Meeting Packet - Insurance & Banking Subcommittee (Tuesday, March 23, 2021)
Summary
A Meeting Packet for the Insurance & Banking Subcommittee of the Florida House of Representatives Commerce Committee, for its meeting on Tuesday, March 23, 2021, 9:30 AM to 12:15 PM in Webster Hall. The agenda lists HB 1305 (Workers' Compensation Insurance for Employee Leasing Companies), HB 1593 (Seminole County) and PCS for HB 305 (Insurance). The packet includes the staff analysis of HB 1305, which says the bill specifies when an employee leasing company must provide workers' compensation insurance to cover a subcontractor's leased and nonleased employees, and has an effective date of July 1, 2021. It ends with amendment text that refers to public adjusters, contractors and residential property owners.
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Insurance & Banking Subcommittee
Tuesday, March 23, 2021
9:30 AM - 12:15 PM
Webster Hall (212 Knott)
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
Tuesday, March 23, 2021
9:30 AM – 12:15 PM
Webster Hall (212 Knott)
I. Call to Order
II. Roll Call
III. Welcome and Opening Remarks
IV. Consideration of the following bill(s):
• HB 1305 Workers' Compensation Insurance for Employee Leasing
Companies by Giallombardo
• HB 1593 Seminole County by Smith, D.
Consideration of the following proposed committee substitute(s):
• PCS for HB 305 – Insurance
V. Closing Remarks
VI. Adjournment
303 House Office Building, 402 South Monroe Street, Tallahassee, FL 32399-1300
(850) 717-4870
HB 1305
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 1305 Workers' Compensation Insurance for Employee Leasing Companies
SPONSOR(S): Giallombardo
TIED BILLS: IDEN./SIM. BILLS: SB 1458
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 workers’ compensation law (ch. 440, F.S) requires an employer, subject to certain exceptions, to obtain
coverage for its “employees” that provides for lost income and all medically necessary remedial treatment,
attendance, and care, resulting from work-related injuries and occupational diseases. Employee leasing is an
arrangement in which a leasing company, or PEO, assigns its employees to a client and allocates the direction
of and control over the leased employees between the leasing company and the client. An employee leasing
company is the legal employer of leased employees and is responsible for providing them with workers’
compensation coverage.
The bill makes changes to workers’ compensation law by specifying when an employee leasing company must
provide workers’ compensation insurance to cover a subcontractor’s leased and nonleased employees. The bill
does not modify the current law requirement that an employee leasing company secure workers’ compensation
coverage for its leased employees or that a subcontractor secure workers’ compensation coverage for its
nonleased employees. However, the bill shifts the responsibility for a subcontractor’s failure to secure workers’
compensation coverage from the general contractor, which current law deems the statutory employer, to the
employee leasing company.
The bill provides that if an employee leasing company and a subcontractor have an employee leasing
arrangement, unless the subcontractor has secured additional workers’ compensation coverage, a person is
deemed an employee of the employee leasing company upon the earliest of the following: the hiring of the
person by the subcontractor; the commencement of work by the person for the subcontractor; or the hiring of
the person directly by the employee leasing company.
The bill has no impact on state or local government revenues or expenditures. It has an unknown direct
economic impact on the private sector.
The bill has 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:
Overview of Florida’s Workers’ Compensation System
Chapter 440, F.S., is Florida’s workers’ compensation law. It is the stated intent of the Legislature that
the workers’ compensation system be self-executing and for the law to be interpreted to “assure the
quick and efficient delivery of disability and medical benefits to an injured worker and to facilitate the
worker’s return to gainful reemployment at a reasonable cost to the employer.”1 For work-related
injuries, workers’ compensation provides all medically necessary remedial treatment, care, and
attendance, including medications, medical supplies, durable medical equipment, and prosthetics.2 It
also provides compensation for disability when the injury causes an employee to miss more than seven
days of work.3
Workers’ compensation is the injured employee’s remedy for “compensable” workplace injuries.4
Employees generally cannot sue a covered employer for workplace injuries.5 The law requires that all
employers, with limited exceptions, provide workers’ compensation insurance for their employees.
Whether an employer is required to have workers’ compensation insurance depends upon the
employer’s industry and the number of employees. Employers may secure coverage by purchasing a
workers’ compensation insurance policy or qualifying as a self-insurer. An employer in a non-
construction industry employing four or more part- or full-time employees must secure insurance.6 An
employer engaged in the construction industry must secure workers’ compensation insurance if it
employs one or more part- or full-time employees.7 No more than three officers of a corporation or
members of a limited liability company who are engaged in the construction industry may elect to be
exempt from this requirement, if certain conditions are met.8 Corporate officers and members of a non-
construction LLC can elect to be exempt from workers’ compensation coverage requirements.9
Section 440.10, F.S., makes a contractor the “statutory employer” of its subcontractor.10 Thus, the
contractor is responsible for providing workers’ compensation insurance for a subcontractor’s
employees, unless the subcontractor has its own workers’ compensation policy. While this does not
relieve a subcontractor of its legal duty to provide workers’ compensation insurance, it ensures that
employees will have workers’ compensation coverage in the event the subcontractor does not have
coverage.
Employee Leasing
“Employee leasing” is an arrangement in which a leasing company, or professional employer
organization (PEO), assigns its employees to a client and allocates the direction of and control over the
leased employees between the leasing company and the client.11 It is unlawful to operate as an
1 S. 440.015, F.S.
2 S. 440.13(2)(a), F.S.
3 S. 440.12(1), F.S.
4 “Compensable” means a determination by a carrier or judge of compensation claims that a condition suffered by an
employee results from an injury arising out of and in the course of employment. S. 440.13(1)(d), F.S.
5 S. 440.11(1), F.S. Employers who fail to obtain required workers’ compensation coverage may be sued by an injured
worker in civil court. Likewise, an employee who is either exempt or excluded from workers’ compensation coverage
requirements may sue his or her employer in civil court for work-related injuries, even if the employer has coverage for
other employees.
6 S. 440.02, F.S.
7 Id.
8 Id.
9 Id.
10 S. 440.10(1)(b), F.S.
11 S. 468.520(4), F.S. Temporary help arrangements are excluded from the definition of employee leasing.
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employee leasing company without a license, and licensed employee leasing companies may lease
employees only through contractual arrangements with client companies that satisfy certain conditions,
including retaining responsibility for the management of workers’ compensation claims. An employee
leasing company is considered the employer of leased employees12 and is responsible for providing
them with workers’ compensation coverage.13 According to the Office of Program Policy Analysis and
Government Accountability (OPPAGA), there were 760 PEOs in the state as of March 2020 and the
construction industry was the industry that used PEOs the most.14
Workers’ compensation insurance requirements for employee leasing companies are set forth in s.
627.192, F.S. An employee leasing agreement generally provides that the leasing company secures
workers’ compensation coverage only for leased employees listed with the employee leasing company
and that the client company remains responsible for coverage for all nonleased employees.15 A leasing
company’s insurance carrier policy typically covers only those employees of a client company that have
been processed through its payroll system.16 Thus, new hires who are injured prior to being processed
through payroll may not be covered by the policy.17 This can lead to problems for contractors, who are
statutorily responsible for their subcontractors’ employees, unless the subcontractors have other
workers’ compensation coverage.18
The Department of Business and Professional Regulation, through its Board of Employee Leasing
Companies, licenses and regulates employee leasing companies.19 An employee leasing company may
be disciplined for violating ch. 455, F.S., and ch. 468, F.S., for failing to maintain workers’
compensation or misclassifying employees. The Department of Financial Services (DFS) is responsible
for enforcing employer compliance with workers’ compensation coverage requirements. If an employer
fails to comply with those requirements, the DFS must issue a stop-work order within 72 hours of
determining noncompliance.20
Effect of the Bill
The bill makes changes to workers’ compensation law by specifying when an employee leasing
company that has an arrangement with a subcontractor must provide workers’ compensation insurance
to cover the subcontractor’s leased and nonleased employees. The bill does not modify the current law
requirement that an employee leasing company secure workers’ compensation coverage for its leased
employees or that a subcontractor secure workers’ compensation for its employees. However, the bill
shifts the responsibility for a subcontractor’s failure to secure workers’ compensation coverage for an
employee from the general contractor, which current law deems the statutory employer, to the
employee leasing company.
The bill provides that if an employee leasing company and a subcontractor have an employee leasing
arrangement, unless the subcontractor has secured workers’ compensation coverage for a person
hired by it, for purposes of workers compensation, such person is deemed an employee of the
employee leasing company. The bill also provides that the person becomes an employee of the leasing
company upon the earliest of the following: the hiring of the person by the subcontractor; the
12 A “leased employee” is defined in s. 627.192, F.S., as “a person performing services for a lessee under an employee
leasing arrangement.”
13 S. 468.529(1), F.S.
14 OPPAGA, Report 21-04, Review of Professional Employer Organizations and Workers’ Compensation, pp. 7-8 (Mar.
2021), https://oppaga.fl.gov/Documents/Reports/21-04.pdf (last visited Mar. 15, 2021).
15 Id. at p. 2.
16 Id. at p. 12.
17 Id.
18 See Florida United Business Association, The Perils of PEOs for Florida’s Construction Industry (Jan. 31, 2019),
https://fuba.org/2019/01/31/the-perils-of-peos-for-floridas-construction-industry/ (last visited Mar. 14, 2021).
19 According to OPPAGA, the Board of Employee Leasing Companies “rarely finds that employee leasing companies
violated workers’ compensation requirements.” OPPAGA, Report 21-04, Review of Professional Employer Organizations
and Workers’ Compensation, p. 4 (Mar. 2021), https://oppaga.fl.gov/Documents/Reports/21-04.pdf (last visited Mar. 15,
2021).
20 S. 440.107, F.S.
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commencement of work by the person for the subcontractor; or the hiring of the person directly by the
employee leasing company.
The bill adds to an employee leasing company’s license requirements by requiring that, unless a
subcontractor has secured workers’ compensation insurance for its nonleased employees, an
employee leasing company’s arrangement with a subcontractor must provide that a person is an
employee of the employee leasing company at the earliest of the individual’s hiring by the
subcontractor, commencement of work for the subcontractor, or hiring by the employee leasing
company.
B. SECTION DIRECTORY:
Section 1. Amends s. 440.10, F.S., relating to liability for compensation.
Section 2. Amends s. 468.525, F.S., relating to license requirements.
Section 3. Amends s. 468.529, F.S., relating to licensee’s insurance; employment tax; benefit plans.
Section 4. Reenacts s. 468.532, F.S., relating to discipline.
Section 5. 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, indeterminate fiscal impact on contractors by reducing the costs of their
workers’ compensation insurance policies. The bill may have a negative, indeterminate fiscal impact on
subcontractors by making it more expensive to do business with employee leasing companies/PEOs.
There may be a negative, indeterminate fiscal impact on employee leasing companies/PEOs. The
impact on PEOs may depend on how well they can anticipate exposure and adjust the costs of their
leasing arrangements.
D. FISCAL COMMENTS:
None.
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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 provide a grant of rulemaking authority, nor does it require rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
The bill does not indicate if it is intended to affect existing contractual agreements. An amendment may
be needed to clarify that the bill applies to only contracts entered into on or after the effective date of
the bill. The sponsor has indicated an intent to address this issue.
Currently, PEOs are not required to notify client companies in advance if they are cancelling a contract
and thus cancelling their workers’ compensation coverage. A provision requiring PEOs to give advance
notice of termination would give client companies time to find replacement workers’ compensation
coverage. 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 1305 2021
1 A bill to be entitled
2 An act relating to workers' compensation insurance for
3 employee leasing companies; amending s. 440.10, F.S.;
4 specifying when a person is deemed an employee of an
5 employee leasing company for workers' compensation
6 insurance purposes under circumstances relating to the
7 company's employee leasing arrangement with a
8 subcontractor; amending s. 468.525, F.S.; providing
9 that if an employee leasing company's client company
10 is a subcontractor, workers' compensation insurance
11 requirements are not satisfied by the employee leasing
12 arrangement unless certain conditions are met;
13 amending s. 468.529, F.S.; requiring certain client
14 companies to maintain separate workers' compensation
15 insurance coverage unless certain conditions are met;
16 specifying when a person is deemed an employee of an
17 employee leasing company for workers' compensation
18 insurance proposes under certain circumstances;
19 providing construction; reenacting s. 468.532(1)(g),
20 F.S., relating to discipline, to incorporate the
21 amendment made to s. 468.529, F.S., in a reference
22 thereto; providing an effective date.
23
24 Be It Enacted by the Legislature of the State of Florida:
25
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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 1305 2021
26 Section 1. Paragraph (d) of subsection (1) of section
27 440.10, Florida Statutes, is amended to read:
28 440.10 Liability for compensation.—
29 (1)
30 (d)1. If a contractor becomes liable for the payment of
31 compensation to the employees of a subcontractor who has failed
32 to secure such payment in violation of s. 440.38, the contractor
33 or other third-party payor shall be entitled to recover from the
34 subcontractor all benefits paid or payable plus interest unless
35 the contractor and subcontractor have agreed in writing that the
36 contractor will provide coverage.
