Insurance & Banking Subcommittee — Meeting Packet (February 11, 2026)
Summary
Meeting packet of the House of Representatives Insurance & Banking Subcommittee for Wednesday, February 11, 2026, 9:00 AM to 11:30 AM in Morris Hall (17 HOB), with Bradford Yeager named alongside the title Chair. The meeting notice lists HB 883, CS/HB 951 on the one-cent piece, CS/HB 961, HB 1039 and HB 1415, plus proposed committee substitutes (PCS) for HB 175, HB 1263 and HB 1265. The bill analysis for HB 883 says the bill authorizes protected cell captive insurance companies to operate and be domiciled in Florida and creates a regulatory framework for them. The packet closes with the PCS for HB 1265, Public Records/Office of Insurance Regulation, whose last section ties its effective date to HB 1263 or similar legislation.
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Insurance & Banking Subcommittee
Wednesday, February 11, 2026
9:00 AM - 11:30 AM
Morris Hall (17 HOB)
Meeting Packet
Daniel Perez Bradford Yeager
Speaker Chair
Committee Meeting Notice
HOUSE OF REPRESENTATIVES
Insurance & Banking Subcommittee
Start Date and Time: Wednesday, February 11, 2026 09:00 AM
End Date and Time: Wednesday, February 11, 2026 11:30 AM
Location: Morris Hall (17 HOB)
Duration: 2.50 hrs
Consideration of the following bill(s):
HB 883 Protected Cell Captive Insurance Companies by Fabricio
CS/HB 951 One-cent Piece by Ways & Means Committee, McFarland, Overdorf
CS/HB 961 Salvage Certificates of Title and Certificates of Destruction by Government Operations
Subcommittee, Albert
HB 1039 Establishment and Administration of a State Cryptocurrency Reserve by Snyder
HB 1415 Use of Digital Currency by the Department of Financial Services by Holcomb, Giallombardo
Consideration of the following proposed committee substitute(s):
PCS for HB 175 -- Payment Stablecoin
PCS for HB 1263 -- Office of Insurance Regulation
PCS for HB 1265 -- Public Records/Office of Insurance Regulation
NOTICE FINALIZED on 02/09/2026 4:42PM by Marks.Amie
02/09/2026 04:42:08PM Leagis ® Page 1 of 1
HB 883
FLORIDA HOUSE OF REPRESENTATIVES
BILL ANALYSIS
This bill analysis was prepared by nonpartisan committee staff and does not constitute an official statement of legislative intent.
BILL #: HB 883 COMPANION BILL: SB 990 (Leek)
TITLE: Protected Cell Captive Insurance Companies LINKED BILLS: None
SPONSOR(S): Fabricio RELATED BILLS: None
Committee References
Insurance & Banking Civil Justice & Claims Commerce
SUMMARY
Effect of the Bill:
The bill authorizes protected cell captive insurance companies to operate and be domiciled in Florida, and creates a
regulatory framework for such companies. A protected cell is a separate account established by a protected cell
captive insurance company, which segregates a participant’s assets and liabilities from other participants’.
The bill’s regulatory framework addresses the following areas:
• Formation of a captive cell captive insurance company.
• Capital and surplus requirements.
• Segregation of assets and liabilities.
• Reinsurance contracts.
• Requirements to write business in Florida.
• Conservation, rehabilitation, and liquidation.
• Legal proceedings against protected cell captive insurance companies.
• Conversion.
• Financial Reporting.
Fiscal or Economic Impact:
There may be an indeterminate economic impact on the private sector.
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ANALYSIS
EFFECT OF THE BILL:
Formation
The bill authorizes sponsors 1 to apply to the Office of Insurance Regulation (“OIR”) to form a protected cell captive
insurance company, provided that it only insures the risks of its protected cell participants. 2 As is currently the
case for other types of captive insurance companies, a protected cell 3 captive insurance company may transact in
all types of insurance except for workers’ compensation and employer’s liability, life, health, personal motor
vehicle, and person residential property. (Section 2).
1 A “sponsor” is any person or entity that is approved by OIR to provide all or part of the capital and surplus and to organize
and operate a protected cell captive insurance company.
2 A participant is defined by the bill as “a person or an entity, and any affiliate of such person or entity, which is insured by a
protected cell captive insurance company, if the losses of the participant are limited through a participant contract.”
STORAGE NAME: h0883.IBS
DATE: 2/10/2026
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HB 883
“Protected cell” is defined by the bill as a separate account established by a protected cell captive insurance
company. The account identifies a pool of assets and liabilities which is separated and insulated from the
remainder of the protected cell captive insurance company's assets and liabilities in accordance with the terms of
one or more participant contracts. (Section 1).
The bill provides that one or more sponsors may form a protected cell captive insurance company. The protected
cell captive insurance company must be incorporated as one of the following entity types:
• as a stock insurer with its capital divided into shares and held by the stockholders;
• as a mutual corporation;
• as a nonprofit corporation with one or more members; or
• as a limited liability company. (Section 6).
An applicant protected cell captive insurance company must file the following information with OIR:
• Materials demonstrating how the applicant will account for the loss and expense experience of each
protected cell.
• A statement acknowledging that all financial records of the applicant, including records related to any
protected cells, must be made available for inspection or examination by OIR.
• All contracts or sample contracts between the applicant and any participants.
• Evidence that expenses will be allocated to each protected cell in a fair and equitable manner. (Section 6).
A protected cell captive insurance company may establish or maintain one or more incorporated or
unincorporated protected cells, to insure risks of one or more participants, subject to the following conditions:
• A protected cell captive insurance company may establish one or more protected cells if OIR has approved
in writing a plan of operation submitted by the protected cell captive insurance company with respect to
each protected cell.
• Once OIR provides written approval of the plan of operation, the protected cell may attribute insurance
obligations with respect to its insurance business to the protected cell.
• A protected cell must have its own distinct name or designation, which must include the word “protected
cell,” “incorporated cell,” or an abbreviation of those designations.
• The protected cell must transfer all assets attributable to a protected cell to one or more separately
established and identified protected cell accounts bearing the name or designation of that protected cell.
• Protected cell assets must be held in the protected cell accounts for the purpose of satisfying the
obligations of that protected cell.
• An incorporated cell may be organized and operated in any form of business organization authorized by
OIR. Each incorporated protected cell of a protected cell captive insurance company must be treated as a
captive insurer and has the power to enter into contracts.
• All attributions of assets and liabilities between a protected cell and the general account 4 must be in
accordance with the plan of operation and participant contracts 5 approved by OIR. These attributions must
be in cash or in readily marketable securities 6 with established market values. (Section 6).
The bill provides that the creation of a protected cell does not create a legal person separate from the protected cell
captive insurance company unless the protected cell is an incorporated cell. Amounts attributed to a protected cell
are owned by the protected cell. A protected cell captive insurance company may not act as a trustee of the
protected cell assets of the protected cell account. However, a protected cell captive insurance company may allow
4 “General account” is defined in the bill as “all assets and liabilities of a protected cell captive insurance company not
attributable to a protected cell.”
5 A “participant contract” is defined by the bill as a contract by which a protected cell captive insurance company insures the
risks of a participant and limits the losses of each such participant to its proportional share of the assets of one or more
protected cells identified in such contract.
6 Marketable securities are very easy to convert to cash, and can be liquidated within minutes, hours, or at most days. See
Investopedia, Marketable Security: What it is, How it Works,
https://www.investopedia.com/terms/m/marketable_security.asp (last visited Feb. 9, 2026).
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a security interest 7 to attach to the assets of a protected cell assets or a protected cell account if the security
interest is in favor of a creditor of that protected cell. (Section 6).
The bill provides that a participant contract may not take effect without OIR’s prior written approval. The addition
of each new protected cell, the withdrawal of any participant, or the termination of any existing protected cell
constitutes a change in the plan of operations, and requires OIR approval. (Section 6).
The bill provides that a protected cell captive insurance company may establish and operate both unincorporated
and incorporated protected cells. (Section 6).
The bill provides that biographical affidavits are not required for participants in unincorporated cells, but
biographical affidavits are required for owners of incorporated cells. (Section 6).
Capital and Surplus Requirements
The bill requires a protected cell captive insurance company to possess, and maintain, unimpaired paid-in capital
of at least $100,000. For protected cell captive insurance companies incorporated as nonprofit corporations, the
bill requires unrestricted net assets of at least $100,000. (Section 3).
The bill requires protected cell captive insurance companies to possess, and maintain, unimpaired surplus of at
least $100,000. (Section 4).
Segregation of assets and liabilities
A protected cell captive insurance company must establish administrative and accounting procedures necessary to
properly identify the protected cell captive insurance company as well as the protected cells assets, and protected
cell liabilities attributable to the protected cells. The directors of a protected cell captive insurance company must
keep protected cell assets and protected cell liabilities:
• Separate and separately identifiable from the assets and liabilities of the protected cell captive insurance
company’s general account; and
• Attributable to one protected cell separate and separately identifiable from protected cell assets and
protected cell liabilities attributable to other protected cells. (Section 6).
If assets and liabilities are not kept separate, the bill provides the remedy of tracing 8. (Section 6).
The bill provides that when establishing a protected cell, the protected cell captive insurance company must
attribute to the protected cell assets a value at least equal to the reserves and other insurance liabilities attributed
to that protected cell. (Section 6).
Each protected cell must be accounted for separately on the books and records of the protected cell captive
insurance company to reflect the financial condition and results of operations of each protected cell. (Section 6).
An asset of a protected cell may not be liable for any business conducted by the protected cell captive insurance
company on behalf of any other protected cell or the company’s general account. (Section 6).
7 A security interest is an enforceable legal claim or lien on collateral that has been pledged to obtain a loan. See Investopedia,
Understanding Security Interests: Legal Definition and Key Requirements, https://www.investopedia.com/terms/s/security-
interest.asp (last visited Feb. 9, 2026).
8 Tracing is a remedy that is used to identify, follow, and recover property that has been mixed with other assets. See Kornfeld,
Principles of Tracing, https://kornfeldllp.com/2021/06/principles-of-
tracing/#:~:text=Tracing%20is%20a%20remedy%20that%20can%20be,bona%20fide%20purchaser%20for%20value%20
without%20notice (last visited Feb. 10, 2026).
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HB 883
A protected cell captive insurance company may not sell, exchange, or otherwise transfer assets between or among
any of its protected cells without the consent of the protected cells. However, the assets of two or more protected
cells may be combined for purposes of investment. (Section 6).
The bill allows protected cell captive insurance companies to contract with or arrange for an investment advisor,
commodity trading advisor, or other third party to manage the protected cell assets of a protected cell if all
remuneration, expenses, and other compensation of the third party advisor or manager are payable from the
protected cell assets of that protected cell, and not from the protected assets of other cells or the assets of the
protected cell captive insurance company’s general account. (Section 6).
The bill provides that the assets of a protected cell may not be used to pay any expenses or claims other than those
attributable to the protected cell. (Section 6).
A protected cell captive insurance company’s capital and surplus must at all times be available to pay any expenses
or claims against the protected cell captive insurance company. (Section 6).
Reinsurance Contracts
The protected cell captive insurance company must attribute all insurance obligations, assets, and liabilities
relating to a reinsurance contract entered into with respect to a protected cell to such protected cell. (Section 6).
Dividends and Distributions
A protected cell captive insurance company may not sell, exchange, transfer, or otherwise distribute assets, or pay
any dividend or distribution from a protected cell to the company or to a participant without OIR’s approval. The
bill prohibits OIR from approving any sale, exchange, transfer, dividend, or distribution that would result in
insolvency or impairment of a protected cell. (Section 6).
Business Written by a Protected Cell Captive Insurance Company
The bill requires the business written by a protected cell captive insurance company to be:
• Fronted 9 by an insurance company licensed under the laws of any state.
