PCS for CS/HB 1433 — Act Relating to Hurricane Mitigation Grants and Insurers' Regulations (2025)
Summary
PCS for CS/HB 1433 2025 is a bill to be entitled an act relating to hurricane mitigation grants and insurers' regulations. It amends the My Safe Florida Home Program provisions so that grants are awarded only under certain circumstances and the Department of Financial Services requires mitigation improvements as a condition of reimbursing an approved homeowner. It also covers prohibitions for officers and directors of an insolvent insurer, rate filing deemed approvals, and limits on nonrenewal of residential property policies based solely on a claim. A created section permits insurers to use algorithms, artificial intelligence systems and machine learning systems to assist with claims but bars their use as the sole basis for denial, requiring a qualified human professional to make the final decision.
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“PCS for CS/HB 1433 — Act Relating to Hurricane Mitigation Grants and Insurers' Regulations (2025).”
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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
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1 A bill to be entitled
2 An act relating to hurricane mitigation grants and
3 insurers' regulations; amending s. 215.5586, F.S.;
4 revising legislative intent; specifying that hurricane
5 mitigation grants funded through the My Safe Florida
6 Home Program may be awarded only under certain
7 circumstances; requiring the Department of Financial
8 Services to require that certain mitigation
9 improvements be made as a condition of reimbursing a
10 homeowner approved for a grant; amending s. 624.4073,
11 F.S.; specifying prohibitions for persons who were
12 officers or directors of an insolvent insurer,
13 officers or directors of a managing general agent of
14 an insolvent insurer, attorneys in fact of an
15 insolvent reciprocal insurer, or officers or directors
16 of an attorney in fact of an insolvent reciprocal
17 insurer; providing applicability; requiring the Office
18 of Insurance Regulation to prohibit insurers or
19 reciprocal insurers from paying any compensation to
20 certain persons for certain violations until the
21 violations are remedied; amending s. 627.062, F.S.;
22 prohibiting the office from requesting insurers to
23 waive deemed approvals for residential property
24 insurance rate filings under certain circumstances;
25 prohibiting the office from issuing notices of intent
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26 to disapprove residential property insurance rate
27 filings under certain circumstances; amending s.
28 627.4133, F.S.; prohibiting the nonrenewal of certain
29 residential property insurance policies based solely
30 on the filing of a claim; providing exceptions;
31 authorizing premium increases under certain
32 conditions; clarifying insurer authority to nonrenew
33 for other lawful reasons; creating s. 627.4263, F.S.;
34 defining terms; authorizing insurers to use
35 algorithms, artificial intelligence systems, and
36 machine learning systems to assist in processing
37 claims; prohibiting the use of algorithms, artificial
38 intelligence systems, and machine learning systems as
39 the sole basis for denying claims or portions of
40 claims; requiring that insurers' final decisions to
41 deny claims or portions of claims be made by qualified
42 human professionals; specifying the duties of
43 qualified human professionals; requiring insurers to
44 maintain certain records; requiring insurers to
45 include certain information in claims denial
46 communications to claimants; requiring that certain
47 insurers detail specified information in claims-
48 handling manuals; authorizing the office to conduct
49 market conduct examinations, perform investigations,
50 and use other lawful methods for a specified purpose;
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51 providing an effective date.
52
53 Be It Enacted by the Legislature of the State of Florida:
54
55 Section 1. Section 215.5586, Florida Statutes, is amended
56 to read:
57 215.5586 My Safe Florida Home Program.—There is
58 established within the Department of Financial Services the My
59 Safe Florida Home Program. The department shall provide fiscal
60 accountability, contract management, and strategic leadership
61 for the program, consistent with this section. This section does
62 not create an entitlement for property owners or obligate the
63 state in any way to fund the inspection or retrofitting of
64 residential property in this state. Implementation of this
65 program is subject to annual legislative appropriations. It is
66 the intent of the Legislature that, subject to the availability
67 of funds, the My Safe Florida Home Program provide licensed
68 inspectors to perform hurricane mitigation inspections of
69 eligible homes and grants to fund hurricane mitigation projects
70 that result in property insurance credits, discounts, or other
71 rate differentials on those homes. The department shall
72 implement the program in such a manner that the total amount of
73 funding requested by accepted applications, whether for
74 inspections, grants, or other services or assistance, does not
75 exceed the total amount of available funds. If, after
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76 applications are processed and approved, funds remain available,
77 the department may accept applications up to the available
78 amount. The program shall develop and implement a comprehensive
79 and coordinated approach for hurricane damage mitigation
80 pursuant to the requirements provided in this section.
