicant has
23 earned the designation of Accredited Advisor in Insurance (AAI),
24 Associate in General Insurance (AINS), or Accredited Customer
25 Service Representative (ACSR) from the Insurance Institute of
26 America; the designation of Certified Insurance Counselor (CIC)
27 from the Society of Certified Insurance Service Counselors; the
28 designation of Certified Professional Service Representative
29 (CPSR) from the National Foundation for CPSR; the designation of
30 Certified Insurance Service Representative (CISR) from the
31 Society of Certified Insurance Service Representatives; the
32 designation of Certified Insurance Representative (CIR) from
33 All-Lines Training; the designation of Insurance Customer
34 Service Representative (ICSR) from Statewide Insurance
35 Associates LLC; the designation of Professional Customer Service
36 Representative (PCSR) from the Professional Career Institute;
37 the designation of Registered Customer Service Representative
38 (RCSR) from a regionally accredited postsecondary institution in
39 the state whose curriculum is approved by the department and
40 includes comprehensive analysis of basic property and casualty
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Amendment No. 1
41 lines of insurance and testing which demonstrates mastery of the
42 subject; or a degree from an accredited institution of higher
43 learning approved by the department when the degree includes a
44 minimum of 9 credit hours of insurance instruction, including
45 specific instruction in the areas of property, casualty, and
46 inland marine insurance. The department shall adopt rules
47 establishing standards for the approval of curriculum.
48 Section 5. Section 626.856, Florida Statutes, is amended
49 to read:
50 626.856 "Company employee adjuster" defined.—A "company
51 employee adjuster" means a person licensed as an all-lines
52 adjuster who is appointed and employed on an insurer's staff of
53 adjusters, by an affiliate, or by a wholly owned subsidiary of
54 the insurer, and who undertakes on behalf of such insurer or
55 other insurers under common control or ownership to ascertain
56 and determine the amount of any claim, loss, or damage payable
57 under a contract of insurance, or undertakes to effect
58 settlement of such claim, loss, or damage.
59 Section 6. Effective upon this act becoming a law,
60 subsections (1), (2), and (4) of section 626.9202, Florida
61 Statutes, are amended, and subsections (7) and (8) are added to
62 that section, to read:
63 626.9202 Loss run statements for all lines of insurance.—
64 (1) As used in this section, the term:
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65 (a) "Loss run statement" means a report that contains the
66 policy number, the period of coverage, the number of claims, the
67 paid losses on all claims, and the date of each loss. The term
68 does not include supporting claim file documentation, including,
69 but not limited to, copies of claim files, investigation
70 reports, evaluation statements, insureds' statements, and
71 documents protected by a common law or statutory privilege. As
72 applied to group health insurance, the term means a report that
73 also contains premiums paid, number of insureds on a monthly
74 basis, and dependent status.
75 (b) "Provide" means to electronically send a document or
76 to allow access through an electronic portal to view or generate
77 a document.
78 (2) Notwithstanding any other law, an insurer shall
79 provide to an insured within 15 calendar days after an
80 individual or entity designated by the insurer receives receipt
81 of the insured's written request, either:
82 (a) A loss run statement; or
83 (b) For personal lines of insurance, information on how to
84 obtain a loss run statement at no charge through a consumer
85 reporting agency. However, this section does not prohibit an
86 insured from requesting a loss run statement after receiving
87 information from a consumer reporting agency, in which case the
88 insurer must then provide such loss run statement within 15
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89 calendar days after the individual or entity designated by the
90 insurer receives the insured's subsequent written request.
91 (4) A loss run statement provided pursuant to this section
92 must contain a claims history with the insurer for the preceding
93 3 5 years or, if the claims history is less than 3 5 years, a
94 complete claims history with the insurer.
95 (7) This section does not apply to a life insurer as
96 defined in s. 624.602.
97 (8) For group health insurance, only the group
98 policyholder may request and be provided a loss run statement
99 pursuant to this section.
100 Section 7. Paragraph (b) of subsection (2) of section
101 627.062, Florida Statutes, is amended to read:
102 627.062 Rate standards.—
103 (2) As to all such classes of insurance:
104 (b) Upon receiving a rate filing, the office shall review
105 the filing to determine if a rate is excessive, inadequate, or
106 unfairly discriminatory. In making that determination, the
107 office shall, in accordance with generally accepted and
108 reasonable actuarial techniques, consider the following factors:
109 1. Past and prospective loss experience within and without
110 this state.
111 2. Past and prospective expenses.
112 3. The degree of competition among insurers for the risk
113 insured.
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114 4. Investment income reasonably expected by the insurer,
115 consistent with the insurer's investment practices, from
116 investable premiums anticipated in the filing, plus any other
117 expected income from currently invested assets representing the
118 amount expected on unearned premium reserves and loss reserves.
119 The commission may adopt rules using reasonable techniques of
120 actuarial science and economics to specify the manner in which
121 insurers calculate investment income attributable to classes of
122 insurance written in this state and the manner in which
123 investment income is used to calculate insurance rates. Such
124 manner must contemplate allowances for an underwriting profit
125 factor and full consideration of investment income that produces
126 a reasonable rate of return; however, investment income from
127 invested surplus may not be considered.
128 5. The reasonableness of the judgment reflected in the
129 filing.
130 6. Dividends, savings, or unabsorbed premium deposits
131 allowed or returned to policyholders, members, or subscribers in
132 this state.
133 7. The adequacy of loss reserves.
134 8. The cost of reinsurance. The office may not disapprove
135 a rate as excessive solely due to the insurer having obtained
136 catastrophic reinsurance to cover the insurer's estimated 250-
137 year probable maximum loss or any lower level of loss.
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138 9. Trend factors, including trends in actual losses per
139 insured unit for the insurer making the filing.
140 10. Conflagration and catastrophe hazards, if applicable.
141 11. Projected hurricane losses, if applicable, which must
142 be estimated using a model or method found to be acceptable or
143 reliable by the Florida Commission on Hurricane Loss Projection
144 Methodology, and as further provided in s. 627.0628. A
145 residential property insurance rate filing may use a weighted or
146 straight average of two or more such models or methods.
147 12. Projected flood losses for personal residential
148 property insurance, if applicable, which may be estimated using
149 a model or method, or a straight average of model results or
150 output ranges, independently found to be acceptable or reliable
151 by the Florida Commission on Hurricane Loss Projection
152 Methodology and as further provided in s. 627.0628.
153 13. A reasonable margin for underwriting profit and
154 contingencies.
155 14. The cost of medical services, if applicable.
156 15. Other relevant factors that affect the frequency or
157 severity of claims or expenses.
158
159 The provisions of this subsection do not apply to workers'
160 compensation, employer's liability insurance, and motor vehicle
161 insurance.
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Amendment No. 1
162 Section 8. Paragraph (b) of subsection (2) of section
163 627.0629, Florida Statutes, is amended, and subsection (9) is
164 added to that section, to read:
165 627.0629 Residential property insurance; rate filings.—
166 (2)
167 (b) A rate filing for residential property insurance made
168 more than 150 days after approval by the office of a building
169 code rating factor plan submitted by a statewide rating
170 organization may shall include positive and negative rate
171 factors that reflect the manner in which building code
172 enforcement in a particular jurisdiction addresses risk of wind
173 damage. The rate filing must shall include variations from
174 standard rate factors on an individual basis based on inspection
175 of a particular structure by a licensed home inspector. If an
176 inspection is requested by the insured, the insurer may require
177 the insured to pay the reasonable cost of the inspection. This
178 paragraph applies to structures constructed or renovated after
179 the implementation of this paragraph.
180 (9) An insurer may file with the office a personal lines
181 residential property insurance rating plan that provides
182 justified premium discounts, credits, or other rate
183 differentials based on windstorm mitigation construction
184 standards developed by an independent, not-for-profit,
185 scientific research organization, if such standards meet the
186 requirements of this section. The insurer may require a
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187 policyholder who elects to construct or retrofit the structure,
188 in whole or in part, for windstorm mitigation purposes to
189 present to the insurer evidence of compliance with the
190 mitigation standards before receiving any premium discount,
191 credit, or rate reduction allowed under the rating plan.
192 Section 9. Subsection (1) of section 627.072, Florida
193 Statutes, is amended to read:
194 627.072 Making and use of rates.—
195 (1) As to workers' compensation and employer's liability
196 insurance, the following factors shall be used in the
197 determination and fixing of rates:
198 (a) The past loss experience and prospective loss
199 experience within and outside this state;
200 (b) The impact resulting from the past loss experience and
201 prospective loss experience for insurers whose data are missing
202 from statewide experience due to insolvency. Prior reported data
203 for such insurers and all other relevant information may be used
204 to assess the impact on rates;
205 (c)(b) The conflagration and catastrophe hazards;
206 (d)(c) A reasonable margin for underwriting profit and
207 contingencies;
208 (e)(d) Dividends, savings, or unabsorbed premium deposits
209 allowed or returned by insurers to their policyholders, members,
210 or subscribers;
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211 (f)(e) Investment income on unearned premium reserves and
212 loss reserves;
213 (g)(f) Past expenses and prospective expenses, both those
214 countrywide and those specifically applicable to this state; and
215 (h)(g) All other relevant factors, including judgment
216 factors, within and outside this state.
217 Section 10. Paragraph (a) of subsection (6) of section
218 627.351, Florida Statutes, is amended to read:
219 627.351 Insurance risk apportionment plans.—
220 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
221 (a) The public purpose of this subsection is to ensure
222 that there is an orderly market for property insurance for
223 residents and businesses of this state.
224 1. The Legislature finds that private insurers are
225 unwilling or unable to provide affordable property insurance
226 coverage in this state to the extent sought and needed. The
227 absence of affordable property insurance threatens the public
228 health, safety, and welfare and likewise threatens the economic
229 health of the state. The state therefore has a compelling public
230 interest and a public purpose to assist in assuring that
231 property in the state is insured and that it is insured at
232 affordable rates so as to facilitate the remediation,
233 reconstruction, and replacement of damaged or destroyed property
234 in order to reduce or avoid the negative effects otherwise
235 resulting to the public health, safety, and welfare, to the
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Amendment No. 1
236 economy of the state, and to the revenues of the state and local
237 governments which are needed to provide for the public welfare.