37 2. If a contractor or third-party payor becomes liable for
38 the payment of compensation to the corporate officer of a
39 subcontractor who is engaged in the construction industry and
40 has elected to be exempt from the provisions of this chapter,
41 but whose election is invalid, the contractor or third-party
42 payor may recover from the claimant or corporation all benefits
43 paid or payable plus interest, unless the contractor and the
44 subcontractor have agreed in writing that the contractor will
45 provide coverage.
46 3. If a subcontractor and an employee leasing company are
47 operating pursuant to an arrangement for employee leasing as
48 defined in s. 468.520(4) and workers' compensation insurance is
49 provided by the employee leasing company to the leased
50 employees, a person is deemed an employee of the employee
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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 1305 2021
51 leasing company for purposes of workers' compensation insurance,
52 unless the subcontractor has secured additional workers'
53 compensation coverage applicable to the employee, upon the
54 earliest of the following:
55 a. The hiring of the person by the subcontractor.
56 b. The commencement of work by the person for the
57 subcontractor.
58 c. The hiring of the person directly by the employee
59 leasing company.
60 Section 2. Subsection (5) is added to section 468.525,
61 Florida Statutes, to read:
62 468.525 License requirements.—
63 (5) If the client company is a subcontractor, the
64 requirements of s. 440.10(1)(a) are not satisfied by the
65 employee leasing arrangement unless the subcontractor has
66 secured additional workers' compensation insurance for nonleased
67 employees or unless the contractual arrangement provides that a
68 person is deemed an employee of the employee leasing company for
69 purposes of workers' compensation coverage, upon the earliest of
70 the following:
71 (a) The hiring of the person by the client company.
72 (b) The commencement of work by the person for the client
73 company.
74 (c) The hiring of the person directly by the employee
75 leasing company.
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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 1305 2021
76 Section 3. Subsection (1) of section 468.529, Florida
77 Statutes, is amended, present subsections (4) and (5) of that
78 section are redesignated as subsections (5) and (6),
79 respectively, and a new subsection (4) is added to that section,
80 to read:
81 468.529 Licensee's insurance; employment tax; benefit
82 plans.—
83 (1) A licensed employee leasing company is the employer of
84 the leased employees, except that this provision is not intended
85 to affect the determination of any issue arising under Pub. L.
86 No. 93-406, the Employee Retirement Income Security Act, as
87 amended from time to time. An employee leasing company shall be
88 responsible for timely payment of reemployment assistance taxes
89 pursuant to chapter 443, and shall be responsible for providing
90 workers' compensation coverage pursuant to chapter 440.
91 (a) However, a no licensed employee leasing company may
92 not shall sponsor a plan of self-insurance for health benefits,
93 except as may be permitted by the provisions of the Florida
94 Insurance Code or, if applicable, by Pub. L. No. 93-406, the
95 Employee Retirement Income Security Act, as amended from time to
96 time. For purposes of this section, the term a "plan of self-
97 insurance" excludes shall exclude any arrangement where an
98 admitted insurance carrier has issued a policy of insurance
99 primarily responsible for the obligations of the health plan.
100 (b) This section does not modify the statutory obligation
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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 1305 2021
101 of a client company to secure workers' compensation coverage as
102 required under s. 440.10 for direct employees whom the client
103 company does not lease pursuant to an employee leasing
104 arrangement. A client company that is engaged in the
105 construction industry and that is in an employee leasing
106 arrangement shall maintain separate workers' compensation
107 insurance coverage as required under this section and s. 440.10
108 unless the employee leasing company and its carrier agree to
109 provide such coverage directly to the client company, covering
110 all persons performing work for the client at all times, in full
111 compliance with s. 440.10.
112 (4) During the term of an employee leasing arrangement
113 with a subcontractor, if a subcontractor does not obtain
114 workers' compensation insurance for nonleased employees, a
115 person is deemed an employee of the employee leasing company for
116 purposes of workers' compensation insurance, upon the earliest
117 of the following:
118 (a) The hiring of such person by the client company.
119 (b) The commencement of work by such person for the client
120 company.
121 (c) The hiring of the person directly by the employee
122 leasing company.
123 Section 4. For the purpose of incorporating the amendment
124 made by this act to section 468.529, Florida Statutes, in a
125 reference thereto, paragraph (g) of subsection (1) of section
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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 1305 2021
126 468.532, Florida Statutes, is reenacted to read:
127 468.532 Discipline.—
128 (1) The following constitute grounds for which
129 disciplinary action against a licensee may be taken by the
130 board:
131 (g) Failing to maintain workers' compensation insurance as
132 required in s. 468.529.
133 Section 5. This act shall take effect July 1, 2021.
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INSURANCE & BANKING SUBCOMMITTEE
HB 1305 by Rep. Giallombardo
Workers’ Compensation Insurance for Employee Leasing Companies
AMENDMENT SUMMARY
March 23, 2021
Amendment 1 by Rep. Giallombardo: The strike-all amendment makes the following changes
to the bill:
• Provides that during the term of an employee leasing arrangement, if the client company
is a subcontractor engaged in the construction industry, all leased and nonleased
employees of the subcontractor, including any such employees who are hired by the
subcontractor, commence work for the subcontractor, or are hired directly by the
employee leasing company, are deemed employees of the employee leasing company
(PEO) for purposes of workers’ compensation coverage.
• Requires that if a PEO terminates a leasing arrangement with a subcontractor engaged
in the construction industry:
o The PEO must give at least 10 days’ notice to the subcontractor, and if the
termination is for cause, allow the subcontractor to cure any defaults within that
time frame. Notice must also be sent to the last known address of each
employee and all known contractors with whom the subcontractor has
contracted.
o Workers’ compensation coverage must continue to be provided by the PEO for
20 days after termination of the leasing arrangement.
• Clarifies that the bill applies to contracts for leasing arrangements entered into or
renewed on or after July 1, 2021.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1305 (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 Giallombardo offered the following:
4
5 Amendment (with title amendment)
6 Remove everything after the enacting clause and insert:
7 Section 1. Paragraph (a) of subsection (1) of section
8 440.10, Florida Statutes, is amended to read:
9 440.10 Liability for compensation.—
10 (1)
11 (a) Every employer coming within the provisions of this
12 chapter shall be liable for, and shall secure, the payment to
13 his or her employees, or any physician, surgeon, or pharmacist
14 providing services under the provisions of 440.13, of the
15 compensation payable under ss. 440.13, 440.15, and 440.16. Any
16 contractor or subcontractor who engages in any public or private
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1305 (2021)
Amendment No. 1
17 construction in the state shall secure and maintain compensation
18 for his or her employees under this chapter as provided in s.
19 440.38, or pursuant to an employee leasing arrangement under s.
20 468.525(g).
21 Section 2. Paragraphs (g) and (h) are added to subsection
22 (4) of section 468.525, Florida Statutes, to read:
23 468.525 License requirements.—
24 (4)
25 (g) Provides that during the term of the employee leasing
26 arrangement, if the client company is a subcontractor engaged in
27 the construction industry, all leased and nonleased employees of
28 the subcontractor, including any such employees who are hired by
29 the subcontractor, commence work for the subcontractor, or are
30 hired directly by the employee leasing company during the term
31 of the employee leasing arrangement, are deemed employees of the
32 employee leasing company for purposes of workers’ compensation
33 coverage.
34 (h) Provides at least 10 days' notice to a client company
35 who is a subcontractor engaged in the construction industry
36 before terminating an employee leasing arrangement. If the
37 termination is for cause, allows the client company to cure any
38 contractual defaults or deficiencies within that time frame.
39 Section 3. Subsection (1) of section 468.529, Florida
40 Statutes, is amended, present subsections (4) and (5) of that
41 section are redesignated as subsections (5) and (6),
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1305 (2021)
Amendment No. 1
42 respectively, and new subsections (4), (7), and (8) are added to
43 that section, to read:
44 468.529 Licensee's insurance; employment tax; benefit
45 plans.—
46 (1) A licensed employee leasing company is the employer of
47 the leased employees, except that this provision is not intended
48 to affect the determination of any issue arising under Pub. L.
49 No. 93-406, the Employee Retirement Income Security Act, as
50 amended from time to time. An employee leasing company shall be
51 responsible for timely payment of reemployment assistance taxes
52 pursuant to chapter 443, and shall be responsible for providing
53 workers' compensation coverage pursuant to chapter 440.
54 (a) However, a no licensed employee leasing company may
55 not shall sponsor a plan of self-insurance for health benefits,
56 except as may be permitted by the provisions of the Florida
57 Insurance Code or, if applicable, by Pub. L. No. 93-406, the
58 Employee Retirement Income Security Act, as amended from time to
59 time. For purposes of this section, the term a "plan of self-
60 insurance" excludes shall exclude any arrangement where an
61 admitted insurance carrier has issued a policy of insurance
62 primarily responsible for the obligations of the health plan.
63 (4) During the term of an employee leasing arrangement
64 with a client company who is a subcontractor engaged in the
65 construction industry, all leased and nonleased employees of the
66 subcontractor, including any such employees who are hired by the
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1305 (2021)
Amendment No. 1
67 subcontractor, commence work for the subcontractor, or are hired
68 directly by the employee leasing company during the term of the
69 employee leasing arrangement, are deemed employees of the
70 employee leasing company for purposes of workers’ compensation
71 coverage.
72 (7) If an employee leasing arrangement between an employee
73 leasing company and a client company who is a subcontractor
74 engaged in the construction industry is terminated, the employee
75 leasing company must send notice by first class mail to the last
76 known address of each employee who was assigned to the client
77 company. The notification must include the date the employee
78 leasing arrangement was terminated. The notice must also be sent
79 by first class mail to all contractors with whom the client
80 company has contracted, if known.
81 (8) Workers’ compensation coverage must continue to be
82 provided by the employee leasing company for 20 days after the
83 leasing company terminates the arrangement with a client company
84 who is a subcontractor engaged in the construction industry.
85 Section 4. For the purpose of incorporating the amendment
86 made by this act to section 468.529, Florida Statutes, in a
87 reference thereto, paragraph (g) of subsection (1) of section
88 468.532, Florida Statutes, is reenacted to read:
89 468.532 Discipline.—
90 (1) The following constitute grounds for which
91 disciplinary action against a licensee may be taken by the
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1305 (2021)
Amendment No. 1
92 board:
93 (g) Failing to maintain workers' compensation insurance as
94 required in s. 468.529.
95 Section 5. This act shall take effect July 1, 2021, and
96 applies to contracts entered into or renewed on or after that
97 date.
98
99
100
101 -----------------------------------------------------
102 T I T L E A M E N D M E N T
103 Remove everything before the enacting clause and insert:
104 A bill to be entitled
105 An act relating to workers’ compensation insurance for employee
106 leasing companies; amending s. 440.10, F.S.; specifying when a
107 subcontractor who engages in public or private construction must
108 maintain compensation for his or her employees; amending s.
109 468.525, F.S.; providing that if an employee leasing company’s
110 client company is a subcontractor, workers’ compensation
111 insurance requirements are not satisfied by the employee leasing
112 arrangement unless certain conditions are met; amending s.
113 468.529, F.S.; specifying when a person is deemed an employee of
114 an employee leasing company for workers’ compensation insurance;
115 requiring that an employee leasing company provide written
116 notice of intent to terminate an employee leasing arrangement
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1305 (2021)
Amendment No. 1
117 with a client company who is a subcontractor engaged in the
118 construction industry; reenacting s. 468.531(1)(g), F.S.,
119 relating to discipline, to incorporate the amendment made to s.
120 468.529, F.S., in a reference thereto; providing an effective
121 date.
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HB 1593
HOUSE OF REPRESENTATIVES LOCAL BILL STAFF ANALYSIS
BILL #: HB 1593 Seminole County
SPONSOR(S): Smith, D.
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Local Administration & Veterans Affairs 18 Y, 0 N Darden Miller
Subcommittee
2) Insurance & Banking Subcommittee Fortenberry Luczynski
3) State Affairs Committee
SUMMARY ANALYSIS
Cemeteries in Florida are regulated under ch. 497, the ““Florida Funeral, Cemetery, and Consumer Services
Act.” A person may not operate a cemetery without obtaining a license from the Department of Financial
Services (DFS). An applicant for a cemetery license must meet certain requirements concerning the size and
location of the cemetery, as well as financial criteria. A cemetery may be exempt from licensure if owned by a
religious institution, community and non-profit association, county, municipality, or fraternal organization,
subject to certain criteria, or is a family cemetery of less than two acres.
The bill provides that the provisions of ch. 497, F.S., as well as rules adopted by DFS pursuant to that chapter,
do not apply to cemeteries of three acres or less that are located in the unincorporated area of Seminole
County and do not sell burial spaces or burial merchandise.