• Reinsured by a reinsurer authorized or approved by Florida.
• Secured by a trust fund in the United States for the benefit of policyholders and claimants or funded by an
irrevocable letter of credit or other arrangement that is acceptable to OIR. The amount of security provided
may not be less than the reserves associated with those liabilities which are neither fronted nor reinsured.
(Section 6).
Conservation, Rehabilitation, or Liquidation
Each protected cell captive insurance company must notify OIR in writing within 10 business days of any protected
cell that is insolvent or otherwise unable to meet its claim or expense obligations. (Section 6).
If a protected cell captive insurance company enters into conservation, rehabilitation, or liquidation proceedings,
the assets and liabilities of a protected cell must be kept separate from those of other protected cells and the
protected cell captive insurance company, to the extent OIR determines they are separable. (Section 6).
In the event of an insolvency of a protected cell captive insurance company where OIR determines that one or
more protected cells remain solvent, OIR may separate those solvent cells from the protected cell captive insurance
company and may allow for the conversion of such protected cells into one or more new or existing protected cell
captive insurance companies. (Section 6).
9 “Fronting” means the use of a licensed, admitted insurer to issue an insurance policy on behalf of a self-insured organization
or captive insurer without the intention of transferring any of the risk. The risk of loss is retained by the self-insured or captive
insurer with an indemnity or reinsurance agreement. However, the fronting company assumes a credit risk since it would be
required to honor the obligations imposed by the policy if the self-insurer or captive failed to indemnify it. See International
Risk Management Institute, Fronting, https://www.irmi.com/term/insurance-
definitions/fronting#:~:text=Fronting%20refers%20to%20the%20use,Conferences (last visited Feb. 8, 2026).
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HB 883
The bill provides that upon any order of supervision, rehabilitation, or liquidation of a protected cell captive
insurance company, the receiver 10 must manage the assets and liabilities of the protected cell captive insurance
company. (Section 6).
Legal Proceedings Against a Protected Cell Captive Insurance Company
The pleadings in any legal action brought by or against a protected cell captive insurance company must specify
which protected cell or cells are or should be named a party to the lawsuit. If the general account is party to the
suit, such account must be separately identified in the pleadings as if it were a protected cell. (Section 6).
The bill provides that if a legal action brought against a protected cell captive insurance company does not specify
one or more protected cells, it must be deemed to have been brought against the general account only. (Section 6).
The bill provides that any protected cell that is not named in the pleadings of a lawsuit may not be deemed to be a
party to the legal action, and if erroneously named as a party, it is entitled to prompt dismissal from the lawsuit.
(Section 6).
The bill provides that the assets of one protected cell may not be encumbered or seized to satisfy the obligations of
or a judgment against any other protected cell, unless specified by the plan of operation. A protected cell does not
have a duty to defend the rights and obligations of any other protected cell. (Section 6).
The bill provides that in any legal action involving a protected cell captive insurance company or a protected cell,
any papers, documents, or property of a nonparty protected cell must be afforded the same status during discovery
as the documents or property of any other unrelated third party. (Section 6).
Conversion
The bill provides that upon the application of a protected cell captive insurance company, one of its protected cells
may be converted to any form of captive insurance company with OIR’s consent. OIR may issue the converting
protected cell a certificate of authority with an effective date of the original date of formation as a protected cell.
(Section 6).
The bill provides that a captive insurance company may apply to OIR to become a protected cell captive insurance
company. This conversion requires approval by OIR and the filing of amended organization documents with the
Secretary of State. The effective date of the certificate of authority would remain the same as the effective date of
the prior captive insurance company. (Section 6).
The bill provides that with the consent of both the affected protected cell captive insurance companies and OIR, an
individual protected cell of a captive insurance company may disaffiliate from one protected cell captive insurance
company and affiliate with another protected cell captive insurance company. The protected cell must maintain
and carry over all assets and liabilities to the new protected cell captive insurance company. (Section 6).
The bill provides that with the consent of the affected protected cell captive insurance company or companies, the
owners or the participants of the protected cells, and OIR, an individual protected cell of a captive insurance
company may merge or otherwise combine assets or liabilities with another individual protected cell captive
insurance company. The surviving protected cell must acquire all of the assets and liabilities of the merging
protected cell. (Section 6).
The date of final conversion or disaffiliation of a protected cell shall be deemed a termination of that cell from the
prior entity only for the purpose of annual reports, inspections, examinations, and taxation. (Section 6).
10 The Department of Financial Services is the appointed receiver of all insurance companies ordered into receivership in
Florida. See ch. 631, F.S.
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HB 883
Financial Reporting to OIR
Each protected cell captive insurance company must annually file with OIR any financial reports required by the
office. The bill provides that these reports must include accounting statements detailing the financial experience of
each protected cell. (Section 6).
Applicability of the Florida Insurance Code
The bill provides that the Florida Insurance Code does not apply to protected cell captive insurance companies, as
is currently the case for captive insurance companies. (Section 5).
Effective Date
The bill provides an effective date of July 1, 2026. (Section 7).
FISCAL OR ECONOMIC IMPACT:
PRIVATE SECTOR:
There may be an indeterminate economic impact on the private sector to the extent that businesses may find it
easier to self-insure through this model.
RELEVANT INFORMATION
SUBJECT OVERVIEW:
Office of Insurance Regulation
The Office of Insurance Regulation (“OIR”) regulates all activities relating to insurers and other risk bearing
entities, including licensing, rates, policy forms, marked conduct, claims, issuance of certificates of authority,
solvency, viatical settlements, premium financing, and administrative supervision. 11
Florida Insurance Code
The Florida Insurance Code 12 provides the regulatory framework for admitted insurers in the state. Insurance
companies that transact insurance in Florida or that have offices located in the state are required to obtain a
certificate of authority (“COA”) issued by OIR. These companies, referred to as authorized or admitted insurers, are
broadly regulated by OIR under the Insurance Code as to reserves, surplus as to policyholders, solvency, rates and
forms, market conduct, permissible investments, and affiliate relationships. 13 Authorized insurers are also
required to participate in a variety of government mandated insurance programs and pay assessments levied by
state guaranty funds in the event of insurer insolvencies. 14
The Florida Insurance Code also authorizes OIR examine the affairs, transactions, accounts, records, and assets of
each insurer that holds a COA to transact insurance business in Florida. 15 As part of the examination process, all
persons being examined must make available to OIR the accounts, records, documents, files, information, assets,
and matters in their possession or control that relate to the subject of the examination. 16 OIR is also authorized to
conduct market conduct examinations to determine compliance with applicable provisions of the Florida
Insurance Code.
11 S. 20.121(3)(a), F.S.
12 See s. 624.01, F.S.
13 The Insurance Code consists of chs. 624-632, 634, 635, 636, 641, 642, 648, and 651, F.S.
14 For example, Florida licensed direct writers of property and casualty insurance must be members of the Florida Insurance
Guaranty Association (“FIGA”), which handles the claims of insolvent insurers under part II of ch. 631, F.S., and insurers
offering workers’ compensation coverage in Florida must be members of the Florida Workers’ Compensation Insurance
Guaranty Association, which provides payment of covered claims for insurers that are declared insolvent under part V of
ch. 631, F.S.
15 S. 624.316(1)(a), F.S.
16 S. 624.318(2), F.S.
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Captive Insurance
Captive insurance is a specialized form of self-insurance allowing a business to create its own insurance company
to cover specific types of risk. Rather than purchasing coverage from a traditional insurance company, the business
establishes a “captive” insurance company to underwrite its own risks. The captive insurer operates by having its
owner pay premiums to cover specific risks. The captive insurer then underwrites policies, invests the premiums,
and manages claims. Profits can be returned to the owner as dividends, reinvested to build surplus, used to reduce
future premiums, expand coverage, or fund risk management initiatives that help mitigate future losses. 17
Captives are commonly used to manage unique or complex risks. Sometimes traditional commercial policies have
policy gaps, exclusions, or are too expensive. 18
The types of risk covered by captive insurance companies include:19
• Professional and management liability.
o Errors and omissions
o Directors and officers
• Product liability
• Specialized risks
o Cyber liability
o Environmental (i.e., pollution)
o Active shooter
o Terrorism
o Supply chain disruption
o Reputational risks
o Cannabis
• Commercial property and casualty
o General liability
o Commercial auto
o Property damage
o Business interruption
Captive insurers are sometimes used to supplement traditional commercial policies with high deductibles or to
cover self-insured retentions.20
Florida, authorizes and regulates captive insurance companies. A captive insurance company may do any and all
insurance authorized under the insurance code, except for workers’ compensation and employer’s liability, life,
health, personal motor vehicle, and personal residential property. 21
Presently, there are three domestic captive insurers authorized to do business in Florida, two of which became
authorized since the beginning of 2025. 22 Minimum unimpaired capital requirements for a Florida authorized
captive insurer are: 23
• Pure captive insurance company, at least $100,000.
• Industrial insured captive insurance company incorporated as a stock insurer, at least $200,000.
17 Captive.com, The Expanding Role of Captives in Today’s Changing Risk Market, https://www.captive.com/news/the-
expanding-role-of-captives-in-todays-changing-risk-market (last visited Feb. 9, 2026).
18 Id.
19 Id.
20 Id.
21 S. 628.905, F.S.
22 Office of Insurance Regulation, Active Company Search, https://companysearch.floir.gov/ (last visited Feb. 9, 2026).
23 S. 628.907(1), F.S.
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• Special purpose captive insurance company, an amount determined by OIR after giving due consideration
to the company’s business plan, feasibility study, and pro forma financial statements and projections,
including the nature of the risks to be insured.
Minimum maintained unrestricted net asset requirements for a Florida authorized captive insurer incorporated as
a nonprofit corporation are: 24
• Pure captive insurance company, at least $250,000.
• A special purpose captive insurance company, an amount determined by OIR after giving due consideration
to the company’s business plan, feasibility study, and pro forma financial statements and projections,
including the nature of the risks to be insured.
Protected Cell Captive Insurance Companies
A protected cell captive is a single legal insurance entity that allows legally segregated companies to effectively
receive the benefits of the captive insurance model without the costs of the full set-up of a standalone captive
insurance company. 25
Business joins the protected cell captive but its assets are kept in its own walled-off cell. 26 The assets in one
participant's account may not be used to pay liabilities in another unless the respective participants have entered
into an agreement to do so. 27 Each cell functions like a separate company protecting its finances from other cells
and the core's general business. 28
A hardening insurance market coupled with inflation has led to the growth of captive insurers, and in recent times,
protected cell captives have seen a surge in popularity. 29
Florida does not currently recognize protected cell captive insurance companies as a type of captive insurer.
However, 28 states and the District of Columbia recognize protected cell captive insurance companies. 30
24 S. 628.907(2), F.S.
25 Captive.com, What is a Protected or Segregared Cell Captive?, https://www.captive.com/articles/what-is-a-protected-or-
segregated-cell-captive#:~:text=Tax%20deductibility%20of%20premiums%20not,an%20agreement%20to%20do%20so
(last visited Feb. 9, 2026).
26 Id.
27 Id.
28 Id.
29 Anthony Bellano, Protected Cell Structures Fuel Captive Growth, Best’s Review (August 2022), available at
https://bestsreview.ambest.com/edition/2022/August/docs/BestsReviewAugust2022.pdf?reload=1673039112745&utm
(last visited Feb. 9, 2026).
30 States that recognize protected cell captive insurance companies include: Alabama, Arizona, Arkansas, Connecticut,
Delaware, the District of Columbia, Georgia, Hawaii, Illinois, Iowa, Kansas, Kentucky, Maine, Michigan, Missouri, Montana,
Nevada, New Jersey, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont,
Virginia, and Washington. See National Association of Insurance Commissioners, Protected Cell Company Model Act,
https://content.naic.org/sites/default/files/model-law-state-page-290.pdf (last visited Feb. 9, 2026).
