Meeting Packet — Insurance & Banking Subcommittee (December 13, 2023)
Summary
A meeting packet of the Insurance & Banking Subcommittee, part of the Florida House of Representatives Commerce Committee, for Wednesday, December 13, 2023, at Morris Hall (17 HOB). The agenda lists HB 215 Risk Retention Groups by Truenow, HB 585 Access to Financial Institution Customer Accounts and HB 587 Pub. Rec./Access to Financial Institution Customer Accounts, both by Rommel, and HB 623 Home Warranty Transfers by Steele. The staff analysis of HB 215, dated 12/8/2023, states that the bill has no impact on local or state government revenues or expenditures and is effective on July 1, 2024. The packet ends with Amendment No. 1 to HB 623 and its title amendment.
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Insurance & Banking Subcommittee
Wednesday, December 13, 2023
10:30 AM - 12:30 PM
Morris Hall (17 HOB)
Meeting Packet
Paul Renner Wyman Duggan
Speaker Chair
The Florida House of Representatives
Commerce Committee
Insurance & Banking Subcommittee
Paul Renner Wyman Duggan
Speaker Chair
Meeting Agenda
Wednesday, December 13, 2023
10:30 am – 12:30 pm
Morris Hall (17 HOB)
I. Call to Order
II. Roll Call
III. Welcome and Opening Remarks
IV. Consideration of the following bill(s):
• HB 215 Risk Retention Groups by Truenow
• HB 585 Access to Financial Institution Customer Accounts by Rommel
• HB 587 Pub. Rec./Access to Financial Institution Customer Accounts by
Rommel
• HB 623 Home Warranty Transfers by Steele
V. Closing Remarks
VI. Adjournment
303 House Office Building, 402 South Monroe Street, Tallahassee, FL 32399-1300
(850) 717-4870
HB 215
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 215 Risk Retention Groups
SPONSOR(S): Truenow
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee Fortenberry Lloyd
2) Commerce Committee
SUMMARY ANALYSIS
A risk retention group (RRG) is a type of liability insurance company owned by its members. RRGs allow
businesses with similar insurance needs to pool risks and form their own insurance companies under a
combination of state and federal laws. Members of an RRG must be engaged in similar businesses or activities
that have similar exposures due to the type of business, trade, product, service, premises, or operations.
RRGs may only provide liability insurance; the law defines liability insurance as coverage for liability for
damages to persons or property arising out of any business, trade, product, professional service, premises,
operation, or activity of a state or local government.
RRGs must be domiciled in a state, but once licensed by the state of domicile, RRGs are permitted to insure
members in all states. RRGs must complete a registration process in the non-domiciliary states in which they
want to do business.
RRGs may operate in Florida if they obtain a certificate of authority as a liability insurer, or are licensed in
another state and provide a copy of their business plan and annual financial statement to the Office of
Insurance Regulation and designate the Chief Financial Officer as their agent for service of process.
Fronting is the use of a licensed, admitted insurer to issue an insurance policy on behalf of a self-insured
organization or captive insurer without transferring any risk. The risk of loss under the policy remains with the
self-insured entity or captive insurer, but the authorized insurer assumes a credit risk because it would be
required to honor the policy if the insured fails to do so. This provides proof of coverage that is needed to
satisfy financial responsibility laws when states require evidence of coverage written by an admitted insurer.
Insurers typically charge between 5 and 10 percent of the premium being written in exchange for serving as
fronting companies. Currently, an RRG cannot provide the coverage to its members in Florida that is required
to satisfy motor vehicle financial responsibility laws. Therefore, it must utilize a fronting company.
The bill provides that RRGs authorized to do business in Florida are considered insurance companies
authorized to do business in Florida. This statutory change would allow RRGs to provide coverage to their
members, including that required to prove financial responsibility under Florida motor vehicle law, without
having to utilize a fronting company.
The bill has no impact on local or state government revenues or expenditures. It has an indeterminate positive and
negative direct economic impact on the private sector.
The bill is effective on July 1, 2024.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h0215.IBS
DATE: 12/8/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Risk Retention Groups
A risk retention group (RRG) is a type of liability insurance company owned by its members. 1 RRGs
allow businesses with similar insurance needs to pool risks and form their own insurance companies
under a combination of state and federal laws.2 Members of an RRG must be engaged in similar
businesses or activities that have similar exposures due to the type of business, trade, product, service,
premises, or operations.3
RRGs may only provide liability insurance; the law defines liability insurance as coverage for liability for
damages to persons or property arising out of any business, trade, product, professional service,
premises, operation, or activity of a state or local government.4 However, liability insurance does not
include an employer’s liability to its employees; thus, risk retention groups may not issue workers’
compensation insurance policies to their members.5
Federal law treats risk retention groups differently than traditional insurance companies. Authorized
insurers must be licensed in every state in which they operate and the domicile state serves as the
primary regulator. In 1986, Congress passed the Liability Risk Retention Act (LRRA) to help businesses
and other entities obtain liability insurance that had become either unaffordable or unavailable.6 Under
the LRRA, RRGs must be domiciled in a state, but once licensed by the state of domicile, RRGs are
permitted to insure members in all states.7 As a federal law, the LRRA preempts state regulation, and
makes it easier for RRGs to do business throughout the country. 8 Those RRGs that were chartered
prior to 1985 may operate under the laws of Bermuda or the Cayman Islands.9
Despite being governed by the LRRA, RRGs must complete a registration process in the non-
domiciliary states in which they want to do business, and must designate those states’ insurance
commissioners as their agents for service of process for any legal proceedings originating in those
states.10 Additionally, RRGs must submit a plan of operation or feasibility study to the insurance
commissioner of the domiciliary state before they may offer insurance in any state.11 The plan or study
must include the coverages, deductibles, coverage limits, rates and rating classification systems for
each line of commercial liability insurance the RRG plans to cover. 12
1 National Association of Insurance Commissioners (NAIC), Risk Retention Groups, https://content.naic.org/cipr-
topics/risk-retention-groups (last visited Dec. 4, 2023).
2 Id.
3 15 U.S.C. §3901(a)(4)(F) and s. 627.942(9)(f), F.S.
4 15 U.S.C. 3901(a)(2)(A) and s. 627.942(9)(g), F.S.
5 15 U.S.C. 3901(a)(2)(B) and s. 627.942(4), F.S.
6 Captive Insurance Companies Association (CICA), Risk Retention Resources, https://www.cicaworld.com/risk-retention-
resources/#:~:text=The%20Liability%20Risk%20Retention%20Act%20(LRRA)%20is%20a% 20federal%20law,crisis%E2
%80%9D%20in%20the%20United%20States (last visited Dec. 4, 2023). The LRRA consists of sections 15 U.S.C. §§
3902-3906.
7 Id.
8 Id.
9 15 U.S.C. § 3901(a)(4) and s. 627.942(9), F.S.
10 NAIC, supra note 1.
11 Id.
12 Id.
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State regulators may also require RRGs to comply with state laws relating to claim settlement and false
or fraudulent acts, pay premium taxes, and submit to financial exams if such exam has not been
completed by the state in which the RRG is domiciled.13
States cannot require RRGs to participate in any insolvency guaranty association.14 However, states
may require notice that insurance provided by RRGs is not protected by an insolvency guaranty
association.15 Unlike authorized insurers, RRGs do not submit rate and form filings with a state
regulator for approval. Instead, risk retention groups apportion risk among their members; thus, rates
are based on an actuarial analysis of the membership and policies can be tailored to suit the needs of
the membership.16
Risk Retention Groups in Florida
RRGs may operate in Florida if they obtain a certificate of authority as a liability insurer, or are licensed
in another state and provide a copy of their business plan and annual financial statement to the Office
of Insurance Regulation (OIR) and designate the Chief Financial Officer as their agent for service of
process.17 According to OIR, 146 risk retention groups are licensed in a state other than Florida and
registered to do business in Florida.18
Domestic RRGs pay the same premium taxes as other domestic insurers.19 Risk retention groups
registered to operate in Florida but licensed in another state pay the same premium taxes as surplus
lines insurers.20 All risk retention groups operating in Florida must use agents who are licensed and
appointed in Florida.21
Fronting Arrangements
The International Risk Management Institute (IRMI) describes “fronting” as the use of a licensed,
admitted insurer to issue an insurance policy on behalf of a self-insured organization or captive insurer
without transferring any risk.22 The risk of loss under the policy remains with the self-insured entity or
captive insurer, but the authorized insurer assumes a credit risk because it would be required to honor
the policy if the insured fails to do so.23 This provides proof of coverage that is needed to satisfy
financial responsibility laws when states require evidence of coverage written by an admitted insurer.24
Insurers typically charge between 5 and 10 percent of the premium being written in exchange for
serving as fronting companies.25
The Florida Insurance Code (Code)26 describes a fronting company as an authorized insurer which by
reinsurance or otherwise generally transfers more than 50 percent to one unauthorized insurer, or more
13 15 U.S.C. § 3902(a)(1).
14 15 U.S.C. § 3902(a)(2).
15 15 U.S.C. § 3902(a)(1).
16 NAIC, supra note 1.
17 See ss. 627.943 and 627.944, F.S.
18 Florida Office of Insurance Regulation, Active Company Search, https://companysearch.myfloridacfo.gov/ (last visited
Dec. 6, 2023).
19 S. 627.943(4), F.S. Pursuant to s. 624.509, F.S., premium taxes (typically 1.75 percent of the premium) are collected by
the licensed insurer and paid to the Department of Revenue on or before March 1 of each year. A domestic insurer is one
formed under Florida law. S. 624.06(1), F.S.
20 S. 627.944(3), F.S. Pursuant to s. 626.932, F.S., premium taxes (4.94 percent of the premium) are collected by the
licensed insurance agent and paid to the Department of Financial Services on a quarterly basis; premiums are also
reported to the Florida Surplus Lines Service Office (FSLSO) which oversees the reporting requirements of eligible
surplus lines insurers.
21 Ss. 627.943(5) and 627.944(12), F.S.
22 IRMI, fronting, https://www.irmi.com/term/insurance-definitions/fronting (last visited Dec. 6, 2023).
23 Id.
24 Id. Chapter 324, F.S. sets forth the financial responsibility laws for owners and operators of motor vehicles, whether
used for personal or commercial purposes.
25 IRMI, supra note 22.
26 Chapters 624-632, 634, 635, 636, 641, 642, 648, and 651, F.S., constitute the “Florida Insurance Code.”
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than 75 percent to two or more unauthorized insurers, of the entire risk of loss on all of the insurance
written by it in Florida.27 The unauthorized insurers that receive the risk do not meet the requirements to
be an accredited or trusteed reinsurer in Florida.28 Additionally, no authorized insurer is permitted to act
as a fronting company for any unauthorized insurer which is not an approved reinsurer.29
Florida law explicitly prohibits:
An authorized insurer or licensed motor vehicle service agreement company from acting as a
fronting company for any unauthorized insurer or unlicensed motor vehicle service agreement
company.30
An authorized insurer or licensed home warranty association from acting as a fronting company
for any unauthorized insurer or unlicensed home warranty association. 31
An authorized insurer or licensed service warranty association from acting as a fronting
company for any unauthorized insurer or unlicensed service warranty association. 32
The Code does not contemplate an authorized insurer acting as a fronting company for an RRG.
Effect of the Bill
The bill provides that RRGs authorized to do business in Florida are considered insurance companies
authorized to do business in Florida. This statutory change would allow RRGs to provide directly
coverage to their members, including those that are required to prove financial responsibility under
Florida motor vehicle law, without having to utilize a fronting company.
B. SECTION DIRECTORY:
Section 1. Amends s. 627.944, F.S., relating to risk retention groups not certified in this state.