According to House Rule 5.5(b), a local bill providing an exemption from general law may not be placed
on the Special Order Calendar for expedited consideration. Since this bill creates an exemption to
general law, the provisions of House Rule 5.5(b) apply.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h1593b.IBS
DATE: 3/19/2021
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Cemetery Regulation
Cemeteries in Florida are regulated pursuant to the ““Florida Funeral, Cemetery, and Consumer
Services Act.”1 A person may not operate a cemetery without obtaining a license from the Department
of Financial Services (DFS).2 An applicant for a license to operate a cemetery (applicant) must be a
corporation, partnership, or limited liability company and must provide the following information, using
forms and procedures prescribed by rules adopted by DFS:
The name, principal place of business, date of formation, and federal tax identification number
of the applicant;
Historical sketches and audited or unaudited financial statements concerning the applicant and
each principal of the applicant;
Any and all names under which the cemetery may do business if licensed, if different from the
applicant's name;
The exact location of the proposed cemetery;
The exact number of acres of the proposed cemetery, including a minimum of 30 contiguous
acres;
A description of the proposed financial structure of the cemetery;
A legal description of the cemetery;
Maps or surveys of the proposed cemetery, and maps showing the location of the proposed
cemetery in the local area, prepared by a licensed Florida professional surveyor; and
A description of the development plans for the proposed cemetery.3
Applicants must have a net worth of at least $50,000, disclose any criminal history and disciplinary
proceedings against a professional license, submit fingerprints, and demonstrate by clear and
convincing evidence that the applicant has the ability, experience, financial stability, and integrity to
operate a cemetery.4
If DFS finds an applicant meets the above qualifications, then DFS may issue a license if the applicant:
Establishes a care and maintenance trust fund of at least $50,000 that is certified by a trust
company, state or national bank holding trust powers, or a savings and loan association holding
trust powers;
Files an opinion or certification from a Florida attorney in good standing, or a Florida title
company, that the applicant holds unencumbered fee simple title to all land identified in the
application;
Obtains approval from local zoning authorities, or if no approval by local zoning authorities is
required, obtains approval of residents adjacent to the proposed cemetery;
Designates a general manager of the cemetery who has at least three years of cemetery
management experience, has the ability to operate a cemetery, and is a person of integrity;
Has developed at least two acres for use as burial space, including a paved road from a public
roadway to the developed section; and
Files a notice, signed by a licensed Florida attorney, in the public records of the county that
states the land identified in the cemetery application may not be sold, conveyed, leased,
mortgaged, or encumbered without the prior written approval of DFS.5
1 S. 497.001, F.S.
2 S. 497.263(1), F.S.
3 S. 497.263(2)(a)-(g), (i)-(l), F.S.
4 S. 497.263(2)(h), (m)-(p), F.S.
5 S. 497.263(3), FS.
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DATE: 3/19/2021
A cemetery license is not transferable or assignable, but control of a cemetery may be transferred,
subject to approval by DFS, to another person or entity who meets the qualifications for licensure.6
The cemetery owner is responsible for ensuring the grounds, structures, and other improvements of the
cemetery are well cared for and maintained in a proper and dignified condition.7 DFS may adopt rules
defining differing levels of care or maintenance based on industry practices, economic and physical
feasibility, location, or intended uses.
The laws regarding cemetery licenses and the related rules regarding care and maintenance of
cemeteries do not apply to cemeteries that are:
Religious institution cemeteries, if the cemetery is less than five acres and provides only single-
level ground burial or if the cemetery was owned and operated or dedicated prior to June 23,
1976;
County or municipal cemeteries;
Community and non-profit association cemeteries, if the cemetery provides only single-level
ground burial and does not sell burial spaces or burial merchandise;
Cemeteries beneficially owned and operated since July 1, 1915, by a fraternal organization or
its corporate agent;
A columbarium8 of less than one-half acres, or a mausoleum9 of less than 2 acres, that is
owned by and immediately contiguous to an existing religious institution facility and subject to
local government zoning;10
A columbarium of less than five acres located on the main campus of a state university;11 or
Family cemeteries of less than two acres that do not sell burial spaces or burial merchandise.12
However, all cemeteries, including those not subject to licensure requirements, must maintain burial
records, abide by anti-discrimination provisions, follow DFS rules concerning solicitations, and allow
purchasers of grave space to record those purchases with the clerk of the circuit court in the county
where the grave space is located.13 All cemeteries are prohibited from requiring the purchase of a
monument as a condition of purchasing a grave space and from charging a fee for the installation of a
monument purchased from and installed by a person or firm other than the cemetery or its agents.14 A
county or municipality may take action to provide for the maintenance and security of any cemetery
within its boundaries that has been abandoned or not reasonably maintained for a period of six months
or more.15
Effect of Proposed Changes
The bill provides that the provisions of ch. 497, F.S., as well as rules adopted by DFS pursuant to that
chapter, do not apply to cemeteries of three acres or less that are located in the unincorporated area of
Seminole County and do not sell burial spaces or burial merchandise.
B. SECTION DIRECTORY:
Section 1: Creates an exception to ch. 497, F.S. for cemeteries of three acres or less that are
located in unincorporated Seminole County and do not sell burial spaces or burial
merchandise.
6 S. 497.264, F.S.
7 S. 497.262, F.S.
8 A “columbarium” is a structure or building that is substantially exposed above the ground and that is intended to be used
for the inurnment of cremated remains. See s. 497.005(18), F.S.
9 A “mausoleum” is a structure or building that is substantially exposed above the ground and that is intended to be used
for the entombment of human remains. See s. 497.005(46), F.S.
10 Ss. 497.260(1)(f) and (h), F.S. The religious institution must ensure the columbarium or mausoleum is perpetually kept and
maintained in a manner consistent with the intent of ch. 497, F.S.
11 See s. 1000.21(6), F.S.
12 S. 497.260(1), F.S.
13 S. 497.260(2), F.S.
14 Id.
15 Id.
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DATE: 3/19/2021
Section 2: Provides that the bill shall take effect upon becoming law.
II. NOTICE/REFERENDUM AND OTHER REQUIREMENTS
A. NOTICE PUBLISHED? Yes [x] No []
IF YES, WHEN? January 27, 2021
WHERE? The Orlando Sentinel, a daily newspaper of general circulation in Seminole
County, Florida.
B. REFERENDUM(S) REQUIRED? Yes [] No [x]
IF YES, WHEN?
C. LOCAL BILL CERTIFICATION FILED? Yes [x] No []
D. ECONOMIC IMPACT STATEMENT FILED? Yes [x] No []
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
None.
B. RULE-MAKING AUTHORITY:
The bill does not provide rulemaking authority or require executive branch rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
The bill exempts qualifying cemeteries from all provisions of ch. 497, F.S., including those otherwise
applicable to all cemeteries.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
STORAGE NAME: h1593b.IBS PAGE: 4
DATE: 3/19/2021
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 1593 2021
1 A bill to be entitled
2 An act relating to Seminole County; providing an
3 exception to general law; providing an exception for
4 specified cemeteries in the unincorporated areas of
5 Seminole County; providing an effective date.
6
7 Be It Enacted by the Legislature of the State of Florida:
8
9 Section 1. Notwithstanding any other law to the contrary,
10 the provisions of chapter 497, Florida Statues, and all rules
11 adopted pursuant thereto, do not apply to a cemetery of fewer
12 than 3 acres in size located in the unincorporated area of
13 Seminole County that does not sell burial spaces or burial
14 merchandise.
15 Section 2. This act shall take effect upon becoming a law.
Page 1 of 1
CODING: Words stricken are deletions; words underlined are additions.
hb1593-00
PCS for HB 305
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: PCS for HB 305 Insurance
SPONSOR(S): Insurance & Banking Subcommittee
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
Orig. Comm.: Insurance & Banking Subcommittee Fortenberry Luczynski
SUMMARY ANALYSIS
The bill makes several changes related to insurance:
Office of Insurance Regulation (OIR) – Authority to examine managing general agents (MGAs) – The
bill clarifies that OIR has the same authority to examine MGAs, including affiliates of insurers, as it has to
examine insurers, even if the MGA represents a single domestic insurer. It requires that each insurer
paying an affiliate shall produce information regarding fees paid to the affiliate upon request by OIR. It also
requires that all MGAs must execute contracts with the insurers that they do business with even if they
control, or are controlled by, an insurer.
Collection of property insurance claims litigation data by OIR – All insurers with a Florida certificate of
authority must file quarterly and annual reports with OIR that contain various financial data and actuarial
opinions. However, they are not required to collect or report data regarding the litigation of property
insurance claims. The bill establishes that each insurer or insurer group doing business in Florida shall file
specific data regarding litigation of personal and commercial residential property insurance claims on a
quarterly basis.
Citizens Property Insurance Corporation (Citizens) – The bill makes several changes to the operations
of, and requirements for, Citizens, the state-run property insurer:
o Revises the eligibility for residential property owners to obtain coverage from Citizens so that they
are not eligible for Citizens’ coverage if they can obtain coverage from private insurers that is less
than 20 percent greater than the premium for comparable coverage from Citizens
o Establishes that if Citizens does not buy reinsurance to cover its projected 100-year probable
maximum loss, it must still include the cost of such reinsurance in its rate calculations.
o Establishes that no employees of Citizens may receive salaries in excess of 150 percent of the
salary received by the head of OIR, with certain exceptions.
Notice of property insurance claims – Notice of hurricane or windstorm loss must be provided to a
property insurer within three years of the date of loss. Notice for all other types of property insurance claims
must be provided within five years of the date of loss. The bill changes the notice of claim deadlines in the
Insurance Code so that notice of any property insurance claim must be provided to a property insurer
within two years of the date of loss.
Presuit notice and demand requirements for property insurance claims – The bill creates new
statutory requirements for residential or commercial property suits that are not brought by an assignee,
including a ten-day presuit notice and demand, after a determination of coverage, before bringing suit
against an insurer. An insurer served with this notice must respond in writing within ten days by either
making a settlement offer or requiring participation in an appraisal or alternative dispute resolution
proceeding as provided for in the policy.
The bill has no impact on state or local government revenues or expenditures. It may have a positive direct
economic impact on the private sector.
The bill has 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: pcs0305.IBS
DATE: 3/20/2021
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Office of Insurance Regulation (OIR) – Authority to examine managing general agents (MGAs)
Background
MGAs
An MGA is a specialized type of insurance agent or broker that has underwriting authority from an
insurer.1 MGAs can perform certain functions that insurers typically handle, including binding coverage,
underwriting and pricing, agent appointments, and claims adjusting and settlement.2 An MGA may be
an affiliate of an insurer. Section 624.10(1), F.S., defines an affiliate as an entity that exercises control
over or is directly or indirectly controlled by an insurer. Under current law, MGAs must enter into
contracts with insurers with which they do business unless the MGA is a controlled or controlling person
of the insurer (i.e. an affiliate).3 These contracts must specify the division of responsibilities between
the insurer and the MGA.4
Examination of Insurers and MGAs
OIR is responsible for examining the affairs, transactions, accounts, records, and assets of each insurer
that holds a certificate of authority to transact insurance business in Florida.5 Examination authority
extends to the examination of MGAs6 unless the MGA solely represents a single domestic insurer.7
With certain exceptions, OIR must examine domestic insurers8 at least once every five years and the
exam shall cover the preceding five fiscal years.9
As part of the examination process, all persons being examined must make available to OIR the
accounts, records, documents, files, information, assets, and matters in their possession or control that
relate to the subject of the examination.10 As part of an examination, OIR reviews contracts between
insurers and MGAs, so that it can determine how much an insurer is paying its MGA and what services
the insurer is receiving for the fee it pays. However, the lack of contracts between insurers and their
affiliate MGAs sometimes makes it difficult to determine how much the insurer is paying and what
services it is receiving from the MGA.
Effect of the Bill
The bill clarifies that OIR has the same authority to examine MGAs as it has to examine insurers,
whether or not an MGA is an affiliate of an insurer. This authority applies even if the MGA solely
represents a single domestic insurer. It establishes that each insurer paying an affiliate shall produce
information regarding the fee paid to the affiliate upon request by OIR. OIR may determine whether the
fee an insurer pays to an affiliate is fair and reasonable and, in so doing, may consider the actual cost
of the services being provided in exchange for the fee. Further, the bill establishes that all MGAs must
1
IRMI, https://www.irmi.com/term/insurance-definitions/managing-general-agent (last visited Mar. 19, 2021).
2
Id.
3
S. 626.7451, F.S.
4
Id.
5
S. 624.316(1)(a), F.S.
6
Id.
7
S. 626.7452, F.S.
8
A domestic insurer is one formed under the laws of Florida. S. 624.06(1), F.S.
9
S. 624.316(2)(a), F.S. While s. 624.316(1)(a), F.S., clearly states that OIR may examine MGAs, because some MGAs are considered
affiliates of insurers, and 624.316(2)(a), F.S., does not specify that OIR may examine affiliates in the same way as insurers, OIR has
indicated that some MGAs have not been completely cooperative with the examination process.
10
S. 624.318(2), F.S.
STORAGE NAME: pcs0305.IBS PAGE: 2
DATE: 3/20/2021
execute contracts with the insurers that they do business with, even if they are MGAs that control, or
are controlled by, an insurer.
Collection of property insurance claims litigation data by OIR
Background
All insurers with a Florida certificate of authority to transact insurance business must file quarterly and
annual reports with OIR that contain various financial data and actuarial opinions.11 However, the law
does not currently specify that insurers must report data regarding the litigation of claims.