81 (1) HURRICANE MITIGATION INSPECTIONS.—
82 (a) To be eligible for a hurricane mitigation inspection
83 under the program:
84 1. A home must be a single-family, detached residential
85 property or a townhouse as defined in s. 481.203;
86 2. A home must be site-built and owner-occupied; and
87 3. The homeowner must have been granted a homestead
88 exemption on the home under chapter 196.
89 (b)1. An application for a hurricane mitigation inspection
90 must contain a signed or electronically verified statement made
91 under penalty of perjury that the applicant has submitted only
92 one inspection application on the home or that the application
93 is allowed under subparagraph 2., and the application must have
94 documents attached which demonstrate that the applicant meets
95 the requirements of paragraph (a).
96 2. An applicant may submit a subsequent hurricane
97 mitigation inspection application for the same home only if:
98 a. The original hurricane mitigation inspection
99 application has been denied or withdrawn because of errors or
100 omissions in the application;
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101 b. The original hurricane mitigation inspection
102 application was denied or withdrawn because the home did not
103 meet the eligibility criteria for an inspection at the time of
104 the previous application, and the homeowner reasonably believes
105 the home now is eligible for an inspection; or
106 c. The program's eligibility requirements for an
107 inspection have changed since the original application date, and
108 the applicant reasonably believes the home is eligible under the
109 new requirements.
110 (c) An applicant meeting the requirements of paragraph (a)
111 may receive an inspection of a home under the program without
112 being eligible for a grant under subsection (2) or applying for
113 such grant.
114 (d) Licensed inspectors are to provide home inspections of
115 eligible homes to determine what mitigation measures are needed,
116 what insurance premium discounts may be available, and what
117 improvements to existing residential properties are needed to
118 reduce the property's vulnerability to hurricane damage. An
119 inspector may inspect a townhouse as defined in s. 481.203 to
120 determine if opening protection mitigation as listed in
121 subparagraph (2)(e)1. would provide improvements to mitigate
122 hurricane damage.
123 (e) The department shall contract with wind certification
124 entities to provide hurricane mitigation inspections. The
125 inspections provided to homeowners, at a minimum, must include:
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126 1. A home inspection and report that summarizes the
127 results and identifies recommended improvements a homeowner may
128 take to mitigate hurricane damage.
129 2. A range of cost estimates regarding the recommended
130 mitigation improvements.
131 3. Information regarding estimated premium discounts,
132 correlated to the current mitigation features and the
133 recommended mitigation improvements identified by the
134 inspection.
135 (f) To qualify for selection by the department as a wind
136 certification entity to provide hurricane mitigation
137 inspections, the entity must, at a minimum, meet the following
138 requirements:
139 1. Use hurricane mitigation inspectors who are licensed or
140 certified as:
141 a. A building inspector under s. 468.607;
142 b. A general, building, or residential contractor under s.
143 489.111;
144 c. A professional engineer under s. 471.015;
145 d. A professional architect under s. 481.213; or
146 e. A home inspector under s. 468.8314 and who have
147 completed at least 3 hours of hurricane mitigation training
148 approved by the Construction Industry Licensing Board, which
149 training must include hurricane mitigation techniques,
150 compliance with the uniform mitigation verification form, and
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151 completion of a proficiency exam.