238 It is necessary, therefore, to provide affordable property
239 insurance to applicants who are in good faith entitled to
240 procure insurance through the voluntary market but are unable to
241 do so. The Legislature intends, therefore, that affordable
242 property insurance be provided and that it continue to be
243 provided, as long as necessary, through Citizens Property
244 Insurance Corporation, a government entity that is an integral
245 part of the state, and that is not a private insurance company.
246 To that end, the corporation shall strive to increase the
247 availability of affordable property insurance in this state,
248 while achieving efficiencies and economies, and while providing
249 service to policyholders, applicants, and agents which is no
250 less than the quality generally provided in the voluntary
251 market, for the achievement of the foregoing public purposes.
252 Because it is essential for this government entity to have the
253 maximum financial resources to pay claims following a
254 catastrophic hurricane, it is the intent of the Legislature that
255 the corporation continue to be an integral part of the state and
256 that the income of the corporation be exempt from federal income
257 taxation and that interest on the debt obligations issued by the
258 corporation be exempt from federal income taxation.
259 2. The Residential Property and Casualty Joint
260 Underwriting Association originally created by this statute
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261 shall be known as the Citizens Property Insurance Corporation.
262 The corporation shall provide insurance for residential and
263 commercial property, for applicants who are entitled, but, in
264 good faith, are unable to procure insurance through the
265 voluntary market. The corporation shall operate pursuant to a
266 plan of operation approved by order of the Financial Services
267 Commission. The plan is subject to continuous review by the
268 commission. The commission may, by order, withdraw approval of
269 all or part of a plan if the commission determines that
270 conditions have changed since approval was granted and that the
271 purposes of the plan require changes in the plan. For the
272 purposes of this subsection, residential coverage includes both
273 personal lines residential coverage, which consists of the type
274 of coverage provided by homeowner, mobile home owner, dwelling,
275 tenant, condominium unit owner, and similar policies; and
276 commercial lines residential coverage, which consists of the
277 type of coverage provided by condominium association, apartment
278 building, and similar policies.
279 3. With respect to coverage for personal lines residential
280 structures:
281 a. Effective January 1, 2014, a structure that has a
282 dwelling replacement cost of $1 million or more, or a single
283 condominium unit that has a combined dwelling and contents
284 replacement cost of $1 million or more, is not eligible for
285 coverage by the corporation. Such dwellings insured by the
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Amendment No. 1
286 corporation on December 31, 2013, may continue to be covered by
287 the corporation until the end of the policy term. The office
288 shall approve the method used by the corporation for valuing the
289 dwelling replacement cost for the purposes of this subparagraph.
290 If a policyholder is insured by the corporation before being
291 determined to be ineligible pursuant to this subparagraph and
292 such policyholder files a lawsuit challenging the determination,
293 the policyholder may remain insured by the corporation until the
294 conclusion of the litigation.
295 b. Effective January 1, 2015, a structure that has a
296 dwelling replacement cost of $900,000 or more, or a single
297 condominium unit that has a combined dwelling and contents
298 replacement cost of $900,000 or more, is not eligible for
299 coverage by the corporation. Such dwellings insured by the
300 corporation on December 31, 2014, may continue to be covered by
301 the corporation only until the end of the policy term.
302 c. Effective January 1, 2016, a structure that has a
303 dwelling replacement cost of $800,000 or more, or a single
304 condominium unit that has a combined dwelling and contents
305 replacement cost of $800,000 or more, is not eligible for
306 coverage by the corporation. Such dwellings insured by the
307 corporation on December 31, 2015, may continue to be covered by
308 the corporation until the end of the policy term.
309 d. Effective January 1, 2017, a structure that has a
310 dwelling replacement cost of $700,000 or more, or a single
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Amendment No. 1
311 condominium unit that has a combined dwelling and contents
312 replacement cost of $700,000 or more, is not eligible for
313 coverage by the corporation. Such dwellings insured by the
314 corporation on December 31, 2016, may continue to be covered by
315 the corporation until the end of the policy term.
316
317 The requirements of sub-subparagraphs b.-d. do not apply in
318 counties where the office determines there is not a reasonable
319 degree of competition. In such counties a personal lines
320 residential structure that has a dwelling replacement cost of
321 less than $1 million, or a single condominium unit that has a
322 combined dwelling and contents replacement cost of less than $1
323 million, is eligible for coverage by the corporation.
324 4. It is the intent of the Legislature that policyholders,
325 applicants, and agents of the corporation receive service and
326 treatment of the highest possible level but never less than that
327 generally provided in the voluntary market. It is also intended
328 that the corporation be held to service standards no less than
329 those applied to insurers in the voluntary market by the office
330 with respect to responsiveness, timeliness, customer courtesy,
331 and overall dealings with policyholders, applicants, or agents
332 of the corporation.
333 5.a. Effective January 1, 2009, a personal lines
334 residential structure that is located in the "wind-borne debris
335 region," as defined in s. 1609.2, International Building Code
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Amendment No. 1
336 (2006), and that has an insured value on the structure of
337 $750,000 or more is not eligible for coverage by the corporation
338 unless the structure has opening protections as required under
339 the Florida Building Code for a newly constructed residential
340 structure in that area. A residential structure is deemed to
341 comply with this sub-subparagraph if it has shutters or opening
342 protections on all openings and if such opening protections
343 complied with the Florida Building Code at the time they were
344 installed.
345 b. Any major structure, as defined in s. 161.54(6)(a),
346 that is newly constructed, or rebuilt, repaired, restored, or
347 remodeled to increase the total square footage of finished area
348 by more than 25 percent, pursuant to a permit applied for after
349 July 1, 2015, is not eligible for coverage by the corporation if
350 the structure is seaward of the coastal construction control
351 line established pursuant to s. 161.053 or is within the Coastal
352 Barrier Resources System as designated by 16 U.S.C. ss. 3501-
353 3510.
354 6. With respect to wind-only coverage for commercial lines
355 residential condominiums, effective July 1, 2014, a condominium
356 may shall be deemed ineligible for coverage when if 50 percent
357 or more of the units are rented more than eight times in a
358 calendar year for a rental agreement period of less than 30
359 days.
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Amendment No. 1
360 Section 11. Subsection (6) is added to section 627.421,
361 Florida Statutes, to read:
362 627.421 Delivery of policy.—
363 (6) If a policy is sold in a wholly electronic manner, the
364 insurer may electronically transmit all policy documents and
365 claims communications to the insured or policyholder so long as
366 the insurer provides a disclosure to the insured or policyholder
367 at the time of sale.
368 Section 12. Effective upon this act becoming a law,
369 subsections (1), (2), and (4) of section 627.444, Florida
370 Statutes, are amended, and subsections (7) and (8) are added to
371 that section, to read:
372 627.444 Loss run statements for all lines of insurance.—
373 (1) As used in this section, the term:
374 (a) "Loss run statement" means a report that contains the
375 policy number, the period of coverage, the number of claims, the
376 paid losses on all claims, and the date of each loss. The term
377 does not include supporting claim file documentation, including,
378 but not limited to, copies of claim files, investigation
379 reports, evaluation statements, insureds' statements, and
380 documents protected by a common law or statutory privilege. As
381 applied to group health insurance, the term means a report that
382 also contains premiums paid, number of insureds on a monthly
383 basis, and dependent status.
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Amendment No. 1
384 (b) "Provide" means to electronically send a document or
385 to allow access through an electronic portal to view or generate
386 a document.
387 (2) Notwithstanding any other law, an insurer shall
388 provide to an insured within 15 calendar days after an
389 individual or entity designated by the insurer receives receipt
390 of the insured's written request, either:
391 (a) A loss run statement; or
392 (b) For personal lines of insurance, information on how to
393 obtain a loss run statement at no charge through a consumer
394 reporting agency. However, this section does not prohibit an
395 insured from requesting a loss run statement after receiving
396 information from a consumer reporting agency, in which case the
397 insurer must then provide such loss run statement within 15
398 calendar days after the individual or entity designated by the
399 insurer receives the insured's subsequent written request.
400 (4) A loss run statement provided pursuant to this section
401 must contain a claims history with the insurer for the preceding
402 3 5 years or, if the claims history is less than 3 5 years, a
403 complete claims history with the insurer.
404 (7) This section does not apply to a life insurer as
405 defined in s. 624.602.
406 (8) For group health insurance, only the group
407 policyholder may request and be provided a loss run statement
408 pursuant to this section.
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Bill No. HB 815 (2021)
Amendment No. 1
409 Section 13. Section 627.6647, Florida Statutes, is
410 repealed.
411 Section 14. Paragraph (b) of subsection (1) of section
412 627.7011, Florida Statutes, is amended to read:
413 627.7011 Homeowners' policies; offer of replacement cost
414 coverage and law and ordinance coverage.—
415 (1) Prior to issuing a homeowner's insurance policy, the
416 insurer must offer each of the following:
417 (b) A policy or endorsement providing that, subject to
418 other policy provisions, any loss that is repaired or replaced
419 at any location will be adjusted on the basis of replacement
420 costs to the dwelling not exceeding policy limits, rather than
421 actual cash value, and also including costs necessary to meet
422 applicable laws and ordinances enacted on or before the time of
423 loss which regulate regulating the construction, use, or repair
424 of any property or require requiring the tearing down of any
425 property, including the costs of removing debris. However,
426 additional costs necessary to meet applicable laws and
427 ordinances may be limited to 25 percent or 50 percent of the
428 dwelling limit, as selected by the policyholder, and such
429 coverage applies only to repairs of the damaged portion of the
430 structure unless the total damage to the structure exceeds 50
431 percent of the replacement cost of the structure.