OIR recently conducted a data survey of property insurers to gather information regarding the litigation
of personal or commercial residential property insurance claims.12 In response to this survey, several
insurers indicated that they could not provide OIR with answers to questions related to litigation trends
because they did not collect the requested data as part of their claims evaluation and adjusting
process.13
Effect of the Bill
The bill establishes that each insurer or insurer group doing business in Florida must provide specific
pieces of data regarding litigation of personal and commercial residential property insurance claims to
OIR on a quarterly basis. This data includes, but is not limited to, the following information on a per
claim basis:
Type of policy;
Date, location, and type of loss;
Dates on which the claim was reported to the insurer, closed by the insurer, and reopened by
the insurer;
Whether the claimant had a public adjuster or an attorney;
Total amounts that the insurer paid for indemnity, loss adjustment expenses,14 and insured’s
attorney fees;
Whether the insured’s attorney requested that a contingency risk multiplier (CRM)15 be applied
to the attorney fees calculation and, if so, what CRM was applied.
If insurers collect and report this data, OIR and the Legislature should be able to more effectively
identify current and emerging property insurance litigation trends that may be affecting insureds’
rates.16
Citizens Property Insurance Corporation (Citizens)
Citizens is a state-created, not-for-profit, tax-exempt government entity that is an integral part of the
state, whose public purpose is to provide property insurance to those unable to find affordable
coverage in the private market.17
11
S. 624.424, F.S.
12
Report from David Altmaier, Florida Insurance Commissioner, to Chair Blaise Ingoglia, Commerce Committee, regarding cost
drivers affecting Florida’s insurance rates, p. 12 (Feb. 24, 2021).
13
Id.
14
Loss adjustment expenses are the costs associated with investigating and adjusting losses or insurance claims. IRMI,
https://www.irmi.com/term/insurance-definitions/loss-adjustment-expense (last visited Mar. 19, 2021).
15
A CRM is a multiplier applied to attorney fees that reflects the risk of attorneys accepting, on a contingency fee basis, cases that
may be difficult to win. See e.g., Joyce v. Federated Nat'l Ins. Co., 228 So. 3d 1122 (Fla. 2017).
16
Altmaier, supra, note 12, at 12.
17
S. 627.351(6)(a)1., F.S.
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DATE: 3/20/2021
Eligibility and Rates
Background
New applicants are eligible for coverage from Citizens if no private carrier will write them a policy for
premium that is less than 15 percent greater than what Citizens would offer them for comparable
coverage.18 The rate cap, also known as the “glide path,” is not closing the gap between Citizens rates
and private market rates. Instead, because of the rate cap and the increasing rates of private property
insurance, the gap is growing and making Citizens more like a competitor to private insurers than an
insurer of last resort. Annual rate increases for existing Citizens’ policyholders are capped at no more
than 10 percent for any single policy.19 It is unclear if, or how, the law allows OIR to approve a rate
reduction for Citizens.
Because Citizens’ rates are often well below those of private carriers, Citizens may be more
competitive than otherwise intended. Due to Citizens’ structure, its rates do not contain certain
elements that the rates of private insurers contain. Citizens does not pay taxes like private carriers do
and does not have the need to purchase as much reinsurance as private carriers due to higher levels of
capital and surplus.
Current law requires that Citizens make its best efforts to procure catastrophe reinsurance at
reasonable rates to cover its projected 100-year probable maximum loss.20 Due to the high cost of
reinsurance over the recent years, Citizens has determined that it is not available at reasonable rates
and has not purchased it. This lack of purchase has contributed to its rates remaining more competitive
and more consumers being eligible for coverage from Citizens.
Effect of the Bill
The bill establishes that residential property owners are not eligible for coverage from Citizens if they
can obtain coverage from private insurers that is less than 20 percent greater than the premium for
comparable coverage from Citizens.
The bill also establishes that on or after January 1, 2022, Citizens shall implement rate increases that
do not exceed the following percentages for any single policy that it issues:
Eleven percent for 2022;
Twelve percent for 2023;
Thirteen percent for 2024;
Fourteen percent for 2025;
Fifteen percent for 2026 and all subsequent years.
Additionally, the bill prohibits Citizens from filing with OIR a request for the approval of a rate reduction
at any time.
The bill clarifies that Citizens need not purchase catastrophe reinsurance to cover its projected 100-
year probable maximum loss if it is not available at reasonable rates. However, Citizens must include
the cost of this reinsurance in its rate calculations even if it does not purchase the reinsurance.
18
S. 627.351(6)(c)5.a., F.S.
19
S. 627.351(6)(n)6., F.S.
20
S. 627.351(6)(c)9., F.S. Probable maximum loss refers to the value that may be reasonably expected to be lost in a single casualty.
IRMI, https://www.irmi.com/term/insurance-definitions/probable-maximum-loss (last visited Mar. 19, 2021). If an insurer is buying
reinsurance to cover its 100-year probable maximum loss, it is purchasing reinsurance to cover the maximum loss that has a chance of
occurring once in 100 years.
STORAGE NAME: pcs0305.IBS PAGE: 4
DATE: 3/20/2021
Salaries of Citizens’ Personnel
Background
Citizens operates pursuant to a plan of operation (plan) that is approved by the Financial Services
Commission (FSC).21 Pursuant to the applicable statute, the plan may contain certain criteria regarding
Citizens’ employees.22 Additionally, the applicable statute specifies that candidates for senior
management positions with Citizens must undergo background checks, that employees must attest
annually that they do not have any conflicts of interests with their employment, and that certain
employees of Citizens are subject to ethics disclosures.23 However, neither the statute nor the plan
provide any parameters for the salaries that Citizens may pay its employees.
Effect of the Bill
The bill provides statutory guidance that Citizens can utilize in its plan to set parameters for employee
compensation. The bill establishes that no employees of Citizens may receive salaries in excess of 150
percent of the salary received by the Florida Insurance Commissioner, with certain exceptions. Anyone
employed by Citizens as of June 30, 2021, whose salary exceeds this cap may keep his or her salary,
but may not receive a raise. Anyone employed by Citizens whose salary does not exceed this cap as of
June 30, 2021, may receive a raise as long as that raise does not cause his or her salary to exceed this
cap.
Notice of Property Insurance Claims
Background
Until 2011, the Florida Insurance Code (Code)24 did not contain a time limit for giving notice of any type
of property insurance claim. Section 95.11, F.S., requires that actions on contracts be brought within
five years. Because an insurance policy is a contract, the five year statute of limitations for contract
actions generally applied to claims under insurance policies. Since a claim must have been made
before a policyholder could sue for breach of contract, and a policyholder had five years to sue for
breach of contract, the claim must have been made within five years of the date of loss.
Section 627.70132, F.S., enacted in 2011, established that notice of any hurricane or windstorm claim,
supplemental claim, or reopened claim25 under a property insurance policy must be provided to an
insurer within three years after the hurricane made landfall or the windstorm caused the covered
damage. Any claim for which notice is not given within the three-year timeframe is barred.26 The three-
year time limit for providing notice of a hurricane or windstorm claim does not affect the five-year
statute of limitations for bringing suit under s. 95.11, F.S.27 This means that while notice of a windstorm
or hurricane claim must be provided to an insurer within three years of the date of loss, suit may still be
brought for an additional two years past the notice deadline.28 The time limit for notice of all other
property insurance claims besides hurricane and windstorm claims has remained equal to the five-year
statute of limitations because statutes do not specify otherwise.
Effect of the Bill
21
S 627.351(6)(a)2., F.S. The FSC is composed of the Governor, Attorney General, Chief Financial Officer, and Commissioner of
Agriculture. S. 20.121(3), F.S.
22
S. 627.351(6)(c)3., F.S.
23
S. 627.351(6)(d), F.S.
24
The Florida Insurance Code is comprised of chapters 624-632, 634-636, 641, 642, 648, and 651, F.S.
25
S. 627.70132, F.S., defines both “supplemental claim” and “reopened claim” as “any additional claim for recovery from the insurer
for losses from the same hurricane or windstorm which the insurer has previously adjusted pursuant to the initial claim.” Because
these terms have the same definition, it is unclear why the statute uses both of them.
26
S. 627.70132, F.S.
27
Id.
28
Often, the type of suit that an insured brings against an insurer is a breach of contract suit based upon a denial of a claim.
STORAGE NAME: pcs0305.IBS PAGE: 5
DATE: 3/20/2021
The bill changes the notice of claim deadlines in the Code so that notice of any property insurance
claim, including a claim made under a property insurance policy issued by an eligible surplus lines
insusrer, must be provided to a property insurer within two years of the date of loss. It also makes
technical changes to the statute regarding alternative dispute resolution of property insurance claims so
that the changes to the notice of claim statute do not conflict with that statute.29
Presuit notice and demand requirements for property insurance claims
Background
Under existing law, within 90 days after a residential property insurer receives a notice of an initial,
reopened, or supplemental property insurance claim from a policyholder, the insurer must pay or deny
the claim or a portion of the claim, unless the failure to pay is due to circumstances beyond the
insurer’s control which reasonably prevent payment.30 In some circumstances, a claimant will hire an
attorney and file suit against an insurer before the expiration of the allotted time for the insurer to pay or
deny a claim. In contrast, as a condition precedent to bringing a third-party cause of action to
enforcement an assignment agreement against an insurer, the assignee must provide the name
insured and the assignor a written notice of intent to initiate litigation, delivered at least 10 business
days before filing suit, but not before the insurer has made a determination of coverage.31
Effect of the Bill
The bill creates a new statutory section which applies to all residential and commercial property suits
not brought by an assignee. Under that section, a claimant or claimant’s attorney must give presuit
notice of intent to initiate litigation at least ten business days prior to filing suit, but not before the insurer
has made a determination of coverage as provided for under existing law.32 The notice must include the
following information:
Insurer’s acts or omissions that give rise to the suit;
Damages in dispute;
Demand;33
Amount of reasonable and necessary attorney fees and costs incurred by the claimant.
An insurer served with a presuit notice must respond to the notice in writing within 10 business days
after receiving the notice by making a settlement offer or by requiring the claimant to participate in
appraisal or another form of alternative dispute resolution as provided for under the insurance policy.
The bill establishes that time limits for filing a suit under s. 95.11, F.S., are tolled during the ten-day
period for the insurer to respond to the presuit notice and while appraisal or alternative dispute
resolution is ongoing.
The bill requires that a court must dismiss without prejudice any claimant’s suit relating to a claim for
which presuit notice is given if the suit is commenced before the expiration of the ten-day period for the
insurer to respond. If a court dismissed a claimant’s suit under these circumstances, the claimant’s
attorney is not entitled to an award of attorney fees for services rendered before the dismissal of the
suit.
Finally, the bill establishes that presuit notice is admissible as evidence in a civil suit or an alternative
dispute resolution proceeding, does not limit the evidence of attorney fees or costs, damages, or loss,
29
S. 627.7015, F.S.
30
S. 627.70131, F.S. This statute is sometimes referred to as the “prompt pay” statute for property insurance claims.
31
An assignee is someone who receives policy rights through an assignment by a policyholder (assignor). IRMI,
https://www.irmi.com/term/insurance-definitions/assignee (last visited Mar. 19, 2021). See s. 627.7152, F.S., for presuit requirements
placed on assignees.
32
S. 627.70131, F.S.
33
The statute created by the bill defines demand as “the specific amount alleged to be owed by the insurer to the claimant under the
residential or commercial property insurance policy.”
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which may be offered at trial, and does not relieve the insured or an assignee of any other notice
required by law.
B. SECTION DIRECTORY:
Section 1. Amends s. 624.316, F.S., relating to examination of insurers.
Section 2. Amends s. 624.318, F.S., relating to conduct of examination or investigation; access to
records; correction of accounts; appraisals.
Section 3. Amends s. 624.424, F.S., relating to annual statement and other information.
Section 4. Amends s. 626.7451, F.S., relating to managing general agents; required contract
provisions.
Section 5. Amends s. 626.7452, F.S., relating to managing general agents; examination authority.
Section 6. Amends s. 627.351, F.S., relating to insurance risk reapportionment plans.
Section 7. Amends s. 627.3518, F.S., relating to Citizens Property Insurance Corporation policyholder
eligibility clearinghouse program.
Section 8. Amends s. 627.70132, F.S., relating to notice of windstorm or hurricane claim.
Section 9. Amends s. 627.7015, F.S., relating to alternative procedure for resolution for disputed
property insurance claims.
Section 10. Creates s. 627.70152, F.S., relating to suits arising under a property insurance policy.
Section 11. 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:
None
D. FISCAL COMMENTS:
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DATE: 3/20/2021
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:
The bill requires no additional rulemaking authority for OIR. While the bill requires the adoption of a
form prescribed by the FSC on which insurers will report their property insurance claims litigation data,
the Florida Insurance Code contains existing authority for the promulgation of such forms by the FSC.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
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1 A bill to be entitled
2 An act relating to insurance; amending s. 624.316,
3 F.S.; authorizing the Office of Insurance Regulation
4 to examine insurer affiliates; amending s. 624.318,
5 F.S.; requiring insurer affiliates to provide certain
6 items and information to the office during examination
7 or investigation; amending s. 624.424, F.S.; requiring
8 property insurers to include certain data regarding
9 closed claims in their quarterly reports to the
10 office; requiring insurers to provide information
11 regarding payments to affiliates upon request by the
12 office; requiring the office to consider certain costs
13 in determining whether payments made by an insurer to
14 an affiliate are fair and reasonable; amending s.