152 2. Use hurricane mitigation inspectors who also have
153 undergone drug testing and a background screening. The
154 department may conduct criminal record checks of inspectors used
155 by wind certification entities. Inspectors must submit a set of
156 fingerprints to the department for state and national criminal
157 history checks and must pay the fingerprint processing fee set
158 forth in s. 624.501. The fingerprints must be sent by the
159 department to the Department of Law Enforcement and forwarded to
160 the Federal Bureau of Investigation for processing. The results
161 must be returned to the department for screening. The
162 fingerprints must be taken by a law enforcement agency,
163 designated examination center, or other department-approved
164 entity.
165 3. Provide a quality assurance program including a
166 reinspection component.
167 (2) HURRICANE MITIGATION GRANTS.—Financial grants shall be
168 used by homeowners to make improvements recommended by an
169 inspection which increase resistance to hurricane damage.
170 (a) A homeowner is eligible for a hurricane mitigation
171 grant if all of the following criteria are met:
172 1. The home must be eligible for an inspection under
173 subsection (1).
174 2. The home must be a dwelling with an insured value of
175 $700,000 or less. Homeowners who are low-income persons, as
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176 defined in s. 420.0004(11), are exempt from this requirement.
177 3. The home must undergo an acceptable hurricane
178 mitigation inspection as provided in subsection (1).
179 4. The building permit application for initial
180 construction of the home must have been made before January 1,
181 2008.
182 5. The homeowner must agree to make his or her home
183 available for inspection once a mitigation project is completed.
184 6. The homeowner must agree to provide to the department
185 information received from the homeowner's insurer identifying
186 the discounts realized by the homeowner because of the
187 mitigation improvements funded through the program.
188 (b)1. An application for a grant must contain a signed or
189 electronically verified statement made under penalty of perjury
190 that the applicant has submitted only one grant application or
191 that the application is allowed under subparagraph 2., and the
192 application must have documents attached demonstrating that the
193 applicant meets the requirements of paragraph (a).
194 2. An applicant may submit a subsequent grant application
195 if:
196 a. The original grant application was denied or withdrawn
197 because the application contained errors or omissions;
198 b. The original grant application was denied or withdrawn
199 because the home did not meet the eligibility criteria for a
200 grant at the time of the previous application, and the homeowner
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201 reasonably believes that the home now is eligible for a grant;
202 or
203 c. The program's eligibility requirements for a grant have
204 changed since the original application date, and the applicant
205 reasonably believes that he or she is an eligible homeowner
206 under the new requirements.
207 3. A grant application must include a statement from the
208 homeowner which contains the name and state license number of
209 the contractor that the homeowner acknowledges as the intended
210 contractor for the mitigation work. The program must
211 electronically verify that the contractor's state license number
212 is accurate and up to date before grant approval.
213 (c) All grants must be matched on the basis of $1 provided
214 by the applicant for $2 provided by the state up to a maximum
215 state contribution of $10,000 toward the actual cost of the
216 mitigation project, except as provided in paragraph (h).
217 (d) All hurricane mitigation performed under the program
218 must be based upon the securing of all required local permits
219 and inspections and must be performed by properly licensed
220 contractors.
221 (e) When recommended by a hurricane mitigation inspection,
222 grants for eligible homes may be used for the following
223 improvements:
224 1. Opening protection, including exterior doors, garage
225 doors, windows, and skylights.
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226 2. Reinforcing roof-to-wall connections.
227 3. Improving the strength of roof-deck attachments.
228 4. Secondary water resistance for roof.
229 (f) When recommended by a hurricane mitigation inspection,
230 grants for townhouses, as defined in s. 481.203, may only be
231 used for opening protection.
232 (g) A grant may be awarded only for each mitigation
233 improvement that, when applied to the home, will result in a
234 property insurance mitigation credit, discount, or other rate
235 differential. If necessary for the home to qualify for a
236 mitigation credit, discount, or other rate differential, the
237 department must may require that improvements be made to all
238 openings, including exterior doors, garage doors, windows, and
239 skylights, as a condition of reimbursing a homeowner approved
240 for a grant. The department may adopt, by rule, the maximum
241 grant allowances for any improvement allowable under paragraph
242 (e) or paragraph (f).