Section 2. Provides and effective date of July 1, 2024.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
27 S. 624.404(4)(b), F.S. See also s. 624.410, F.S.
28 Id.; see also s. 624.410,F.S.
29 S. 624.404(4)(a), F.S.
30 S. 634.241, F.S.
31 S. 634.326, F.S.
32 S. 634.429, F.S.
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DATE: 12/8/2023
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill will have a positive direct economic impact on private sector businesses that save money by
receiving coverage from the RRGs of which they are a member instead of having to pay a fronting
company. However, it will have a negative impact on insurers that have acted as fronting companies for
the placement of coverage by RRGs.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not Applicable. The bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill neither authorizes nor requires administrative rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 215 2024
1 A bill to be entitled
2 An act relating to risk retention groups; amending s.
3 627.944, F.S.; providing that risk retention groups
4 authorized to do business in this state are deemed to
5 be insurance companies authorized to do business in
6 this state; providing an effective date.
7
8 Be It Enacted by the Legislature of the State of Florida:
9
10 Section 1. Section 627.944, Florida Statutes, is amended
11 to read:
12 627.944 Risk retention groups not certificated in this
13 state.—Risk retention groups authorized to do business in this
14 state pursuant to this section are deemed to be insurance
15 companies authorized to do business in this state. Risk
16 retention groups certificated or licensed in states other than
17 this state and seeking to do business as a risk retention group
18 in this state must observe and abide by the laws of this state
19 as follows:
20 (1) NOTICE OF OPERATIONS AND DESIGNATION OF CHIEF
21 FINANCIAL OFFICER AS AGENT.—Before offering insurance in this
22 state, a risk retention group shall submit to the office:
23 (a) A statement identifying the state or states in which
24 the risk retention group is certificated or licensed as a
25 liability insurance company, date of certification or licensing,
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HB 215 2024
26 its principal place of business, and such other information,
27 including information on its membership, as the office may
28 require to verify that the risk retention group is qualified as
29 a risk retention group under the provisions of this part.
30 (b) A copy of its plan of operations or a feasibility
31 study and revisions of such plan or study submitted to its state
32 of domicile; provided, however, that the provision relating to
33 the submission of a plan of operation or a feasibility study
34 shall not apply with respect to any line or classification of
35 liability insurance which was defined in the Product Liability
36 Risk Retention Act of 1981 before October 27, 1986, and which
37 was offered before such date by any risk retention group which
38 had been certificated or licensed and operating for not less
39 than 3 years before such date.
40 (c) A statement of registration which designates the Chief
41 Financial Officer or her or his designee as its agent for the
42 purpose of receiving service of legal documents of process.
43 (2) FINANCIAL CONDITION.—Any risk retention group doing
44 business in this state shall submit to the office:
45 (a) A copy of the group's financial statement submitted to
46 its state of domicile, which shall be certified by an
47 independent public accountant and contain a statement of opinion
48 on loss and loss adjustment expense reserves made by a member of
49 the American Academy of Actuaries or a qualified loss reserve
50 specialist under criteria established by rule of the commission
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51 after considering any criteria established by the National
52 Association of Insurance Commissioners.
53 (b) A copy of each examination of the risk retention group
54 as certified by the insurance commissioner or public official
55 conducting the examination.
56 (c) Upon request by the office, a copy of any audit
57 performed with respect to the risk retention group.
58 (d) Such information as may be required to verify its
59 continuing qualification as a risk retention group under the
60 provisions of this part.
61 (3) TAXATION.—All premiums paid for insurance or coverages
62 on risks located within this state to a risk retention group
63 shall be subject to taxation at the same rate and subject to the
64 same interest, fines, and penalties for nonpayment as that
65 applicable to eligible surplus lines insurers. Each agent
66 utilized in any transaction shall report and pay the taxes for
67 the premiums for risks which they have placed with or on behalf
68 of a risk retention group not certificated in this state. In the
69 event that an agent fails to pay the tax, each risk retention
70 group shall pay the tax for insured or covered risks located
71 within this state. Further, each risk retention group shall
72 report all premiums paid to it for insured or covered risks
73 located within this state.
74 (4) COMPLIANCE WITH UNFAIR CLAIM SETTLEMENT PRACTICES
75 LAW.—Any risk retention group, its agents, and its
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76 representatives shall comply with the unfair claim settlement
77 practices law of this state as set forth in s. 626.9541(1)(i).
78 (5) DECEPTIVE, FALSE, OR FRAUDULENT PRACTICES.—Any risk
79 retention group shall comply with and be subject to the laws of
80 this state regarding deceptive, false, or fraudulent acts or
81 practices, including the provisions of part IX of chapter 626.
82 If the office seeks an injunction regarding conduct in violation
83 of these laws, the injunction may be obtained from any Florida
84 court of competent jurisdiction.
85 (6) EXAMINATION REGARDING FINANCIAL CONDITION.—Any risk
86 retention group must submit to an examination by the office to
87 determine its financial condition if the insurance commissioner
88 of the jurisdiction in which the group is certificated or
89 licensed has not initiated an examination or does not initiate
90 an examination within 30 days after a request by the office. Any
91 examination shall be coordinated to avoid unjustified repetition
92 and conducted in an expeditious manner.
93 (7) NOTICE TO PURCHASERS.—Any policy issued by a risk
94 retention group shall contain in 10-point type on the front page
95 and the declaration page, the following provision:
96 "Notice, this policy is issued by your risk retention group.
97 Your risk retention group may not be subject to all of the
98 insurance laws and regulations of your state. State insurance
99 insolvency guaranty funds are not available for your risk
100 retention group."
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101 (8) PROHIBITED ACTS REGARDING SOLICITATION OR SALE.—The
102 following acts by a risk retention group are hereby prohibited:
103 (a) The solicitation or sale of insurance by a risk
104 retention group to any person who is not eligible for membership
105 in the group.
106 (b) The solicitation or sale of insurance by, or operation
107 of, a risk retention group that is in a hazardous financial
108 condition or is financially impaired.
109 (9) PROHIBITED OWNERSHIP BY AN INSURANCE COMPANY. —No risk
110 retention group shall be allowed to do business in this state if
111 an insurer is directly or indirectly a member or owner of the
112 risk retention group, other than in the case of a risk retention
113 group all of whose members are insurers.
114 (10) PROHIBITED COVERAGE.—No risk retention group may
115 offer insurance coverage prohibited by the Florida Insurance
116 Code or declared unlawful by the highest court of this state.
117 (11) DELINQUENCY PROCEEDINGS.—A risk retention group not
118 domiciled in this state but doing business in this state shall
119 comply with a lawful order issued in a voluntary dissolution
120 proceeding or in a delinquency proceeding commenced by the
121 office if there has been a finding of financial impairment after
122 an examination under subsection (6).
123 (12) UTILIZATION OF AGENT.—A risk retention group shall
124 utilize an agent licensed and appointed in this state in order
125 to solicit, transact, underwrite, or provide insurance on a risk
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126 of a group member, which risk is located in this state.
127 Section 2. This act shall take effect July 1, 2024.
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INSURANCE & BANKING SUBCOMMITTEE
HB 215 by Rep. Truenow
Risk Retention Groups
AMENDMENT SUMMARY
December 13, 2023
Amendment 1 by Rep. Truenow (Strike-all): The amendment:
• Provides that motor vehicle insurance coverage issued by risk retention groups
operating under federal law, and registered to do business in the state, satisfies the
financial responsibility requirements of state motor vehicle law.
• Preserves current law regarding risk retention groups within the Florida Insurance
Code.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 215 (2024)
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 Truenow offered the following:
4
5 Amendment (with title amendment)
6 Remove everything after the enacting clause and insert:
7 Section 1. Subsection (8) of Section 324.021, Florida Statutes,
8 is amended to read:
9 324.021 Definitions; minimum insurance required.—The
10 following words and phrases when used in this chapter shall, for
11 the purpose of this chapter, have the meanings respectively
12 ascribed to them in this section, except in those instances
13 where the context clearly indicates a different meaning:
14 (8) MOTOR VEHICLE LIABILITY POLICY.—Any owner's or
15 operator's policy of liability insurance furnished as proof of
16 financial responsibility pursuant to s. 324.031, insuring such
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 215 (2024)
Amendment No. 1
17 owner or operator against loss from liability for bodily injury,
18 death, and property damage arising out of the ownership,
19 maintenance, or use of a motor vehicle in not less than the
20 limits described in subsection (7) and conforming to the
21 requirements of s. 324.151, issued by any insurance company
22 authorized to do business in this state, including but not
23 limited to, a risk retention group operating in accordance with
24 15 U.S.C. § 3901 et seq. that conducts business in this state
25 pursuant to s. 627.944. The owner, registrant, or operator of a
26 motor vehicle is exempt from providing such proof of financial
27 responsibility if he or she is a member of the United States
28 Armed Forces and is called to or on active duty outside this
29 state or the United States, or if the owner of the vehicle is
30 the dependent spouse of such active duty member and is also
31 residing with the active duty member at the place of posting of
32 such member, and the vehicle is primarily maintained at such
33 place of posting. The exemption provided by this subsection
34 applies only as long as the member of the armed forces is on
35 such active duty outside this state or the United States and the
36 owner complies with the security requirements of the state of
37 posting or any possession or territory of the United States.
38
39
40 -----------------------------------------------------
41 T I T L E A M E N D M E N T
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 215 (2024)
Amendment No. 1
42 Remove everything before the enacting clause and insert:
43 An act relating to risk retention groups; amending s. 324.021,
44 F.S.; providing that motor vehicle insurance coverage issued by
45 risk retention groups operating under federal law satisfies
46 financial responsibility requirements under state mot or vehicle
47 law; providing an effective date.
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HB 585
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 585 Access to Financial Institution Customer Accounts
SPONSOR(S): Rommel
TIED BILLS: HB 587 IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee Fletcher Lloyd
2) State Administration & Technology
Appropriations Subcommittee
3) Commerce Committee
SUMMARY ANALYSIS
The federal Bank Secrecy Act (BSA) establishes reporting, recordkeeping, and related requirements for federal
and state-chartered financial institutions to help detect and prevent money laundering. Under the BSA,
financial institutions are required to report suspicious activity that might signify money laundering, tax evasion,
or other criminal activities. These types of reports are known as “suspicious activity reports” (SARs) and are
filed with the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury.
Florida’s codification of the BSA is the Florida Control of Money-Laundering and Terrorist Financing in
Financial Institutions Act (Act). The Act requires financial institutions to submit to the Office of Financial
Regulation (OFR) certain reports and maintain certain records of customers, accounts, and transactions
involving currency or monetary instruments or suspicious activities in accordance with the policies of the BSA.
The bill requires financial institutions to file a report with OFR whenever the financial institution suspends,
terminates, or takes similar action restricting access to a customer’s or member’s account because of
suspicious activity.
In connection with the termination-of-access report, the bill also:
Requires OFR to investigate the report to determine whether the financial institution’s action was made
in bad faith;
Requires OFR to report a bad faith determination to the Department of Financial Services, the Attorney
General, and the customer or member;
Creates a private right of action for the recovery of damages against the financial institution if a bad
faith determination is made, including award of attorney fees; and
Provides that a qualified public depository’s (QPD) bad faith suspension, termination, or similar action
restricting account access is grounds for suspension or disqualification from the QPD program, as well
as grounds for the Chief Financial Officer to impose an administrative penalty on the QPD in lieu of a
suspension or disqualification.
The bill has no impact on state revenues or local government revenues and expenditures, but has an
indeterminate negative impact on state expenditures and an indeterminate positive impact on the private
sector.