432
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Amendment No. 1
433 An insurer is not required to make the offers required by this
434 subsection with respect to the issuance or renewal of a
435 homeowner's policy that contains the provisions specified in
436 paragraph (b) for law and ordinance coverage limited to 25
437 percent of the dwelling limit, except that the insurer must
438 offer the law and ordinance coverage limited to 50 percent of
439 the dwelling limit. This subsection does not prohibit the offer
440 of a guaranteed replacement cost policy.
441 Section 15. Effective upon this act becoming a law,
442 present subsections (4) through (10) of section 627.715, Florida
443 Statutes, are redesignated as subsections (5) through (11),
444 respectively, and a new subsection (4) is added to that section,
445 to read:
446 627.715 Flood insurance.—An authorized insurer may issue
447 an insurance policy, contract, or endorsement providing personal
448 lines residential coverage for the peril of flood or excess
449 coverage for the peril of flood on any structure or the contents
450 of personal property contained therein, subject to this section.
451 This section does not apply to commercial lines residential or
452 commercial lines nonresidential coverage for the peril of flood.
453 An insurer may issue flood insurance policies, contracts,
454 endorsements, or excess coverage on a standard, preferred,
455 customized, flexible, or supplemental basis.
456 (4) An agent may export a contract or an endorsement
457 providing flood coverage to an eligible surplus lines insurer
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Amendment No. 1
458 without making a diligent effort to seek such coverage from
459 three or more authorized insurers under s. 626.916(1)(a).
460 Section 16. Effective upon this act becoming a law,
461 paragraph (b) of subsection (1) and paragraph (a) of subsection
462 (9) of section 627.7152, Florida Statutes, are amended to read:
463 627.7152 Assignment agreements.—
464 (1) As used in this section, the term:
465 (b) "Assignment agreement" means any instrument by which
466 post-loss benefits under a residential property insurance policy
467 or commercial property insurance policy, as that term is defined
468 in s. 627.0625(1), are assigned or transferred, or acquired in
469 any manner, in whole or in part, to or from a person providing
470 services, including, but not limited to, scopes of service, to
471 inspect, protect, repair, restore, or replace property or to
472 mitigate against further damage to the property. The term does
473 not include fees collected by a public adjuster as defined in
474 626.854.
475 (9)(a) An assignee must provide the named insured,
476 insurer, and the assignor, if not the named insured, with a
477 written notice of intent to initiate litigation before filing
478 suit under the policy. Such notice must be served by certified
479 mail, return receipt requested, to the name and mailing address
480 designated by the insurer in the policy forms, or by electronic
481 delivery at the e-mail address designated by the insurer in the
482 policy forms at least 10 business days before filing suit, but
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Amendment No. 1
483 may not be served before the insurer has made a determination of
484 coverage under s. 627.70131. The notice must specify the damages
485 in dispute, the amount claimed, and a presuit settlement demand.
486 Concurrent with the notice, and as a precondition to filing
487 suit, the assignee must provide the named insured, insurer, and
488 the assignor, if not the named insured, a detailed written
489 invoice or estimate of services, including itemized information
490 on equipment, materials, and supplies; the number of labor
491 hours; and, in the case of work performed, proof that the work
492 has been performed in accordance with accepted industry
493 standards.
494 Section 17. Section 627.7276, Florida Statutes, is amended
495 to read:
496 627.7276 Notice of limited coverage.—
497 (1) An automobile policy that does not contain coverage
498 for bodily injury and property damage must include a notice be
499 clearly stamped or printed to the effect that such coverage is
500 not included in the policy in the following manner:
501
502 "THIS POLICY DOES NOT PROVIDE BODILY INJURY AND
503 PROPERTY DAMAGE LIABILITY INSURANCE OR ANY OTHER
504 COVERAGE FOR WHICH A SPECIFIC PREMIUM CHARGE IS NOT
505 MADE, AND DOES NOT COMPLY WITH ANY FINANCIAL
506 RESPONSIBILITY LAW."
507
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Amendment No. 1
508 (2) This notice legend must accompany appear on the policy
509 declaration page and on the filing back of the policy and be
510 printed in a contrasting color from that used on the policy and
511 in type and larger than the largest type used in the text at
512 least as large as the type and text used on the declarations
513 page thereof, as an overprint or by a rubber stamp impression.
514
515
516 -----------------------------------------------------
517 T I T L E A M E N D M E N T
518 Remove lines 7-57 and insert:
519 process is valid and binding upon insurers; creating s.
520 624.46227, F.S.; authorizing an association, trust, or pool
521 created for the purpose of forming or managing a risk management
522 mechanism or providing self-insurance for a public entity to
523 establish a quorum and conduct public business through
524 communication media technology; amending s. 626.7351, F.S.;
525 revising a qualification for licensure as a customer
526 representative; amending s. 626.856, F.S.; revising the
527 definition of the term "company employee adjuster"; amending s.
528 626.9202, F.S.; revising the definition of the term "loss run
529 statement"; specifying the entities that must receive requests
530 for loss run statements; specifying that insurers must provide
531 loss run statements under certain circumstances; revising the
532 required claims history in loss run statements; providing
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Amendment No. 1
533 applicability; limiting loss run statement requests with respect
534 to group health insurance policies to group policyholders;
535 amending s. 627.062, F.S.; revising the factors for determining
536 whether an insurance rate filing is excessive, inadequate, or
537 unfairly discriminatory; amending s. 627.0629, F.S.;
538 authorizing, rather than requiring, rate filings for certain
539 residential property insurance to include certain rate factors;
540 authorizing insurers to file certain insurance rating plans
541 based on certain windstorm mitigation construction standards;
542 authorizing insurers to require policyholders to provide
543 evidence of compliance with mitigation standards under certain
544 conditions; amending s. 627.072, F.S.; providing a ratemaking
545 factor for workers' compensation and employer's liability
546 insurance; amending s. 627.351, F.S.; revising conditions for
547 determining the ineligibility of condominiums for wind-only
548 coverage; amending s. 627.421, F.S.; authorizing insurers to
549 electronically transmit policy documents and claims documents
550 under certain circumstances; amending s. 627.444, F.S.; revising
551 the definition of the term "loss run statement"; specifying the
552 entities that must receive requests for loss run statements;
553 specifying that insurers must provide loss run statements under
554 certain circumstances; revising the required claims history in
555 loss run statements; providing applicability; limiting loss run
556 statement requests with respect to group health insurance
557 policies to group policyholders; repealing s. 627.6647, F.S.,
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558 relating to the release of information required for bid to group
559 health insurance policyholders; amending s. 627.7011, F.S.;
560 revising conditions for inclusion of costs for law and ordinance
561 coverage in loss adjustments under certain homeowners' policies;
562 amending s. 627.715, F.S.; providing an exemption from a
563 diligent effort requirement for agents exporting contracts or
564 endorsements providing flood coverage; amending s. 627.7152,
565 F.S.; revising the definition of the term "assignment
566 agreement"; specifying the addresses to which a notice of intent
567 must be served; amending s. 627.7276, F.S.; revising notice
568 requirements for motor vehicle policies that do not provide
569 coverage for bodily injury and property damage liability;
570
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HB 895
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 895 Consumer Finance Loans
SPONSOR(S): Stevenson
TIED BILLS: IDEN./SIM. BILLS: SB 1478
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee Hinshelwood Luczynski
2) Commerce Committee
SUMMARY ANALYSIS
The Florida Consumer Finance Act in ch. 516, F.S., permits licensed lenders to make secured or unsecured
loans up to $25,000 with a tiered interest rate structure such that the maximum annual interest rate allowed on
each tier decreases as principle amounts increase:
30 percent on the first $3,000.
24 percent on principal above $3,000 and up to $4,000.
18 percent on principal above $4,000 and up to $25,000.
Consumer finance lenders are permitted to charge certain fees, including up to $25 for investigating the credit
and character of the borrower. Because the list of permissible fees does not include a prepayment penalty, then
impliedly a licensee is prohibited from charging a prepayment penalty. Consumer finance loans are repayable in
installments every two weeks, semimonthly, or monthly, but there is currently no minimum or maximum loan
term.
The bill provides an express prohibition on prepayment penalties for consumer finance loans. The bill also
provides minimum loan terms for consumer finance loans as follows:
At least 90 days for a loan with principle balance upon origination of no more than $4,000; and
At least 12 months for a loan with principle balance upon origination that exceeds $4,000.
The bill has no impact on state or local governments and an indeterminate but likely positive impact on the
private sector.
The bill provides an effective date of July 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Consumer Finance Loans
The OFR’s Division of Consumer Finance is responsible for the licensing and regulation of non-
depository financial service entities and individuals, and conducts examinations and complaint
investigations for licensed entities to determine compliance with Florida law.
One of the loan products regulated by the OFR’s Division of Consumer Finance is the Florida
Consumer Finance Act, ch. 516, F.S. (“the Act”). Loans permitted under the Act are commonly referred
to as “consumer finance loans”, which are “loan[s] of money, credit, goods, or choses in action,1
including, except as otherwise specifically indicated, provision of a line of credit, in an amount or to a
value of $25,000 or less for which the lender charges, contracts for, collects, or receives interest at a
rate greater than 18 percent per annum.”2 Although consumer finance loans may be secured or
unsecured, the Act prohibits lenders from taking a security interest in certain types of collateral.3
Consumer finance loans made pursuant to the Act must be repaid in periodic installments as nearly
equal as mathematically practicable, except that the final payment may be less than the amount of the
prior installments.4 Installments may be due every two weeks, semimonthly, or monthly.5 There is no
minimum or maximum loan term under the Act. Consumer finance loans have a tiered interest rate
structure such that the maximum annual interest rate allowed on each tier decreases as principle
amounts increase:
30 percent on the first $3,000.
24 percent on principal above $3,000 and up to $4,000.