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BILL HISTORY
STAFF
DIRECTOR/ ANALYSIS
COMMITTEE REFERENCE ACTION DATE POLICY CHIEF PREPARED BY
Insurance & Banking Brackett Miguez
Subcommittee
Civil Justice & Claims
Subcommittee
Commerce Committee
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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 883 2026
1 A bill to be entitled
2 An act relating to protected cell captive insurance
3 companies; amending s. 628.901, F.S.; revising the
4 definitions of the terms "captive insurance company"
5 and "special purpose captive insurance company";
6 defining terms; amending s. 628.905, F.S.; specifying
7 that a protected cell captive insurance company may
8 only insure certain risks; amending s. 628.907, F.S.;
9 revising the unimpaired paid-in capital requirements
10 for captive insurance companies; revising the
11 unrestricted net asset requirements for captive
12 insurance companies incorporated as nonprofit
13 corporations; amending s. 628.908, F.S.; revising the
14 unimpaired surplus requirements for captive insurance
15 companies; amending s. 628.909, F.S.; revising
16 applicability; creating s. 628.921, F.S.; authorizing
17 one or more sponsors to form a protected cell captive
18 insurance company; requiring protected cell captive
19 insurance companies to be incorporated in a specified
20 manner; requiring applicant protected cell captive
21 insurance companies to file certain information with
22 the Office of Insurance Regulation; authorizing
23 protected cell captive insurance companies to
24 establish and maintain certain protected cells,
25 subject to certain approvals granted by the office;
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26 specifying conditions on protected cell establishment
27 and maintenance; providing construction; specifying
28 requirements regarding protected cells' assets and
29 liabilities and their attribution; requiring protected
30 cell captive insurance companies to file annual
31 reports, as required by the office, and to notify the
32 office when any protected cell is insolvent or unable
33 to meet its obligations; requiring the office's
34 approval before a participant contract may take
35 effect; specifying requirements for any insurance
36 business written by a protected cell captive insurance
37 company and the security arrangements that must be
38 established; authorizing the office to take certain
39 actions in the event of an insolvency of a protected
40 cell captive insurance company; requiring certain
41 affidavits for owners of incorporated protected cells;
42 authorizing the assets of two or more protected cells
43 to be combined for a specified purpose; specifying
44 that such combination may not be construed in a
45 certain manner; authorizing the office to approve the
46 use of certain methods for valuation of certain assets
47 and liabilities and rating the risk attributable to a
48 protected cell; requiring a receiver to manage the
49 assets and liabilities of protected cell captive
50 insurance companies under certain circumstances;
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51 prohibiting assets of protected cells from being used
52 to pay certain expenses and claims; requiring that
53 protected cell captive insurance companies' capital
54 and surplus be available to pay certain expenses or
55 claims; specifying requirements in actions brought by
56 or against protected cell captive insurance companies;
57 specifying that certain legal actions are deemed to be
58 brought against the general account only; specifying
59 that protected cells not named in an action are not
60 deemed to be a party to the action and are entitled to
61 dismissal under certain circumstances; prohibiting the
62 assets of protected cells from being encumbered or
63 seized under certain circumstances; specifying that
64 protected cells do not have a duty to defend the
65 rights and obligations or other protected cells;
66 requiring protected cell captive insurance companies
67 and protected cells to be afforded a certain status
68 during discovery; specifying that nonparty protected
69 cells have standing under certain circumstances;
70 authorizing protected cells to be converted to any
71 authorized form of captive insurance company;
72 authorizing the office to issue a specified
73 certificate of authority; requiring converting
74 protected cells to file certain organizational
75 documents; specifying requirements for such documents;
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76 specifying the formation date upon conversion;
77 requiring converted protected cells to possess certain
78 assets and liabilities; requiring the converting
79 protected cell to submit amended organizational
80 documents under certain circumstances; authorizing
81 captive insurance companies to apply to the office for
82 conversion to protected cell captive insurance
83 companies; requiring captive insurance companies to be
84 issued a revised certificate of authority under
85 certain circumstances; specifying the effective date
86 of such certificate; authorizing protected cells of a
87 captive insurance company to disaffiliate and to
88 affiliate with another protected cell captive
89 insurance company under certain circumstances;
90 authorizing the office to require changes to certain
91 documents under certain circumstances; specifying the
92 formation date of protected cells that affiliate with
93 another protected cell captive insurance company;
94 requiring such protected cells to maintain and carry
95 over certain assets and liabilities; authorizing an
96 individual protected cell to merge or otherwise
97 combine assets and liabilities with another individual
98 protected cell, subject to certain requirements;
99 specifying that a hearing is not required for certain
100 mergers; specifying the date of final conversion or
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101 disaffiliation of a protected cell for certain
102 purposes; specifying that the prior entity and
103 successor entities are responsible for certain tasks;
104 providing an effective date.
105
106 Be It Enacted by the Legislature of the State of Florida:
107
108 Section 1. Present subsections (8) through (11), (12)
109 through (14), and (15) of section 628.901, Florida Statutes, are
110 redesignated as subsections (9) through (12), (19) through (21),
111 and (23), respectively, new subsections (8) and (13) through
112 (15) and subsections (16) through (18) and (22) are added to
113 that section, and subsection (2) and present subsection (14) of
114 that section are amended, to read:
115 628.901 Definitions.—As used in this part, the term:
116 (2) "Captive insurance company" means a domestic insurer
117 established under this part. A captive insurance company
118 includes a protected cell captive insurance company, pure
119 captive insurance company, special purpose captive insurance
120 company, or industrial insured captive insurance company formed
121 and licensed under this part.
122 (8) "General account" means all assets and liabilities of
123 a protected cell captive insurance company not attributable to a
124 protected cell.
125 (13) "Participant" means a person or an entity, and any
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126 affiliate of such person or entity, which is insured by a
127 protected cell captive insurance company, if the losses of the
128 participant are limited through a participant contract.
129 (14) "Participant contract" means a contract by which a
130 protected cell captive insurance company insures the risks of a
131 participant and limits the losses of each such participant to
132 its pro rata share of the assets of one or more protected cells
133 identified in such contract.
134 (15) "Protected cell" means a separate account established
135 by a protected cell captive insurance company formed or licensed
136 under this part, in which account an identified pool of assets
137 and liabilities is segregated and insulated by means of this
138 part from the remainder of the protected cell captive insurance
139 company's assets and liabilities in accordance with the terms of
140 one or more participant contracts to fund the liabilities of the
141 protected cell captive insurance company with respect to the
142 participants as set forth in the participant contracts.
143 (16) "Protected cell assets" means all assets, contract
144 rights, and general intangibles identified with and attributable
145 to a specific protected cell of a protected cell captive
146 insurance company.
147 (17) "Protected cell captive insurance company" means a
148 captive insurance company:
149 (a) In which the minimum capital and surplus required by
150 this part are provided by one or more sponsors;
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151 (b) That is formed or licensed under this part;
152 (c) That insures the risks of separate participants
153 through participant contracts; and
154 (d) That funds its liability to each participant through
155 one or more protected cells and segregates the assets of each
156 protected cell from the assets of other protected cells and from
157 the assets of the protected cell captive insurance company's
158 general account.
159 (18) "Protected cell liabilities" means all liabilities
160 and other obligations identified with and attributed to a
161 specific protected cell of a protected cell captive insurance
162 company.
163 (21)(14) "Special purpose captive insurance company" means
164 a captive insurance company that is formed or licensed under
165 this part which chapter that does not meet the definition of any
166 other type of captive insurance company defined in this section.
167 (22) "Sponsor" means any person or entity that is approved
168 by the office to provide all or part of the capital and surplus
169 required by this part and to organize and operate a protected
170 cell captive insurance company.
171 Section 2. Paragraph (f) is added to subsection (1) of
172 section 628.905, Florida Statutes, to read:
173 628.905 Licensing; authority.—
174 (1) A captive insurance company, if permitted by its
175 charter or articles of incorporation, may apply to the office
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176 for a license to do any and all insurance authorized under the
177 insurance code, other than workers' compensation and employer's
178 liability, life, health, personal motor vehicle, and personal
179 residential property insurance, except that:
180 (f) A protected cell captive insurance company may only
181 insure the risks of its protected cell participants.
182 Section 3. Subsections (1) and (2) of section 628.907,
183 Florida Statutes, are amended to read:
184 628.907 Minimum capital and net assets requirements;
185 restriction on payment of dividends.—
186 (1) A captive insurance company may not be issued a
187 license unless it possesses and thereafter maintains the
188 following applicable unimpaired paid-in capital requirements of:
189 (a) In the case of a protected cell captive insurance
190 company, at least $100,000.
191 (b) In the case of a pure captive insurance company, at
192 least $100,000.;
193 (c)(b) In the case of an industrial insured captive
194 insurance company incorporated as a stock insurer, at least
195 $200,000.; and
196 (d)(c) In the case of a special purpose captive insurance
197 company, an amount determined by the office after giving due
198 consideration to the company's business plan, feasibility study,
199 and pro forma financial statements and projections, including
200 the nature of the risks to be insured.
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201 (2) The office may not issue a license to a captive
202 insurance company incorporated as a nonprofit corporation unless
203 the company possesses and maintains the following applicable
204 unrestricted net assets requirements of:
205 (a) In the case of a protected cell captive insurance
206 company, at least $100,000.
207 (b) In the case of a pure captive insurance company, at
208 least $250,000.
209 (c)(b) In the case of a special purpose captive insurance
210 company, an amount determined by the office after giving due
211 consideration to the company's business plan, feasibility study,
212 and pro forma financial statements and projections, including
213 the nature of the risks to be insured.
214 Section 4. Subsection (1) of section 628.908, Florida
215 Statutes, is amended to read:
216 628.908 Surplus requirements; restriction on payment of
217 dividends.—
218 (1) The office may not issue a license to a captive
219 insurance company unless the company possesses and maintains the
220 following applicable unimpaired surplus requirements of:
221 (a) In the case of a pure captive insurance company, at
222 least $150,000.
223 (b) In the case of a protected cell captive insurance
224 company, at least $100,000.
225 (c) In the case of an industrial insured captive insurance
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226 company incorporated as a stock insurer, at least $300,000.
227 (d)(c) In the case of an industrial insured captive
228 insurance company incorporated as a mutual insurer, at least
229 $500,000.
230 (e)(d) In the case of a special purpose captive insurance
231 company, an amount determined by the office after giving due
232 consideration to the company's business plan, feasibility study,
233 and pro forma financial statements and projections, including
234 the nature of the risks to be insured.
235 Section 5. Subsection (1) of section 628.909, Florida
236 Statutes, is amended to read:
237 628.909 Applicability of other laws.—
238 (1) The Florida Insurance Code does not apply to captive
239 insurance companies, protected cell captive insurance companies,
240 or industrial insured captive insurance companies except as
241 provided in this part and subsections (2) and (3).
242 Section 6. Section 628.921, Florida Statutes, is created
243 to read:
244 628.921 Protected cell captive insurance companies.—
245 (1) One or more sponsors may form a protected cell captive
246 insurance company under this part.
247 (2) A protected cell captive insurance company must be
248 incorporated as a stock insurer with its capital divided into
249 shares and held by the stockholders, as a mutual corporation, as
250 a nonprofit corporation with one or more members, or as a
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251 limited liability company.
252 (3) In addition to the information required by chapter
253 624, each applicant protected cell captive insurance company
254 must file all of the following information with the office:
255 (a) Materials demonstrating how the applicant will account
256 for the loss and expense experience of each protected cell at a
257 level of detail found to be sufficient by the office, and how it
258 will report such experience to the office.