243 (h) Low-income homeowners, as defined in s. 420.0004(11),
244 who otherwise meet the applicable requirements of this
245 subsection are eligible for a grant of up to $10,000 and are not
246 required to provide a matching amount to receive the grant.
247 (i)1. The department shall develop a process that ensures
248 the most efficient means to collect and verify inspection
249 applications and grant applications to determine eligibility.
250 The department may direct hurricane mitigation inspectors to
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251 collect and verify grant application information or use the
252 Internet or other electronic means to collect information and
253 determine eligibility.
254 2. The department shall prioritize the review and approval
255 of such inspection applications and grant applications in the
256 following order:
257 a. First, applications from low-income persons, as defined
258 in s. 420.0004, who are at least 60 years old;
259 b. Second, applications from all other low-income persons,
260 as defined in s. 420.0004;
261 c. Third, applications from moderate-income persons, as
262 defined in s. 420.0004, who are at least 60 years old;
263 d. Fourth, applications from all other moderate-income
264 persons, as defined in s. 420.0004; and
265 e. Last, all other applications.
266 3. The department shall start accepting inspection
267 applications and grant applications no earlier than the
268 effective date of a legislative appropriation funding
269 inspections and grants, as follows:
270 a. Initially, from applicants prioritized under sub-
271 subparagraph 2.a.;
272 b. From applicants prioritized under sub-subparagraph
273 2.b., beginning 15 days after the program initially starts
274 accepting applications;
275 c. From applicants prioritized under sub-subparagraph
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276 2.c., beginning 30 days after the program initially starts
277 accepting applications;
278 d. From applicants described in sub-subparagraph 2.d.,
279 beginning 45 days after the program initially starts accepting
280 applications; and
281 e. From all other applicants, beginning 60 days after the
282 program initially starts accepting applications.
283 4. The program may accept a certification directly from a
284 low-income homeowner or moderate-income homeowner who meets the
285 requirements of s. 420.0004(11) or (12), respectively, if the
286 homeowner provides such certification in a signed or
287 electronically verified statement made under penalty of perjury.
288 (j) A homeowner who receives a grant shall finalize
289 construction and request a final inspection, or request an
290 extension for an additional 6 months, within 1 year after grant
291 approval. If a homeowner fails to comply with this paragraph,
292 his or her application is deemed abandoned and the grant money
293 reverts to the department.
294 (3) REQUESTS FOR INFORMATION.—The department may request
295 that an applicant provide additional information. An application
296 is deemed withdrawn by the applicant if the department does not
297 receive a response to its request for additional information
298 within 60 days after the notification of any apparent error or
299 omission.
300 (4) EDUCATION, CONSUMER AWARENESS, AND OUTREACH.—
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301 (a) The department may undertake a statewide multimedia
302 public outreach and advertising campaign to inform consumers of
303 the availability and benefits of hurricane inspections and of
304 the safety and financial benefits of residential hurricane
305 damage mitigation. The department may seek out and use local,
306 state, federal, and private funds to support the campaign.
307 (b) The program may develop brochures for distribution to
308 Citizens Property Insurance Corporation and other licensed
309 entities or nonprofits that work with the department to educate
310 the public on the benefits of the program. Citizens Property
311 Insurance Corporation must distribute the brochure to
312 policyholders of the corporation each year the program is
313 funded. The brochures may be made available electronically.
314 (5) FUNDING.—The department may seek out and leverage
315 local, state, federal, or private funds to enhance the financial
316 resources of the program.
317 (6) RULES.—The department shall adopt rules pursuant to
318 ss. 120.536(1) and 120.54 to govern the program; implement the
319 provisions of this section; including rules governing hurricane
320 mitigation inspections and grants, mitigation contractors, and
321 training of inspectors and contractors; and carry out the duties
322 of the department under this section.