The bill provides an effective date of July 1, 2024.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Financial Institutions Codes
Florida’s Financial Institutions Codes are codified under Title XXXVIII of the Florida Statutes.1 The
Financial Institutions Codes apply to all state-authorized and state-chartered financial institutions and to
the enforcement of all laws relating to state-authorized and state-chartered financial institutions.2 A
primary purpose of the Financial Institutions Codes is to provide for and promote the safe and sound
conduct of the financial services industry in Florida.3
The specific chapters under the Financial Institutions Codes are:
Ch. 655, F.S. – Financial Institutions Generally
Ch. 657, F.S. – Credit Unions
Ch. 658, F.S. – Banks and Trust Companies;
Ch. 660, F.S. – Trust Business
Ch. 662, F.S. – Family Trust Companies
Ch. 663, F.S. – International Banking
Ch. 665, F.S. – Associations
Ch. 667, F.S. – Savings Banks
Office of Financial Regulation
The Office of Financial Regulation (OFR) is the regulatory authority for Florida’s financial services
industry.4 OFR reports to the Financial Services Commission (Commission) which is made up of the
Governor and the members of the Florida Cabinet: the Chief Financial Officer (CFO), Attorney General
(AG), and Agriculture Commissioner.5 OFR enforces and administers the Financial Institutions Codes;
is responsible for supervising banks, credit unions, savings associations, and international bank
agencies; and licenses and regulates non-depository finance companies and the securities industry.6
Bank Secrecy Act
The federal Bank Secrecy Act (BSA)7 establishes reporting, recordkeeping, and related requirements
for federal and state-chartered8 financial institutions to help detect and prevent money laundering. 9
Specifically, the BSA and other anti-money laundering regulations (BSA/AML) require financial
institutions to, among other things, keep records of cash purchases of negotiable instruments and file
reports of cash transactions exceeding $10,000 (daily aggregate amount). 10
1 S. 655.005(1)(k), F.S.
2 S. 655.001(1), F.S.
3 S. 655.001(2), F.S.
4 Florida Office of Financial Regulation, About Our Agency, https://flofr.gov/sitePages/AboutOFR.htm (last visited Dec. 4,
2023).
5 Id.
6 Florida Department of Financial Services, Financial Services Commission, https://www.myfloridacfo.com/about/about -
dfs/commission (last visited Dec. 4, 2023). See also, s. 655.012, F.S.
7 31 U.S.C. § 5311 et seq.
8 See, 12 C.F.R. § 326.8 (sets forth requirements for state-chartered banks to establish and maintain procedures to
ensure and monitor their compliance with the BSA). See also, 12 C.F.R. § 353 (establishes requirements for state-
chartered banks to file a suspicious activity report under certain circumstances).
9 U.S. Treasury Financial Crimes Enforcement Network, FinCEN’s Legal Authorities,
https://www.fincen.gov/resources/fincens-legal-authorities (last visited Dec. 6, 2023).
10 Id.
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Under the BSA/AML laws, financial institutions must also:
establish effective BSA compliance programs;
establish effective customer due diligence systems and monitoring programs;
screen against Office of Foreign Assets Control lists and other government lists;
establish an effective suspicious activity monitoring and reporting process; and
develop risk-based anti-money laundering programs.11
The U.S. Office of the Comptroller of Currency regularly conducts examinations of national banks,
federal branches, federal savings associations, and agencies of foreign banks in the U.S. to determine
compliance with BSA/AML laws.12
SUSPICIOUS ACTIVITY REPORTS
In addition to the other requirements under the BSA/AML laws, financial institutions are also required to
report suspicious activity that might signify money laundering, tax evasion, or other criminal activities. 13
These types of reports are known as “suspicious activity reports” (SAR) and are filed with the Financial
Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, using
FinCEN’s BSA E-filing system.14
Under this requirement, a financial institution is required to file an SAR no later than 30 calendar days
after the date of initial detection of facts that may constitute a basis for filing an SAR. 15 For instances
where no suspect was identified on the date of the incident requiring the filing, a financial institution
may delay filing an SAR for an additional 30 calendar days to identify a suspect. 16 However, in no case
shall reporting be delayed more than 60 calendar days after the date of initial detection of a reportable
transaction.17
Florida Control of Money-Laundering and Terrorist Financing in Financial Institutions Act
The purpose of the Florida Control of Money-Laundering and Terrorist Financing in Financial
Institutions Act18 (Act), s. 655.50, F.S., is to require submission to OFR of certain reports and the
maintenance of certain records of customers, accounts, and transactions involving currency or
monetary instruments or suspicious activities if:19
such reports and records deter using financial institutions to conceal, move, or provide proceeds
obtained from or intended for criminal or terrorist activities; or
such reports and records have a high degree of usefulness in criminal, tax, or regulatory
investigations or proceedings.
The Act requires financial institutions to designate and retain a BSA/AML compliance officer, which is
defined as an officer that is responsible for the development and implementation of the financial
institution’s policies and procedures for complying with the requirements of the Act and BSA/AML
laws.20 Any change in a financial institution’s BSA/AML compliance officer must be reported to OFR. 21
11 U.S. Office of the Comptroller of the Currency, Bank Secrecy Act, https://www.occ.treas.gov/topics/supervision-and-
examination/bsa/index-bsa.html (last visited Dec. 5, 2023).
12 Id.
13 U.S. Treasury Financial Crimes Enforcement Network, supra note 9.
14 U.S. Office of the Comptroller of the Currency, Suspicious Activity Report Program,
https://www.occ.treas.gov/publications-and-resources/forms/sar-program/index-sar-program.html (last visited Dec. 5,
2023).
15 Id.
16 Id.
17 Id.
18 S. 655.50, F.S.
19 S. 655.50(2), F.S.
20 S. 655.50(4), F.S.
21 Id.
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Additionally, the Act requires financial institutions to maintain: 22
full and complete records of all financial transactions, including all records required by the
BSA/AML laws, for a minimum of 5 years;
a copy of all reports filed with OFR as required under the Act for a minimum of 5 years after
submission of the report; and
a copy of all records of exemption for each qualified business customer 23 for a minimum of 5
calendar years after termination of exempt status of such customer.
The Act also requires financial institutions to keep a record of each financial transaction which involves
currency or other monetary instrument that has a value greater than $10,000, involves the proceeds of
specified unlawful activity, or is designed to evade the reporting requirements of the Act or other state
or federal laws, or which the financial institution reasonably believes is suspicious activity.24
A financial institution, or officer, employee, or agent thereof, which files a report in good faith pursuant
to the Act is not liable to any person for loss or damage caused in whole or in part by the making, filing,
or governmental use of the report, or any information contained therein.25
OFR ENFORCEMENT
In addition to any other powers conferred by the Financial Institutions Codes, OFR may bring an action
in court to enforce or administer the Act, as well as issue and serve upon any person an order of
removal if OFR determines such person is violating, has violated, or is about to violate any provisions of
the Act or any similar state or federal law.26
OFR may also impose and collect an administrative fine against any person found to have violated any
provision of the Act or similar state or federal law in an amount up to $10,000 per day for each willful
violation or $500 per day for each negligent violation.27
VIOLATIONS OF THE ACT
A person who willfully violates the Act commits a misdemeanor of the first degree,28 unless the violation
involves financial transactions of certain amounts, in which case the criminal penalties vary by first,
second, and third-degree felonies depending on the amount and timing of such transactions. 29
In addition to the criminal penalties, a person who violates the Act may be subject to a fine of up to
$250,000 or twice the value of the financial transaction, whichever is greater, and a subsequent
violation could result in a fine up to $500,000 or quintuple the value of the financial transaction,
whichever is greater.30
22 S. 655.50(8), F.S.
23 See, 31 U.S.C. § 5313(e), providing that the U.S. Secretary of Treasury (Secretary) may exempt a depository institution
from BSA/AML reporting requirements for transactions between the institution and a “qualified business customer” (QBC)
of the institution on the basis of information submitted to the Secretary. QBC is defined as a business that:
maintains a transaction account at the depository institution;
frequently engages in transactions with the institution which are subject to BSA/AML reporting requirements; and
meets criteria which the Secretary determines is sufficient to ensure the purposes of the BSA/AML laws are
carried out without requiring a report for such transactions.
24 S. 655.50(5), F.S.
25 S. 655.50(5)(c), F.S.
26 Ss. 655.50(9)(a)-(c), F.S.
27 S. 655.50(9)(d), F.S.
28 S. 655.50(10)(a), F.S.
29 S. 655.50(10)(b), F.S. See also, s. 775.082, F.S. A person who willfully violates or knowingly causes another to violate
the Act and the violation involves financial transactions of certain amounts:
financial transactions totaling or exceeding $300 but less than $20,000 in any 12-month period, commits a felony
of the third degree;
financial transactions totaling or exceeding $20,000 but less than $100,000 in any 12-month period, commits a
felony of the second degree; or
financial transactions totaling or exceeding $100,000 in any 12-month period, commits a felony of the first degree.
30 S. 655.50(10)(c), F.S.
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A person or financial institution who violates the Act may also be liable for a civil penalty of not more
than the greater of the value of the financial transaction involved or $25,000. 31
Effects of Banks’ Termination of Account Access
In 2022, banks filed over 1.8 million SARs, which is a 50% increase in two years. 32 Multiple SARs often
result in a financial institution terminating, suspending, or otherwise restricting a customer’s account
access.33 A New York Times study of over 500 cases of financial institutions “dropping” their
customers, including interviews with current and former bank industry staffers, revealed the negative
effects of a bank’s decision to remove a customer’s account access:
Individuals can’t pay their bills on time. Banks often take weeks to send them
their balances. While the institutions close their credit cards, their credit scores
suffer. Upon cancellation, small businesses often struggle to make payroll – and
must explain to vendors and partners that they don’t have a bank account for the
time being… [And] once customers have moved on, they don’t know whether
there is a black mark somewhere on their permanent records that will cause a
repeat episode at another bank. If the bank has filed an SAR, it isn’t legally
allowed to tell you, and the federal government prosecutes only a small fraction
of the people whom the banks document in their SARs. 34
As a result, customers do not know why they were ever under suspicion. 35 Interviews with individuals
who had lost access to their accounts revealed behaviors that may have caused their banks to “drop”
them.36 Specifically, a few of the interviews revealed the following: 37
Unusual Cash Deposits: When a bar owner’s weekly cash deposits fell just below the federal
currency reporting thresholds, the bank closed the bar’s account and the personal checking and
credit card accounts of the owner and his spouse.
A Marijuana Connection: A married couple’s accounts at a bank were shut down after the
husband started receiving direct deposits from a cannabis company that had recently acquired
his employer.
Criminal History: A man who had served 5 years in prison for stealing a car from a dealership
and using a counterfeit bill (among other crimes) had his accounts shut down at three different
banks. His personal banker from the third bank hinted it was because of his criminal record.
31 Ss. 655.50(10)(d)-(e), F.S.
32 Ron Lieber and Tara Seigel Bernard, Why Bank s Are Suddenly Closing Down Customer Accounts , Thomson Reuters
(Nov. 5, 2023), https://www.nytimes.com/2023/11/05/business/banks -accounts-close-
suddenly.html?unlocked_article_code= 1.8Uw.udoQ. 0cmUgCSuo6eS&smid=nytcore -android-s hare (last visited Dec. 5,
2023).
33 Id.
34 Id.
35 Id.
36 Id.
37 Id.
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Qualified Public Depositories
Unless a specific exemption applies, state and local governments must deposit public funds in a bank
or savings association that has been designated as a qualified public depository (QPD) under the
Florida Security for Public Deposits Act (FSPD).38
To be designated as a QPD by the CFO, a bank, savings bank, or savings association must:
Have a federal or state charter;
Have authority to accept deposits in Florida;
Have its principal place of business in Florida, or a branch office in Florida;
Have deposit insurance pursuant to the Federal Deposit Insurance Act;39
Have procedures and practices for accurate identification, classification, reporting, and
collateralization of public deposits;
Annually attest to the CFO that the QPD has not engaged in an “unsafe and unsound practice”
by denying or cancelling services based on environmental, social, or governance factors, as
required by s. 280.025, F.S.; and
Meet all the requirements of ch. 280, F.S., relating to security for public deposits. 40
Under the FSPD, a QPD may be suspended or disqualified or both if the CFO determines that the QPD
has engaged in certain activities that are listed in s. 280.051, F.S.