18 percent on principal above $4,000 and up to $25,000.6
The original principal amount is the amount financed, as defined by the federal Truth in Lending Act
(TILA)7 and TILA’s federal implementing regulations.8 For the purpose of determining compliance with
these statutory maximum interest rates, the interest rate computations used must be simple interest.9 In
the event that two or more interest rates are applied to the principal amount of a loan,10 a lender may
charge interest at a single annual percentage rate (APR) which would produce at maturity the total
amount of interest as permitted by the tiered interest rate structure above.11 The APR charged by a
lender may not exceed the APR that must be computed and disclosed according to TILA and its
implementing regulations.12 A licensee may not induce or permit a borrower to divide a loan and may
1 “Chose in action” is defined as “1. A property right in personam, such as a debt owed by another person . . . 2. The right
to bring an action to recover a debt, money, or thing. 3. Personal property that one person owns but another person
possesses, the owner being able to regain possession through a lawsuit.” BLACK’S LAW DICTIONARY 101 (3d ed. 1996).
2 S. 516.01(2), F.S.
3 See s. 516.031(1), F.S. (prohibition on taking a security interest in land for a loan less than $1,000); s. 516.17, F.S.
(prohibition on assignment of, or order for payment of, wages given to secure a loan).
4 S. 516.36, F.S. This section does not apply to lines of credit.
5 Id.
6 S. 516.031(1), F.S.
7 Codified at 15 U.S.C. § 1601 et seq.
8 Currently, the statute references TILA’s implementing regulations as “Regulation Z of the Board of Governors of the
Federal Reserve System.” s. 516.031(1), F.S. However, the Dodd-Frank Wall Street Reform and Consumer Protection
Act, Pub. L. No. 111-203, H.R. 4173, 124 Stat. 1376-2223, 111th Cong. (July 21, 2010), commonly referred to as the
“Dodd-Frank Act”, transferred rulemaking authority for TILA to the Bureau of Consumer Financial Protection, effective July
21, 2011. See also Truth in Lending (Regulation Z), 76 Fed. Reg. 79768 (Dec. 22, 2011).
9 Id.
10 For example, on a principle amount of $3,500, an interest rate of 30 percent per annum may be applied to $3,000 of the
principle amount, and an interest rate of 24 percent per annum may be applied to the remaining $500 of the principal
amount.
11 S. 516.031(1), F.S.
12 S. 516.031(2), F.S.
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not induce or permit a person to become obligated to the licensee under more than one loan contract
for the purpose of obtaining a greater finance charge than would otherwise be permitted under the
parameters described above.13
If consideration for a new loan contract includes the unpaid principal balance of a prior loan with the
licensee, then the principal amount of the new loan contract may not include more than 60 days’ unpaid
interest accrued on the prior loan.14
The Act prohibits lenders from directly or indirectly charging borrowers additional fees as a condition to
the grant of a loan, except for the following allowable fees:
Up to $25 for investigating the credit and character of the borrower;
A $25 annual fee on the anniversary date of each line-of-credit account;
Brokerage fees for certain loans, title insurance, and appraisals of real property offered as
security;
Intangible personal property tax on the loan note or obligation if secured by a lien on real
property;
Documentary excise tax and lawful fees for filing, recording, or releasing an instrument securing
the loan;
The premium for any insurance in lieu of perfecting a security interest otherwise required by the
licensee in connection with the loan;
Actual and reasonable attorney fees and court costs;
Actual and commercially reasonable expenses for repossession, storing, repairing and placing
in condition for sale, and selling of any property pledged as security;
A delinquency charge of up to $15 for each payment in default for at least 10 days, if agreed
upon in writing before the charge is imposed; and
A bad check charge of up to $20.15
Because the above list of permissible fees does not include a prepayment penalty, then impliedly a
licensee is prohibited from charging a prepayment penalty.16
Optional credit property, credit life, and disability insurance may be provided at the borrower’s expense
via a deduction from the principal amount of the loan.17
Licenses granted under the Act are for a single place of business18 and must be renewed every two
years.19 As of February 16, 2021, there are 170 licensed consumer finance loan companies operating
in Florida operating across a total of 382 locations.20
The yearly data for licensure under ch. 516, F.S., is contained in the charts below.21
Chapter 516, F.S., Licenses by Year
00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10
Applications Received 318 44 136 82 48 72 192 30 52 32
Applications Approved 228 136 125 76 43 64 95 29 18 19
Active Licenses 589 607 568 609 532 584 626 600 390 386
Renewals & Reactivations 496 1 542 0 523 1 569 0 388 0
13 S. 516.031(4), F.S.
14 S. 516.031(5), F.S.
15 S. 516.031(3), F.S.
16 Id.; Office of Financial Regulation, Agency Analysis of 2021 House Bill 895, p. 2 (Feb. 17, 2021).
17 S. 516.35(2), F.S.
18 Ss. 516.01(1) and 516.05(3), F.S.
19 Ss. 516.03(1) and 516.05(1) & (2), F.S.
20 Office of Financial Regulation, supra note 16.
21 Office of Financial Regulation, Active Licenses, https://www.flofr.com/sitePages/documents/finregstats.pdf (last visited
Mar. 16, 2019).
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Chapter 516, F.S., Licenses by Year (Cont'd)
10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20
Applications Received 175 41 82 116 66 102 55 96 109 100
Applications Approved 137 37 53 113 37 81 36 83 104 98
Active Licenses 347 303 293 349 331 349 338 373 348 390
Renewals & Reactivations 226 0 258 0 312 0 326 0 342 0
An application to become a consumer finance lender must be accompanied by a nonrefundable
application fee of $625 and a nonrefundable investigation fee of $200.22 Licenses must be renewed
biennially, at which time the licensee must pay a nonrefundable biennial license fee of $625.23 At the
time of application, the applicant must provide evidence of liquid assets of at least $25,000.24 Each
location of a consumer finance lender must be separately licensed.25
The Act does not apply to persons doing business under state or federal laws governing banks, savings
banks, trust companies, building and loan associations, credit unions, or industrial loan and investment
companies.26
Deferred Presentment Transactions (Payday Loans)
Deferred presentment transactions, commonly referred to as “payday loans”, are another small-dollar
loan product under the OFR’s regulatory authority. These transactions are governed by ch. 560, F.S.,
part IV.
A deferred presentment transaction means providing currency or a payment instrument in exchange for
a drawer’s (borrower’s) check and agreeing to hold the check for a number of days until depositing,
presenting, or redeeming the payment instrument.27 The only persons who may engage in deferred
presentment transactions are financial institutions as defined in s. 655.005, F.S.,28 and money services
business licensed under ch. 560, F.S., part II29 or part III.30
There are two types of payday loan products permitted in Florida:
Deferred presentment transaction not repayable in installments: The face amount of a check
taken for deferred presentment may not exceed $500, exclusive of fees.31 Fees may not exceed
22 S. 516.03(1), F.S.
23 Id.; s. 516.05(1), F.S.
24 S. 516.03(1), F.S.
25 S. 516.05(3), F.S.
26 S. 516.02(4), F.S.
27 S. 560.402(2) & (3), F.S.
28 Section 655.005, F.S., defines a “financial institution” to mean a state or federal savings or thrift association, bank,
savings back, trust company, international bank agency, international banking corporation, international branch,
international representative office, international administrative office, international trust entity, international trust company
representative office, qualified limited service affiliate, credit union, or an agreement corporation operating pursuant to s.
25 of the Federal Reserve Act, 12 U.S.C. ss. 601 et seq. or Edge Act corporation organized pursuant to s. 25(a) of the
Federal Reserve Act, 12 U.S.C. ss. 611 et seq.
29 Licensure as a money transmitter. A money transmitter is defined by s. 560.103(23), F.S., as a corporation, limited
liability company, limited liability partnership, or foreign entity qualified to do business in this state which receives
currency, monetary value, or payment instruments for the purpose of transmitting the same by any means, including
transmission by wire, facsimile, electronic transfer, courier, the Internet, or through bill payment services or other
businesses that facilitate such transfer within this country, or to or from this country. Money transmitters may engage in
check cashing under ch. 560, F.S., part III.
30 Licensure as a check casher. A check casher is defined by s. 560.103(6), F.S., as a person who sells currency in
exchange for payment instruments received, except travelers checks.
31 S. 560.404(5), F.S.
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10 percent of payment provided to the drawer plus a verification fee of up to $5.32 The term of a
deferred presentment agreement may not be less than seven days or greater than 31 days.33
Deferred presentment installment transaction: A deferred presentment installment transaction is
repayable in installments, has a term of 60 to 90 days, and may have an outstanding transaction
balance (exclusive of fees) of up to $1,000.34 The permissible fees are a verification fee of up to
$5 and up to 8 percent of the outstanding transaction balance on a biweekly basis.35 The
installment periods must be 13 days to one calendar month, except that the first installment
period may be longer than the remaining installment periods by not more than 15 days.36
Prepayment penalties are prohibited.37
A deferred presentment provider may not enter into a deferred presentment transaction with a drawer
who has an outstanding deferred presentment transaction with any provider or within 24 hours of the
termination of a previous transaction.38 In order to enforce this restriction, the OFR maintains a
database against which a deferred presentment provider must verify each transaction before entering
into the deferred presentment agreement.39 A deferred presentment provider may not engage in the
rollover of a deferred presentment agreement and may not redeem, extend, or otherwise consolidate a
deferred presentment agreement with the proceeds of another deferred presentment transaction made
by it or an affiliate.40
For deferred presentment transactions not repayable in installments, if the drawer, by the end of the
deferment period, informs the deferred presentment provider in person that the drawer cannot redeem
or pay in full in cash the amount due, the drawer must be given a grace period that extends the term of
the agreement for 60 additional days.41 As a condition of receiving the grace period, the drawer must
make an appointment with a consumer credit counseling agency within seven days after the end of the
deferment period and complete counseling by the end of the grace period.42
If the drawer in a deferred presentment installment transaction informs the deferred presentment
provider in writing or in person by noon of the business day before a scheduled payment that the
drawer cannot pay in full the scheduled payment, the provider must give the drawer one opportunity to
defer a scheduled payment for no additional fee or charge.43 The deferred payment is due after the last
scheduled installment payment, at an interval which is no shorter than the intervals between the
originally scheduled payments.44 Thus, for a deferred presentment installment transaction in which
payments are due once every two weeks, the deferred payment would be due at least two weeks after
the final installment payment is due.