259 (b) A statement acknowledging that all financial records
260 of the applicant, including records pertaining to any protected
261 cells, must be made available for inspection or examination by
262 the office or the office's designated agent.
263 (c) All contracts or sample contracts between the
264 applicant and any participants.
265 (d) Evidence that expenses will be allocated to each
266 protected cell in a fair and equitable manner.
267 (4) A protected cell captive insurance company formed or
268 licensed under this part may establish and maintain one or more
269 incorporated or unincorporated protected cells, to insure risks
270 of one or more participants, subject to all of the following
271 conditions:
272 (a)1. A protected cell captive insurance company may
273 establish one or more protected cells if the office has approved
274 in writing a plan of operation or amendments to a plan of
275 operation submitted by the protected cell captive insurance
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276 company with respect to each protected cell. A plan of operation
277 must include, but is not limited to, the specific business
278 objectives and investment guidelines of the protected cell.
279 However, the office may require additional information in the
280 plan of operation. The office may make the approval of a plan of
281 operation or amendments to a plan of operation effective as of
282 any date on or before the date the approval is signed so long as
283 the effective date is no earlier than the date on which the plan
284 of operation or amendments to the plan of operation were filed
285 with the office.
286 2. Upon the office's written approval of the plan of
287 operation, the protected cell captive insurance company, in
288 accordance with the approved plan of operation, may attribute
289 insurance obligations with respect to its insurance business to
290 the protected cell.
291 3. A protected cell must have its own distinct name or
292 designation, which must include the words "protected cell" or
293 "incorporated cell." Such names or designations may also be
294 reasonably abbreviated, including, without limitation, PC or
295 P.C. for "protected cell"; IC, I.C., IPC, or I.P.C. for
296 "incorporated cell"; and SC, S.C., SPC, or S.P.C. for "series
297 cell."
298 4. The protected cell captive insurance company shall
299 transfer all assets attributable to a protected cell to one or
300 more separately established and identified protected cell
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301 accounts bearing the name or designation of that protected cell.
302 Protected cell assets must be held in the protected cell
303 accounts for the purpose of satisfying the obligations of that
304 protected cell.
305 5. An incorporated protected cell may be organized and
306 operated in any form of business organization authorized by the
307 office, including, but not limited to, an individual series of a
308 limited liability company under chapter 605. Each incorporated
309 protected cell of a protected cell captive insurance company
310 must be treated as a captive insurer for purposes of this part
311 and has the power to enter into contracts, including an
312 individual series of a limited liability company. Unless
313 otherwise permitted by the organizational documents of a
314 protected cell captive insurance company, each incorporated
315 protected cell of the protected cell captive insurance company
316 must have the same directors, secretary, and registered office
317 as the protected cell captive insurance company.
318 6. All attributions of assets and liabilities between a
319 protected cell and the general account must be in accordance
320 with the plan of operation and participant contracts approved by
321 the office. A protected cell captive insurance company may not
322 make other attributions of assets or liabilities between the
323 protected cell captive insurance company's general account and
324 its protected cells. Any attribution of assets and liabilities
325 between the general account and a protected cell must be in cash
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326 or in readily marketable securities with established market
327 values.
328 (b) The creation of a protected cell does not create, with
329 respect to that protected cell, a legal person separate from the
330 protected cell captive insurance company unless the protected
331 cell is an incorporated cell. Amounts attributed to a protected
332 cell under this part, including assets transferred to a
333 protected cell account, are owned by the protected cell. A
334 protected cell captive insurance company may not act as, or hold
335 itself out to be, a trustee of the protected cell assets of the
336 protected cell account. Notwithstanding this subsection, a
337 protected cell captive insurance company may permit a security
338 interest to attach to the assets of a protected cell assets or a
339 protected cell account if the security interest is in favor of a
340 creditor of that protected cell and is otherwise authorized by
341 applicable law.
342 (c) This subsection may not be construed to prohibit the
343 protected cell captive insurance company from contracting with
344 or arranging for an investment advisor, commodity trading
345 advisor, or other third party to manage the protected cell
346 assets of a protected cell if all remuneration, expenses, and
347 other compensation of the third-party advisor or manager are
348 payable from the protected cell assets of that protected cell
349 and not from the protected cell assets of other protected cells
350 or the assets of the protected cell captive insurance company's
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351 general account.
352 (d)1. A protected cell captive insurance company must
353 establish administrative and accounting procedures necessary to
354 properly identify the one or more protected cells of the
355 protected cell captive insurance company and the protected cell
356 assets and protected cell liabilities attributable to the
357 protected cells. The directors of a protected cell captive
358 insurance company must keep protected cell assets and protected
359 cell liabilities:
360 a. Separate and separately identifiable from the assets
361 and liabilities of the protected cell captive insurance
362 company's general account; and
363 b. Attributable to one protected cell separate and
364 separately identifiable from protected cell assets and protected
365 cell liabilities attributable to other protected cells.
366 2. If subparagraph 1. is violated, the remedy of tracing
367 applies to protected cell assets that have been commingled with
368 the protected cell assets of other protected cells or with the
369 assets of the protected cell captive insurance company's general
370 account. The remedy of tracing may not be construed as
371 exclusive.
372 (e) When establishing a protected cell, the protected cell
373 captive insurance company must attribute to the protected cell
374 assets a value at least equal to the reserves and other
375 insurance liabilities attributed to that protected cell.
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376 (f) Each protected cell must be accounted for separately
377 on the books and records of the protected cell captive insurance
378 company to reflect the financial condition and results of
379 operations of such protected cell, net income or loss, dividends
380 or other distributions to participants, and such other factors
381 as may be provided in the participant contract or required by
382 the office.
383 (g) An asset of a protected cell may not be charged with,
384 or otherwise made liable for, any liability arising out of
385 insurance business conducted by the protected cell captive
386 insurance company on behalf of any other protected cell or its
387 general account.
388 (h) A protected cell captive insurance company may not
389 sell, exchange, or otherwise transfer assets between or among
390 any of its protected cells without the consent of such protected
391 cells.
392 (i) A protected cell captive insurance company may not
393 sell, exchange, transfer, or otherwise distribute assets, or pay
394 any dividend or distribution, from a protected cell to the
395 company or to a participant without the approval of the office.
396 The office may not approve any sale, exchange, transfer,
397 dividend, or distribution that would result in the insolvency or
398 impairment of a protected cell.
399 (j) All attributions of assets and liabilities to the
400 protected cells and the general account must be in accordance
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401 with the plan of operation approved by the office. A protected
402 cell captive insurance company may not attribute assets or
403 liabilities between its general account and any protected cell,
404 or between any protected cells. The protected cell captive
405 insurance company must attribute all insurance obligations,
406 assets, and liabilities relating to a reinsurance contract
407 entered into with respect to a protected cell to such protected
408 cell. The performance under such reinsurance contract and any
409 tax benefits, losses, refunds, or credits allocated pursuant to
410 a tax allocation agreement to which the protected cell captive
411 insurance company is a party, including any payments made by or
412 due to be made to the protected cell captive insurance company
413 pursuant to the terms of such agreement, must reflect the
414 insurance obligations, assets, and liabilities relating to the
415 reinsurance contract which are attributed to such protected
416 cell.
417 (k) In connection with the conservation, rehabilitation,
418 or liquidation of a protected cell captive insurance company,
419 the assets and liabilities of a protected cell must, to the
420 extent the office determines they are separable, at all times be
421 kept separate from, and may not be commingled with, those of
422 other protected cells and the protected cell captive insurance
423 company.
424 (l) Each protected cell captive insurance company must
425 annually file with the office such financial reports as required
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426 by the office. Any such financial report must include, without
427 limitation, accounting statements detailing the financial
428 experience of each protected cell.
429 (m) Each protected cell captive insurance company must
430 notify the office in writing within 10 business days of any
431 protected cell that is insolvent or otherwise unable to meet its
432 claim or expense obligations.
433 (n) A participant contract may not take effect without the
434 office's prior written approval. The addition of each new
435 protected cell, the withdrawal of any participant, or the
436 termination of any existing protected cell constitutes a change
437 in the plan of operation requiring the office's prior written
438 approval.
439 (o) The business written by a protected cell captive
440 insurance company, with respect to each protected cell, must be:
441 1. Fronted by an insurance company licensed under the laws
442 of any state;
443 2. Reinsured by a reinsurer authorized or approved by this
444 state; or
445 3. Secured by a trust fund in the United States for the
446 benefit of policyholders and claimants or funded by an
447 irrevocable letter of credit or other arrangement that is
448 acceptable to the office. The amount of security provided may
449 not be less than the reserves associated with those liabilities
450 which are neither fronted nor reinsured, including reserves for
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451 losses, allocated loss adjustment expenses, incurred but not
452 reported losses, and unearned premiums for business written
453 through the participant's protected cell. The office may require
454 the protected cell captive insurance company to increase the
455 funding of any security arrangement established under this
456 paragraph. If the form of security is a letter of credit, the
457 letter of credit must be issued or confirmed by a bank approved
458 by the office. A trust maintained pursuant to this paragraph
459 must be established in a form and upon such terms as approved by
460 the office.
461 (p) Notwithstanding this part or other laws of this state,
462 and in addition to subsection (6), in the event of an insolvency
463 of a protected cell captive insurance company where the office
464 determines that one or more protected cells remain solvent, the
465 office may separate such cells from the protected cell captive
466 insurance company and may allow, on application of the protected
467 cell captive insurance company, for the conversion of such
468 protected cells into one or more new or existing protected cell
469 captive insurance companies, or one or more other captive
470 insurance companies, pursuant to such plan of operation as the
471 office deems acceptable.
472 (q) Biographical affidavits are not required for
473 participants in unincorporated cells. However, biographical
474 affidavits are required for owners of incorporated cells,
475 including series members of a series limited liability company.
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476 (r) A protected cell captive insurance company formed or
477 licensed under this part may establish and operate both
478 unincorporated and incorporated protected cells.
479 (5) Notwithstanding subsection (4), the assets of two or
480 more protected cells may be combined for purposes of investment,
481 and such combination may not be construed as defeating the
482 segregation of such assets for accounting or other purposes.
483 Notwithstanding any other provision of the insurance code, the
484 office may approve the use of alternative reliable methods for
485 the valuation of protected cell assets and liabilities and for
486 the rating of risks attributable to a protected cell.
487 (6) Upon any order of supervision, rehabilitation, or
488 liquidation of a protected cell captive insurance company, the
489 receiver shall manage the assets and liabilities of the
490 protected cell captive insurance company pursuant to this part.
491 (7)(a) Assets of a protected cell may not be used to pay
492 any expenses or claims other than those attributable to such
493 protected cell.
494 (b) A protected cell captive insurance company's capital
495 and surplus must at all times be available to pay any expenses
496 of or claims against the protected cell captive insurance
497 company.
498 (8)(a) The pleadings in any legal action brought by or
499 against a protected cell captive insurance company must specify
500 which protected cell or cells are or should be named a party to
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501 the suit. If the general account is party to the suit, such
502 account must be separately identified in the pleadings as if it
503 were a protected cell.
504 (b) A legal action brought against a protected cell
505 captive insurance company which does not specify one or more
506 protected cells shall be deemed to have been brought against the
507 general account only.
508 (c) Any protected cell that is not named in the pleadings
509 of the legal action may not be deemed to be a party to the legal
510 action. Any protected cell that is erroneously named as a party
511 or named without proper cause is entitled to prompt dismissal
512 from the legal action.
513 (d) Unless specified by the plan of operation, participant
514 contract, or other prior contractual agreement, the assets of
515 one protected cell may not be encumbered or seized to satisfy
516 the obligations of or a judgment against any other protected
517 cell. A protected cell does not have a duty to defend the rights
518 and obligations of any other protected cell.