15 626.7451, F.S; requiring that managing general agents
16 enter into specified contracts with insurers even when
17 the managing general agents control, or are controlled
18 by, the insurers; amending s. 626.7452, F.S.;
19 providing that a managing general agent may be
20 examined as if it were the insurer even if the
21 managing general agent solely represents a single
22 domestic insurer; amending s. 627.351, F.S.; revising
23 a procedure that the plan of operation of Citizens
24 Property Insurance Corporation must provide; requiring
25 the corporation to include the costs of catastrophe
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26 reinsurance to its projected 100-year probable maximum
27 loss in its rate calculations even if the corporation
28 does not purchase such reinsurance; deleting obsolete
29 language relating to the corporation's rate filings;
30 requiring the corporation to annually implement a rate
31 increase that does not exceed a certain percent for
32 specified years; prohibiting the corporation from
33 seeking approval by the office for a rate reduction;
34 providing limits on salaries and salary raises of
35 current employees of the corporation and employees
36 hired by the corporation on or after a specified date;
37 amending s. 627.3518, F.S.; conforming a cross-
38 reference; amending s. 627.70132, F.S.; providing that
39 claims, supplemental claims, and reopened claims under
40 certain property insurance policies for loss or damage
41 caused by perils are barred unless notice is given
42 within a specified timeframe; revising the timeframe
43 for notice for loss or damage caused by windstorm or
44 hurricane; providing date of loss for weather-related
45 events; revising the definition of the term
46 "supplemental claim" or "reopened claim" to include
47 all perils; amending s. 627.7015, F.S.; conforming a
48 provision to changes made by the act; creating s.
49 627.70152, F.S.; providing applicability; providing
50 definitions; requiring that written notice be provided
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51 to an insurer before suit is filed under an insurance
52 policy; requiring that certain information be included
53 in the notice; requiring that notice be served within
54 specified time limits; requiring that an insurer
55 provide a response to the notice within specified
56 timeframe; providing for tolling of time if
57 appropriate; requiring an insurer to investigate,
58 review, and evaluate a dispute stated in the notice;
59 requiring an insurer to investigate each claim in the
60 notice in accordance with the Florida Insurance Code;
61 requiring a court to dismiss without prejudice a
62 claimant's suit under certain circumstances; providing
63 for evidentiary requirements regarding the notice;
64 prohibiting a court from awarding attorney fees to a
65 claimant under certain circumstances; providing an
66 effective date.
67
68 Be It Enacted by the Legislature of the State of Florida:
69
70 Section 1. Paragraph (a) of subsection (2) of section
71 624.316, Florida Statutes, is amended to read:
72 Section 624.316 Examination of insurers.—
73 (2)(a) Except as provided in paragraph (f), the office
74 may examine each insurer, including affiliates, as often as may
75 be warranted for the protection of the policyholders and in the
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76 public interest, and shall examine each domestic insurer not
77 less frequently than once every 5 years. The examination shall
78 cover the preceding 5 fiscal years of the insurer and shall be
79 commenced within 12 months after the end of the most recent
80 fiscal year being covered by the examination. The examination
81 may cover any period of the insurer's operations since the last
82 previous examination. The examination may include examination
83 of events subsequent to the end of the most recent fiscal year
84 and the events of any prior period that affect the present
85 financial condition of the insurer.
86 Section 2. Subsection (2) of section 624.318, Florida
87 Statutes, is amended to read:
88 624.318 Conduct of examination or investigation; access to
89 records; correction of accounts; appraisals.—
90 (2) Every person, including an affiliate, being examined
91 or investigated, and its officers, attorneys, employees, agents,
92 and representatives, shall make freely available to the
93 department or office or its examiners or investigators the
94 accounts, records, documents, files, information, assets, and
95 matters in their possession or control relating to the subject
96 of the examination or investigation. An agent who provides other
97 products or services or maintains customer information not
98 related to insurance must maintain records relating to insurance
99 products and transactions separately if necessary to give the
100 department or office access to such records. If records relating
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101 to the insurance transactions are maintained by an agent on
102 premises owned or operated by a third party, the agent and the
103 third party must provide access to the records by the department
104 or office.
105 Section 3. Subsection (11) of section 624.424, Florida
106 Statutes, is renumbered as subsection (12), and a new subsection
107 (11) and subsection (13) are added to that section, to read:
108 624.424 Annual statement and other information.—
109 (11) Each authorized insurer or insurer group issuing
110 personal lines or commercial lines residential property
111 insurance policies in this state shall file with the office on a
112 quarterly basis in conjunction with the statements required by
113 paragraph (1)(a) a supplemental report on an individual and
114 group basis for closed claims. The report must be on a form
115 prescribed by the commission and must include the following
116 information for each claim closed, excluding liability only
117 claims, within the reporting period in this state:
118 (a) Unique claim identification number.
119 (b) Type of policy.
120 (c) Zip code of the property where the claim occurred.
121 (d) County where the claim occurred.
122 (e) Date of loss.
123 (f) Peril or type of loss.
124 (g) Date reported to insurer.
125 (h) Initial date closed.
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126 (i) Date claim most recently reopened, if applicable.
127 (j) Most recent date closed.
128 (k) Public adjuster on the claim.
129 (l) Attorney for the claimant.
130 (m) Water mitigation firm used.
131 (n) Total indemnity paid by the insurer.
132 (o) Total loss adjustment expenses paid by the insurer.
133 (p) Amount paid for insured's attorney fees.
134 (q) Contingency fee multiplier requested to be applied to
135 the calculation of the insured's attorney fees payment, and, if
136 so, contingency risk multiplier requested.
137 (r) Contingency risk multiplier applied to the calculation
138 of the insured's attorney fees payment, and, if so, contingency
139 fee multiplier applied.
140 (s) Other information deemed necessary by the commission
141 to provide the office with the ability to track litigation and
142 claims trends occurring in the property market.
143 (13) Each insurer doing business in this state which pays
144 a fee, commission, or other financial consideration or payment
145 to any affiliate directly or indirectly is required upon request
146 to provide to the office any information the office deems
147 necessary. The fee, commission, or other financial consideration
148 or payment to any affiliate must be fair and reasonable. In
149 determining whether the fee, commission, or other financial
150 consideration or payment is fair and reasonable, the office
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151 shall consider, among other things, the actual cost of the
152 service being provided.
153 Section 4. Subsection (6) of section 626.7451, Florida
154 Statutes, is amended to read:
155 626.7451 Managing general agents; required contract
156 provisions.—No person acting in the capacity of a managing
157 general agent shall place business with an insurer unless there
158 is in force a written contract between the parties which sets
159 forth the responsibility for a particular function, specifies
160 the division of responsibilities, and contains the following
161 minimum provisions:
162 (6) The contract shall specify appropriate underwriting
163 guidelines, including:
164 (a) The maximum annual premium volume.
165 (b) The basis of the rates to be charged.
166 (c) The types of risks which may be written.
167 (d) Maximum limits of liability.
168 (e) Applicable exclusions.
169 (f) Territorial limitations.
170 (g) Policy cancellation provisions.
171 (h) The maximum policy period.
172
173 This subsection shall not apply when the managing general agent
174 is a controlled or controlling person.
175
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176 For the purposes of this section and ss. 626.7453 and 626.7454,
177 the term "controlling person" or "controlling" has the meaning
178 set forth in s. 625.012(5)(b)1., and the term "controlled
179 person" or "controlled" has the meaning set forth in s.
180 625.012(5)(b)2.
181 Section 5. Section 626.7452, Florida Statutes, is amended
182 to read:
183 Section 626.7452 Managing general agents; examination
184 authority.—The acts of the managing general agent are considered
185 to be the acts of the insurer on whose behalf it is acting. A
186 managing general agent may be examined as if it were the insurer
187 except in the case where the managing general agent solely
188 represents a single domestic insurer.
189 Section 6. Paragraphs (c) and (n) of subsection (6) of
190 section 627.351, Florida Statutes, are amended, and a new
191 paragraph (jj) is added to subsection (6) of that section, to
192 read:
193 627.351 Insurance risk apportionment plans.—
194 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
195 (c) The corporation's plan of operation:
196 1. Must provide for adoption of residential property and
197 casualty insurance policy forms and commercial residential and
198 nonresidential property insurance forms, which must be approved
199 by the office before use. The corporation shall adopt the
200 following policy forms:
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201 a. Standard personal lines policy forms that are
202 comprehensive multiperil policies providing full coverage of a
203 residential property equivalent to the coverage provided in the
204 private insurance market under an HO-3, HO-4, or HO-6 policy.
205 b. Basic personal lines policy forms that are policies
206 similar to an HO-8 policy or a dwelling fire policy that provide
207 coverage meeting the requirements of the secondary mortgage
208 market, but which is more limited than the coverage under a
209 standard policy.
210 c. Commercial lines residential and nonresidential policy
211 forms that are generally similar to the basic perils of full
212 coverage obtainable for commercial residential structures and
213 commercial nonresidential structures in the admitted voluntary
214 market.
215 d. Personal lines and commercial lines residential
216 property insurance forms that cover the peril of wind only. The
217 forms are applicable only to residential properties located in
218 areas eligible for coverage under the coastal account referred
219 to in sub-subparagraph (b)2.a.
220 e. Commercial lines nonresidential property insurance
221 forms that cover the peril of wind only. The forms are
222 applicable only to nonresidential properties located in areas
223 eligible for coverage under the coastal account referred to in
224 sub-subparagraph (b)2.a.
225 f. The corporation may adopt variations of the policy
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226 forms listed in sub-subparagraphs a.-e. which contain more
227 restrictive coverage.
228 g. Effective January 1, 2013, the corporation shall offer
229 a basic personal lines policy similar to an HO-8 policy with
230 dwelling repair based on common construction materials and
231 methods.
232 2. Must provide that the corporation adopt a program in
233 which the corporation and authorized insurers enter into quota
234 share primary insurance agreements for hurricane coverage, as
235 defined in s. 627.4025(2)(a), for eligible risks, and adopt
236 property insurance forms for eligible risks which cover the
237 peril of wind only.
238 a. As used in this subsection, the term:
239 (I) "Quota share primary insurance" means an arrangement
240 in which the primary hurricane coverage of an eligible risk is
241 provided in specified percentages by the corporation and an
242 authorized insurer. The corporation and authorized insurer are
243 each solely responsible for a specified percentage of hurricane
244 coverage of an eligible risk as set forth in a quota share
245 primary insurance agreement between the corporation and an
246 authorized insurer and the insurance contract. The
247 responsibility of the corporation or authorized insurer to pay
248 its specified percentage of hurricane losses of an eligible
249 risk, as set forth in the agreement, may not be altered by the
250 inability of the other party to pay its specified percentage of
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251 losses. Eligible risks that are provided hurricane coverage
252 through a quota share primary insurance arrangement must be
253 provided policy forms that set forth the obligations of the
254 corporation and authorized insurer under the arrangement,
255 clearly specify the percentages of quota share primary insurance
256 provided by the corporation and authorized insurer, and
257 conspicuously and clearly state that the authorized insurer and
258 the corporation may not be held responsible beyond their
259 specified percentage of coverage of hurricane losses.
260 (II) "Eligible risks" means personal lines residential and
261 commercial lines residential risks that meet the underwriting
262 criteria of the corporation and are located in areas that were
263 eligible for coverage by the Florida Windstorm Underwriting
264 Association on January 1, 2002.
265 b. The corporation may enter into quota share primary
266 insurance agreements with authorized insurers at corporation
267 coverage levels of 90 percent and 50 percent.
268 c. If the corporation determines that additional coverage
269 levels are necessary to maximize participation in quota share
270 primary insurance agreements by authorized insurers, the
271 corporation may establish additional coverage levels. However,
272 the corporation's quota share primary insurance coverage level
273 may not exceed 90 percent.
274 d. Any quota share primary insurance agreement entered
275 into between an authorized insurer and the corporation must
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276 provide for a uniform specified percentage of coverage of
277 hurricane losses, by county or territory as set forth by the
278 corporation board, for all eligible risks of the authorized
279 insurer covered under the agreement.
280 e. Any quota share primary insurance agreement entered
281 into between an authorized insurer and the corporation is
282 subject to review and approval by the office. However, such
283 agreement shall be authorized only as to insurance contracts
284 entered into between an authorized insurer and an insured who is
285 already insured by the corporation for wind coverage.
286 f. For all eligible risks covered under quota share
287 primary insurance agreements, the exposure and coverage levels
288 for both the corporation and authorized insurers shall be
289 reported by the corporation to the Florida Hurricane Catastrophe
290 Fund. For all policies of eligible risks covered under such
291 agreements, the corporation and the authorized insurer must
292 maintain complete and accurate records for the purpose of
293 exposure and loss reimbursement audits as required by fund
294 rules. The corporation and the authorized insurer shall each
295 maintain duplicate copies of policy declaration pages and
296 supporting claims documents.
297 g. The corporation board shall establish in its plan of
298 operation standards for quota share agreements which ensure that
299 there is no discriminatory application among insurers as to the
300 terms of the agreements, pricing of the agreements, incentive
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301 provisions if any, and consideration paid for servicing policies
302 or adjusting claims.
303 h. The quota share primary insurance agreement between the
304 corporation and an authorized insurer must set forth the
305 specific terms under which coverage is provided, including, but
306 not limited to, the sale and servicing of policies issued under
307 the agreement by the insurance agent of the authorized insurer
308 producing the business, the reporting of information concerning
309 eligible risks, the payment of premium to the corporation, and
310 arrangements for the adjustment and payment of hurricane claims
311 incurred on eligible risks by the claims adjuster and personnel
312 of the authorized insurer. Entering into a quota sharing
313 insurance agreement between the corporation and an authorized
314 insurer is voluntary and at the discretion of the authorized
315 insurer.