323 (7) HURRICANE MITIGATION INSPECTOR LIST.—The department
324 shall develop and maintain as a public record a current list of
325 hurricane mitigation inspectors authorized to conduct hurricane
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326 mitigation inspections pursuant to this section.
327 (8) CONTRACT MANAGEMENT.—
328 (a) The department may contract with third parties for
329 grants management, inspection services, contractor services for
330 low-income homeowners, information technology, educational
331 outreach, and auditing services. Such contracts are considered
332 direct costs of the program and are not subject to
333 administrative cost limits. The department shall contract with
334 providers that have a demonstrated record of successful business
335 operations in areas directly related to the services to be
336 provided and shall ensure the highest accountability for use of
337 state funds, consistent with this section.
338 (b) The department shall implement a quality assurance and
339 reinspection program that determines whether initial inspections
340 and home improvements are completed in a manner consistent with
341 the intent of the program. The department may use valid random
342 sampling in order to perform the quality assurance portion of
343 the program.
344 (9) INTENT.—It is the intent of the Legislature that
345 grants made to residential property owners under this section
346 shall be considered disaster-relief assistance within the
347 meaning of s. 139 of the Internal Revenue Code of 1986, as
348 amended.
349 (10) REPORTS.—The department shall make an annual report
350 on the activities of the program that shall account for the use
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351 of state funds and indicate the number of inspections requested,
352 the number of inspections performed, the number of grant
353 applications received, the number and value of grants approved,
354 and the estimated average annual amount of insurance premium
355 discounts and total estimated annual amount of insurance premium
356 discounts homeowners received from insurers as a result of
357 mitigation funded through the program. The report must be
358 delivered to the President of the Senate and the Speaker of the
359 House of Representatives by February 1 of each year.
360 Section 2. Section 624.4073, Florida Statutes, is amended
361 to read:
362 624.4073 Officers and directors or attorneys in fact of
363 insolvent insurers.—
364 (1) Any person who was an officer or director of an
365 insurer doing business in this state and who served in that
366 capacity within the 2-year period before the date the insurer
367 became insolvent, for any insolvency that occurs on or after
368 July 1, 2002, but before July 1, 2025, may not thereafter serve
369 as an officer or director of an insurer authorized in this state
370 or have direct or indirect control over the selection or
371 appointment of an officer or director through contract, trust,
372 or by operation of law, unless the officer or director
373 demonstrates that his or her personal actions or omissions were
374 not a significant contributing cause to the insolvency.
375 (2) Any person who was an officer or director of an
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376 insurer doing business in this state, was the attorney in fact
377 of a reciprocal insurer doing business in this state, or was an
378 officer or director of an attorney in fact of a reciprocal
379 insurer doing business in this state and who served in that
380 capacity within the 5-year period before the date such insurer
381 or reciprocal insurer became insolvent, for any insolvency that
382 occurs on or after July 1, 2025, may not thereafter do any of
383 the following:
384 (a) Serve as an officer or a director of an insurer
385 authorized in this state.
386 (b) Serve as an officer or a director of a managing
387 general agent of an insurer authorized in this state.
388 (c) Serve as an attorney in fact or as an officer or a
389 director of the attorney in fact of a reciprocal insurer
390 authorized in this state.
391 (d) Serve as an officer or a director of an affiliate of
392 an insurer authorized in this state which provides services to
393 such insurer.
394 (e) Exercise direct or indirect control through contract,
395 trust, or by operation of law over the selection or appointment
396 of any position specified in paragraphs (a)-(d).
397 (3)(a) The prohibitions in subsections (1) and (2) do not
398 apply if the officer, director, or attorney in fact
399 demonstrates, and the office determines, that his or her
400 personal actions or omissions were not a significant
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401 contributing cause to the insolvency.