519 (e) In any legal action involving a protected cell captive
520 insurance company or a protected cell, any papers, documents, or
521 property of a nonparty protected cell must be afforded the same
522 status during discovery as the documents or property of any
523 other unrelated third party. A nonparty protected cell has
524 standing to appear and petition for any appropriate relief to
525 protect the confidentiality of its papers or documents.
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526 (9)(a)1. Upon the application of a protected cell captive
527 insurance company, one of its protected cells may be converted
528 to any form of captive insurance company authorized pursuant to
529 this part with the consent of the office. Upon compliance with
530 this part, the office may issue to the converting protected cell
531 a certificate of authority with an effective date of its
532 original date of formation as a protected cell.
533 2. If the converting protected cell is a series of a
534 limited liability company, the protected cell must file
535 organizational documents with the Secretary of State which
536 comply with this part. The organizational documents must include
537 the date of formation as a series of a limited liability
538 company. Upon conversion, the formation date of the series shall
539 be deemed the formation date of the converted protected cell.
540 The converted protected cell shall possess all assets and
541 liabilities, including outstanding insurance liabilities, owned
542 by the predecessor series.
543 3. If the converting protected cell is any other type of
544 incorporated protected cell entity, the converting protected
545 cell must submit amended organizational documents to the
546 Secretary of State which comply with this part.
547 4. If the converting protected cell is neither a series of
548 a limited liability company nor an incorporated protected cell,
549 the protected cell must file organizational documents with the
550 Secretary of State which comply with this part. The
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551 organizational documents must include the date of formation as a
552 protected cell. Upon conversion, the formation date of the
553 protected cell is the formation date of the converted protected
554 cell. The converted protected cell shall possess all assets and
555 liabilities, including outstanding insurance liabilities, owned
556 by the predecessor cell.
557 (b) A captive insurance company may apply to the office
558 for conversion to become a protected cell captive insurance
559 company under any form permitted under this part. Upon
560 compliance with this part, approval by the office, and the
561 filing of amended organizational documents with the Secretary of
562 State, the captive insurance company must be issued a revised
563 certificate of authority. The effective date of the revised
564 protected cell captive insurance company's certificate of
565 authority shall remain the same as the effective date of the
566 prior captive insurance company.
567 (c) With the consent of both the affected protected cell
568 captive insurance companies and the office, an individual
569 protected cell of a captive insurance company may disaffiliate
570 from one protected cell captive insurance company and affiliate
571 with another protected cell captive insurance company. The
572 office may require the affected protected cell captive insurance
573 companies and the individual protected cell to make necessary
574 changes to their business plans, organizational documents,
575 participation contracts, or other governing documents before
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576 approving the change in affiliation. The formation date of a
577 protected cell that affiliates with another protected cell
578 captive insurance company shall be the date of its original
579 formation with the prior protected cell captive insurance
580 company. A protected cell shall maintain and carry over all
581 assets and liabilities, including outstanding insurance
582 liabilities, to the new protected cell captive insurance
583 company.
584 (d) With the consent of the affected protected cell
585 captive insurance company or companies, the owners or the
586 participants of the protected cells, and the office, an
587 individual protected cell of a captive insurance company may
588 merge or otherwise combine assets and liabilities with another
589 individual protected cell of a protected cell captive insurance
590 company. The office may require the affected protected cell
591 captive insurance companies and the individual protected cells
592 to make necessary changes to their business plans,
593 organizational documents, participation contracts, or other
594 governing documents before approving the change in affiliation.
595 The formation date of a protected cell that merges or otherwise
596 combines assets and liabilities with another protected cell
597 captive insurance company is the date of the original formation
598 of the surviving protected cell. The surviving protected cell
599 must acquire all of the assets and liabilities, including
600 outstanding insurance liabilities, of the merging protected
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hb883-00
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 883 2026
601 cell. A hearing is not required for mergers of protected cells
602 effectuated under this section.
603 (e) Solely for the purposes of annual reports,
604 inspections, examinations, and taxation, the date of final
605 conversion or disaffiliation of a protected cell shall be deemed
606 a termination of that cell from the prior entity. The prior
607 entity shall be responsible for the accounting, oversight, and
608 premium tax on any transactions prior to the date of final
609 conversion or disaffiliation. The successor entity shall be
610 responsible for the accounting, oversight, and premium tax on
611 any transactions on or after the date of final conversion or
612 disaffiliation.
613 Section 7. This act shall take effect July 1, 2026.
Page 25 of 25
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hb883-00
INSURANCE & BANKING SUBCOMMITTEE
HB 883 by Rep. Fabricio
Protected Cell Captive Insurance Companies
AMENDMENT SUMMARY
February 11, 2026
Amendment #892381by Rep. Fabricio (line 189):
• Increases the unimpaired paid-in capital requirements for protected cell captive
insurance companies from $100,000 to $200,000.
• Increases the unimpaired paid-in capital requirement for nonprofit corporations forming a
protected cell captive insurance company from $100,000 to $250,000.
• Increases the unimpaired surplus requirements for protected cell captive insurance
companies from $100,000 to $150,000.
Amendment #394335 by Rep. Fabricio (line 417):
• Removes the word “conservation,” as that is a proceeding only available for foreign and
alien insurers. Maintains language relating to rehabilitation and liquidation proceedings.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 883 (2026)
Amendment No.
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 Fabricio offered the following:
4
5 Amendment
6 Remove lines 189-224 and insert:
7 (a) In the case of a protected cell captive insurance
8 company, at least $200,000.
9 (b) In the case of a pure captive insurance company, at
10 least $100,000.;
11 (c)(b) In the case of an industrial insured captive
12 insurance company incorporated as a stock insurer, at least
13 $200,000.; and
14 (d)(c) In the case of a special purpose captive insurance
15 company, an amount determined by the office after giving due
16 consideration to the company's business plan, feasibility study,
892381 - h0883-line 189.docx
Published On: 2/10/2026 4:46:22 PM
Page 1 of 3
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 883 (2026)
Amendment No.
17 and pro forma financial statements and projections, including
18 the nature of the risks to be insured.
19 (2) The office may not issue a license to a captive
20 insurance company incorporated as a nonprofit corporation unless
21 the company possesses and maintains the following applicable
22 unrestricted net assets requirements of:
23 (a) In the case of a protected cell captive insurance
24 company, at least $250,000.
25 (b) In the case of a pure captive insurance company, at
26 least $250,000.
27 (c)(b) In the case of a special purpose captive insurance
28 company, an amount determined by the office after giving due
29 consideration to the company's business plan, feasibility study,
30 and pro forma financial statements and projections, including
31 the nature of the risks to be insured.
32 Section 4. Subsection (1) of section 628.908, Florida Statutes,
33 is amended to read:
34 628.908 Surplus requirements; restriction on payment of
35 dividends.—
36 (1) The office may not issue a license to a captive
37 insurance company unless the company possesses and maintains the
38 following applicable unimpaired surplus requirements of:
39 (a) In the case of a pure captive insurance company, at
40 least $150,000.
892381 - h0883-line 189.docx
Published On: 2/10/2026 4:46:22 PM
Page 2 of 3
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 883 (2026)
Amendment No.
41 (b) In the case of a protected cell captive insurance
42 company, at least $150,000.
43
892381 - h0883-line 189.docx
Published On: 2/10/2026 4:46:22 PM
Page 3 of 3
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 883 (2026)
Amendment No.
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 Fabricio offered the following:
4
5 Amendment
6 Remove line 417 and insert:
7 (k) In connection with the rehabilitation
394335 - h0883-line 417.docx
Published On: 2/10/2026 4:44:57 PM
Page 1 of 1
CS/HB 951
FLORIDA HOUSE OF REPRESENTATIVES
BILL ANALYSIS
This bill analysis was prepared by nonpartisan committee staff and does not constitute an official statement of legislative intent.
BILL #: CS/HB 951 COMPANION BILL: SB 1074 (Gaetz)
TITLE: One-cent Piece LINKED BILLS: None
SPONSOR(S): McFarland and Overdorf RELATED BILLS: None
Committee References
Ways & Means Insurance & Banking Commerce
18 Y, 0 N, As CS
SUMMARY
Effect of the Bill:
HB 951 establishes rounding procedures for sales tax dealers who, due to the discontinuation of the penny, are
unable to provide exact change. Under the bill, cash transactions may be rounded to the nearest nickel after the
calculation of tax is accounted for. The bill confirms that rounding cash transactions in this manner does not alter
the amount of tax owed.
The bill also provides rounding provisions for cash payments made to secondary metals recyclers.
Additionally, the bill provides that the Florida Deceptive and Unfair Trade Practices Act does not apply to the
rounding of consumer sales to the nearest nickel when the penny is no longer in production.
The bill takes effect upon becoming a law.
Fiscal or Economic Impact:
The Revenue Estimating Conference has not estimated the impact of the bill on state or local government revenues.
Staff estimates the bill will not impact on state or local government revenues.
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
ANALYSIS
EFFECT OF THE BILL:
If the one-cent piece (the penny) is no longer in production, an in-person cash transaction may be rounded to the
nearest nickel.
The rounding rules for cash transactions, to be applied after tax is calculated and added to the sales price, would be
as follows:
For amounts ending in: Then round:
one or two cents down to zero cents
three or four cents up to five cents
six or seven cents down to five cents
eight or nine cents up to ten cents
Transactions already ending in zero or five cents are unchanged, and are not rounded.
STORAGE NAME: h0951b.IBS
DATE: 2/9/2026
1
CS/HB 951
Rounding to the nearest nickel does not apply to transactions conducted electronically, and for mixed-tender
transactions, rounding to the nearest nickel applies only to the portion of the transaction paid in cash. The bill
further provides that rounding under new s. 212.12(10)(c), F.S., does not increase or decrease the amount of sales
tax due for in-person cash transactions. Further, rounding will not alter or affect the exact amounts authorized,
cleared, or settled through any noncash payment system. (Section 1)
The bill amends s. 501.212, F.S., to provide that the Florida Deceptive and Unfair Trade Practices Act does not
apply to rounding a consumer sale to the nearest nickel if the one-cent piece is no longer in production. (Section 2)
The bill amends s. 538.235, F.S., to provide that cash payments made to secondary metals recyclers must be made
in full or rounded up to the nearest nickel if the one-cent piece is no longer in production. (Section 3)
The bill takes effect upon becoming a law. (Section 4)
FISCAL OR ECONOMIC IMPACT:
STATE GOVERNMENT:
The Revenue Estimating Conference has not estimated the impact of the bill on state government revenues. Staff
estimates that the bill will not impact on state government revenues.
LOCAL GOVERNMENT:
The Revenue Estimating Conference has not estimated the impact of the bill on local government revenues. Staff
estimates that the bill will not impact on local government revenues.
RELEVANT INFORMATION
SUBJECT OVERVIEW:
Penny Production
The federal government has stopped manufacturing new pennies; however, the Federal Reserve will continue to
recirculate the pennies still in existence, which are roughly 114 billion pennies.1 The Treasury Department aims to
help keep the existing supply of pennies in circulation by encouraging the public to spend their on-hand pennies,
which will provide a smooth transition and allow retailers and point-of-sale system providers time to adapt to the
change.2
Merchants may round transactions either up or down to the nearest five cents as pennies fall out of circulation.3
However many states require sales tax to be calculated on the final sale price rounded to the nearest penny, so
states and localities may need to amend their sales tax laws.4
1 U.S. Department of the Treasury, Penny Production Cessation FAQs (December 23, 2025), available at
https://home.treasury.gov/news/featured-stories/penny-production-cessation-faqs (last visited Jan. 20, 2026).