A deferred presentment provider may not include in the agreement a hold harmless clause, a
confession of judgment clause, an assignment of or order for payment of wages or other compensation
for services, or a provision in which the drawer waives any claim or defense arising out of the
agreement or any provision of ch. 560, F.S., part IV.45 A deferred presentment provider must comply
with state and federal disclosure requirements.46
Effect of the Bill
32 S. 560.404(6), F.S.
33 S. 560.404(8), F.S.
34 S. 560.404(5) & (8), F.S.
35 S. 560.404(6), F.S.
36 S. 560.404(26), F.S.
37 S. 560.404(6)(c), F.S.
38 S. 560.404(19), F.S.
39 S. 560.404(19)(a) & (23), F.S.
40 S. 560.404(18), F.S.
41 S. 560.404(22), F.S.
42 Id.
43 S. 560.404, F.S.
44 Id.
45 S. 560.404(10), F.S.
46 S. 560.404(13) & (20), F.S.
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The bill provides an express prohibition on prepayment penalties for consumer finance loans. The bill
also provides minimum loan terms for consumer finance loans as follows:
At least 90 days for a loan with principle balance upon origination of no more than $4,000; and
At least 12 months for a loan with principle balance upon origination that exceeds $4,000.
The bill provides an effective date of July 1, 2021.
Below is a chart comparing existing law regarding payday loans and consumer finance loans with the
changes proposed by the bill.
Payday Loans Consumer Finance Loans (Ch. 516,
(Ch. 560, Part IV, F.S.) F.S.)
Payday Loans Payday Loans HB 895
Current Law
(Non-Installment) (Installment) Proposed Changes
Loan
$500 (max) $1,000 (max) $25,000 (max) (No change)
Amount
Add min. loan terms:
At least 90 days
for a loan with
principle balance
Length of upon origination of
7 - 31 days 60 - 90 days No min. or max. no more than $4,000
Term
At least 12 months
for a loan with
principle balance
upon origination
that exceeds $4,000
Lump sum at end Installments with Installments due
of loan term 13 days to 1 month monthly, semi-
in between each, monthly, or every 2
except that the first weeks
installment period
Payments (No change)
may be longer than
the remaining
installment periods
by a maximum of 15
days
APR equivalent 8% biweekly on 30% per year on
(assuming $500 loan the outstanding the first $3,000 of
amount and $5 transaction balance principal
verification fee): APR equivalent: 24% per year on
129.52% for a 31 day approx. 208% (will be principal above
Interest Rate loan, 573.57% for a 7 slightly higher as a $3,000 and up to (No change)
day loan result of the $5 $4,000
verification fee) 18% per year on
principal above
$4,000 and up to
$25,000
10% of loan $5 verification fee Fees specified in s. Add express
amount No additional fees 516.031(3), F.S., prohibition on
$5 verification fee permitted including up to $25 prepayment
Other
No additional fees for investigating the penalties
Upfront Fees credit and character
permitted
Permitted of the borrower
No additional fees
permitted
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B. SECTION DIRECTORY:
Section 1. Amends s. 516.031, F.S., relating to finance charge; maximum rates.
Section 2. Amends s. 516.36, F.S., relating to installment requirement.
Section 3. Provides an effective date of July 1, 2021.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may have a positive impact on consumers by providing a meaningful opportunity to repay the
loan rather than the consumer refinancing every so often in order to extend the time for repayment.
However, as it is unclear how many consumers this change would impact, the impact to the private
sector is indeterminate.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill does not confer rulemaking authority nor require the promulgation of rules.
C. DRAFTING ISSUES OR OTHER COMMENTS:
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The portion of the bill that provides minimum loan terms should state that the new requirements are for
loans made on or after the effective date of the bill. The sponsor has indicated an intent to address this
issue.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 895 2021
1 A bill to be entitled
2 An act relating to consumer finance loans; amending s.
3 516.031, F.S.; prohibiting a person licensed to make
4 and collect loans under the Florida Consumer Finance
5 Act from charging prepayment penalties for loans;
6 amending s. 516.36, F.S.; providing requirements for
7 loan terms; providing an effective date.
8
9 Be It Enacted by the Legislature of the State of Florida:
10
11 Section 1. Paragraph (c) is added to subsection (3) of
12 section 516.031, Florida Statutes, to read:
13 516.031 Finance charge; maximum rates.—
14 (3) OTHER CHARGES.—
15 (c) A licensee may not require a borrower to pay a
16 prepayment penalty for paying all or part of the loan principal
17 before the date on which the payment is due.
18 Section 2. Section 516.36, Florida Statutes, is amended to
19 read:
20 516.36 Installment requirement.—
21 (1) Every loan made pursuant to this chapter must be
22 repaid in periodic installments as nearly equal as
23 mathematically practicable, except that the final payment may be
24 less than the amount of the prior installments. Installments may
25 be due every 2 weeks, semimonthly, or monthly. This section does
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hb0895-00
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 895 2021
26 not apply to lines of credit.
27 (2) A loan with a principal balance upon origination of no
28 more than $4,000 must provide a term of at least 90 days. A loan
29 with a principal balance upon origination that exceeds $4,000
30 must provide a term of at least 12 months.
31 Section 3. This act shall take effect July 1, 2021.
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hb0895-00
INSURANCE & BANKING SUBCOMMITTEE
HB 895 by Rep. Stevenson
Consumer Finance Loans
AMENDMENT SUMMARY
March 10, 2021
Amendment 1 by Rep. Stevenson (Strike): The amendment:
• Authorizes a consumer finance lender to provide a surety bond, certificate of deposit, or
letter of credit of a specified amount in lieu of the current statutory requirement to
maintain $25,000 of liquid assets.
• Amends the minimum loan term, as created by the bill, to 6 months.
• Provides that the minimum loan term is applicable to a loan, including a refinancing,
made on or after the effective date of the bill, rather than such minimum loan term
applying to currently outstanding loans, as well.
• Makes conforming changes.
• Changes the effective date of the bill.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 895 (2021)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Insurance & Banking
2 Subcommittee
3 Representative Stevenson offered the following:
4
5 Amendment (with title amendment)
6 Remove everything after the enacting clause and insert:
7 Section 1. Subsection (1) of section 516.03, Florida
8 Statutes, is amended to read:
9 516.03 Application for license; fees; etc.—
10 (1) APPLICATION.—Application for a license to make loans
11 under this chapter shall be in the form prescribed by rule of
12 the commission. The commission may require each applicant to
13 provide any information reasonably necessary to determine the
14 applicant's eligibility for licensure. The applicant shall also
15 provide information that the office requires concerning any
16 officer, director, control person, member, partner, or joint
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 895 (2021)
Amendment No. 1
17 venturer of the applicant or any person having the same or
18 substantially similar status or performing substantially similar
19 functions or concerning any individual who is the ultimate
20 equitable owner of a 10-percent or greater interest in the
21 applicant. The office may require information concerning any
22 such applicant or person, including, but not limited to, his or
23 her full name and any other names by which he or she may have
24 been known, age, social security number, residential history,
25 qualifications, educational and business history, and
26 disciplinary and criminal history. The applicant must provide
27 evidence of liquid assets of at least $25,000 or documents
28 satisfying the requirements in s. 516.05(10). At the time of
29 making such application the applicant shall pay to the office a
30 nonrefundable biennial license fee of $625. Applications, except
31 for applications to renew or reactivate a license, must also be
32 accompanied by a nonrefundable investigation fee of $200. An
33 application is considered received for purposes of s. 120.60
34 upon receipt of a completed application form as prescribed by
35 commission rule, a nonrefundable application fee of $625, and
36 any other fee prescribed by law. The commission may adopt rules
37 requiring electronic submission of any form, document, or fee
38 required by this act if such rules reasonably accommodate
39 technological or financial hardship. The commission may
40 prescribe by rule requirements and procedures for obtaining an
41 exemption due to a technological or financial hardship.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 895 (2021)
Amendment No. 1
42 Section 2. Subsection (6) is added to section 516.031,
43 Florida Statutes, to read:
44 516.031 Finance charge; maximum rates.—
45 (6) PREPAYMENT PENALTIES PROHIBITED.—A licensee may not
46 require a borrower to pay a prepayment penalty for paying all or
47 part of the loan principal before the date on which the payment
48 is due.
49 Section 3. Subsection (10) is added to section 516.05,
50 Florida Statutes, to read:
51 516.05 License.—
52 (10)(a) In lieu of the $25,000 liquid asset requirement in
53 s. 516.03(1):
54 1. An applicant or a licensee may provide to the office a
55 surety bond in the amount of at least $25,000 issued by a
56 bonding company or insurance company authorized to do business
57 in this state.
58 2. A company with at least one currently licensed location
59 must provide to the office a rider or surety bond, in the amount
60 of at least $5,000 for each additional license, issued by a
61 bonding company or insurance company authorized to do business
62 in this state. However, in no event may the aggregate amount of
63 the surety bond required for a company with multiple licenses
64 exceed $100,000.
65 (b) In lieu of a surety bond, the applicant or the
66 licensee may provide evidence of a certificate of deposit or an
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 895 (2021)
Amendment No. 1
67 irrevocable letter of credit in the same amount of the surety
68 bond required under paragraph (a). The certificate of deposit
69 must be deposited in a financial institution, as defined in s.
70 655.005(1)(i). The letter of credit must be issued by a
71 financial institution, as defined in s. 655.005(1)(i).
72 (c) The original surety bond, certificate of deposit, or
73 letter of credit must be filed with the office, and the office
74 must be named as beneficiary. The surety bond, certificate of
75 deposit, or letter of credit must be for the use and benefit of
76 any borrower who is injured by acts of a licensee involving
77 fraud, misrepresentation, or deceit, including willful
78 imposition of illegal or excessive charges; or
79 misrepresentation, circumvention, or concealment of any matter
80 required to be stated or furnished to a borrower, where such
81 acts are in connection with a loan made under this chapter. The
82 office, or any claimant, may bring an action in a court of
83 competent jurisdiction on the surety bond, certificate of
84 deposit, or letter of credit. The surety bond, certificate of
85 deposit, or letter of credit must be payable on a pro rata
86 basis, but the aggregate amount may not exceed the amount of the
87 surety bond, certificate of deposit, or letter of credit.