402 (b) For any violation of paragraph (2)(b), paragraph
403 (2)(c), or paragraph (2)(d), the office shall prohibit an
404 insurer or reciprocal insurer authorized in this state from
405 paying any compensation to a managing general agent, affiliate,
406 or attorney in fact that has an officer or director or is an
407 attorney in fact that engaged in such violation until the office
408 determines the violation has been remedied.
409 Section 3. Paragraph (a) of subsection (2) of section
410 627.062, Florida Statutes, is amended to read:
411 627.062 Rate standards.—
412 (2) As to all such classes of insurance:
413 (a) Insurers or rating organizations shall establish and
414 use rates, rating schedules, or rating manuals that allow the
415 insurer a reasonable rate of return on the classes of insurance
416 written in this state. A copy of rates, rating schedules, rating
417 manuals, premium credits or discount schedules, and surcharge
418 schedules, and changes thereto, must be filed with the office
419 under one of the following procedures:
420 1. If the filing is made at least 90 days before the
421 proposed effective date and is not implemented during the
422 office's review of the filing and any proceeding and judicial
423 review, such filing is considered a "file and use" filing. In
424 such case, the office shall finalize its review by issuance of a
425 notice of intent to approve or a notice of intent to disapprove
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426 within 90 days after receipt of the filing. If the 90-day period
427 ends on a weekend or a holiday under s. 110.117(1)(a)-(i), it
428 must be extended until the conclusion of the next business day.
429 The notice of intent to approve and the notice of intent to
430 disapprove constitute agency action for purposes of the
431 Administrative Procedure Act. Requests for supporting
432 information, requests for mathematical or mechanical
433 corrections, or notifications notification to the insurer by the
434 office of its preliminary findings do does not toll the 90-day
435 period during any such proceedings and subsequent judicial
436 review. The rate is shall be deemed approved if the office does
437 not issue a notice of intent to approve or a notice of intent to
438 disapprove within 90 days after receipt of the filing. The
439 office may not request that an insurer waive such deemed
440 approval for any residential property insurance rate filing in
441 which the insurer proposes a rate decrease, provided that the
442 decrease is not solely due to a reduction in coverage or a
443 change to a policy form. The office may not issue a notice of
444 intent to disapprove a residential property insurance rate
445 filing in which the insurer proposes a rate decrease unless the
446 office has completed a finalized review.
447 2. If the filing is not made in accordance with
448 subparagraph 1., such filing must be made as soon as
449 practicable, but within 30 days after the effective date, and is
450 considered a "use and file" filing. An insurer making a "use and
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451 file" filing is potentially subject to an order by the office to
452 return to policyholders those portions of rates found to be
453 excessive, as provided in paragraph (h).
454 3. For all property insurance filings made or submitted
455 after January 25, 2007, but before May 1, 2012, an insurer
456 seeking a rate that is greater than the rate most recently
457 approved by the office shall make a "file and use" filing. For
458 purposes of this subparagraph, motor vehicle collision and
459 comprehensive coverages are not considered property coverages.
460
461 The provisions of this subsection do not apply to workers'
462 compensation, employer's liability insurance, and motor vehicle
463 insurance.
464 Section 4. Subsection (9) is added to section 627.4133,
465 Florida Statutes, to read:
466 627.4133 Notice of cancellation, nonrenewal, or renewal
467 premium.—
468 (9)(a) An insurer is prohibited from nonrenewing a
469 residential property insurance policy solely due to the filing
470 of a claim if the policyholder meets all of the following
471 conditions:
472 1. The policyholder has maintained continuous coverage with
473 the insurer for at least five consecutive years immediately
474 preceding the date of renewal; and
475 2. The policyholder has not filed a claim under the policy
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476 in the five consecutive years immediately preceding the date of
477 renewal.
478 (b) If a policyholder who meets the conditions in
479 paragraphs (a) files a claim, the insurer must offer to renew
480 the policy at the subsequent policy renewal following the claim,
481 and the policy must contain policy terms similar to the policy
482 being renewed unless the insurer has updated approved forms that
483 will apply to all insureds with the same endorsement.