2 Id.
3 Id.
4 Id.
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
2
CS/HB 951
Other countries, (e.g., Canada,5 the Bahamas,6 and several European Union countries7) have implemented rounding
policies that eliminate the use of the one-cent coin in cash transactions using the same basic tenets:
Round cash purchases down to the nearest nickel for totals ending in 1, 2, 6 or 7; round up to the nearest
nickel for those ending in 3, 4, 8 or 9.
Applies to only cash transactions.
Occurs at the end of the transaction (after taxes are applied).
Doesn’t change the price for those possessing exact change.
Some states have proposed legislation or acted through state agencies8:
Proposed legislation in New York (Assembly Bill A9274 and companion Senate Bill S8580) would require
merchants to round final cash transactions based on the final cost of the item.
Utah and Texas have provided guidelines on rounding.
The Florida Department of Revenue has published a Taxpayer Information Publication (TIP) advising retailers they
must calculate Florida sales tax and discretionary sales surtax (local sales tax) on the actual sales price prior to any
rounding9. The TIP also advises dealers to disclose their rounding methods for cash transactions prominently
within the business.
Sales Tax
Florida’s sales and use tax is a six percent levy on retail sales of a wide array of tangible personal property,
admissions, transient lodgings, and commercial real estate rentals,10 unless expressly exempted. Generally, the sales
tax is added to the price of a taxable good and collected by the dealer from the purchaser at the time of sale.
Sales tax represents the majority of Florida’s General Revenue (projected 73.9 percent for FY 2024-25)11 and is
administered by the Department of Revenue (DOR) under ch. 212, F.S. Sales tax revenue is distributed via a
formula found in s. 212.20, F.S., with roughly 89.6% going to the General Revenue Fund, 10.3% going to local
governments,12 and the remainder being distributed to specified trust funds or sports facilities. For FY 2025-26,
the Revenue Estimating Conference estimates that the sales tax collections under chapter 212, F.S., will result in
more than $41 billion of total revenue, with distributions to the General Revenue Fund of roughly $37.4 billion.13
5 Eliminating the Penny, available at https://www.budget.canada.ca/2012/themes/theme2-eng.pdf (last visited Jan. 26, 2026).
6 Elimination of the One Cent Coin, available at https://cdn.centralbankbahamas.com/download/075913500.pdf (last visited
Jan. 26, 2026).
7 Rounding Rules and Cash Inflation When We No Longer Make Sense, Federal Reserve Bank of Atlanta, available at
https://www.atlantafed.org/blogs/macroblog/2025/11/03/rounding-rules-and-cash-inflation-when-we-no-longer-make-
cents (last visited Jan. 26, 2026).
8 National Conference of State Legislatures, With Demise of the Penny, States Prepare for Change by Joe Livingston (December
11, 2025) available at https://www.ncsl.org/state-legislatures-news/details/with-demise-of-the-penny-states-prepare-for-
change (last visited Jan. 29, 2026).
9 https://floridarevenue.com/taxes/tips/Documents/TIP_25A01-18.pdf
10 Commercial real estate rentals are subject to a 2.0% sales tax pursuant to s. 212.031(1)(c), F.S.
11 The Office of Economic and Demographic Research, 2024 Florida Tax Handbook, p. 16 (last visited Jan. 26, 2026).
12 The local government distributions include the Local Government Half-Cent Sales Tax Clearing Trust Fund under s. 218.61,
F.S., county and municipal revenue sharing trust funds under s. 218.215, F.S., emergency distributions under s. 218.65, F.S.,
and a shift of a specified amount to counties that used to be funded from pari-mutuel revenues pursuant to s. 212.20(6)(d)6.a.,
F.S.
13 Revenue Estimating Conference on General Revenue, held January 23, 2026 (last visited Jan. 29, 2026).
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
3
CS/HB 951
In 2021, Florida transitioned from the bracket system for calculating sales tax and discretionary sales surtax to a
rounding algorithm.14 Dealers are required to use a rounding algorithm that carries the tax computation to the
third decimal place and always rounds up to the nearest whole cent when the third decimal place is greater than
4.15 The DOR provides the following examples:16
$5.045 rounds up to $5.05; and
$3.213 rounds down to $3.21.
Dealers may compute the tax by applying the rounding algorithm to the combined taxable amount on an invoice or
to the individual taxable items on an invoice.17
Dealer
Section 212.06(2)(a), F.S., defines “dealer” as including every person, as used in ch. 212, F.S., who manufactures or
produces tangible personal property for sale at retail; for use, consumption, or distribution; or for storage to be
used or consumed in Florida. The term is further defined with specifics in s. 212.06, F.S.
Florida Deceptive and Unfair Trade Practices Act (FRUTPA)
Defined in Part II of Chapter 501, F.S., the FRUTPA is Florida’s main consumer-protection and fair-competition
statute designed to police the marketplace making it unlawful to engage in unfair methods of competition or
deceptive and unconscionable acts in the conduct of trade or commerce.
Section 501.212, F.S., provides circumstances in which the FRUTPA rules do not apply.
Secondary Metals Recyclers
Section 538.18(11), F.S., defines “secondary metals recycler” as a person who:
Is engaged, from a fixed location, in the business of purchase transactions or gathering or obtaining ferrous
or nonferrous metals that have served their original economic purpose or is in the business of performing
the manufacturing process by which ferrous metals or nonferrous metals are converted into raw material
products consisting of prepared grades and having an existing or potential economic value; or
Has facilities for performing the manufacturing process by which ferrous metals or nonferrous metals are
converted into raw material products consisting of prepared grades and having an existing or potential
economic value, other than by the exclusive use of hand tools, by methods including, without limitation,
processing, sorting, cutting, classifying, cleaning, baling, wrapping, shredding, shearing, or changing the
physical form or chemical content thereof.
14 See ch. 2021-2, Laws of Fla. See also the Florida Department of Revenue, Tax Information Publication (April 28, 2021),
available at https://floridarevenue.com/taxes/tips/Documents/TIP_21A01-02.pdf (last visited Jan. 20, 2026).
15 Id.
16 Id.
17 Id. See also s. 212.12(10)(b), F.S.
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
4
CS/HB 951
BILL HISTORY
STAFF
DIRECTOR/ ANALYSIS
COMMITTEE REFERENCE ACTION DATE POLICY CHIEF PREPARED BY
IWays & Means Committee 18 Y, 0 N, As CS 2/2/2026 Aldridge Kurtz
THE CHANGES ADOPTED BY THE The amendment:
COMMITTEE: Revises the bill to make rounding to the nearest nickel permissive
rather than required.
Revised to add rounding provision for secondary metals recyclers.
Made non-substantive revisions to align bill language with Senate
companion.
Insurance & Banking Brackett Highsmith
Subcommittee
Commerce Committee
-------------------------------------------------------------------------------------------------------------------------------------
THIS BILL ANALYSIS HAS BEEN UPDATED TO INCORPORATE ALL OF THE CHANGES DESCRIBED ABOVE.
-------------------------------------------------------------------------------------------------------------------------------------
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
5
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
CS/HB 951 2026
1 A bill to be entitled
2 An act relating to the one-cent piece; amending s.
3 212.12, F.S.; authorizing dealers to round to the
4 nearest nickel in certain circumstances; specifying
5 the methodology for such rounding; providing
6 applicability and construction; amending s. 501.212,
7 F.S.; providing that rounding to the nearest nickel is
8 not a deceptive and unfair trade practice in certain
9 circumstances; amending s. 538.235, F.S.; requiring
10 that certain cash payments be made in the full amount
11 due or rounded in a specified manner in certain
12 circumstances; providing an effective date.
13
14 Be It Enacted by the Legislature of the State of Florida:
15
16 Section 1. Paragraphs (c) and (d) are added to subsection
17 (10) of section 212.12, Florida Statutes, to read:
18 212.12 Dealer's credit for collecting tax; penalties for
19 noncompliance; powers of Department of Revenue in dealing with
20 delinquents; rounding; records required.—
21 (10)
22 (c) If the 1-cent piece is no longer in production, an in-
23 person cash transaction may be rounded to the nearest nickel
24 using the following methodology:
25 1. If the final digit of a cash transaction ends in 1 or 2
Page 1 of 3
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hb951-01-c1
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
CS/HB 951 2026
26 cents, it must be rounded down to zero.
27 2. If the final digit of a cash transaction ends in 3 or 4
28 cents, it must be rounded up to 5 cents.
29 3. If the final digit of a cash transaction ends in 6 or 7
30 cents, it must be rounded down to 5 cents.
31 4. If the final digit of a cash transaction ends in 8 or 9
32 cents, it must be rounded up to 10 cents.
33 5. Cash transactions ending in 0 or 5 cents are not
34 rounded.
35 (d)1. Paragraph (c) applies only to cash transactions. For
36 mixed-tender transactions, any portion of the transaction paid
37 by a customer in cash shall be applied to the sale price, and
38 any remaining amount, including taxes imposed by this chapter,
39 shall be paid using electronic or other noncash payment methods.
40 2. Paragraph (c) does not alter the sales price, the
41 amount of tax collected under this chapter, or any surcharges,
42 assessments, or fees imposed on the sale.
43 3. Paragraph (c) applies to the sales price of the
44 transaction or to the amount of change tendered to the
45 purchaser.
46 4. Paragraph (c) does not alter or affect the exact
47 amounts authorized, cleared, or settled through any noncash
48 payment system or electronic transaction.
49 Section 2. Subsection (8) is added to section 501.212,
50 Florida Statutes, to read:
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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
CS/HB 951 2026
51 501.212 Application.—This part does not apply to:
52 (8) Rounding a consumer sale to the nearest nickel if the
53 1-cent piece is no longer in production.
54 Section 3. Subsections (2) and (3) of section 538.235,
55 Florida Statutes, are renumbered as subsections (3) and (4),
56 respectively, and a new subsection (2) is added to that section,
57 to read:
58 538.235 Method of payment.—
59 (2) Any cash payment made to a seller under this section
60 shall be made in the full amount due or rounded up to the
61 nearest nickel if the 1-cent piece is no longer in production.
62 Section 4. This act shall take effect upon becoming a law.
Page 3 of 3
CODING: Words stricken are deletions; words underlined are additions.
hb951-01-c1
INSURANCE & BANKING SUBCOMMITTEE
HB 951 by Rep. McFarland
The One-cent Piece
AMENDMENT SUMMARY
February 11, 2026
Amendment #280501 by Rep. McFarland (strike-all):
• Adds a definition for “cash.”
• Clarifies payment methods that do not constitute cash, including electronic funds
transfers, checks, gift cards, money orders, credit cards, or the non-cash portion of a
mixed-tender transaction.
• Makes other technical changes.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 951 (2026)
Amendment No.
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 McFarland offered the following:
4
5 Amendment (with title amendment)
6 Remove everything after the enacting clause and insert:
7 Section 1. Paragraph (c) is added to subsection (10) of
8 section 212.12, Florida Statutes, to read:
9 212.12 Dealer’s credit for collecting tax; penalties for
10 noncompliance; powers of Department of Revenue in dealing with
11 delinquents; rounding; records required.—
12 (10)
13 (c)1. For purposes of this paragraph, the term “cash” has
14 the same meaning as defined in 12 U.S.C. s. 4001.
15 2. If the 1-cent piece is no longer in production, an in-
16 person cash transaction may be rounded to the nearest nickel
280501 - h0951-strike.docx
Published On: 2/10/2026 4:47:08 PM
Page 1 of 3
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 951 (2026)
Amendment No.
17 using the following methodology:
18 a. If the final digit of a cash transaction ends in 1 or 2
19 cents, it must be rounded down to zero.
20 b. If the final digit of a cash transaction ends in 3 or 4
21 cents, it must be rounded up to 5 cents.
22 c. If the final digit of a cash transaction ends in 6 or 7
23 cents, it must be rounded down to 5 cents.