Additionally, if the CFO finds that one or more grounds exist for the suspension or disqualification of a
QPD, the CFO may, in lieu of suspension or disqualification, impose an administrative penalty upon the
QPD.41 Specifically, with respect to any knowing and willful violation by the QPD of a lawful order or
rule, the CFO may impose a penalty not exceeding $1,000 for each violation. 42 Currently, only failure to
timely file the attestation required under s. 280.025, F.S., is deemed a knowing and willful violation by a
QPD.43
Effect of the Bill
Termination-of-Access Reports
The bill amends Florida’s Financial Institutions Codes to require a financial institution that terminates,
suspends, or takes similar action restricting a customer’s or member’s account to file a termination-of-
access report with OFR, unless such termination, suspension, or similar action was due to:
The customer or member initiating the access change themselves;
A lack of activity in the account; or
The property is presumed unclaimed pursuant to ch. 717, F.S. 44
The bill provides that the termination-of-access report shall be filed at such time and must contain such
information as the Commission requires by rule.
38 S. 280.01, F.S. The Florida Security for Public Deposits Act is codified under ch. 280, F.S.
39 12 U.S.C.A. Ch. 16.
40 S. 280.02(26), F.S.
41 S. 280.054(1), F.S.
42 S. 280.054(1)(b), F.S.
43 Id.
44 Ch. 717, F.S. is the Florida Disposition of Unclaimed Property Act (FDUP Act). Unclaimed property is a financial asset
that is unknown or lost, or has been left inactive, unclaimed, or abandoned by its owner. Under the FDUP Act, unclaimed
property is held by business or government entities (known as “holders”) for a set period of time, usually 5 years. If the
holder is unable to locate the owner, re-establish contact, and return the asset, it is reported and remitted to the Florida
Department of Financial Services’ Division of Unclaimed Property. See, Florida Department of Financial Services, Division
of Unclaimed Property, About, https://fltreasurehunt.gov/UP-Web/sitePages/About.jsp (last visited Dec. 5, 2023).
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OFR INVESTIGATION AND DETERMINATION
Within 90 days after receipt of a termination-of-access report, OFR must investigate the financial
institution’s action and determine whether the action was taken in bad faith as substantiated by
competent and substantial evidence that was known or should have been known to the financial
institution at the time of the termination, suspension, or similar action.
Within 30 days after making a bad faith determination, OFR must report to the AG and the CFO such
bad faith termination, suspension, or similar action. The report to the AG must describe the findings of
the investigation, provide a summary of the evidence, and state whether the financial institution violated
the Financial Institutions Codes. Upon sending the report to the AG, OFR must also send a copy of the
report to the aggrieved customer or member by certified mail, return receipt requested.
The bill provides that a financial institution’s termination, suspension, or similar action restricting a
customer’s or member’s account access in bad faith (as determined by OFR), or a financial institution’s
failure to timely file a termination-of-access report altogether, constitutes a violation of Florida’s
Financial Institutions Codes and subjects the financial institution to the applicable sanctions and
penalties provided therein.
The bill requires OFR to provide any filed termination-of-access report, and any information contained
therein, to any federal, state, or local law enforcement or prosecutorial agency, and any federal or state
agency responsible for the regulation or supervision of financial institutions, if the provision of such
report is otherwise required by law.
PRIVATE CAUSE OF ACTION
The bill provides a private cause of action to the aggrieved customer or member against the financial
institution that, pursuant to a finding by OFR, acted in bad faith in terminating, suspending, or taking
similar action restricting account access. The aggrieved customer or member may recover damages in
any court of competent jurisdiction, together with costs and reasonable attorney fees to be assessed by
the court.
To recover damages, however, the customer or member must establish that, beyond a reasonable
doubt, the financial institution acted in bad faith in terminating, suspending, or taking similar action
restricting access to the customer’s or member’s account.
The bill provides that a customer’s or member’s failure to initiate a cause of action within 12 months of
OFR making a bad faith determination shall bar recovery of any filed claims thereafter.
Qualified Public Depositories
The bill also amends the list of activities that are grounds for suspension or disqualification or both for a
QPD. Specifically, the bill provides that a QPD who is found by OFR to have acted in bad faith when
terminating, suspending, or taking similar action restricting a customer’s or member’s account, or who
has failed to timely file a termination-of-access report altogether, is grounds for suspension or
disqualification or both.
The bill provides that, with respect to administrative penalties imposed in lieu of suspension or
disqualification, a QPD’s bad faith termination, suspension, or similar action restricting a customer’s or
member’s account access (as determined by OFR), or a QPD’s failure to timely file a termination-of-
access report altogether, are each deemed a knowing and willful violation by the QPD.
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B. SECTION DIRECTORY:
Section 1. Amends s. 280.051, F.S., relating to grounds for suspension or disqualification of a
qualified public depository.
Section 2. Amends s. 280.054, F.S., relating to administrative penalty in lieu of suspension or
disqualification.
Section 3. Creates s. 655.49, F.S., relating to termination-of-access reports by financial institutions;
investigations by the Office of Financial Regulation.
Section 4. Provides an effective date of July 1, 2024.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
The bill may have an indeterminate negative impact on OFR given the investigatory obligations
imposed upon OFR by the bill. See Fiscal Comments, below.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may have an indeterminate positive economic impact on the private sector. The bill may lead to
fewer financial institutions suspending, terminating, or taking similar action restricting customers’ or
members’ account access in bad faith.
D. FISCAL COMMENTS:
The bill could increase the workload of OFR, depending on how many termination-of-access reports
are filed with OFR. It is currently unknown whether additional resources would be needed to address
the additional workload.
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.
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2. Other:
Not applicable.
B. RULE-MAKING AUTHORITY:
The bill provides rule-making authority to the Commission. Specifically, the bill provides that the
termination-of-access report required under the proposed s. 655.40, F.S., shall be filed at such time
and must contain such information as the Commission requires by rule.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 585 2024
1 A bill to be entitled
2 An act relating to access to financial institution
3 customer accounts; amending s. 280.051, F.S.;
4 providing additional grounds for qualified public
5 depositories to be suspended and disqualified;
6 amending s. 280.054, F.S.; providing additional acts
7 deemed knowing and willful violations by qualified
8 public depositors which are subject to certain
9 penalties; creating s. 655.49, F.S.; requiring
10 financial institutions that take actions to restrict
11 customers' and members' account access to file
12 termination-of-access reports with the Office of
13 Financial Regulation; providing exceptions from the
14 reporting requirements; requiring such reports to be
15 filed at such time and to contain such information as
16 required by the Financial Services Commission;
17 providing duties of the Office of Financial
18 Regulation; providing reporting requirements for the
19 office; providing violations and penalties;
20 authorizing the office to provide the reports and
21 certain information to specified entities under
22 certain circumstances; providing that the financial
23 institutions' customers and members have a cause of
24 action under certain circumstances; authorizing such
25 customers and members to recover damages, together
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26 with costs and attorney fees; providing a time limit
27 for initiating causes of action; providing an
28 effective date.
29
30 Be It Enacted by the Legislature of the State of Florida:
31
32 Section 1. Subsection (16) is added to section 280.051,
33 Florida Statutes, to read:
34 280.051 Grounds for suspension or disqualification of a
35 qualified public depository.—A qualified public depository may
36 be suspended or disqualified or both if the Chief Financial
37 Officer determines that the qualified public depository has:
38 (16) Pursuant to a determination notice reported by the
39 Office of Financial Regulation under s. 655.49, acted in bad
40 faith when terminating, suspending, or taking similar action
41 restricting a customer's or member's account, or failed to
42 timely file a termination-of-access report with the office as
43 required under s. 655.49.
44 Section 2. Paragraph (b) of subsection (1) of section
45 280.054, Florida Statutes, is amended to read:
46 280.054 Administrative penalty in lieu of suspension or
47 disqualification.—
48 (1) If the Chief Financial Officer finds that one or more
49 grounds exist for the suspension or disqualification of a
50 qualified public depository, the Chief Financial Officer may, in
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51 lieu of suspension or disqualification, impose an administrative
52 penalty upon the qualified public depository.
53 (b) With respect to any knowing and willful violation of a
54 lawful order or rule, the Chief Financial Officer may impose a
55 penalty upon the qualified public depository in an amount not
56 exceeding $1,000 for each violation. If restitution is due, the
57 qualified public depository shall make restitution upon the
58 order of the Chief Financial Officer and shall pay interest on
59 such amount at the legal rate. Each day a violation continues
60 constitutes a separate violation. Each of the following Failure
61 to timely file the attestation required under s. 280.025 is
62 deemed a knowing and willful violation by the qualified public
63 depository:
64 1. Failure to timely file the attestation required under
65 s. 280.025.
66 2. Bad faith termination, suspension, or similar action
67 restricting a customer's or member's account access, as
68 determined by the Office of Financial Regulation pursuant to s.
69 655.49.
70 3. Failure to timely file a termination-of-access report
71 required under s. 655.49.
72 Section 3. Section 655.49, Florida Statutes, is created to
73 read:
74 655.49 Termination-of-access reports by financial
75 institutions; investigations by the Office of Financial
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76 Regulation.—
77 (1) A financial institution that terminates, suspends, or
78 takes similar action restricting a customer's or member's
79 account access must file a termination-of-access report with the
80 Office of Financial Regulation, unless the termination,
81 suspension, or similar action restricting access was due to:
82 (a) The customer or member initiating the access change;
83 (b) A lack of activity in the account; or
84 (c) The account is presumed unclaimed pursuant to chapter
85 717.
86
87 The termination-of-access report shall be filed at such time and
88 must contain such information as the commission requires by
89 rule.
90 (2) The Office of Financial Regulation must:
91 (a) Within 90 days after receipt of a termination-of-
92 access report, investigate the financial institution's action
93 and determine whether the action was taken in bad faith as
94 substantiated by competent and substantial evidence that was
95 known or should have been known to the financial in stitution at
96 the time of the termination, suspension, or similar action; and
97 (b) Within 30 days after making the determination required
98 under paragraph (a), report to the Attorney General and the
99 Chief Financial Officer a determination of a bad faith
100 termination, suspension, or similar action restricting a
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101 customer's or member's account access. The report to the
102 Attorney General must describe the findings of the
103 investigation, provide a summary of the evidence, and state
104 whether an alleged violation of the financial institutions codes
105 by the financial institution occurred. Upon sending the report
106 to the Attorney General pursuant to this paragraph, the office
107 must send a copy of the report to the customer or member by
108 certified mail, return receipt requested.
109 (3) A financial institution's termination, suspension, or
110 similar action restricting a customer's or member's account
111 access, or a financial institution's failure to timely file a
112 termination-of-access report as required under subsection (1),
113 constitutes a violation of the financial institutions codes and
114 subjects the financial institution to the applicable sanctions
115 and penalties provided for in the financial institutions codes.
116 (4) The office shall provide any report filed pursuant to
117 this section, or information contained therein, to any federal,
118 state, or local law enforcement or prosecutorial agency, and any
119 federal or state agency responsible for the regulation or
120 supervision of financial institutions, if the provision of such
121 report is otherwise required by law.
122 (5) If the office determines that a financial institution
123 has acted in bad faith pursuant to subsection (2), the aggrieved
124 customer or member of the financial institution has a cause of
125 action against such financial institution for damages and may
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126 recover damages therefor in any court of competent jurisdiction,
127 together with costs and reasonable attorney fees to be assessed
128 by the court. To recover damages under this subsection, the
129 customer or member must establish that, beyond a reasonable
130 doubt, the financial institution acted in bad faith in
131 terminating, suspending, or taking similar action restricting
132 access to the customer's or member's account. A customer's or
133 member's failure to initiate a cause of action under this
134 subsection within 12 months after the office's finding of bad
135 faith pursuant to subsection (2) shall bar recovery of any filed
136 claims thereafter.