316 3. May provide that the corporation may employ or
317 otherwise contract with individuals or other entities to provide
318 administrative or professional services that may be appropriate
319 to effectuate the plan. The corporation may borrow funds by
320 issuing bonds or by incurring other indebtedness, and shall have
321 other powers reasonably necessary to effectuate the requirements
322 of this subsection, including, without limitation, the power to
323 issue bonds and incur other indebtedness in order to refinance
324 outstanding bonds or other indebtedness. The corporation may
325 seek judicial validation of its bonds or other indebtedness
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326 under chapter 75. The corporation may issue bonds or incur other
327 indebtedness, or have bonds issued on its behalf by a unit of
328 local government pursuant to subparagraph (q)2. in the absence
329 of a hurricane or other weather-related event, upon a
330 determination by the corporation, subject to approval by the
331 office, that such action would enable it to efficiently meet the
332 financial obligations of the corporation and that such
333 financings are reasonably necessary to effectuate the
334 requirements of this subsection. The corporation may take all
335 actions needed to facilitate tax-free status for such bonds or
336 indebtedness, including formation of trusts or other affiliated
337 entities. The corporation may pledge assessments, projected
338 recoveries from the Florida Hurricane Catastrophe Fund, other
339 reinsurance recoverables, policyholder surcharges and other
340 surcharges, and other funds available to the corporation as
341 security for bonds or other indebtedness. In recognition of s.
342 10, Art. I of the State Constitution, prohibiting the impairment
343 of obligations of contracts, it is the intent of the Legislature
344 that no action be taken whose purpose is to impair any bond
345 indenture or financing agreement or any revenue source committed
346 by contract to such bond or other indebtedness.
347 4. Must require that the corporation operate subject to
348 the supervision and approval of a board of governors consisting
349 of nine individuals who are residents of this state and who are
350 from different geographical areas of the state, one of whom is
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351 appointed by the Governor and serves solely to advocate on
352 behalf of the consumer. The appointment of a consumer
353 representative by the Governor is deemed to be within the scope
354 of the exemption provided in s. 112.313(7)(b) and is in addition
355 to the appointments authorized under sub-subparagraph a.
356 a. The Governor, the Chief Financial Officer, the
357 President of the Senate, and the Speaker of the House of
358 Representatives shall each appoint two members of the board. At
359 least one of the two members appointed by each appointing
360 officer must have demonstrated expertise in insurance and be
361 deemed to be within the scope of the exemption provided in s.
362 112.313(7)(b). The Chief Financial Officer shall designate one
363 of the appointees as chair. All board members serve at the
364 pleasure of the appointing officer. All members of the board are
365 subject to removal at will by the officers who appointed them.
366 All board members, including the chair, must be appointed to
367 serve for 3-year terms beginning annually on a date designated
368 by the plan. However, for the first term beginning on or after
369 July 1, 2009, each appointing officer shall appoint one member
370 of the board for a 2-year term and one member for a 3-year term.
371 A board vacancy shall be filled for the unexpired term by the
372 appointing officer. The Chief Financial Officer shall appoint a
373 technical advisory group to provide information and advice to
374 the board in connection with the board's duties under this
375 subsection. The executive director and senior managers of the
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376 corporation shall be engaged by the board and serve at the
377 pleasure of the board. Any executive director appointed on or
378 after July 1, 2006, is subject to confirmation by the Senate.
379 The executive director is responsible for employing other staff
380 as the corporation may require, subject to review and
381 concurrence by the board.
382 b. The board shall create a Market Accountability Advisory
383 Committee to assist the corporation in developing awareness of
384 its rates and its customer and agent service levels in
385 relationship to the voluntary market insurers writing similar
386 coverage.
387 (I) The members of the advisory committee consist of the
388 following 11 persons, one of whom must be elected chair by the
389 members of the committee: four representatives, one appointed by
390 the Florida Association of Insurance Agents, one by the Florida
391 Association of Insurance and Financial Advisors, one by the
392 Professional Insurance Agents of Florida, and one by the Latin
393 American Association of Insurance Agencies; three
394 representatives appointed by the insurers with the three highest
395 voluntary market share of residential property insurance
396 business in the state; one representative from the Office of
397 Insurance Regulation; one consumer appointed by the board who is
398 insured by the corporation at the time of appointment to the
399 committee; one representative appointed by the Florida
400 Association of Realtors; and one representative appointed by the
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401 Florida Bankers Association. All members shall be appointed to
402 3-year terms and may serve for consecutive terms.
403 (II) The committee shall report to the corporation at each
404 board meeting on insurance market issues which may include rates
405 and rate competition with the voluntary market; service,
406 including policy issuance, claims processing, and general
407 responsiveness to policyholders, applicants, and agents; and
408 matters relating to depopulation.
409 5. Must provide a procedure for determining the
410 eligibility of a risk for coverage, as follows:
411 a. Subject to s. 627.3517, with respect to personal lines
412 residential risks, if the risk is offered coverage from an
413 authorized insurer at the insurer's approved rate under a
414 standard policy including wind coverage or, if consistent with
415 the insurer's underwriting rules as filed with the office, a
416 basic policy including wind coverage, for a new application to
417 the corporation for coverage, the risk is not eligible for any
418 policy issued by the corporation unless the premium for coverage
419 from the authorized insurer is more than 20 15 percent greater
420 than the premium for comparable coverage from the corporation.
421 Whenever an offer of coverage for a personal lines residential
422 risk is received for a policyholder of the corporation at
423 renewal from an authorized insurer, if the offer is equal to or
424 less than the corporation's renewal premium for comparable
425 coverage, the risk is not eligible for coverage with the
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426 corporation. If the risk is not able to obtain such offer, the
427 risk is eligible for a standard policy including wind coverage
428 or a basic policy including wind coverage issued by the
429 corporation; however, if the risk could not be insured under a
430 standard policy including wind coverage regardless of market
431 conditions, the risk is eligible for a basic policy including
432 wind coverage unless rejected under subparagraph 8. However, a
433 policyholder removed from the corporation through an assumption
434 agreement remains eligible for coverage from the corporation
435 until the end of the assumption period. The corporation shall
436 determine the type of policy to be provided on the basis of
437 objective standards specified in the underwriting manual and
438 based on generally accepted underwriting practices.
439 (I) If the risk accepts an offer of coverage through the
440 market assistance plan or through a mechanism established by the
441 corporation other than a plan established by s. 627.3518, before
442 a policy is issued to the risk by the corporation or during the
443 first 30 days of coverage by the corporation, and the producing
444 agent who submitted the application to the plan or to the
445 corporation is not currently appointed by the insurer, the
446 insurer shall:
447 (A) Pay to the producing agent of record of the policy for
448 the first year, an amount that is the greater of the insurer's
449 usual and customary commission for the type of policy written or
450 a fee equal to the usual and customary commission of the
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451 corporation; or
452 (B) Offer to allow the producing agent of record of the
453 policy to continue servicing the policy for at least 1 year and
454 offer to pay the agent the greater of the insurer's or the
455 corporation's usual and customary commission for the type of
456 policy written.
457
458 If the producing agent is unwilling or unable to accept
459 appointment, the new insurer shall pay the agent in accordance
460 with sub-sub-sub-subparagraph (A).
461 (II) If the corporation enters into a contractual
462 agreement for a take-out plan, the producing agent of record of
463 the corporation policy is entitled to retain any unearned
464 commission on the policy, and the insurer shall:
465 (A) Pay to the producing agent of record, for the first
466 year, an amount that is the greater of the insurer's usual and
467 customary commission for the type of policy written or a fee
468 equal to the usual and customary commission of the corporation;
469 or
470 (B) Offer to allow the producing agent of record to
471 continue servicing the policy for at least 1 year and offer to
472 pay the agent the greater of the insurer's or the corporation's
473 usual and customary commission for the type of policy written.
474
475 If the producing agent is unwilling or unable to accept
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476 appointment, the new insurer shall pay the agent in accordance
477 with sub-sub-sub-subparagraph (A).
478 b. With respect to commercial lines residential risks, for
479 a new application to the corporation for coverage, if the risk
480 is offered coverage under a policy including wind coverage from
481 an authorized insurer at its approved rate, the risk is not
482 eligible for a policy issued by the corporation unless the
483 premium for coverage from the authorized insurer is more than 15
484 percent greater than the premium for comparable coverage from
485 the corporation. Whenever an offer of coverage for a commercial
486 lines residential risk is received for a policyholder of the
487 corporation at renewal from an authorized insurer, if the offer
488 is equal to or less than the corporation's renewal premium for
489 comparable coverage, the risk is not eligible for coverage with
490 the corporation. If the risk is not able to obtain any such
491 offer, the risk is eligible for a policy including wind coverage
492 issued by the corporation. However, a policyholder removed from
493 the corporation through an assumption agreement remains eligible
494 for coverage from the corporation until the end of the
495 assumption period.
496 (I) If the risk accepts an offer of coverage through the
497 market assistance plan or through a mechanism established by the
498 corporation other than a plan established by s. 627.3518, before
499 a policy is issued to the risk by the corporation or during the
500 first 30 days of coverage by the corporation, and the producing
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501 agent who submitted the application to the plan or the
502 corporation is not currently appointed by the insurer, the
503 insurer shall:
504 (A) Pay to the producing agent of record of the policy,
505 for the first year, an amount that is the greater of the
506 insurer's usual and customary commission for the type of policy
507 written or a fee equal to the usual and customary commission of
508 the corporation; or
509 (B) Offer to allow the producing agent of record of the
510 policy to continue servicing the policy for at least 1 year and
511 offer to pay the agent the greater of the insurer's or the
512 corporation's usual and customary commission for the type of
513 policy written.
514
515 If the producing agent is unwilling or unable to accept
516 appointment, the new insurer shall pay the agent in accordance
517 with sub-sub-sub-subparagraph (A).
518 (II) If the corporation enters into a contractual
519 agreement for a take-out plan, the producing agent of record of
520 the corporation policy is entitled to retain any unearned
521 commission on the policy, and the insurer shall:
522 (A) Pay to the producing agent of record, for the first
523 year, an amount that is the greater of the insurer's usual and
524 customary commission for the type of policy written or a fee
525 equal to the usual and customary commission of the corporation;
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526 or
527 (B) Offer to allow the producing agent of record to
528 continue servicing the policy for at least 1 year and offer to
529 pay the agent the greater of the insurer's or the corporation's
530 usual and customary commission for the type of policy written.
531
532 If the producing agent is unwilling or unable to accept
533 appointment, the new insurer shall pay the agent in accordance
534 with sub-sub-sub-subparagraph (A).
535 c. For purposes of determining comparable coverage under
536 sub-subparagraphs a. and b., the comparison must be based on
537 those forms and coverages that are reasonably comparable. The
538 corporation may rely on a determination of comparable coverage
539 and premium made by the producing agent who submits the
540 application to the corporation, made in the agent's capacity as
541 the corporation's agent. A comparison may be made solely of the
542 premium with respect to the main building or structure only on
543 the following basis: the same coverage A or other building
544 limits; the same percentage hurricane deductible that applies on
545 an annual basis or that applies to each hurricane for commercial
546 residential property; the same percentage of ordinance and law
547 coverage, if the same limit is offered by both the corporation
548 and the authorized insurer; the same mitigation credits, to the
549 extent the same types of credits are offered both by the
550 corporation and the authorized insurer; the same method for loss
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551 payment, such as replacement cost or actual cash value, if the
552 same method is offered both by the corporation and the
553 authorized insurer in accordance with underwriting rules; and
554 any other form or coverage that is reasonably comparable as
555 determined by the board. If an application is submitted to the
556 corporation for wind-only coverage in the coastal account, the
557 premium for the corporation's wind-only policy plus the premium
558 for the ex-wind policy that is offered by an authorized insurer
559 to the applicant must be compared to the premium for multiperil
560 coverage offered by an authorized insurer, subject to the
561 standards for comparison specified in this subparagraph. If the
562 corporation or the applicant requests from the authorized
563 insurer a breakdown of the premium of the offer by types of
564 coverage so that a comparison may be made by the corporation or
565 its agent and the authorized insurer refuses or is unable to
566 provide such information, the corporation may treat the offer as
567 not being an offer of coverage from an authorized insurer at the
568 insurer's approved rate.
569 6. Must include rules for classifications of risks and
570 rates.
571 7. Must provide that if premium and investment income for
572 an account attributable to a particular calendar year are in
573 excess of projected losses and expenses for the account
574 attributable to that year, such excess shall be held in surplus
575 in the account. Such surplus must be available to defray
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576 deficits in that account as to future years and used for that
577 purpose before assessing assessable insurers and assessable
578 insureds as to any calendar year.
579 8. Must provide objective criteria and procedures to be
580 uniformly applied to all applicants in determining whether an
581 individual risk is so hazardous as to be uninsurable. In making
582 this determination and in establishing the criteria and
583 procedures, the following must be considered:
584 a. Whether the likelihood of a loss for the individual
585 risk is substantially higher than for other risks of the same
586 class; and
587 b. Whether the uncertainty associated with the individual
588 risk is such that an appropriate premium cannot be determined.