24 d. If the final digit of a cash transaction ends in 8 or 9
25 cents, it must be rounded up to 10 cents.
26 e. Cash transactions ending in 0 or 5 cents are not
27 rounded.
28 3. Rounding to the nickel applies only to cash
29 transactions. Rounding to the nickel does not apply to any
30 transaction for which payment is made by a noncash method,
31 including electronic funds transfer; check; gift card; money
32 order; credit card; or mixed tender, except to the extent that
33 cash is dispersed to the purchaser.
34 4. Rounding to the nickel does not alter the sales price,
35 the amount of tax collected under this chapter, or any
36 surcharges, assessments, or fees imposed on the sale.
37 5. Rounding to the nickel may apply to the amount of the
38 transaction or to the amount of change tendered to the
39 purchaser.
40 6. Rounding to the nickel does not alter or affect the
41 exact amounts authorized, cleared, or settled through any
42 noncash payment system or electronic transaction.
280501 - h0951-strike.docx
Published On: 2/10/2026 4:47:08 PM
Page 2 of 3
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 951 (2026)
Amendment No.
43 Section 2. Subsection (8) is added to section 501.212,
44 Florida Statutes, to read:
45 501.212 Application.—This part does not apply to:
46 (8) Rounding a consumer sale to the nickel if the 1-cent
47 piece is no longer in production.
48 Section 3. Present subsections (2) and (3) of section
49 538.235, Florida Statutes, are redesignated as subsections (3)
50 and (4), respectively, and a new subsection (2) is added to that
51 section, to read:
52 538.235 Method of payment.—
53 (2) Any cash payment made to a seller under this section
54 shall be made in the full amount due or rounded up to the
55 nearest nickel if the 1-cent piece is no longer in production.
56 Section 4. This act shall take effect upon becoming a law.
57
58 -----------------------------------------------------
59 T I T L E A M E N D M E N T
60 Remove line 3 and insert:
61 212.12, F.S.; defining the term “cash”; authorizing
62 dealers to round to the
280501 - h0951-strike.docx
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Page 3 of 3
CS/HB 961
FLORIDA HOUSE OF REPRESENTATIVES
BILL ANALYSIS
This bill analysis was prepared by nonpartisan committee staff and does not constitute an official statement of legislative intent.
BILL #: CS/HB 961 COMPANION BILL: SB 684 (McClain)
TITLE: Salvage Certificates of Title and Certificates of LINKED BILLS: None
Destruction RELATED BILLS: None
SPONSOR(S): Albert
Committee References
Government Operations Insurance & Banking State Affairs
15 Y, 0 N, As CS
SUMMARY
Effect of the Bill:
The bill replaces a requirement that electronic signatures on odometer disclosures by insurance companies related
to certificates of destruction or salvage certificates of title for motor vehicles and mobile homes meet specific
authentication standards with a requirement that insurance companies (or their authorized agents) implement
secure control processes and procedures for electronic signatures that are acceptable to the Department of
Highway Safety and Motor Vehicles.
Fiscal or Economic Impact:
None
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
ANALYSIS
EFFECT OF THE BILL:
The bill removes the existing requirement that electronic signatures on odometer disclosures submitted by
insurance companies use systems that meet heightened digital identity standards under the National Institute of
Standards and Technology’s Digital Identity Guidelines. The bill replaces that provision with a requirement that
insurance companies, or their authorized agents, implement their own control processes and procedures
acceptable to the Department of Highway Safety and Motor Vehicles to ensure adequate identity verification,
preservation, disposition, integrity, security, confidentiality, and auditability of electronic signatures on odometer
disclosures related to certificates of destruction or salvage certificates of title. (Section 1)
The effective date of the bill is July 1, 2026. (Section 2)
RELEVANT INFORMATION
SUBJECT OVERVIEW:
Electronic Signatures
The “Electronic Signature Act of 1996”1 provides that unless otherwise provided by law, an electronic signature2
may be used to sign a writing and has the same force and effect as a written signature. Federal law grants
electronic signatures the same force and effect as written signatures for transactions affecting interstate and
foreign commerce.3
1 Ch. 668, part I, F.S.
2 S. 668.003(4), F.S., defines “electronic signature” as any letters, characters, or symbols, manifested by electronic or similar
means, executed or adopted by a party with an intent to authenticate a writing. A writing is electronically signed if an
electronic signature is logically associated with such writing.
3 15 U.S.C. s. 7001.
STORAGE NAME: h0961b.IBS
DATE: 2/9/2026
1
CS/HB 961
Requirements for Salvage Certificates of Title and Certificates of Destruction
The owner of a motor vehicle or mobile home that is considered to be salvage4 is required to forward the title of
the motor vehicle or mobile home to the Department of Highway Safety and Motor Vehicles (DHSMV) for
processing within 72 hours after the motor vehicle or mobile home becomes salvage.5 In the case of an insurance
company that pays for the salvaged motor vehicle or mobile home, however, it must first obtain the certificate of
title.6 Then the insurer must notify the National Motor Vehicle Title Information System7 and, within 72 hours after
receiving the certificate of title, forward it to DHSMV.8
The certificate of title may be forwarded to the DHSMV via electronic means, the United States Postal Service, or
other commercial delivery service (e.g., FedEx or UPS).9 The owner or insurance company may not dispose of a
vehicle or mobile home that is a total loss before it obtains a salvage certificate of title10 or certificate of destruction
from DHSMV.11 To facilitate the issuance of salvage certificates of title and certificates of destruction when the
insurer has been unable to obtain the title from the insured so that it may be surrendered to DHSMV, the insurer
may receive a salvage certificate of title or certificate of destruction from DHSMV 30 days after paying the claim, if
the insurer has:
Obtained a release of all liens.
Provided proof of payment of the total loss claim.
Provided an affidavit12 signed by the insurance company or its authorized agent stating the attempts13 that
have been made to obtain the title from the owner or lienholder and further stating that all attempts are to
no avail.
Odometer Disclosures
All certificates of title are required to contain an odometer disclosure statement, which is required by federal
regulations14 to be filled out15 and signed before the title may be transferred.16 In September 2019, the U.S.
Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) announced the
publication of a Final Rule establishing standards for states to follow when accepting odometer disclosures in an
electronic format.17 Odometer fraud is a federal crime18 and NHTSA rules have required sellers to disclose vehicle
4 S. 319.30(1)(t), F.S., defines “salvage” as a motor vehicle or mobile home that is a total loss.
5 S. 319.30(3)(b), F.S.
6 S. 319.30, F.S.
7 The National Motor Vehicle Title Information System (NMVTIS) is an electronic system that provides consumers with
valuable information about a vehicle's condition and history. NMVTIS allows consumers to find information on a vehicle's title,
most recent odometer reading, brand history, and, in some cases, historical theft data. See National Motor Vehicle Title
Information System, For Consumers (last visited January 23, 2026).
8 S. 319.30(3)(b), F.S.
9 Id.
10 S. 319.001(1), F.S., defines “certificate of title” as the record that is evidence of ownership of a vehicle, whether a paper
certificate authorized by the DHSMV or a certificate consisting of information that is stored in an electronic form in the
DHSMV’s database.
11 S. 319.30(1)(a), F.S., defines “certificate of destruction” as a certificate issued pursuant to s. 713.78(11) or s. 713.785(7)(a),
F.S.
12 The affidavit must include a request that the salvage certificate of title or certificate of destruction be issued in the insurance
company’s name due to payment of a total loss claim to the owner or lienholder. S. 319.30(3)(b)1.c., F.S.
13 The attempts to contact the owner may be by written request delivered in person or by first-class mail with a certificate of
mailing to the owner’s or lienholder’s last known address. S. 319.30(3)(b)1.c., F.S. If the owner or lienholder is notified of the
request for title in person, the insurance company must provide an affidavit attesting to the in-person request for a certificate
of title. S. 319.30(3)(b)2., F.S.
14 S. 319.225(2), F.S.
15 49 C.F.R. s. 580.5(a).
16 49 C.F.R. s. 580.5(c). (“This disclosure must be signed by the transferor…”)
17 49 C.F.R. Part 580, Final Rule (September 16, 2019).
18 49 U.S.C. s. 32703.
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2
CS/HB 961
odometer readings at the time of sale for decades.19 Most vehicle transfers have been subject to a requirement that
odometer disclosures be made in a paper format with handwritten names and wet ink signatures. This Final Rule
removed the paper requirement and allowed electronic disclosure systems that have robust security and
authentication. This action also removed the last remaining federal impediment to paperless motor vehicle
transfers.20 Instead of moving to an entirely paperless system, some states, like Florida, have continued to use
hybrid odometer disclosure systems, where title transferors and transferees fill out odometer disclosures on paper
forms that are then entered into an electronic system.21
While current law authorizes any electronic signature consistent with the state Electronic Signature Act to satisfy
the requirements related to the issuance of a salvage certificate of title or certificate of destruction,22 when it comes
to odometer disclosures submitted by insurance companies to obtain a salvage certificate of title or certificate of
destruction, electronic signatures must meet a heightened verification standard set by the federal National
Institute of Standards and Technology (NIST) Digital Identity Guidelines.23 The NIST guidelines have three
assurance categories for digital identity verification:24
Identity Assurance: Conveys the degree of confidence that the applicant’s claimed identity is their real
identity.
Authenticator Assurance: Describes the strength of the authentication process.
Federation Assurance: Describes the verification protocol used by a set of networked systems to
communicate authentication information.
Each assurance category contains three levels, with level 1 being the weakest and level 3 the strongest.25 Current
law requires the electronic signatures on odometer disclosures submitted by insurance companies to obtain a
salvage certificate of title or certificate of destruction to be at least level 2 for all assurance levels.26
19 49 C.F.R. s. 580
20 49 C.F.R. s. 580.5.
21 49 C.F.R. Part 580, Final Rule, pg. 23-24 (September 16, 2019).
22 S. 319.30(3)(d), F.S.
23 U.S. Department of Commerce, National Institute of Standards and Technology, NIST Special Publication 800-63-3, Digital
Identity Guidelines (last visited January 23, 2026).
24 Id.
25 Id.
26 Id.
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3
CS/HB 961
BILL HISTORY
STAFF
DIRECTOR/ ANALYSIS
COMMITTEE REFERENCE ACTION DATE POLICY CHIEF PREPARED BY
Government Operations 15 Y, 0 N, As CS 1/29/2026 Toliver Lines
Subcommittee
THE CHANGES ADOPTED BY THE Allowed authorized agents of insurance companies to provide electronic
COMMITTEE: signatures on odometer disclosures in the same way the bill permits insurance
companies to do.
Insurance & Banking Brackett Veigle
Subcommittee
State Affairs Committee
-------------------------------------------------------------------------------------------------------------------------------------
THIS BILL ANALYSIS HAS BEEN UPDATED TO INCORPORATE ALL OF THE CHANGES DESCRIBED ABOVE.
-------------------------------------------------------------------------------------------------------------------------------------
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4
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
CS/HB 961 2026
1 A bill to be entitled
2 An act relating to salvage certificates of title and
3 certificates of destruction; amending s. 319.30, F.S.;
4 requiring insurance companies or their authorized
5 agents to implement control processes and procedures
6 to ensure adequate identity verification of electronic
7 signatures; providing an effective date.
8
9 Be It Enacted by the Legislature of the State of Florida:
10
11 Section 1. Paragraph (d) of subsection (3) of section
12 319.30, Florida Statutes, is amended to read:
13 319.30 Definitions; dismantling, destruction, change of
14 identity of motor vehicle, vessel, or mobile home; salvage.—
15 (3)
16 (d) An electronic signature that is consistent with
17 chapter 668 satisfies any signature required under this
18 subsection, except that an electronic signature on an odometer
19 disclosure submitted through an insurance company must be
20 executed using an electronic signature, as defined in s.