88 (d) The surety bond, certificate of deposit, or letter of
89 credit may not be cancelled by the licensee, bonding or
90 insurance company, or financial institution except upon notice
91 to the office by certified mail. A cancellation may not take
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 895 (2021)
Amendment No. 1
92 effect until 30 calendar days after receipt by the office of the
93 written notice.
94 (e) The bonding or insurance company or financial
95 institution must, within 10 calendar days after it pays a claim,
96 give written notice to the office by certified mail of such
97 payment with details sufficient to identify the claimant and the
98 claim or judgment paid.
99 (f) If the principal sum of the surety bond, certificate
100 of deposit, or letter of credit is reduced by one or more
101 recoveries or payments, the licensee must furnish to the office
102 a new or additional surety bond, certificate of deposit, or
103 letter of credit so that the total or aggregate principal sum
104 equals the amount required under this subsection. Alternatively,
105 a licensee may furnish an endorsement executed by the bonding or
106 insurance company or financial institution reinstating the
107 required principal amount.
108 (g) The required surety bond, certificate of deposit, or
109 letter of credit must remain in place for 2 years after the
110 licensee ceases licensed operations in this state. During the 2
111 year period, the office may allow for a reduction or elimination
112 of the surety bond, certificate of deposit, or letter of credit
113 to the extent the licensee’s outstanding consumer finance loans
114 in this state are reduced.
115 (h) The commission may prescribe by rule forms and
116 procedures to implement this subsection.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 895 (2021)
Amendment No. 1
117 Section 4. Paragraph (b) of subsection (1) of section
118 516.07, Florida Statutes, is amended to read:
119 516.07 Grounds for denial of license or for disciplinary
120 action.—
121 (1) The following acts are violations of this chapter and
122 constitute grounds for denial of an application for a license to
123 make consumer finance loans and grounds for any of the
124 disciplinary actions specified in subsection (2):
125 (b) Failure to maintain liquid assets of at least $25,000
126 or a surety bond, certificate of deposit, or letter of credit in
127 the amount required by s. 516.05(10) at all times for the
128 operation of business at a licensed location or proposed
129 location.
130 Section 5. Section 516.36, Florida Statutes, is amended to
131 read:
132 516.36 Installment requirement.—
133 (1) Every loan made pursuant to this chapter must be
134 repaid in periodic installments as nearly equal as
135 mathematically practicable, except that the final payment may be
136 less than the amount of the prior installments. Installments may
137 be due every 2 weeks, semimonthly, or monthly. This section does
138 not apply to lines of credit.
139 (2) Every loan, including a refinancing, made pursuant to
140 this chapter on or after October 1, 2021, must have a minimum
141 loan term of at least 6 months.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 895 (2021)
Amendment No. 1
142 Section 6. Paragraph (a) of subsection (4) of section
143 559.952, Florida Statutes, is amended to read:
144 559.952 Financial Technology Sandbox.—
145 (4) EXCEPTIONS TO GENERAL LAW AND WAIVERS OF RULE
146 REQUIREMENTS.—
147 (a) Notwithstanding any other law, upon approval of a
148 Financial Technology Sandbox application, the following
149 provisions and corresponding rule requirements are not
150 applicable to the licensee during the sandbox period:
151 1. Section 516.03(1), except for the application fee, the
152 investigation fee, the requirement to provide the social
153 security numbers of control persons, evidence of liquid assets
154 of at least $25,000 or documents satisfying the requirements in
155 s. 516.05(10), and the office's authority to investigate the
156 applicant's background. The office may prorate the license
157 renewal fee for an extension granted under subsection (7).
158 2. Section 516.05(1) and (2), except that the office shall
159 investigate the applicant's background.
160 3. Section 560.109, only to the extent that the section
161 requires the office to examine a licensee at least once every 5
162 years.
163 4. Section 560.118(2).
164 5. Section 560.125(1), only to the extent that the
165 subsection would prohibit a licensee from engaging in the
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 895 (2021)
Amendment No. 1
166 business of a money transmitter or payment instrument seller
167 during the sandbox period.
168 6. Section 560.125(2), only to the extent that the
169 subsection would prohibit a licensee from appointing an
170 authorized vendor during the sandbox period. Any authorized
171 vendor of such a licensee during the sandbox period remains
172 liable to the holder or remitter.
173 7. Section 560.128.
174 8. Section 560.141, except for s. 560.141(1)(a)1., 3., 7.-
175 10. and (b), (c), and (d).
176 9. Section 560.142(1) and (2), except that the office may
177 prorate, but may not entirely eliminate, the license renewal
178 fees in s. 560.143 for an extension granted under subsection
179 (7).
180 10. Section 560.143(2), only to the extent necessary for
181 proration of the renewal fee under subparagraph 9.
182 11. Section 560.204(1), only to the extent that the
183 subsection would prohibit a licensee from engaging in, or
184 advertising that it engages in, the selling or issuing of
185 payment instruments or in the activity of a money transmitter
186 during the sandbox period.
187 12. Section 560.205(2).
188 13. Section 560.208(2).
189 14. Section 560.209, only to the extent that the office
190 may modify, but may not entirely eliminate, the net worth,
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 895 (2021)
Amendment No. 1
191 corporate surety bond, and collateral deposit amounts required
192 under that section. The modified amounts must be in such lower
193 amounts that the office determines to be commensurate with the
194 factors under paragraph (5)(c) and the maximum number of
195 consumers authorized to receive the financial product or service
196 under this section.
197 Section 7. This act shall take effect October 1, 2021.
198
199 -----------------------------------------------------
200 T I T L E A M E N D M E N T
201 Remove lines 3-7 and insert:
202 516.03; authorizing an applicant for a license to make
203 and collect loans under the Florida Consumer Finance
204 Act to provide a bond, certificate of deposit, or
205 letter of credit in lieu of liquid assets; amending s.
206 516.031, F.S.; prohibiting a person licensed to make
207 and collect consumer finance loans from charging
208 prepayment penalties for loans; amending s. 516.05;
209 authorizing an applicant for a license to make and
210 collect consumer finance loans or a licensee to
211 provide a surety bond, certificate of deposit, or
212 letter of credit in lieu of liquid assets; providing
213 requirements for such bonds, certificates of deposit,
214 and letters of credit; providing rulemaking authority;
215 amending s. 516.07, F.S.; amending grounds for denial
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 895 (2021)
Amendment No. 1
216 of license or disciplinary action; amending s. 516.36,
217 F.S.; providing requirements for loan terms; amending
218 s. 559.952, F.S.; revising exceptions for a licensee
219 during the Financial Technology Sandbox period;
220 providing an effective date.
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Page 10 of 10
HB 917
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 917 Documentary Stamp Tax Exemption
SPONSOR(S): McClain
TIED BILLS: IDEN./SIM. BILLS: SB 1334
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee Haas Luczynski
2) Ways & Means Committee
3) Commerce Committee
SUMMARY ANALYSIS
Since 1986, the London Interbank Offered Rate (LIBOR) has been the primary reference rate used in setting
interest rates for such loans as adjustable rate mortgages, asset-backed securities, municipal bonds, and other
types of debt. It is estimated that $200 trillion in financial contracts reference the U.S. Dollar LIBOR. However,
the LIBOR has come under increasing scrutiny from regulators and financial markets. The entity that regulates
the LIBOR, the Financial Conduct Authority (FCA) of the United Kingdom, states that the LIBOR will cease
after the end of 2021, though some U.S. Dollar LIBOR panels have been extended to the end of June 2023.
Accordingly, the FCA is recommending transitions to alternative rates before these dates. In the United States,
the Alternative Reference Rates Committee (ARRC) has identified the Secured Overnight Financing Rate
(SOFR) as its recommended alternative to the U.S. Dollar LIBOR.
Some financial contracts that reference the LIBOR include robust fallback language that contemplates a
replacement interest rate index or replacement interest rate calculation in the event that the rate referenced in
the contract is discontinued. However, the ARCC has reported that most contracts referencing the LIBOR may
not have robust fallback language. Financial institutions and other market participants are in the process of
assessing their exposure to the discontinuation of the LIBOR. For contracts based on the LIBOR that do not
contain sufficient fallback language, such contracts may need to be modified in order to provide a substantially
similar interest rate.
Florida law currently levies a documentary stamp tax on promissory notes, mortgages, other written obligations
to pay money, and renewals of those documents. The tax is 35 cents on each $100 or fraction thereof of
indebtedness or obligation. For certain documents, the tax is capped at $2,450. The modification of an original
document which changes the terms of the indebtedness by adding one or more obligors, increasing the
principal balance, or changing the interest rate, maturity date, or payment terms is a taxable renewal.
The bill provides that a modification of an original document that changes the interest rate, which is made as
the result of the discontinuation of an index to which the original interest rate is referenced, is not a renewal
and is not subject to the documentary stamp tax.
The bill has an indeterminate but likely positive impact on the private sector. The bill has no impact on local
governments or the state.
The bill provides an effective date of July 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h0917.IBS
DATE: 3/8/2021
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Florida’s Documentary Stamp Tax on Notes and Mortgages
Florida law currently levies a documentary stamp tax, capped at $2,450, on promissory notes,
nonnegotiable notes, written obligations to pay money, or assignments of salaries made, executed,
delivered, sold, transferred, or assigned in the state, and for each renewal of the same.1 Florida law
also levies a documentary stamp tax, with no cap, on mortgage, trust deeds, security agreements, or
other evidence of indebtedness filed or recorded in this state, and for renewal of the same.2 The
documents are all taxed at 35 cents on each $100 or fraction thereof of the indebtedness or obligation.3
For purposes of taxing renewals of the documents described above, a renewal only includes the
modifications of an original document which changes the terms of the indebtedness by adding one or
more obligors, increasing the principal balance, or changing the interest rate, maturity date, or payment
terms.4 Modifications to documents that do not modify the terms of the indebtedness are not renewals
and are not subject to the documentary stamp tax. Such non-taxable modifications include:5
Modifications given or recorded to correct error;
Modification of covenants, conditions, or terms unrelated to the debt;
Severing of a lien into separate liens;
Providing for additional, substitute, or further security for the indebtedness;
Consolidating indebtedness or collateral;
Adding, changing, or deleting guarantors; or
Substituting a new mortgagee or payee.