137 Section 4. This act shall take effect July 1, 2024.
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INSURANCE & BANKING SUBCOMMITTEE
HB 585 by Rep. Rommel
Relating to Access to Financial Institution Customer Accounts
AMENDMENT SUMMARY
December 13, 2023
Amendment 1 by Rep. Rommel (Line 80): The amendment:
• Clarifies that a financial institution’s bad faith termination, suspension, or other action
restricting account access is a violation of the financial institutions codes.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 585 (2024)
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
6 Remove lines 80-111 and insert:
7 office, unless the termination, suspension, or similar action
8 restricting access was due to:
9 (a) The customer or member initiating the access change;
10 (b) A lack of activity in the account; or
11 (c) The account is presumed unclaimed pursuant to chapter
12 717.
13
14 The termination-of-access report shall be filed at such time and
15 must contain such information as the commission requires by
16 rule.
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Page 1 of 2
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 585 (2024)
Amendment No. 1
17 (2) The office must:
18 (a) Within 90 days after receipt of a termination -of-
19 access report, investigate the financial institution's action
20 and determine whether the action was taken in bad faith as
21 substantiated by competent and substantial evidence that was
22 known or should have been known to the financial institution at
23 the time of the termination, suspension, or similar action; and
24 (b) Within 30 days after making the determination required
25 under paragraph (a), report to the Attorney General and the
26 Chief Financial Officer a determination of a bad faith
27 termination, suspension, or similar action restricting a
28 customer's or member's account access. The report to the
29 Attorney General must describe the findings of the
30 investigation, provide a summary of the evidence, and state
31 whether an alleged violation of the financial institutions codes
32 by the financial institution occurred. Upon sending the report
33 to the Attorney General pursuant to this paragraph, the office
34 must send a copy of the report to the customer or member by
35 certified mail, return receipt requested.
36 (3) A financial institution's bad faith termination,
37 suspension, or similar action restricting a customer's or
38 member's account access, as determined by the office pursuant to
39 subsection (2), or a financial institution’s failure to timely
40 file a
499911 - h0585-line 80.docx
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Page 2 of 2
HB 587
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 587 Pub. Rec./Access to Financial Institution Customer Accounts
SPONSOR(S): Rommel
TIED BILLS: HB 585 IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee Fletcher Lloyd
2) Ethics, Elections & Open Government
Subcommittee
3) Commerce Committee
SUMMARY ANALYSIS
The federal Bank Secrecy Act (BSA) establishes reporting, recordkeeping, and related requirements for federal
and state-chartered financial institutions to help detect and prevent money laundering. Under the BSA,
financial institutions are required to report suspicious activity that might signify money laundering, tax evasion,
or other criminal activities. These types of reports are known as “suspicious activity reports” (SARs) and are
filed with the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury.
Florida’s codification of the BSA is the Florida Control of Money-Laundering and Terrorist Financing in
Financial Institutions Act (Act). The Act requires financial institutions to submit to the Office of Financial
Regulation (OFR) certain reports and maintain certain records of customers, accounts, and transactions
involving currency or monetary instruments or suspicious activities in accordance with the policies of the BSA.
HB 585, to which this bill is linked, requires financial institutions to file a report with OFR whenever the financial
institution suspends, terminates, or takes similar action restricting access to a customer’s or member’s
account, whether due to suspicious activity or otherwise. HB 585 also requires, among other things, OFR to
investigate the termination-of-access report to determine whether the financial institution’s action was made in
bad faith, and report a bad faith determination to the Department of Financial Services, the Attorney General,
and the customer or member.
This bill, which is linked to the passage of HB 585, creates a public records exemption for certain information
received by OFR in a termination-of-access report, including information received by OFR as part of its
investigations or examinations of such reports.
The bill provides that the public records exemption is subject to the Open Government Sunset Review Act and
will repeal on October 2, 2029, unless reviewed and saved from repeal by the Legislature. It also provides a
statement of public necessity as required by the Florida Constitution.
The bill is effective upon the same date that HB 585 or similar legislation takes effect, if such legislation is
adopted in the same legislative session or an extension thereof and becomes a law.
Article I, s. 24(c) of the Florida Constitution requires a two-thirds vote of the members present and
voting for final passage of a newly created public record or public meeting exemption. The bill creates
a public record exemption; thus, it requires a two-thirds vote for final passage.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h0587.IBS
DATE: 12/8/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Public Records
The Florida Constitution sets forth the state’s public policy regarding access to government records,
guaranteeing every person a right to inspect or copy any public record of the legislative, executive, and
judicial branches of government.1 The Legislature, however, may provide by general law for exemption2
from public record requirements provided the exemption passes by two-thirds vote of each chamber,
states with specificity the public necessity justifying the exemption, and is no broader than necessary to
meet its public purpose.3
The Florida Statutes also address the public policy regarding access to government records,
guaranteeing every person a right to inspect and copy any state, county, or municipal record, unless
the record is exempt.4 Furthermore, the Open Government Sunset Review Act5 provides that a public
record exemption may be created, revised, or maintained only if it serves an identifiable public purpose
and the “Legislature finds that the purpose is sufficiently compelling to override the strong public policy
of open government and cannot be accomplished without the exemption.” 6 An identifiable public
purpose is served if the exemption meets one of the following purposes:
Allow the state or its political subdivisions to effectively and efficiently administer a
governmental program, which administration would be significantly impaired without the
exemption;
Protect sensitive personal information that, if released, would be defamatory or would
jeopardize an individual’s safety; however, only the identity of an individual may be exempted
under this provision; or
Protect trade or business secrets.7
Pursuant to the Open Government Sunset Review Act, a new public record exemption or substantial
amendment of an existing public record exemption is repealed on October 2nd of the fifth year following
enactment, unless the Legislature reenacts the exemption. 8
Furthermore, there is a difference between records the Legislature designates as exempt from public
record requirements and those the Legislature deems confidential and exempt. A record classified as
exempt from public disclosure may be disclosed under certain circumstances. However, if the
Legislature designates a record as confidential and exempt from public disclosure, such record may not
be released by the custodian of public records to anyone other than the persons or entities specifically
designated in statute.9
1 Art. I, s. 24(a), FLA . CONST.
2 A public record exemption means a provision of general law which provides that a specified record, or portion thereof, is
not subject to the access requirements of s. 119.07(1), F.S., or s. 24, Art. I of the State Constitution. See s. 119.011(8),
F.S.
3 Art. I, s. 24(c), FLA . CONST.
4 See s. 119.01, F.S.
5 S. 119.15, F.S.
6 S. 119.15(6)(b), F.S.
7 Id.
8 S. 119.15(3), F.S.
9 See WFTV, Inc. v. The School Board of Seminole, 874 So. 2d 48, 53 (Fla. 5th DCA 2004), review denied 892 So. 2d
1015 (Fla. 2004); City of Riviera Beach v. Barfield, 642 So. 2d 1135 (Fla. 4th DCA 1994); Williams v. City of Minneola,
575 So. 2d 687 (Fla. 5th DCA 1991); see Attorney General Opinion 85-62 (August 1, 1985).
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Financial Institutions Codes
Florida’s Financial Institutions Codes are codified under Title XXXVIII of the Florida Statutes. 10 The
Financial Institutions Codes apply to all state-authorized and state-chartered financial institutions and to
the enforcement of all laws relating to state-authorized and state-chartered financial institutions.11 A
primary purpose of the Financial Institutions Codes is to provide for and promote the safe and sound
conduct of the financial services industry in Florida. 12
The specific chapters under the Financial Institutions Codes are:
Ch. 655, F.S. – Financial Institutions Generally
Ch. 657, F.S. – Credit Unions
Ch. 658, F.S. – Banks and Trust Companies;
Ch. 660, F.S. – Trust Business
Ch. 662, F.S. – Family Trust Companies
Ch. 663, F.S. – International Banking
Ch. 665, F.S. – Associations
Ch. 667, F.S. – Savings Banks
OFFICE OF FINANCIAL REGULATION
The Office of Financial Regulation (OFR) is the regulatory authority for Florida’s financial services
industry.13 OFR reports to the Financial Services Commission (Commission) which is made up of the
Governor and the members of the Florida Cabinet: the Chief Financial Officer (CFO), Attorney General
(AG), and Agriculture Commissioner.14 OFR enforces and administers the Financial Institutions Codes;
is responsible for supervising banks, credit unions, savings associations, and international bank
agencies; and licenses and regulates non-depository finance companies and the securities industry. 15
BANK SECRECY ACT
The federal Bank Secrecy Act (BSA)16 establishes reporting, recordkeeping, and related requirements
for federal and state-chartered17 financial institutions to help detect and prevent money laundering. 18
Specifically, the BSA and other anti-money laundering regulations (BSA/AML) require financial
institutions to, among other things, keep records of cash purchases of negotiable instruments and file
reports of cash transactions exceeding $10,000 (daily aggregate amount). 19
10 S. 655.005(1)(k), F.S.
11 S. 655.001(1), F.S.
12 S. 655.001(2), F.S.
13 Florida Office of Financial Regulation, About Our Agency, https://flofr.gov/sitePages/AboutOFR.htm (last visited Dec. 4,
2023).
14 Id.
15 Florida Department of Financial Services, Financial Services Commission, https://www.myfloridacfo.com/about/about -
dfs/commission (last visited Dec. 4, 2023). See also, s. 655.012, F.S.
16 31 U.S.C. § 5311 et seq.
17 See, 12 C.F.R. § 326.8 (sets forth requirements for state-chartered banks to establish and maintain procedures to
ensure and monitor their compliance with the BSA). See also, 12 C.F.R. § 353 (establishes requirements for state-
chartered banks to file a suspicious activity report under certain circumstances).
18 U.S. Treasury Financial Crimes Enforcement Network, FinCEN’s Legal Authorities,
https://www.fincen.gov/resources/fincens-legal-authorities (last visited Dec. 6, 2023).
19 Id.
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Under the BSA/AML laws, financial institutions must also:
Establish effective BSA compliance programs;
Establish effective customer due diligence systems and monitoring programs;
Screen against Office of Foreign Assets Control lists and other government lists;
Establish an effective suspicious activity monitoring and reporting process; and
Develop risk-based anti-money laundering programs.20
The U.S. Office of the Comptroller of Currency regularly conducts examinations of national banks,
federal branches, federal savings associations, and agencies of foreign banks in the U.S. to determine
compliance with BSA/AML laws.21
Suspicious Activity Reports
In addition to the other requirements under the BSA/AML laws, financial institutions are also required to
report suspicious activity that might signify money laundering, tax evasion, or other criminal activities. 22
These types of reports are known as “suspicious activity reports” (SAR) and are filed with the Financial
Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, using
FinCEN’s BSA E-filing system.23
Under this requirement, a financial institution is required to file an SAR no later than 30 c alendar days
after the date of initial detection of facts that may constitute a basis for filing an SAR. 24 For instances
where no suspect was identified on the date of the incident requiring the filing, a financial institution
may delay filing an SAR for an additional 30 calendar days to identify a suspect.25 However, in no case
shall reporting be delayed more than 60 calendar days after the date of initial detection of a reportable
transaction.26
FLORIDA CONTROL OF MONEY-LAUNDERING AND TERRORIST FINANCING IN FINANCIAL INSTITUTIONS ACT
The purpose of the Florida Control of Money-Laundering and Terrorist Financing in Financial
Institutions Act27 (Act), s. 655.50, F.S., is to require submission to OFR of certain reports and the
maintenance of certain records of customers, accounts, and transactions involving currency or
monetary instruments or suspicious activities if:28
such reports and records deter using financial institutions to conceal, move, or provide proceeds
obtained from or intended for criminal or terrorist activities; or
such reports and records have a high degree of usefulness in criminal, tax, or regulatory
investigations or proceedings.
The Act requires financial institutions to designate and retain a BSA/AML compliance officer, which is
defined as an officer that is responsible for the development and implementation of the financial
institution’s policies and procedures for complying with the requirements of the Act and BSA/AML
laws.29 Any change in a financial institution’s BSA/AML compliance officer must be reported to OFR.30
Additionally, the Act requires financial institutions to maintain: 31
20 U.S. Office of the Comptroller of the Currency, Bank Secrecy Act, https://www.occ.treas.gov/topics/supervision-and-
examination/bsa/index-bsa.html (last visited Dec. 5, 2023).