589
590 The acceptance or rejection of a risk by the corporation shall
591 be construed as the private placement of insurance, and the
592 provisions of chapter 120 do not apply.
593 9. Must provide that the corporation make its best efforts
594 to procure catastrophe reinsurance at reasonable rates, to cover
595 its projected 100-year probable maximum loss as determined by
596 the board of governors. If catastrophe reinsurance is not
597 available at reasonable rates, the corporation need not purchase
598 it, but the corporation shall include the costs of reinsurance
599 to cover its projected 100-year probable maximum loss in its
600 rate calculations even if it does not purchase catastrophe
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601 reinsurance.
602 10. The policies issued by the corporation must provide
603 that if the corporation or the market assistance plan obtains an
604 offer from an authorized insurer to cover the risk at its
605 approved rates, the risk is no longer eligible for renewal
606 through the corporation, except as otherwise provided in this
607 subsection.
608 11. Corporation policies and applications must include a
609 notice that the corporation policy could, under this section, be
610 replaced with a policy issued by an authorized insurer which
611 does not provide coverage identical to the coverage provided by
612 the corporation. The notice must also specify that acceptance of
613 corporation coverage creates a conclusive presumption that the
614 applicant or policyholder is aware of this potential.
615 12. May establish, subject to approval by the office,
616 different eligibility requirements and operational procedures
617 for any line or type of coverage for any specified county or
618 area if the board determines that such changes are justified due
619 to the voluntary market being sufficiently stable and
620 competitive in such area or for such line or type of coverage
621 and that consumers who, in good faith, are unable to obtain
622 insurance through the voluntary market through ordinary methods
623 continue to have access to coverage from the corporation. If
624 coverage is sought in connection with a real property transfer,
625 the requirements and procedures may not provide an effective
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626 date of coverage later than the date of the closing of the
627 transfer as established by the transferor, the transferee, and,
628 if applicable, the lender.
629 13. Must provide that, with respect to the coastal
630 account, any assessable insurer with a surplus as to
631 policyholders of $25 million or less writing 25 percent or more
632 of its total countrywide property insurance premiums in this
633 state may petition the office, within the first 90 days of each
634 calendar year, to qualify as a limited apportionment company. A
635 regular assessment levied by the corporation on a limited
636 apportionment company for a deficit incurred by the corporation
637 for the coastal account may be paid to the corporation on a
638 monthly basis as the assessments are collected by the limited
639 apportionment company from its insureds, but a limited
640 apportionment company must begin collecting the regular
641 assessments not later than 90 days after the regular assessments
642 are levied by the corporation, and the regular assessments must
643 be paid in full within 15 months after being levied by the
644 corporation. A limited apportionment company shall collect from
645 its policyholders any emergency assessment imposed under sub-
646 subparagraph (b)3.d. The plan must provide that, if the office
647 determines that any regular assessment will result in an
648 impairment of the surplus of a limited apportionment company,
649 the office may direct that all or part of such assessment be
650 deferred as provided in subparagraph (q)4. However, an emergency
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651 assessment to be collected from policyholders under sub-
652 subparagraph (b)3.d. may not be limited or deferred.
653 14. Must provide that the corporation appoint as its
654 licensed agents only those agents who throughout such
655 appointments also hold an appointment as defined in s. 626.015
656 by an insurer who is authorized to write and is actually writing
657 or renewing personal lines residential property coverage,
658 commercial residential property coverage, or commercial
659 nonresidential property coverage within the state.
660 15. Must provide a premium payment plan option to its
661 policyholders which, at a minimum, allows for quarterly and
662 semiannual payment of premiums. A monthly payment plan may, but
663 is not required to, be offered.
664 16. Must limit coverage on mobile homes or manufactured
665 homes built before 1994 to actual cash value of the dwelling
666 rather than replacement costs of the dwelling.
667 17. Must provide coverage for manufactured or mobile home
668 dwellings. Such coverage must also include the following
669 attached structures:
670 a. Screened enclosures that are aluminum framed or
671 screened enclosures that are not covered by the same or
672 substantially the same materials as those of the primary
673 dwelling;
674 b. Carports that are aluminum or carports that are not
675 covered by the same or substantially the same materials as those
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676 of the primary dwelling; and
677 c. Patios that have a roof covering that is constructed of
678 materials that are not the same or substantially the same
679 materials as those of the primary dwelling.
680
681 The corporation shall make available a policy for mobile homes
682 or manufactured homes for a minimum insured value of at least
683 $3,000.
684 18. May provide such limits of coverage as the board
685 determines, consistent with the requirements of this subsection.
686 19. May require commercial property to meet specified
687 hurricane mitigation construction features as a condition of
688 eligibility for coverage.
689 20. Must provide that new or renewal policies issued by
690 the corporation on or after January 1, 2012, which cover
691 sinkhole loss do not include coverage for any loss to
692 appurtenant structures, driveways, sidewalks, decks, or patios
693 that are directly or indirectly caused by sinkhole activity. The
694 corporation shall exclude such coverage using a notice of
695 coverage change, which may be included with the policy renewal,
696 and not by issuance of a notice of nonrenewal of the excluded
697 coverage upon renewal of the current policy.
698 21. As of January 1, 2012, must require that the agent
699 obtain from an applicant for coverage from the corporation an
700 acknowledgment signed by the applicant, which includes, at a
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701 minimum, the following statement:
702
703 ACKNOWLEDGMENT OF POTENTIAL SURCHARGE
704 AND ASSESSMENT LIABILITY:
705
706 1. AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE
707 CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A
708 DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON,
709 MY POLICY COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND
710 PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF THE
711 POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH AS 45 PERCENT
712 OF MY PREMIUM, OR A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA
713 LEGISLATURE.
714 2. I UNDERSTAND THAT I CAN AVOID THE CITIZENS POLICYHOLDER
715 SURCHARGE, WHICH COULD BE AS HIGH AS 45 PERCENT OF MY PREMIUM,
716 BY OBTAINING COVERAGE FROM A PRIVATE MARKET INSURER AND THAT TO
717 BE ELIGIBLE FOR COVERAGE BY CITIZENS, I MUST FIRST TRY TO OBTAIN
718 PRIVATE MARKET COVERAGE BEFORE APPLYING FOR OR RENEWING COVERAGE
719 WITH CITIZENS. I UNDERSTAND THAT PRIVATE MARKET INSURANCE RATES
720 ARE REGULATED AND APPROVED BY THE STATE.
721 3. I UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY
722 ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER
723 INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE
724 FLORIDA LEGISLATURE.
725 4. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE
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726 CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE
727 STATE OF FLORIDA.
728
729 a. The corporation shall maintain, in electronic format or
730 otherwise, a copy of the applicant's signed acknowledgment and
731 provide a copy of the statement to the policyholder as part of
732 the first renewal after the effective date of this subparagraph.
733 b. The signed acknowledgment form creates a conclusive
734 presumption that the policyholder understood and accepted his or
735 her potential surcharge and assessment liability as a
736 policyholder of the corporation.
737 (n)1. Rates for coverage provided by the corporation must
738 be actuarially sound and subject to s. 627.062, except as
739 otherwise provided in this paragraph. The corporation shall file
740 its recommended rates with the office at least annually. The
741 corporation shall provide any additional information regarding
742 the rates which the office requires. The office shall consider
743 the recommendations of the board and issue a final order
744 establishing the rates for the corporation within 45 days after
745 the recommended rates are filed. The corporation may not pursue
746 an administrative challenge or judicial review of the final
747 order of the office.
748 2. In addition to the rates otherwise determined pursuant
749 to this paragraph, the corporation shall impose and collect an
750 amount equal to the premium tax provided in s. 624.509 to
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751 augment the financial resources of the corporation.
752 3. After the public hurricane loss-projection model under
753 s. 627.06281 has been found to be accurate and reliable by the
754 Florida Commission on Hurricane Loss Projection Methodology, the
755 model shall be considered when establishing the windstorm
756 portion of the corporation's rates. The corporation may use the
757 public model results in combination with the results of private
758 models to calculate rates for the windstorm portion of the
759 corporation's rates. This subparagraph does not require or allow
760 the corporation to adopt rates lower than the rates otherwise
761 required or allowed by this paragraph.
762 4. The rate filings for the corporation which were
763 approved by the office and took effect January 1, 2007, are
764 rescinded, except for those rates that were lowered. As soon as
765 possible, the corporation shall begin using the lower rates that
766 were in effect on December 31, 2006, and provide refunds to
767 policyholders who paid higher rates as a result of that rate
768 filing. The rates in effect on December 31, 2006, remain in
769 effect for the 2007 and 2008 calendar years except for any rate
770 change that results in a lower rate. The next rate change that
771 may increase rates shall take effect pursuant to a new rate
772 filing recommended by the corporation and established by the
773 office, subject to this paragraph.
774 4.5. Beginning on July 15, 2009, and annually thereafter,
775 The corporation must make a recommended actuarially sound rate
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776 filing for each personal and commercial line of business it
777 writes, to be effective no earlier than January 1, 2010.
778 5.6. Beginning on or after January 1, 2010, and
779 Notwithstanding the board's recommended rates and the office's
780 final order regarding the corporation's filed rates under
781 subparagraph 1., the corporation shall annually implement a rate
782 increase which, except for sinkhole coverage, does not exceed
783 the following 10 percent for any single policy issued by the
784 corporation, excluding coverage changes and surcharges:
785 a. Eleven percent for 2022.
786 b. Twelve percent for 2023.
787 c. Thirteen percent for 2024.
788 d. Fourteen percent for 2025.
789 e. Fifteen percent for 2026 and all subsequent years.
790 6. At no time may the corporation file for approval by the
791 office for a rate reduction.
792 7. The corporation may also implement an increase to
793 reflect the effect on the corporation of the cash buildup factor
794 pursuant to s. 215.555(5)(b).
795 8. The corporation's implementation of rates as prescribed
796 in subparagraph 6. shall cease for any line of business written
797 by the corporation upon the corporation's implementation of
798 actuarially sound rates. Thereafter, the corporation shall
799 annually make a recommended actuarially sound rate filing for
800 each commercial and personal line of business the corporation
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801 writes.
802 (jj) An employee of the corporation may not receive an
803 annual salary, whether base pay or base pay combined with any
804 bonus or incentive payments, in excess of 150 percent of the
805 annual salary paid to the head of the office, subject to the
806 following:
807 1. Anyone employed by the corporation as of June 30, 2021,
808 whose salary exceeds the salary limits in this paragraph may
809 retain his or her current salary but may not receive a raise.
810 2. Anyone employed by the corporation as of June 30, 2021,
811 whose salary does not exceed the salary limits in this paragraph
812 may receive a raise such that his or her salary does not exceed
813 the salary limits in this paragraph.
814 3. Anyone hired by the corporation on or after July 1,
815 2021, is subject to the salary limits in this paragraph.
816 Section 7. Subsection (5) of section 627.3518, Florida
817 Statutes, is amended to read:
818 627.3518 Citizens Property Insurance Corporation
819 policyholder eligibility clearinghouse program.—The purpose of
820 this section is to provide a framework for the corporation to
821 implement a clearinghouse program by January 1, 2014.
822 (5) Notwithstanding s. 627.3517, any applicant for new
823 coverage from the corporation is not eligible for coverage from
824 the corporation if provided an offer of coverage from an
825 authorized insurer through the program at a premium that is at
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826 or below the eligibility threshold established in s.
827 627.351(6)(c)5.a. Whenever an offer of coverage for a personal
828 lines risk is received for a policyholder of the corporation at
829 renewal from an authorized insurer through the program, if the
830 offer is equal to or less than the corporation's renewal premium
831 for comparable coverage, the risk is not eligible for coverage
832 with the corporation. In the event an offer of coverage for a
833 new applicant is received from an authorized insurer through the
834 program, and the premium offered exceeds the eligibility
835 threshold contained in s. 627.351(6)(c)5.a., the applicant or
836 insured may elect to accept such coverage, or may elect to
837 accept or continue coverage with the corporation. In the event
838 an offer of coverage for a personal lines risk is received from
839 an authorized insurer at renewal through the program, and the
840 premium offered is more than the corporation's renewal premium
841 for comparable coverage, the insured may elect to accept such
842 coverage, or may elect to accept or continue coverage with the
843 corporation. Section 627.351(6)(c)5.a.(I) does not apply to an
844 offer of coverage from an authorized insurer obtained through
845 the program. An applicant for coverage from the corporation who
846 was declared ineligible for coverage at renewal by the
847 corporation in the previous 36 months due to an offer of
848 coverage pursuant to this subsection shall be considered a
849 renewal under this section if the corporation determines that
850 the authorized insurer making the offer of coverage pursuant to
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851 this subsection continues to insure the applicant and increased
852 the rate on the policy in excess of the increase allowed for the
853 corporation under s. 627.351(6)(n)5. s. 627.351(6)(n)6.