When renewal of a promissory note only extends or continues the identical contractual obligations of
the original promissory note and evidences part or all of the original indebtedness, not including any
accumulated interest thereon and without enlargement in any way of the original contract and
obligation, such renewal note is not subject to the documentary stamp tax, so long as the renewal note
has attached to it the original promissory note with other specified notation thereon.6
London Interbank Offered Rate (LIBOR)
When two parties enter into a financial contract in which interest payments are to be exchanged, those
payments are frequently based on the LIBOR, which provides the benchmark rate for the resulting
interest rate.7 Since 1986, the LIBOR has been the primary reference rate used in setting interest rates
for adjustable rate mortgages, asset-backed securities, municipal bonds, credit default swaps, private
student loans, and other types of debt.8
1 S. 201.08(1)(a), F.S.
2 S. 201.08(1)(b), F.S.
3 S. 201.08(1)(a) and (b), F.S.
4 S. 201.08(5), F.S.
5 Id.
6 S. 201.09(1), F.S.
7 Consumer Finance Protection Bureau, You Might Have Heard That LIBOR is Going Away. Here’s What You Need to
Know About LIBOR and Adjustable-Rate Loans (Oct. 17, 2019), https://www.consumerfinance.gov/about-us/blog/libor-
going-away-heres-what-you-need-know-about-libor-and-adjustable-rate-loans/ (last visited Mar. 5, 2021).
8 Forbes, What Is LiborAnd Why Is It Being Abandoned? (Dec. 16, 2020), https://www.forbes.com/advisor/investing/what-
is-libor/ (last visited Mar. 5, 2021).
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The LIBOR is calculated daily by the Intercontinental Exchange (ICE) Benchmark Administration.9
Eighteen international banks submit rates that each bank believes it would pay, not what it actually
pays, if it had to borrow money from another bank on the interbank lending market in London.10 After
removing the four highest and four lowest submissions, the ICE Benchmark Administration calculates
the rate in five currencies: UK Pound Sterling, the Swiss Franc, the Euro, Japanese Yen, and the U.S.
Dollar.11
It is estimated that $200 trillion in financial contracts reference the U.S. Dollar LIBOR.12 Although the
derivatives market accounts for 95 percent of the outstanding value of all financial products referencing
the U.S. Dollar LIBOR, the LIBOR is also referenced in several trillion dollars of corporate loans,
floating-rate mortgages, floating-rate notes, and securitized products.13 As of 2019, $1.2 trillion worth of
residential mortgage loans and $1.3 trillion of consumer loans referenced the LIBOR.14
The LIBOR has come under increasing scrutiny from regulators and financial markets alike following
documented patterns of attempted manipulation by participating banks and a sustained decline in
unsecured interbank borrowing.15 Others have noted the declining correlations between the LIBOR and
actual bank funding costs.16
In 2014, the Federal Reserve Board and the Federal Reserve Bank of New York convened the
Alternative Reference Rates Committee (ARRC) to identify an alternative reference rate for use
primarily in derivatives contracts.17 The ARCC was reconstituted in 2018 with an expanded
membership in an effort to push a wider segment of market participants to focus on their exposure to
the LIBOR.18
In 2017, the ARRC identified the Secured Overnight Financing Rate (SOFR) as its recommended
alternative to the U.S. Dollar LIBOR.19 SOFR is fully-transaction based and is a broad measure of the
cost of borrowing cash overnight collateralized by U.S. Treasury securities.20 SOFR is based on
transaction data from three segments of the Treasury repurchase agreement market: (1) tri-party
repurchase agreements, (2) General Collateral Finance repurchase agreements; and (3) bilateral
repurchase agreement transactions cleared through the Fixed Income Clearing Corporation.21 The
Federal Reserve Bank of New York publishes SOFR data daily, as well as SOFR Averages and a
SOFR Index.22
The entity that regulates the LIBOR, the Financial Conduct Authority (FCA) of the United Kingdom,
states that the LIBOR will cease after the end of 2021, though some U.S. Dollar LIBOR panels have
been extended to the end of June 2023.23 Accordingly, the FCA is recommending transitions to
alternative rates before these dates.24
9 Id.
10 Id.
11 Id.
12 Alternative Reference Rates Committee, Frequently Asked Questions (Dec. 18, 2020),
https://www.newyorkfed.org/medialibrary/Microsites/arrc/files/ARRC-faq.pdf (last visited Mar. 5, 2021).
13 Id.
14 Forbes, supra note 8.
15 Id.
16 Bowman et al., How Correlated is LIBOR with Bank Funding Costs? (June 29, 2020),
https://www.federalreserve.gov/econres/notes/feds-notes/how-correlated-is-libor-with-bank-funding-costs-20200629.htm
(last visited Mar. 5, 2021).
17 Alternative Reference Rates Committee, supra note 12.
18 Id.
19 Id.
20 Id.
21 Id.
22 Id.
23 New York Federal Reserve, Transition From LIBOR, https://www.newyorkfed.org/arrc/sofr-transition (last visited Mar. 5,
2021); Financial Conduct Authority, Transition From LIBOR (Jan. 19, 2021). https://www.fca.org.uk/markets/libor (last
visited Mar. 5, 2021).
24 Financial Conduct Authority, supra note 23.
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Some financial contracts that reference the LIBOR include robust fallback language25 that contemplates
a replacement interest rate index or replacement interest rate calculation in the event that the rate
referenced in the contract is discontinued. However, the ARCC has reported that most contracts
referencing the LIBOR may not have robust fallback language.26 Financial institutions and other market
participants are in the process of assessing their exposure to the discontinuation of the LIBOR.27 For
contracts based on the LIBOR that do not contain sufficient fallback language, such contracts may
need to be modified in order to provide a substantially similar interest rate.
Effect of the Bill
The bill provides that a modification of an original document that changes the interest rate, which is
made as the result of the discontinuation of an index to which the original interest rate is referenced, is
not a renewal and is not subject to the documentary stamp tax.
The bill takes effect July 1, 2021.
B. SECTION DIRECTORY:
Section 1. Amends s. 201.08, F.S., relating to tax on promissory or nonnegotiable notes, written
obligations to pay money, or assignments of wages or other compensation; exception.
Section 2. Provides an effective date of July 1, 2021.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
See Fiscal Comments.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
25 Fallback language should consist of contractual provisions that specify the trigger events for a transition to a
replacement rate, the replacement rate, and the spread adjustment to align the replacement rate with the benchmark
being replaced—in this case U.S. Dollar LIBOR. Alternative Reference Rates Committee, Summary of ARRC’s LIBOR
Fallback Language (Nov. 2019),
https://www.newyorkfed.org/medialibrary/Microsites/arrc/files/2019/LIBOR_Fallback_Language_Summary.pdf (last visited
Mar. 5, 2021).
26 Id.
27 See, e.g., U.S. Securities and Exchange Commission Office of Compliance Inspections and Examinations, Risk Alert
(June 18, 2020), https://www.sec.gov/files/Risk%20Alert%20-%20OCIE%20LIBOR%20Initiative_1.pdf (last visited Mar. 5,
2021); Board of Governors of the Federal Reserve System et al., Statement on LIBOR Transition (Nov. 30, 2020),
https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20201130a1.pdf (last visited Mar. 5, 2021).
STORAGE NAME: h0917.IBS PAGE: 4
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It is possible that lenders and borrowers could encounter liability for paying documentary stamp taxes
when modifying, supplementing, or amending their contracts to reference the SOFR reference rate
instead of the LIBOR reference rate. The bill will resolve any uncertainty in favor of preventing liability
for documentary stamp tax due to the discontinuation of the LIBOR. The overall economic impact on
the private sector, while likely positive, is indeterminate.
D. FISCAL COMMENTS:
On February 19, 2021, the Revenue Estimating Conference considered the impact of the bill.28 The bill
was estimated to have zero impact as a result of a Department of Revenue Rule that states in pertinent
part, “A renewal that does not add obligor(s) and merely changes the interest rate, the maturity date, or
the payment terms is not subject to tax, provided tax was paid on the original document and the original
document is attached to the renewal.”29
Unlike the rule, however, the bill would allow notes to be modified here in Florida, without incurring
documentary stamp taxes, even if tax was not paid on the original note. One example of why tax might
not have been paid on the original note is that the note was executed out of state; Florida’s
documentary stamp tax is not applicable to a note executed out of state. Nevertheless, it is worth noting
that the documents covered by the bill’s exemption are documents that would not have been modified
but for rather unforeseen circumstances when the referenced interest rate index is discontinued. If such
unforeseen circumstances had not come to pass, the state would not have collected documentary
stamp taxes. For this reason, as well, the impact to the state is zero.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not Applicable. This bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
As written, the bill may provide an exemption from documentary stamp taxes in broader
circumstances than intended. The intent is to limit the exemption to a document modification that
changes only the interest rate (due to the discontinuation of the index to which the interest rate is
referenced). However, the bill’s language could be interpreted to provide an exemption for a
document modification that changes the interest rate (due to the discontinuation of the index to
which the interest rate is referenced) in addition to making other changes (such as changing an
obligor). The sponsor has indicated an intent to address this issue.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
28 Revenue Estimating Conference, 2/19/2021 Revenue Impact Results,
http://www.edr.state.fl.us/Content/conferences/revenueimpact/archives/2021/_pdf/Impact0219.pdf (last visited Mar. 5,
2021).
29 R. 12B-4.052, F.A.C.
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DATE: 3/8/2021
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 917 2021
1 A bill to be entitled
2 An act relating to documentary stamp tax exemption;
3 amending s. 201.08, F.S.; exempting from assessment of
4 documentary stamp taxes the modification of certain
5 documents that change the interest rate under
6 specified conditions; providing an effective date.