21 Id.
22 U.S. Treasury Financial Crimes Enforcement Network, supra note 17.
23 U.S. Office of the Comptroller of the Currency, Suspicious Activity Report Program,
https://www.occ.treas.gov/publications-and-resources/forms/sar-program/index-sar-program.html (last visited Dec. 5,
2023).
24 Id.
25 Id.
26 Id.
27 S. 655.50, F.S.
28 S. 655.50(2), F.S.
29 S. 655.50(4), F.S.
30 Id.
31 S. 655.50(8), F.S.
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full and complete records of all financial transactions, including all records required by the
BSA/AML laws, for a minimum of 5 years;
a copy of all reports filed with OFR as required under the Act for a minimum of 5 years after
submission of the report;
a copy of all records of exemption for each qualified business customer 32 for a minimum of 5
calendar years after termination of exempt status of such customer.
The Act also requires financial institutions to keep a record of each financial transaction which involves
currency or other monetary instrument that has a value greater than $10,000, involves the proceeds of
specified unlawful activity, or is designed to evade the reporting requirements of the Act or other state
or federal laws, or which the financial institution reasonably believes is suspicious activity.33
A financial institution, or officer, employee, or agent thereof, which files a report in good faith pursuant
to the Act is not liable to any person for loss or damage caused in whole or in part by the making, filing,
or governmental use of the report, or any information contained therein. 34
OFR Enforcement
In addition to any other powers conferred by the Financial Institutions Codes, OFR may bring an action
in court to enforce or administer the Act, as well as issue and serve upon any person an order of
removal if OFR determines such person is violating, has violated, or is about to violate any provisions of
the Act or any similar state or federal law.35
OFR may also impose and collect an administrative fine against any person found to have violated any
provision of the Act or similar state or federal law in an amount up to $10,000 per day for each willful
violation or $500 per day for each negligent violation.36
Violations of the Act
A person who willfully violates the Act commits a misdemeanor of the first degree, 37 unless the violation
involves financial transactions of certain amounts, in which case the criminal penalties vary by first,
second, and third-degree felonies depending on the amount and timing of such transactions. 38
In addition to the criminal penalties, a person who violates the Act may be subject to a fine of up to
$250,000 or twice the value of the financial transaction, whichever is greater, and a subsequent
violation could result in a fine up to $500,000 or quintuple the value of the financial transaction,
whichever is greater.39
32 See, 31 U.S.C. § 5313(e), providing that the U.S. Secretary of Treasury (Secretary) may exempt a depository institution
from BSA/AML reporting requirements for transactions between the institution and a “qualified business customer” (QBC)
of the institution on the basis of information submitted to the Secretary. QBC is defined as a business that:
maintains a transaction account at the depository institution;
frequently engages in transactions with the institution which are subject to BSA/AML reporting requirements; and
meets criteria which the Secretary determines is sufficient to ensure the purposes of the BSA/AML laws are
carried out without requiring a report for such transactions.
33 S. 655.50(5), F.S.
34 S. 655.50(5)(c), F.S.
35 Ss. 655.50(9)(a)-(c), F.S.
36 S. 655.50(9)(d), F.S.
37 S. 655.50(10)(a), F.S.
38 S. 655.50(10)(b), F.S. A person who willfully violates or knowingly causes another to violate the Act and the violation
involves financial transactions of certain amounts:
financial transactions totaling or exceeding $300 but less than $20,000 in any 12-month period, commits a felony
of the third degree;
financial transactions totaling or exceeding $20,000 but less than $100,000 in any 12-month period, commits a
felony of the second degree; or
financial transactions totaling or exceeding $100,000 in any 12-month period, commits a felony of the first degree.
39 S. 655.50(10)(c), F.S.
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A person or financial institution who violates the Act may also be liable for a civil penalty of not more
than the greater of the value of the financial transaction involved or $25,000. 40
EFFECTS OF BANKS’ TERMINATION OF ACCOUNT ACCESS
In 2022, banks filed over 1.8 million SARs, which is a 50% increase in two years.41 Multiple SARs often
result in a financial institution terminating, suspending, or otherwise restricting a customer’s account
access.42 A New York Times study of over 500 cases of financial institutions “dropping” their
customers, including interviews with current and former bank industry staffers, revealed the negative
effects of a bank’s decision to remove a customer’s account access:
Individuals can’t pay their bills on time. Banks often take weeks to send them
their balances. While the institutions close their credit cards, their credit scores
suffer. Upon cancellation, small businesses often struggle to make payroll – and
must explain to vendors and partners that they don’t have a bank account for the
time being… [And] once customers have moved on, they don’t know whether
there is a black mark somewhere on their permanent records that will cause a
repeat episode at another bank. If the bank has filed an SAR, it isn’t legally
allowed to tell you, and the federal government prosecutes only a small fraction
of the people whom the banks document in their SARs. 43
As a result, customers do not know why they were ever under suspicion. 44 Interviews with individuals
who had lost access to their accounts revealed behaviors that may have caused their banks to “drop”
them.45 Specifically, a few of the interviews revealed the following: 46
Unusual Cash Deposits: When a bar owner’s weekly cash deposits fell just below the federal
currency reporting thresholds, the bank closed the bar’s account and the personal checking and
credit card accounts of the owner and his spouse.
A Marijuana Connection: A married couple’s accounts at a bank were shut down after the
husband started receiving direct deposits from a cannabis company that had recently acquired
his employer.
Criminal History: A man who had served 5 years in prison for stealing a car from a dealership
and using a counterfeit bill (among other crimes) had his accounts shut down at three different
banks. His personal banker from the third bank hinted it was because of his criminal record.
HB 585
HB 585, to which this bill is linked, amends Florida’s Financial Institutions Codes to require a financial
institution that terminates, suspends, or takes similar action restricting a customer’s or member’s
account to file a termination-of-access report with OFR, unless such termination, suspension, or similar
action was due to:
The customer or member initiating the access change themselves;
A lack of activity in the account; or
The property is presumed unclaimed pursuant to ch. 717, F.S. 47
40 Ss. 655.50(10)(d)-(e), F.S.
41 Ron Lieber and Tara Seigel Bernard, Why Bank s Are Suddenly Closing Down Customer Accounts , Thomson Reuters
(Nov. 5, 2023), https://www.nytimes.com/2023/11/05/business/banks -accounts-close-
suddenly.html?unlocked_article_code= 1.8Uw.udoQ. 0cmUgCSuo6eS&smid=nytcore -android-s hare (last visited Dec. 5,
2023).
42 Id.
43 Id.
44 Id.
45 Id.
46 Id.
47 Ch. 717, F.S. is the Florida Disposition of Unclaimed Property Act (FDUP Act). Unclaimed property is a financial asset
that is unknown or lost, or has been left inactive, unclaimed, or abandoned by its owner. Under the FDUP Act, unclaimed
property is held by business or government entities (known as “holders”) for a set period of time, usually 5 years. If the
holder is unable to locate the owner, re-establish contact, and return the asset, it is reported and remitted to the Florida
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HB 585 also provides that the termination-of-access report shall be filed at such time and must contain
such information as the Commission requires by rule.
OFR INVESTIGATION AND DETERMINATION
Within 90 days after receipt of a termination-of-access report, OFR must investigate the financial
institution’s action and determine whether the action was taken in bad faith as substantiated by
competent and substantial evidence that was known or should have been known to the financial
institution at the time of the termination, suspension, or similar action.
Within 30 days after making a bad faith determination, OFR must report to the AG and the CFO such
bad faith termination, suspension, or similar action. The report to the AG must describe the findings of
the investigation, provide a summary of the evidence, and state whether the financial institution violated
the Financial Institutions Codes. Upon sending the report to the AG, OFR must also send a copy of the
report to the aggrieved customer or member by certified mail, return receipt requested.
HB 585, among other things, also:
provides that a financial institution’s termination, suspension, or similar action restricting a
customer’s or member’s account access in bad faith (as determined by OFR), or a financial
institution’s failure to timely file a termination-of-access report altogether, constitutes a violation
of Florida’s Financial Institutions Codes and subjects the financial institution to the applicable
sanctions and penalties provided therein; and
requires OFR to provide any filed termination-of-access report, and any information contained
therein, to any federal, state, or local law enforcement or prosecutorial agency, and any federal
or state agency responsible for the regulation or supervision of financial institutions, if the
provision of such report is otherwise required by law.
Effect of the Bill
This bill, which is linked to the passage of HB 585, creates a public records exemption for certain
information received by OFR in a termination-of-access report, including information received by OFR
as part of its investigations or examinations of such reports, and provides that such information is
confidential and exempt.
The bill contains a statement of public necessity, as required by Article I, Section 24(c) of the Florida
Constitution. Specifically, the release of information contained in a termination-of-access report,
including information received by OFR in connection with its investigations and examinations of such
reports, could injure a financial institution in the marketplace by providing its competitors with detailed
insight into its business operations, thereby diminishing the advantage the institution maintains over its
competitors that do not possess such information.
Additionally, OFR may receive sensitive financial and personal information of customers or members in
filed termination-of-access reports, the release of which could defame or jeopardize the personal and
financial of such individuals and their family members. An exemption from public records requirements
is necessary to ensure OFR’s ability to administer its regulatory duties while preventing unwarranted
damage to a financial institution or a customer or member thereof.
The bill provides that the public records exemption is subject to the Open Government Sunset Review
Act and will repeal on October 2, 2029, unless reviewed and saved from repeal by the Legislature. It
also provides a statement of public necessity as required by the Florida Constitution.
The bill is effective upon the same date that HB 585 or similar legislation takes effect, if such legislation
is adopted in the same legislative session or an extension thereof and becomes a law.
Department of Financial Services’ Division of Unclaimed Property. See, Florida Department of Financial Services, Division
of Unclaimed Property, About, https://fltreasurehunt.gov/UP-Web/sitePages/About.jsp (last visited Dec. 5, 2023).
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B. SECTION DIRECTORY:
Section 1. Amends s. 655.59, F.S., relating to termination-of-access reports filed by financial
institutions; investigations by the Office of Financial Regulation.
Section 2. Provides a statement of public necessity.
Section 3. Provides a contingent effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
The bill may have a minimal fiscal impact on agencies because agency staff responsible for
complying with public records requests may require training related to the creation of the public
record exemption. Agencies could incur costs associated with redacting the confidential and exempt
information prior to releasing a record. The costs, however, would be absorbed by existing
resources, as they are part of the day-to-day responsibilities of agencies.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
None.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not Applicable. This bill does not appear to affect county or municipal governments.
2. Other:
Vote Requirement
Article I, s. 24(c) of the Florida Constitution requires a two-thirds vote of the members present and
voting for final passage of a newly created or expanded public record exemption. The bill creates a
public record exemption; thus, it requires a two-thirds vote for final passage.
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Public Necessity Statement
Article I, s. 24(c) of the Florida Constitution requires a public necessity statement for a newly created
or expanded public record exemption. The bill creates a public record exemption; therefore, it
includes a public necessity statement.
Breadth of Exemption
Article I, s. 24(c) of the Florida Constitution requires a newly created public record or public meeting
exemption to be no broader than necessary to accomplish the stated purpose of the law. This bill
creates a public record exemption for certain information received by OFR pursuant to a termination-
of-access report filed by a financial institution. The purpose of the exemption is to protect sensitive
personal, financial, and business information that OFR receives in conjunction with its duties related
to receiving a termination-of-access report and investigating and examination such reports. As such,
the bill appears to be no broader than necessary to accomplish its purpose.