484 (c) This subsection does not apply if:
485 1. The nonrenewal is part of a risk mitigation or exposure
486 reduction plan that has been approved by the office. The office
487 may approve a plan that is supported by actuarial justification
488 and designed to reduce the insurer’s concentration of risk in
489 specific geographic areas, including but not limited to coastal
490 or flood-prone regions; or
491 2. The policyholder elects to not renew the policy.
492 3. The policyholder was issued a notice of nonrenewal prior
493 to the date a claim was filed.
494 (d) An insurer may increase the premium for a policy that
495 is continued in force in accordance with this subsection.
496 However, any annual increase may not exceed 20 percent unless
497 the increase is based on a rate filing approved by the office
498 under this chapter.
499 (e) This subsection does not affect an insurer’s authority
500 to nonrenew a policy for any lawful reason permitted under this
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501 chapter.
502 Section 5. Section 627.4263, Florida Statutes, is created
503 to read:
504 627.4263 Use of algorithms, artificial intelligence
505 systems, and machine learning systems in claims handling.—
506 (1) As used in this section:
507 (a) "Algorithm" means a clearly specified mathematical
508 process for computation which uses rules designed to give
509 prescribed results.
510 (b) "Artificial intelligence system" means a machine-based
511 system that may have varying levels of autonomy and that can,
512 for a given set of objectives, generate outputs such as
513 predictions, recommendations, content, or other outputs
514 influencing decisions made in real or virtual environments.
515 (c) "Machine learning system" means an artificial
516 intelligence system that has the ability to learn from provided
517 data without being explicitly programmed.
518 (d) "Qualified human professional" means an individual
519 who, under the Florida Insurance Code, has authority to adjust
520 or deny a claim or a portion of a claim and has such authority
521 over a particular claim.
522 (2) An insurer may use an algorithm, artificial
523 intelligence system, or machine learning system to assist in
524 processing claims, including generating recommendations to
525 approve or deny a claim or a portion of a claim.
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526 (3) A claim or a portion of a claim may not be denied
527 solely on the basis of output from an algorithm, artificial
528 intelligence system, or machine learning system. A final
529 decision to deny a claim or a portion of a claim must be made
530 and documented by a qualified human professional.
531 (4) Before denying a claim or a portion of a claim, a
532 qualified human professional must do all of the following:
533 (a) Independently analyze the facts of the claim and the
534 terms of the applicable insurance policy.
535 (b) Review and verify the accuracy of any outputs or
536 recommendations produced by any algorithm, artificial
537 intelligence system, or machine learning system used in the
538 claims process.
539 (c) Conduct any required internal review of a prior claim
540 adjustment or decision.
541 (5) An insurer must maintain detailed records related to
542 each claim denial, including all of the following:
543 (a) The name and title of the qualified human professional
544 who made the denial decision and of any qualified human
545 professional who reviewed the decision.
546 (b) The date and time of the claim denial and of any
547 review.
548 (c) Documentation of the basis for denial of the claim or
549 a portion of the claim.
550 (6) A written communication to a claimant concerning the
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551 denial of a claim or a portion of a claim must meet both of the
552 following requirements:
553 (a) Clearly identify the qualified human professional
554 responsible for the denial decision.
555 (b) Include a statement affirming that the claim or a
556 portion of the claim was not denied solely based on the output
557 of an algorithm, artificial intelligence system, or machine
558 learning system.
559 (7) An insurer that uses an algorithm, artificial
560 intelligence system, or machine learning system as part of its
561 claims-handling process must detail in its claims-handling
562 manual the manner in which such systems are used and the manner
563 in which the insurer complies with this section.
564 (8) The office may perform market conduct examinations,
565 perform investigations, or use any other lawful method necessary
566 to verify compliance with this section.
567 Section 6. This act shall take effect July 1, 2025.
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