854 Section 8. Section 627.70132, Florida Statutes, is amended
855 to read:
856 627.70132 Notice of property insurance windstorm or
857 hurricane claim.—A claim, supplemental claim, or reopened claim
858 under an insurance policy that provides property insurance, as
859 defined in s. 624.604, including a property insurance policy
860 issued by an eligible surplus lines insurer, for loss or damage
861 caused by any the peril of windstorm or hurricane is barred
862 unless notice of the claim, supplemental claim, or reopened
863 claim was given to the insurer in accordance with the terms of
864 the policy within 2 3 years after the date of loss hurricane
865 first made landfall or the windstorm caused the covered damage.
866 For claims resulting from hurricanes, tornadoes, windstorms,
867 severe rain, or other weather-related events that are tracked by
868 weather services and media, the date of loss is the date that
869 the hurricane made landfall, or the tornado, windstorm, severe
870 rain, or other weather-related event is verified by the National
871 Oceanic and Atmospheric Administration or another disinterested
872 verifiable third party to have occurred, in the location of the
873 property that is the subject of the claim. For purposes of this
874 section, the term "supplemental claim" or "reopened claim" means
875 any additional claim for recovery from the insurer for losses
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876 from the same peril hurricane or windstorm which the insurer has
877 previously adjusted pursuant to the initial claim. This section
878 does not affect any applicable limitation on civil actions
879 provided in s. 95.11 for claims, supplemental claims, or
880 reopened claims timely filed under this section.
881 Section 9. Paragraph (e) of subsection (9) of section
882 627.7015, Florida Statutes, is amended to read:
883 627.7015 Alternative procedure for resolution of disputed
884 property insurance claims.—
885 (9) For purposes of this section, the term "claim" refers
886 to any dispute between an insurer and a policyholder relating to
887 a material issue of fact other than a dispute:
888 (e) With respect to a windstorm or hurricane loss that
889 does not comply with s. 627.70132.
890 Section 10. Section 627.70152, Florida Statutes, is
891 created to read:
892 627.70152 Suits arising under a property insurance
893 policy.—
894 (1) APPLICATION.—This section applies to all residential
895 or commercial property suits not brought by an assignee.
896 (2) DEFINITIONS.—As used in this section, the term:
897 (a) "Claimant" means an insured who is filing suit under a
898 residential or commercial property insurance policy.
899 (b) "Demand" means the specific amount alleged to be owed
900 by the insurer to the claimant under the residential or
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901 commercial property insurance policy.
902 (c) "Notice" means claimant presuit notice.
903 (3) NOTICE.—
904 (a) As a condition precedent to filing a suit under a
905 property insurance policy, a claimant or the claimant's attorney
906 must provide the insurer with a written notice of intent to
907 initiate litigation before filing suit under the policy. Such
908 notice must be served by certified mail, return receipt
909 requested, or electronic delivery at least 10 business days
910 before filing suit, but may not be served before the insurer has
911 made a determination of coverage under s. 627.70131. The notice
912 must specify all of the following:
913 1. That the notice is being provided pursuant to this
914 section.
915 2. The alleged acts or omissions of the insurer giving
916 rise to the suit.
917 3. The damages in dispute.
918 4. The demand.
919 5. The amount of reasonable and necessary attorney fees
920 and costs incurred by the claimant, to be calculated by
921 multiplying the number of hours actually worked on the claim as
922 of the date of the notice by the claimant's attorney by a
923 reasonable hourly rate.
924 6. If provided by an attorney or other representative,
925 that a copy of the notice was provided to the claimant.
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926
927 Documentation to support the information provided in this
928 paragraph may be provided along with the notice to the insurer.
929 (b) A notice of intent to initiate litigation must be
930 served within the time limits provided in s. 95.11. However, the
931 notice is not required if the suit is a counterclaim. Service of
932 a notice tolls the time limits provided in s. 95.11 for 10 days
933 if such time limits will expire before the end of the 10-day
934 notice period.
935 (c) An insurer must respond in writing to the notice
936 within 10 business days after receiving the notice specified in
937 paragraph (a) by making a settlement offer or requiring the
938 claimant to participate in appraisal or another method of
939 alternative dispute resolution under the policy. The time limits
940 provided in s. 95.11 are tolled as long as appraisal or other
941 alternative dispute resolution is ongoing. An insurer must have
942 a procedure for the prompt investigation, review, and evaluation
943 of the dispute stated in the notice and must investigate each
944 claim contained in the notice in accordance with the Florida
945 Insurance Code.
946 (d) A court must dismiss without prejudice any claimant's
947 suit relating to a claim for which a notice of intent to
948 initiate litigation is given as required by this subsection if
949 such suit is commenced before the expiration of the 10-day
950 notice period.
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PCS for HB 305
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 305 2021
951 (4) ADMISSIBILITY OF NOTICE AND RESPONSE.—The notice
952 provided pursuant to subsection (3) and, if applicable, the
953 documentation to support the information provided pursuant to
954 paragraph (3)(a):
955 (a) Are admissible as evidence in a civil suit or an
956 alternative dispute resolution proceeding relating to the claim
957 for which the notice is given.
958 (b) Do not limit the evidence of attorney fees or costs,
959 damages, or loss which may be offered at trial.
960 (c) Do not relieve any obligation that an insured or
961 assignee has to give notice under any other provision of law.
962 (5) ATTORNEY FEES.—If a court dismisses a claimant's suit
963 pursuant to paragraph (3)(d), the court may not award to the
964 claimant any incurred attorney fees for services rendered before
965 the dismissal of the suit.
966 Section 11. This act shall take effect July 1, 2021.
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PCS for HB 305
INSURANCE & BANKING SUBCOMMITTEE
PCS for HB 305 by Rep. Rommel
Insurance
AMENDMENT SUMMARY
March 23, 2021
Amendment 1 by Rep. Rommel (Lines 69 and 188): The amendment creates a statutory
framework for addressing certain property insurance practices by contractors, public adjusters,
public adjuster apprentices, and those acting on their behalf, as follows:
• Establishes that no contractor, including a general, building, residential, or roofing
contractor, or someone acting on the contractor’s behalf may:
o Solicit a residential property owner to file an insurance claim.
o Offer an incentive to a residential homeowner for allowing the inspection of the
residential property owner’s roof or for making an insurance claim for roof
damage.
o Offer or accept any compensation or reward for referral of services for which
property insurance proceeds are payable.
o Interpret policy provisions, advise an insured about policy provisions, or adjust
claims on behalf of an insured unless licensed as a public adjuster.
o Provide an insured with an agreement authorizing repairs without providing a
good faith estimate of the cost of the repairs.
• Establishes that a contractor may not enter into a contract with a residential property
owner to repair or replace a roof without including notice that the contractor is prohibited
from engaging in certain acts.
• Establishes that a public adjuster, public adjuster apprentice, or those acting on their
behalf may not:
o Offer an incentive to a residential homeowner for allowing the inspection of the
residential property owner’s roof or for making an insurance claim for roof
damage.
o Offer or receive any compensation or reward for referral of any services for
which property insurance proceeds would be used for roofing repairs or
replacement.
• Provides that any contractor, public adjuster, public adjuster apprentice, or person
acting on their behalf may be subject to a fine of $10,000 per violation for each of the
statutory prohibitions.
• Provides that any unlicensed person who engages in the prohibited acts shall be guilty
of unlicensed contracting or public adjusting, as applicable, and is subject to a fine of
$10,000 per violation for each of the statutory prohibitions.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for HB 305 (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 Rommel offered the following:
4
5 Amendment (with title amendment)
6 Between lines 69 and 70, insert:
7 Section 489.147, Florida Statutes, is created to read:
8 489.147 Prohibited property insurance practices.—
9 (1) DEFINITIONS.—As used in this section, the term:
10 (a) "Prohibited advertisement" means any written or
11 electronic communication that encourages, instructs, or induces,
12 a consumer to contact a contractor or public adjuster for the
13 purpose of making an insurance claim for roof damage. Prohibited
14 advertisements may include door hangers, business cards,
15 magnets, flyers, pamphlets, and emails.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for HB 305 (2021)
Amendment No. 1
16 (b) "Soliciting" means contacting, in person, by
17 telephone, by electronic means including email and real-time
18 communication face-to-face directed to a specific person, and by
19 delivery to, residential property owners.
20 (2) No contractor, as defined by s. 489.105, including but
21 not limited to, a general contractor, building contractor,
22 residential contractor, or roofing contractor, may directly or
23 indirectly engage in the following:
24 (a) Soliciting a residential property owner by means of a
25 prohibited advertisement.
26 (b) Offering to a residential property owner a rebate,
27 gift, gift card, cash, coupon, the waiver of any insurance
28 deductible, or any other thing of value in exchange for:
29 1. Allowing the contractor to conduct an inspection of the
30 residential property owner's roof;
31 2. Making an insurance claim for damage to the residential
32 property owner's roof.
33 (c) Offering, delivering, receiving, or accepting any
34 compensation, inducement, or reward for the referral of any
35 services for which property insurance proceeds are payable.
36 (d) Interpreting policy provisions or advising an insured
37 regarding coverages or duties under the insured's property
38 insurance policy or adjusting a property insurance claim on
39 behalf of the insured, unless the contractor holds an
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for HB 305 (2021)
Amendment No. 1
40 unencumbered license as a public adjuster pursuant to part VI of
41 chapter 626.
42 (e) Providing an insured with an agreement authorizing
43 repairs without providing a good faith estimate of the itemized
44 and detailed cost of services and materials for repairs
45 undertaken pursuant to a property insurance claim. A contractor
46 does not commit a violation of this subsection if, as a result
47 of the process of the insurer adjusting a claim, the actual cost
48 of repairs differs from the initial estimate.
49 (3) Any contractor who violates this section shall be
50 subject to disciplinary proceedings as set forth in s. 489.129.
51 A contractor may receive up to a $10,000 fine for each violation
52 of this section.
53 (4) For the purposes of this section:
54 (a) The actions of any person acting on behalf of a
55 contractor, including a compensated employee or a nonemployee
56 who is compensated for soliciting as defined in this section,
57 shall be considered the actions of the contractor.
58 (b) Any person who engages in the actions prohibited by
59 this section, but is not a contractor as defined in s. 489.105,
60 is guilty of unlicensed contracting and shall be subject to the
61 penalties set forth in s. 489.13. Notwithstanding s. 489.13(3),
62 an unlicensed person who violates this section may be fined up
63 to $10,000 for each violation.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for HB 305 (2021)
Amendment No. 1
64 (5) A contractor is prohibited from executing a contract
65 related with a residential property owner to repair or replace a
66 roof without including notice that the contractor is prohibited
67 from engaging in the conduct set forth in paragraph (2)(b) of
68 this section. If the contractor fails to include such notice,
69 the residential property owner may void the contract within 10
70 days of executing it.
71 Between lines 188 and 189, insert:
72 Subsection (20) of section 626.854, Florida Statutes, is
73 created to read:
74 626.854 "Public adjuster" defined; prohibitions.—
75 The legislature finds that it is necessary for the practice
76 of the public to regulate public insurance adjusters and to
77 prevent the unauthorized practice of law.
78 (20) The following acts by a public adjuster, a public
79 adjuster apprentice, or a person acting on behalf of a public
80 adjuster are prohibited and shall result in discipline as
81 applicable under chapter 626, part VI:
82 (a) Offering to a residential property owner a rebate,
83 gift, gift card, cash, coupon, the waiver of any insurance
84 deductible, or any other thing of value in exchange for:
85 1. Allowing a contractor, a public adjuster, a public
86 adjuster apprentice, or a person acting on behalf of a public
87 adjuster to conduct an inspection of the residential property
88 owner's roof;
PCS for HB 305 a1
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for HB 305 (2021)
Amendment No. 1
89 2. Making an insurance claim for damage to the residential
90 property owner's roof.
91 (b) Offering, delivering, receiving, or accepting any
92 compensation, inducement, or reward for the referral of any
93 services for which property insurance proceeds would be used for
94 roofing repairs or replacement.
95 (c) Notwithstanding the fine set forth in s. 626.8698, any
96 public adjuster or public adjuster apprentice maybe to subject
97 to a fine not to exceed $10,000 per act for a violation of this
98 subsection.
99 (d) Any person who engages in the actions prohibited by
100 this subsection and is not a public adjuster or a public
101 adjuster apprentice, or is not otherwise exempt from licensure,
102 is guilty of the unlicensed practice of public adjusting and
103 shall be:
104 1. Subject to all applicable penalties set forth in chapter
105 626, part VI.
106 2. Notwithstanding subparagraph 1, subject to a fine not
107 to exceed $10,000 per act for a violation of this section.
108
109
110 -----------------------------------------------------
111 T I T L E A M E N D M E N T
112 Remove line 2 and insert:
PCS for HB 305 a1
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for HB 305 (2021)
Amendment No. 1
113 An act relating to insurance; creating s. 489.147, F.S.;
114 providing definitions; prohibiting certain actions by
115 contractors; providing for disciplinary proceedings; providing
116 that the actions of any persons are the actions of a contractor;
117 providing that certain actions constitute unlicensed
118 contracting; prohibiting a contractor from executing a contract
119 with a residential property owner unless certain notice is
120 provided; providing that any contract executed in violation of
121 this section is voidable; amending s. 624.316,
122 Remove line 22 and insert:
123 Domestic insurer; prohibiting certain actions by a public
124 adjuster, public adjuster apprentice, and certain other persons;
125 providing that certain actions constitute unlicensed practice of
126 public adjusting; amending s. 627.351, F.S.; revising
PCS for HB 305 a1
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