B. RULE-MAKING AUTHORITY:
None. The bill does not confer rulemaking authority nor require the promulgation of rules.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 587 2024
1 A bill to be entitled
2 An act relating to public records; amending s. 655.49,
3 F.S.; providing a public records exemption for
4 termination-of-access reports filed by financial
5 institutions with the Office of Financial Regulation
6 and for information contained in such reports;
7 providing for future legislative review and repeal of
8 the exemption; providing statements of public
9 necessity; providing a contingent effective date.
10
11 Be It Enacted by the Legislature of the State of Florida:
12
13 Section 1. Subsection (4) of section 655.49, Florida
14 Statutes, as created by HB 585, 2024 Regular Session, is amended
15 to read:
16 655.49 Termination-of-access reports by financial
17 institutions; investigations by the Office of Financial
18 Regulation.—
19 (4)(a) All reports filed pursuant to this section, and any
20 information contained therein, are confidential and exempt from
21 s. 119.07(1) and s. 24(a), Art. I of the State Constitution.
22 This paragraph is subject to the Open Government Sunset Review
23 Act in accordance with s. 119.15 and shall stand repealed on
24 October 2, 2029, unless reviewed and saved from repeal through
25 reenactment by the Legislature.
Page 1 of 4
CODING: Words stricken are deletions; words underlined are additions.
hb0587-00
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 587 2024
26 (b) The office shall provide any report filed pursuant to
27 this section, or information contained therein, to any federal,
28 state, or local law enforcement or prosecutorial agency, and any
29 federal or state agency responsible for the regulation or
30 supervision of financial institutions, if the provision of such
31 report is otherwise required by law.
32 Section 2. (1) The Legislature finds that it is a public
33 necessity that a termination-of-access report filed with the
34 Office of Financial Regulation pursuant to s. 655.49, Florida
35 Statutes, by a financial institution that terminates, suspends,
36 or takes similar action restricting a customer's or member's
37 account access and any information obtained by the office in the
38 report or as the result of the office's investigation and
39 examination duties under s. 655.49, Florida Statutes, be made
40 confidential and exempt from s. 119.07(1), Florida Statutes, and
41 s. 24(a), Article I of the State Constitution. The disclosure of
42 such report and information could injure a financial institution
43 in the marketplace by providing its competitors with detailed
44 insight into its business operations, thereby diminishing the
45 advantage that the institution maintains over its competitors
46 that do not possess such information. Proprietary business
47 information derives actual or potential independent economic
48 value from not being generally known to, and not being readily
49 ascertainable by proper means by, other persons who can derive
50 economic value from its disclosure or use. The Office of
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51 Financial Regulation, in performing its duties and
52 responsibilities, may need to obtain proprietary business
53 information from financial institutions. Without an exemption
54 from public records requirements for proprietary business
55 information provided to the office, such information becomes a
56 public record when received and must be divulged upon request.
57 Release of proprietary business information would give business
58 competitors an unfair advantage and weaken the position in the
59 marketplace of the proprietor that owns or controls the business
60 information.
61 (2) Furthermore, the office may receive sensitive
62 financial and personal information of customers or members in
63 the termination-of-access reports filed by financial
64 institutions, the release of which could defame or jeopardize
65 the personal and financial safety of such individuals and their
66 family members. Placing within the public domain the financial
67 and personal identifying information of the customers or members
68 of the financial institutions would increase the security risk
69 for these customers or members, who could become the target of
70 criminal activity. An exemption from public records requirements
71 is necessary to ensure the office's ability to administer its
72 regulatory duties while preventing unwarranted damage to a
73 financial institution or a customer or member of a financial
74 institution.
75 Section 3. This act shall take effect on the same date
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76 that HB 585 or similar legislation takes effect, if such
77 legislation is adopted in the same legislative session or an
78 extension thereof and becomes a law.
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HB 623
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 623 Home Warranty Transfers
SPONSOR(S): Steele
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee Herrera Lloyd
2) Commerce Committee
SUMMARY ANALYSIS
A home warranty agreement is a service contract that may be purchased from a home warranty association or
from an insurer to protect residential real property. In Florida, home warranty associations are regulated by the
Office of Insurance Regulations (OIR) and must maintain certain minimum financial standards to do business.
The home warranty agreement often covers home systems and common appliances. A home warranty
agreement is tied to the owner selling the home and does not transfer to the person buying the home unless
the home seller transfers it to the new owner.
The bill makes residential real property home warranties automatically transfer with the property when it is
sold, rather than transferring it only if a separate assignment is made within 15 days of the sale of the
residence.
The bill also makes the following changes:
the home warranty association or the insurer continues to be obligated under the terms of the home
warranty agreement for a warranty that is transferred and may not charge a fee for the transfer of
the warranty eliminating the $40 assignment fee;
the transfer of a home warranty does not make the existing warranty term longer;
the seller of the residential real property, the home warranty association, or the insurer shall deliver
a paper or electronic copy of the home warranty to the purchaser within 15 days after the home is
sold or transferred.
Also, the bill establishes that it is an unfair method of competition and an unfair or deceptive acts or practice for
a home warranty association or insurer to fail to continue to perform obligations under a transferred home
warranty agreement.
This bill provides an effective date as of July 1, 2024.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h0623.IBS
DATE: 12/7/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
A warranty is an assurance that a manufacturer or seller makes about the condition of its product. 1 A
warranty means that a manufacturer or seller will replace or repair the product under certain instances.
A warranty can be either express or implied.2
An express warranty is a verbal or written assurance for the product. 3 On the other hand, an implied
warranty is an unstated assurance that the product is made for its intended purpose. 4 An implied
warranty is in addition to an express warranty. However, an implied warranty may be negated or limited
by an express warranty. There is no implied warranty if a seller states that the product is “as is”, “with
all faults”, or similar language.5
Home Warranties
A home warranty is a contract or agreement between the homeowner and the issuing company,
safeguarding the homeowner from expenses related to the repair or replacement of structural
components or appliances in the home.6 This protection extends to issues caused by normal wear and
tear or defects in these components or appliances. 7
Home warranty contracts or agreements can be drafted by a Home Warranty Association licensed
under s. 634.303, F.S., or by an authorized insurance company permitted to offer coverage in this
category.8
Magnuson-Moss Warranty Act
The Magnuson-Moss Warranty Act (MMWA)9 is a federal law that governs consumer product
warranties. Passed in 1975, the Act requires manufacturers and sellers of consumer products to
provide consumers with detailed information about warranty coverage before and after the sale of the
warranted product.10
The MMWA defines three kinds of consumers:
a buyer of any consumer product;
any person to whom such product is transferred during the duration of an implied or express
warranty applicable to the product;
any other person who is entitled by the terms of such warranty or under applicable State law to
enforce the obligations of the warranty.11
1 S. 681.102(22), F.S.
2 45 Fla. Jur 2d Sales and Exchanges of Goods § 156.
3 “An express warranty is created by an affirmation of fact or promise made by the seller to the buyer that relates to the good s, by any
description of the goods that is made part of the basis of the bargain, or by any sample or model that is made part of t he basis of the
bargain.” S. 672.313, F.S.
4 S. 672.314, F.S.
5 S. 672.316, F.S.
6 S. 634.301(2), F.S.
7 Id.
8 S. 634.303, F.S.
9 15 U.S.C. §§ 2301-2312 (1975).
10 MMWA does not apply if a seller or manufacturer does not provide a warranty on their product. Jason Gordon, Magnuson Moss
Warranty Act – Explained, The Business Professor, Sept. 26, 2021, https://thebusinessprofessor.com/en_US/consumer-law/magnuson-
moss-warranty-act (last visited Dec 4, 2023).
11 O'Connor v. BMW of N. Am., LLC, 905 So. 2d 235, 236–37 (Fla. 2d DCA 2005); see also, § 2310(d) of MMMWA provides that, “a
consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under this title, or
under a written warranty, implied warranty, or service contract, may bring suit for damages…”
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Home Warranties – Current Situation
The elective market in Florida allows a builder, seller, buyer, or owner of a home to choose whether
they would like to purchase a home warranty to cover against the cost of repair or replacement, or
furnishes repair or replacement, of any structural component or appliance of a home, caused by wear
and tear or a defect of a structural component or appliance. 12
Warranty associations and companies in Florida, including those associations selling home and service
warranties, and those companies selling motor vehicle service agreements, are regulated by the Office
of Insurance Regulation (OIR).13 OIR regulates the insurance industry in Florida. OIR is responsible for
the regulation of all activities in the state concerning insurers and other risk bearing entities, including
licensing, rates, policy forms, market conduct, claims, issuance of certificates of authority, solvency,
viatical settlements, premium financing, and administrative supervision. 14
While warranties are not considered traditional insurance products, OIR regulates warranty
associations and companies similarly to the way in which it regulates insurers. 15 Home and service
warranty associations must be licensed by OIR 16 and must maintain certain minimum financial
standards in order to do warranty business in Florida.17
The following chart reflects the number of licensed warranty associations in Florida as of December 6,
2023:18
Type of Association/Company Number of Licensees
Home Warranty Association 46
Service Warranty Association 101
Motor Vehicle Warranty Company 119
Total 266
Home warranty providers must ensure that every home warranty is sent or delivered to the warranty
holder within 45 days after the commencement of coverage, subject to the insurer's or home warranty
association's premium payment requirements.19 Furthermore, all home warranty contracts are
transferable.20 The contract should explicitly inform the purchaser of their right to assign it within 15
days of selling or transferring the home. The home warranty company may charge an assignment fee
not exceeding $40.21 The home warranty may be assigned, as well from a home builder, who initially
purchased the warranty, to subsequent home purchasers. 22
Effect of the Bill
12 S. 634.301(2), F.S.
13 See ch. 634, F.S.
14 Florida Office of Insurance Regulation, Organization and Operation, https://floir.com/ab out-us/organization-and-
operation#:~:text=The%20Florida%20Office%20of%20Insurance,settlements%2C%20premium%20financing%2C%20and%20administ
rative (last visited Dec. 7, 2023). See also s. 624.308, F.S., and R. 69O, et seq., F.A.C.]
15 See ch. 634, F.S.
16 Ss. 634.303 and 634.403, F.S. Neither the Florida Insurance Code nor this section grants permission for any home warranty
association to conduct insurance business beyond what is specifically defined as home warranty or to participate in any other form of
insurance. Any engagement in alternative insurance types requires explicit authorization through a certificate of authority issued by the
office under the provisions of the Florida Insurance Code. S. 634.325, F.S.
17 Ss. 634.3077 and 634.406, F.S.
18 Data retrieved from OIR Active Company Search application, https://floir.com/CompanySearch/index.aspx (last visited Dec. 6, 2023).
19 S. 634.312(2), F.S.
20 S. 634.312(1), F.S.
21 Id.
22 Id. Certain exemptions in the home warranty association statute cover case s where builders or appliance sellers offer standard
guarantees without extra charges, exclude service contracts with non -profits handling repairs, and accept contracts aligning with
Florida's Insurance Code for systems and appliances, excluding structural components. Individuals affiliated with a domestic insurer are
exempt if they avoid offering home warranties to Florida residents, but compliance requires the insurer to directly issue war ranties or
provide a specific policy. Non-compliance, as determined by the Office of Insurance Regulation, subjects the person to home warranty
association regulations. Additionally, the regulations do not apply to programs offering warranties on new homes if supported by an
insurance policy from a licensed Florida insurer, contingent on approval by the Office. S. 634.301(2), F.S.
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DATE: 12/7/2023
The bill makes residential real property home warranties automatically transfer with the property when it
is sold, rather than transferring it only if a separate assignment is made within 15 days of the sale of the
residence.
The bill also makes the following changes:
the home warranty association or the insurer continues to be obligated under the terms of the
home warranty agreement for a warranty that is transferred and may not charge a fee for the
transfer of the warranty eliminating the $40 assignment fee;
the transfer of a home warranty does not make the existing warranty term longer;
the seller of the residential real property, the home warranty association, or the insurer shall
deliver a paper or electronic copy of the home warranty to the purchaser within 15 days after the
home is sold or transferred.