7
8 Be It Enacted by the Legislature of the State of Florida:
9
10 Section 1. Subsection (5) of section 201.08, Florida
11 Statutes, is amended to read:
12 201.08 Tax on promissory or nonnegotiable notes, written
13 obligations to pay money, or assignments of wages or other
14 compensation; exception.—
15 (5) For purposes of this section, a renewal shall only
16 include modifications of an original document which change the
17 terms of the indebtedness evidenced by the original document by
18 adding one or more obligors, increasing the principal balance,
19 or changing the interest rate, maturity date, or payment terms.
20 Modifications to documents which do not modify the terms of the
21 indebtedness evidenced such as those given or recorded to
22 correct error; modify covenants, conditions, or terms unrelated
23 to the debt; sever a lien into separate liens; provide for
24 additional, substitute, or further security for the
25 indebtedness; consolidate indebtedness or collateral; add,
Page 1 of 2
CODING: Words stricken are deletions; words underlined are additions.
hb0917-00
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 917 2021
26 change, or delete guarantors; or which substitute a new
27 mortgagee or payee are not renewals and are not subject to tax
28 pursuant to this section. A modification of an original document
29 that changes the interest rate which is made as the result of
30 the discontinuation of an index to which the original interest
31 rate is referenced is not a renewal and is not subject to the
32 tax pursuant to this section. If the taxable amount of a
33 mortgage is limited by language contained in the mortgage or by
34 the application of rules limiting the tax base when there is
35 collateral in more than one state, then a modification which
36 changes such limitation or tax base shall be taxable only to the
37 extent of any increase in the limitation or tax base
38 attributable to such modification. This subsection shall not be
39 interpreted to exempt from taxation an original mortgage that
40 would otherwise be subject to tax pursuant to paragraph (1)(b).
41 Section 2. This act shall take effect July 1, 2021.
Page 2 of 2
CODING: Words stricken are deletions; words underlined are additions.
hb0917-00
INSURANCE & BANKING SUBCOMMITTEE
HB 917 by Rep. McClain
Documentary Stamp Tax Exemption
AMENDMENT SUMMARY
March 10, 2021
Amendment 1 by Rep. McClain (line 29): The amendment:
• Adds the word “only” to limit the documentary stamp tax exemption to instances where
a document modification changes only the interest rate due to the discontinuation of the
index to which the interest rate is referenced.
• Makes other technical changes.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 917 (2021)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Insurance & Banking
2 Subcommittee
3 Representative McClain offered the following:
4
5 Amendment (with title amendment)
6 Remove line 29 and insert:
7 which changes only the interest rate and which is made as the
8 result of
9
10 -----------------------------------------------------
11 T I T L E A M E N D M E N T
12 Remove line 5 and insert:
13 documents that change only the interest rate under
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Page 1 of 1
PCS for HB 6077
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: PCS for HB 6077 Assets of an Estate in Administration
SPONSOR(S): Insurance & Banking Subcommittee
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
Orig. Comm.: Insurance & Banking Subcommittee Hinshelwood Luczynski
SUMMARY ANALYSIS
A court having jurisdiction over the administration of an estate may order that part or all of the personal assets
of the estate be placed with a financial institution designated by the court. Currently, the financial institutions
where a court may order assets placed are “a bank, trust company, or savings and loan association (which
savings and loan association is a member of the Federal Savings and Loan Insurance Corporation and doing
business in this state).” The Federal Savings and Loan Insurance Corporation (FSLIC) was created in 1934 in
order to insure deposits of savings and loan associations. However, the FSLIC was abolished in 1989 on the
heels of the savings and loan crisis of the 1980s. Savings and loan associations are now insured by the
Federal Deposit Insurance Corporation, as are commercial banks.
The bill removes a statutory reference to the FSLIC along with other obsolete language.
The bill has no impact on local governments or the state. The bill has an indeterminate but likely positive
impact on the private sector.
The bill provides an effective date of July 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: pcs6077.IBS
DATE: 3/8/2021
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
When a court administers an estate, such as in probate1 or in a guardianship,2 there is often an
individual appointed by the court to assist with the administration. Depending on the context, such
individual will have varying titles such as guardian, curator, executor, administrator, trustee, or receiver.
Although the individual may be required by statute or the court to carry a bond,3 s. 69.031, F.S.,
provides that a court may nevertheless order that part or all of the personal assets of the estate be
placed with a financial institution designated by the court.4 This may occur if the size of the bond
required is burdensome, or for other cause.5 After the assets have been placed with the financial
institution, and receipt for the assets is given by the financial institution, the court must waive the bond
or reduce it so that the bond only applies to the estate remaining in the hands of the individual
appointed to assist with administration of the estate.6
Currently, the financial institutions where a court may order assets placed are “a bank, trust company,
or savings and loan association (which savings and loan association is a member of the Federal
Savings and Loan Insurance Corporation and doing business in this state).”7
The Federal Savings and Loan Insurance Corporation (FSLIC) was created by the National Housing
Act of 1934 in order to insure deposits of savings and loan associations.8 Savings and loan
associations may be chartered both under federal authority9 or state authority10 and were created to
primarily provide depository services and make home loans. Today, the rights and privileges of savings
and loan associations are substantially similar to, and in some cases the same as, commercial banks.11
The Federal Deposit Insurance Corporation now insures savings and loan associations, as well as
commercial banks.12 The FSLIC, the entity that initially insured savings and loan associations, was
abolished in 1989 on the heels of the savings and loan crisis of the 1980s.13
As previously stated, s. 69.031, F.S., permits a court to place assets in a savings and loan association
that is a member of the FSLIC, a now obsolete entity.
Effect of the Bill
1 Probate is a court-supervised process for identifying and gathering the assets of a deceased person (decedent), paying
the decedent’s debts, and distributing the decedent’s assets to his or her beneficiaries. The Florida Bar, Consumer
Pamphlet: Probate in Florida, https://www.floridabar.org/public/consumer/pamphlet026/ (last visited Mar. 6, 2021).
2 A guardianship is a legal proceeding in the circuit courts of Florida in which a guardian is appointed to exercise the legal
rights of an incapacitated person. The Florida Bar, Consumer Pamphlet: What is Guardianship?,
https://www.floridabar.org/public/consumer/pamphlet030/ (last visited Mar. 6, 2021).
3 See, e.g., fiduciary bonds in formal probate proceedings (ss. 733.402 – 733.406, F.S.); fiduciary bonds in guardianship
(ss. 744.2003, 744.351, and 744.619, F.S.).
4 S. 69.031(1), F.S.
5 Id.
6 S. 69.031(1) and (2), F.S.
7 S. 69.031(1), F.S. (emphasis added).
8 Pub.L. 73–479, https://govtrackus.s3.amazonaws.com/legislink/pdf/stat/48/STATUTE-48-Pg1246.pdf.
9 Home Owners' Loan Act, 12 U.S.C. § 1461 et seq.
10 In Florida, chs. 665 and 667, F.S., comprise authority to charter a savings and loan association. However, Florida
currently has no savings and loan associations chartered under its authority.
11 Office of the Comptroller of the Currency, Interpretive Letter #1169 (June 30, 2020),
https://www.occ.treas.gov/topics/charters-and-licensing/interpretations-and-actions/2020/int1169.pdf (last visited Mar. 6,
2021).
12 12 U.S.C. § 1814(a).
13 Financial Institutions Reform, Recovery, and Enforcement Act of 1989, Pub.L. 101-73,
https://www.govinfo.gov/content/pkg/STATUTE-103/pdf/STATUTE-103-Pg183.pdf (last visited Mar. 6, 2021).
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DATE: 3/8/2021
The bill removes a statutory reference to the FSLIC along with other obsolete language.
B. SECTION DIRECTORY:
Section 1. Amends s. 69.031, F.S., relating to designated financial institutions for assets in hands of
guardians, curators, administrators, trustees, receivers, or other officers.
Section 2. Provides an effective date of July 1, 2021.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill broadens access to financial services by allowing a court to place assets of an estate in a
savings and loan association without reference to the savings and loan association having insurance
through the FSLIC, a now obsolete entity. The impact to the private sector, while likely positive, is
indeterminate.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not Applicable. This bill does not appear to affect county or municipal governments
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
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DATE: 3/8/2021
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
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DATE: 3/8/2021
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
PCS for HB 6077 2021
1 A bill to be entitled
2 An act relating to assets of an estate in
3 administration; amending s. 69.031, F.S.; deleting a
4 requirement that assets of an estate in administration
5 may only be placed in a savings and loan association
6 if it is a member of the Federal Savings and Loan
7 Insurance Corporation; providing an effective date.
8
9 Be It Enacted by the Legislature of the State of Florida:
10
11 Section 1. Subsection (1) of section 69.031, Florida
12 Statutes, is amended to read:
13 69.031 Designated financial institutions for assets in
14 hands of guardians, curators, administrators, trustees,
15 receivers, or other officers.—
16 (1) When it is expedient in the judgment of any court
17 having jurisdiction of any estate in process of administration
18 by any guardian, curator, executor, administrator, trustee,
19 receiver, or other officer, because the size of the bond
20 required of the officer is burdensome or for other cause, the
21 court may order part or all of the personal assets of the estate
22 placed with a bank, trust company, or savings and loan
23 association (which savings and loan association is a member of
24 the Federal Savings and Loan Insurance Corporation and doing
25 business in this state) designated by the court, consideration
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PCS for HB 6077
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
PCS for HB 6077 2021
26 being given to any bank, trust company or savings and loan
27 association proposed by the officer. When the assets are placed
28 with the designated financial institution, it shall file a
29 receipt therefor in the name of the estate and give the officer
30 a copy. Such receipt shall acknowledge the assets received by
31 the financial institution. All interest, dividends, principal
32 and other debts collected by the financial institution on
33 account thereof shall be held by the financial institution in
34 safekeeping, subject to the instructions of the officer
35 authorized by order of the court directed to the financial
36 institution.
37 Section 2. This act shall take effect July 1, 2021.
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PCS for HB 6077
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