Finally, the bill establishes that it is an unfair method of competition and an unfair or deceptive acts or
practice for a home warranty association or insurer to fail to continue to perform obligations under a
transferred home warranty agreement.
This bill provides an effective date as of July 1, 2024.
B. SECTION DIRECTORY:
Section 1: Amends s. 634.312, F.S., relating to forms; required provisions and procedures.
Section 2: Amends s. 634.327, F.S., relating to applicability to warranty on new home.
Section 3: Amends s. 634.331, F.S., relating to coverage of property for sale.
Section 4: Creates 634.336, F.S., relating to unfair methods of competition and unfair or deceptive acts
or practices defined.
Section 5: Provides an effective date of July 1, 2024.
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:
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DATE: 12/7/2023
There may be a positive economic impact for property owners and subsequent owners as they can
benefit from the remaining home warranty coverage for their residential real property without needing
additional paperwork due to the currently required separate assignment agreement. The home
purchaser could bear lower out of pocket costs if there is covered damage or wear and tear.
Home warranty associations and insurers may experience nominal increased costs due to the bill’s
prohibition on assignment fees.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to affect counties or municipalities governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None provided by the bill.
C. DRAFTING ISSUES OR OTHER COMMENTS:
Section 3 of the bill was amended to fix a technical redundancy in the statute, which restates a
definition of a term already defined in s. 634.301(8), F.S., i.e., the term “listing period” already includes
the date the sale is closed.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
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DATE: 12/7/2023
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 623 2024
1 A bill to be entitled
2 An act relating to home warranty transfers; amending
3 s. 634.312, F.S.; providing requirements for home
4 warranties transferred to subsequent home purchasers;
5 amending ss. 634.327 and 634.331, F.S.; conforming
6 provisions to changes made by the act; making
7 technical changes; amending s. 634.336, F.S.; revising
8 the definition of the term "unfair methods of
9 competition and unfair or deceptive acts or practices"
10 to include failure to continue to perform obligations
11 under home warranties transferred to subsequent home
12 purchasers; providing an effective date.
13
14 Be It Enacted by the Legislature of the State of Florida:
15
16 Section 1. Subsections (2) through (6) of section 634.312,
17 Florida Statutes, are renumbered as subsections (6) through
18 (10), respectively, and subsection (1) of that section is
19 amended to read:
20 634.312 Transfers; forms; required provisions and
21 procedures.—
22 (1) If a residential real property covered by a home
23 warranty is conveyed to a new owner, the home warranty in force
24 on that residential real property:
25 (a) Is automatically transferred to the new owner; and
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HB 623 2024
26 (b) Continues in effect as if the new owner was the
27 original purchaser of the home warranty.
28 (2) The home warranty association or the insurer that
29 issued the home warranty shall continue to be obligated under
30 the terms of the home warranty for a home warranty transferred
31 to a subsequent home purchaser under this subsection.
32 (3) The transfer of the home warranty to a subsequent home
33 purchaser under this subsection does not extend the remaining
34 term of the home warranty.
35 (4) The seller of the residential real property, the home
36 warranty association, or the insurer, as applicable, shall
37 deliver a paper or electronic copy of the home warranty to the
38 subsequent home purchaser within 15 days after the home is sold
39 or transferred All home warranty contracts are assignable in a
40 consumer transaction and must contain a statement informing the
41 purchaser of the home warranty of her or his right to assign it,
42 at least within 15 days from the date the home is sold or
43 transferred, to a subsequent retail purchaser of the home
44 covered by the home warranty and all conditions on such right of
45 transfer. The home warranty company may charge an assignment fee
46 not to exceed $40.
47 (5) Home warranty transfers under this section assignments
48 include, but are not limited to, the transfer of a home warranty
49 assignment from a home builder who purchased the home warranty
50 to a subsequent home purchaser.
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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 623 2024
51 Section 2. Section 634.327, Florida Statutes, is amended
52 to read:
53 634.327 Applicability to warranty on new home.—Except as
54 provided in s. 634.312(1), this part does shall not apply to any
55 program offering a warranty on a new home which is underwritten
56 by an insurer licensed to do business in the state when the
57 insurance policy underwriting such program has been filed with
58 and approved by the office as required by law.
59 Section 3. Section 634.331, Florida Statutes, is amended
60 to read:
61 634.331 Coverage of property for sale.—A home warranty may
62 provide coverage of residential property during the listing
63 period of such property for a period not to exceed 12 months,
64 provided that the home warranty company charges the warranty
65 purchaser a separately identifiable charge for the listing
66 period coverage in an amount equal to at least 15 percent of the
67 annual premium charged for the home warranty and the charge for
68 such coverage is due at the earlier of the end of the listing
69 period or the date the sale of the residential property is
70 closed. The requirements in s. 634.312(1) apply to the home
71 warranty that is transferred to the home purchaser.
72 Section 4. Subsections (6) through (9) of section 634.336,
73 Florida Statutes, are renumbered as subsections (7) through
74 (10), respectively, and a new subsection (6) is added to that
75 section to read:
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HB 623 2024
76 634.336 Unfair methods of competition and unfair or
77 deceptive acts or practices defined.—The following methods,
78 acts, or practices are defined as unfair methods of competition
79 and unfair or deceptive acts or practices:
80 (6) FAILURE TO CONTINUE TO PERFORM OBLIGATIONS UNDER
81 TRANSFERRED HOME WARRANTIES.—Failing to continue to perform
82 obligations under the terms of a home warranty transferred to a
83 subsequent home purchaser as required in s. 634.312(1).
84 Section 5. This act shall take effect July 1, 2024.
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INSURANCE & BANKING SUBCOMMITTEE
HB 623 by Rep. Steele
Insurance
AMENDMENT SUMMARY
December 13, 2023
Amendment 1 by Rep. Steele (strike all): The amendment:
• Clarifies that, if a home warranty covers structural components, it must automatically
transfer to the new homeowner upon the sale of the home.
o Structural components include things such as the roof, plumbing system, electrical
system, foundation, basement, exterior/interior walls, ceilings, floors, stucco, or spray
foam.
• Applies the automatic transfer requirement to express written warranties issued by the home
builder or purchased by the builder from home warranty association.
• Provides that the transfer of a warranty does not modify or extend the warranty’s
commencement date or its duration, nor is the scope of coverage expanded due to the
transfer.
• Specifies that the builder transacting insurance when providing a compliant warranty to a
home buyer.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 623 (2024)
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 Steele offered the following:
4
5 Amendment (with title amendment)
6 Remove everything after the enacting clause and insert:
7 Section 1. Subsection (1) of section 634.312, Florida
8 Statutes, is amended to read:
9 634.312 Forms; required provisions and procedures. —
10 (1) Except as provided in section 634.601: all
11 (a) Home warranty contracts are assignable in a consumer
12 transaction and must contain a statement informing the purchaser
13 of the home warranty of her or his right to assign it, at least
14 within 15 days from the date the home is sold or transferred, to
15 a subsequent retail purchaser of the home covered by the home
16 warranty and all conditions on such right of transfer.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 623 (2024)
Amendment No. 1
17 (b) The home warranty company may charge an assignment fee
18 not to exceed $40.
19 (c) Home warranty assignments include, but are not limited
20 to, the assignment from a home builder who purchased the home
21 warranty to a subsequent home purchaser.
22 Section 2. Section 634.331, Florida Statutes, is amended
23 to read:
24 634.331 Coverage of property for sale.—A home warranty may
25 provide coverage of residential property during the l isting
26 period of such property for a period not to exceed 12 months,
27 provided that the home warranty company charges the warranty
28 purchaser a separately identifiable charge for the listing
29 period coverage in an amount equal to at least 15 percent of the
30 annual premium charged for the home warranty and the charge for
31 such coverage is due at the earlier of the end of the listing
32 period or the date the sale of the residential property is
33 closed. The requirements in s. 634.601 apply to a home warranty
34 that is transferred to the home purchaser.
35 Section 3. Part IV of chapter 634, Florida Statutes,
36 consisting of ss. 634.600-634.602, Florida Statutes, is created
37 to read:
38 PART IV
39 Miscellaneous Provisions
40 634.600 Definitions. – As used in this part, the term:
41 (1) “Builder” means the primary contractor of a home who
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 623 (2024)
Amendment No. 1
42 possesses the requisite skill, knowledge, and experience, and
43 has the responsibility, to supervise, direct, manage, and
44 control the contracting activities of the business organization
45 with which she or he is connected and who has the responsibility
46 to supervise, direct, manage, and control the construction work
47 on a job for which she or he has obtained the building permit.
48 Construction work includes, but is not limited to, construction
49 of structural components.
50 (2) “Home warranty” or “warranty” has the same meaning as
51 in s. 634.301.
52 (3) “Home warranty association” has the same meaning as in
53 s. 634.301.
54 (4) “Indemnify” means to undertake repair or replacement
55 of a home’s structural component or pay compensation for such
56 repair or replacement by cash, check, or other similar means,
57 including, but not limited to, electronic means.
58 (5) "Structural components" means one or more structural
59 component of a home including, but not limited to, the roof,
60 plumbing system, electrical system, foundation, basement,
61 exterior or interior walls, ceilings, floors, or spray foam.
62 “Exterior walls” includes, but is not limited to, any siding,
63 stucco, or paint on the exterior walls.
64 634.601 Structural Component Indemnification or Coverage.—
65 (1) If a builder is obligated on and provides a homebuyer
66 an express written warranty that indemnifies a homebuyer against
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 623 (2024)
Amendment No. 1
67 the cost of repairing the structural components of a home, then
68 the express written warranty and all indemnification rights
69 thereunder shall automatically transfer to any subsequent
70 purchaser(s) of the home during the duration of the express
71 written warranty.
72 (2) If a builder purchases a home warranty from a licensed
73 home warranty association covering the structural components of
74 a home then the home warranty and all indemnification rights
75 thereunder shall automatically transfer to any subsequent
76 purchaser(s) prior to the end of the home warranty term.
77 (3) Nothing in this section shall modify or extend the
78 commencement date or the duration, or expand the scope of
79 coverage, of the express written warranty or home warranty, as
80 applicable, beyond the express written warranty's or home
81 warranty’s terms.
82 (4) This section does not:
83 (a) Require a builder that is obligated on and providing a
84 homebuyer an express written warranty to obtain a license under
85 the Florida Insurance Code and such practice shall not
86 constitute the transaction of insurance subject to the
87 requirements of the Code, unless otherwise required b y law.
88 (b) Permit the provision of indemnification against
89 consequential damages arising from the failure of any structural
90 component, which practice constitutes the transaction of
91 insurance subject to all requirements of the Florida Insurance
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Bill No. HB 623 (2024)
Amendment No. 1
92 Code.
93 634.602 Unfair method of competition and unfair or
94 deceptive act or practice defined.—It is an unfair method of
95 competition and unfair or deceptive act or practice to fail to
96 continue to perform obligations under the terms of an express
97 written warranty or a home warranty transferred to a subsequent
98 home purchaser as required in s. 634.601.
99 Section 4. Chapter 634, Florida Statutes, entitled
100 “Warranty Associations,” is renamed “Warranties and Warranty
101 Associations.”
102 Section 5. This act shall take effect July 1, 2024.
103
104 -----------------------------------------------------
105 T I T L E A M E N D M E N T
106 Remove lines 3-12 and insert:
107 s. 634.312, F.S.; limiting application; amending s. 634.331,
108 F.S.; conforming provisions to changes made by the act; making
109 technical changes; creating a new part IV of chapter 634, F.S.,
110 entitled "Miscellaneous Provisions”; creating s. 634.600, F.S.,
111 providing definitions; creating s. 634.601, F.S., providing
112 requirements for express written warranties and home warranties
113 transferred to subsequent home purchasers; creating s. 634.602,
114 F.S.; defining an unfair method of competition and unfair or
115 deceptive act or practice; creating an undirected section of law
116 renaming Chapter 634, F.S.,; providing an effective date.
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