21 668.003(4). The insurance company or its authorized agent shall
22 implement control processes and procedures acceptable to the
23 department to ensure adequate identity verification,
24 preservation, disposition, integrity, security, confidentiality,
25 and auditability of the electronic signature, which uses a
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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
CS/HB 961 2026
26 system providing an Identity Assurance Level, Authenticator
27 Assurance Level, and Federation Assurance Level, as described in
28 the National Institute of Standards and Technology Special
29 Publication 800-63-3, as of December 1, 2017, which are
30 equivalent to or greater than Level 2, for each level, for a
31 certificate of destruction or for a salvage certificate of
32 title.
33 Section 2. This act shall take effect July 1, 2026.
Page 2 of 2
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hb961-01-c1
HB 1039
FLORIDA HOUSE OF REPRESENTATIVES
BILL ANALYSIS
This bill analysis was prepared by nonpartisan committee staff and does not constitute an official statement of legislative intent.
BILL #: HB 1039 COMPANION BILL: CS/SB 1038 (Gruters)
TITLE: Establishment and Administration of a State LINKED BILLS: None
Cryptocurrency Reserve RELATED BILLS: None
SPONSOR(S): Snyder
Committee References
Insurance & Banking Government Operations State Administration Commerce
Budget
SUMMARY
Effect of the Bill:
The bill establishes a state cryptocurrency reserve as a special fund outside of the State Treasury. The bill provides
that the Chief Financial Officer has custody of the reserve and is responsible for its administration and
management. The bill specifies the sources of reserve funds and creates criteria that cryptocurrencies must meet to
be eligible for the reserve. The bill creates requirements for custodians and liquidity providers. The bill permits the
Chief Financial Officer to transfer funds out of the reserve under limited conditions. The bill requires the Chief
Financial Officer to publish and submit biennial reports to the President of the Senate and the Speaker of the House
of Representatives containing information on assets in the reserve.
Fiscal or Economic Impact:
The bill may have an indeterminate fiscal impact on the state government and private sector.
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
ANALYSIS
EFFECT OF THE BILL:
Establishment of the Florida Strategic Cryptocurrency Reserve
The bill establishes a cryptocurrency1 reserve as a special fund outside of the State Treasury. (Section 1).
The bill provides that the Chief Financial Officer (“CFO”) has custody of and administers and manages the reserve.
(Section 1).
The bill provides that the reserve will consist of:
Money transferred or deposited to the credit of the reserve by legislative appropriation.
Revenue that the Legislature dedicates for deposit to the credit of the reserve.
Cryptocurrency purchased using money in or received by the reserve.
Investment earnings and interest or rewards earned on assets in the reserve. (Section 1).
Legislative appropriation:
The bill provides that the Legislature may appropriate funds for deposit to the credit of the reserve for the
purposes of:
Investing in cryptocurrency.
Administering and managing the reserve. (Section 1).
1 The bill defines cryptocurrency as a type of virtual currency, as defined in s. 896.101(2), F.S., which uses cryptography to
secure transactions that are digitally recorded on a distributed ledger, such as blockchain.
STORAGE NAME: h1039.IBS
DATE: 2/9/2026
1
HB 1039
Authority and responsibilities of the Chief Financial Officer
To administer and manager the reserve, the bill authorizes the CFO to acquire, exchange, sell, supervise, manage, or
retain any kind of investments as long as the CFO does so while exercising the care, skill, and caution that a prudent
investor exercising reasonable care would do. (Section 1).
While administering and managing the reserve, the bill requires the CFO to consider the purposes, terms,
distribution requirements, and other circumstances pertaining to the reserve as well as the investment of all the
assets of the reserve rather than a single investment. (Section 1).
The bill permits the CFO to use derivatives, if the CFO determines that doing so is in the best interest of the reserve.
(Section 1).
The bill authorizes the CFO to spend cryptocurrency in the reserve or use the net proceeds from the sale of
cryptocurrency in the reserve to pay the reasonable costs of administering and managing the reserve. (Section 1).
Market capitalization
The bill requires cryptocurrency to have had an average market capitalization of at least $500 billion over the most
recent 24-month period to be eligible for the reserve.2 (Section 1).
Third-party contracts
The bill permits the CFO to contract with one or more of the following parties for the administration or
management of the reserve:
A technology provider of a secure custody solution.
A qualified custodian that uses a secure custody solution.
A qualified liquidity provider to facilitate the purchase and sale of assets in the reserve. (Section 1).
The bill defines “secure custody solution” as a technological system that meets all of the following criteria:
The cryptographic private keys3 are:
o Known only by and can only be accessed by the government.
o Kept in an encrypted environment and can be accessed only through fully encrypted channels.
o Never stored on or accessible through a smartphone.
The hardware containing the cryptographic private keys is kept in a secure data center.
Transactions require authorization under a multiparty governance structure.
User access control is enforced and all actions taken by users are logged.
The provider of the technological system has implemented a disaster recovery protocol ensuring state
access to assets if the provider becomes unavailable.
The technological system is routinely reviewed through code audits and penetration testing, and any
security issues are promptly addressed. (Section 1).
The bill defines “qualified custodian” as a state or federally chartered financial institution or other entity regulated
by this state which is authorized to have custody of virtual currencies on behalf of its clients. (Section 1).
2 As of February 2026, Bitcoin (BTC) is the only cryptocurrency that would satisfy the market cap requirement, with a market
cap of approximately $1.3 trillion. The next largest cryptocurrencies, Ethereum (ETH) and Tether (USDT) have market caps of
approximately $232 billion and $185 billion, respectively. https://www.forbes.com/digital-assets/crypto-prices/ (last visited
Feb. 6, 2026).
3 The bill defines “private key” as a unique element of cryptographic data used for signing transactions on blockchain, known
only to the owner.
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2
HB 1039
The bill defines “qualified liquidity provider” as an entity meeting all of the following requirements:
Is licensed or regulated under applicable federal or state law.
Maintains audited financial statements prepared by a regulated auditor.
Has at least 5 years of experience trading in the digital assets industry.
Maintains an office and has a registered principal in this state.
Is certified by the CFO that they meet the above requirements. (Section 1).
The bill permits the CFO to contract with a certified public accountant to perform an independent audit of the
reserve. (Section 1).
State Treasury
The bill authorizes money in the reserve to be invested with the State Treasury. (Section 1).
The bill provides that the CFO may only transfer money in the reserve to the State Treasury when:
authorized by the Legislature in the General Appropriations Act or other law, or
available state funds are not sufficient to pay certain military expenses for the Florida National Guard.4
o The bill permits the CFO to liquidate reserve assets in order to temporarily transfer money from
the reserve to the State Treasury in order to cover the military expenses.
o The bill requires the CFO to return the transferred money to the reserve as soon as practicable,
along with any interest earned on the money while held in the State Treasury. (Section 1).
Florida Strategic Cryptocurrency Reserve Advisory Committee
The bill establishes the Florida Strategic Reserve Advisory Committee. (Section 1).
The bill requires the advisory committee to advise the CFO regarding the administration and management of the
reserve, including:
Recommendations for valuing assets in the reserve.
The establishment of prudent investment policies relating to the investment objectives of and asset
allocation in the reserve.
Recommendations for the establishment of prudent custody and security policies for the reserve. (Section
1).
The advisory committee is composed of the following five members:
The CFO, who serves as the chair.
Four members appointed by the CFO as follows:
o Three members with expertise in cryptocurrency investments.
o One member with expertise in digital asset security.
Members of the committee are not entitled to receive compensation for service on the committee, but may be
reimbursed for per diem and travel expenses. (Section 1).
Members of the committee serve at the will of the CFO. (Section 1).
Biennial report
The bill requires the CFO to publish and submit to the President of the Senate and the Speaker of the House of
Representatives a report that includes:
The amount of cryptocurrency held in the reserve on the last day of the preceding fiscal year biennium.
An estimate of the monetary value of the cryptocurrency held in the reserve on the last day of the
preceding fiscal year biennium.
4 See S. 250.26, F.S.
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3
HB 1039
Any changes in the amount and estimated monetary value of cryptocurrency in the reserve during the
period the cryptocurrency has been held in the reserve, separated by the type of cryptocurrency.
A description of the actions taken by the CFO to administer and manage the reserve during the preceding
fiscal year biennium. (Section 1).
The CFO must publish and submit this report no later than December 31 of each even-numbered calendar year.
(Section 1).
Effective date
The bill provides an effective date of July 1, 2026. (Section 2).
RULEMAKING:
The bill requires the CFO to adopt rules as necessary to administer the Florida Strategic Cryptocurrency Reserve.
Lawmaking is a legislative power; however, the Legislature may delegate a portion of such power to executive
branch agencies to create rules that have the force of law. To exercise this delegated power, an agency must
have a grant of rulemaking authority and a law to implement.
FISCAL OR ECONOMIC IMPACT:
STATE GOVERNMENT:
The bill may have an indeterminate fiscal impact on the state government, to the extent the reserve yields returns
on investments and to the extent that the state government incurs costs to administer and manage the reserve.
PRIVATE SECTOR:
The bill may have an indeterminate fiscal impact on the private sector, to the extent that the reserve yields returns
on investments.
RELEVANT INFORMATION
SUBJECT OVERVIEW:
Chief Financial Officer
The Chief Financial Officer (“CFO”) serves as the chief fiscal officer of the state, responsible for settling and
approving all accounts against the state and keeping all state funds and securities.5
The CFO oversees the state’s accounting, auditing, and investment functions.6 Under current law, the CFO is
responsible for investing general revenue funds and all the trust funds and all agency funds of each state agency
and of the judicial branch, and may upon request, invest funds of any board, association, or entity created by the
State Constitution or by law, except for funds required to be invested by the State Board of Administration.7
5 Section 4(c), Art. IV, Florida Constitution; S. 17.001, F.S.
6 See Florida Department of Financial Services, https://myfloridacfo.com/about/about-dfs (last visited Feb. 5, 2026).
7 S. 17.61, F.S
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
4
HB 1039
When the CFO decides whether to invest and when investing, the CFO must make decisions based solely on
pecuniary factors8 and may not subordinate the interests of the people of this state to other objectives.9 The CFO is
required to make funds available to meet the disbursement needs of the state.10
Funds in excess of the amount needed to meet the disbursement needs of the state must be placed in qualified
public depositories (“QPD”) that will pay rates established by the CFO at levels not less than the prevailing rate for
United States Treasury securities with a corresponding maturity.11 If money is available for investment and QPDs
are unwilling to accept such money and pay the established rates, then the money must be invested in a specified
list of assets, such as:
Direct United States Treasury Obligations;
Obligations of the Federal Farm Credit Banks, Federal Home Loan Bank, Federal National Mortgage
Association;
Money market mutual funds;
Convertible debt obligations of any corporations domiciled within the United States;
Securities;
Derivatives of investment instruments authorized in current law; and
Certain futures and options on futures.12
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 by the CFO as a QPD under the Florida Security for Public Deposits Act.13
To be designated as a QPD by the CFO, a bank, savings bank, or savings association must:
Have authority to accept deposits because it has been chartered and regulated by the state or federal
government;
Have its principal place of business in Florida, or a branch office in Florida;
Have deposit insurance pursuant to the Federal Deposit Insurance Act14 or the National Credit Union Share
Insurance Fund15;
Have procedures and practices for accurate identification, classification, reporting, and collateralization of
public deposits;
Make determinations about the provision of services or the denial of services based on an analysis of risk
factors unique to each customer;
Not engage in the unsafe and unsound practice of denying, canceling, suspending, or terminating its
services to a person on specified grounds; and
Meet any other requirements of the Florida Security for Public Deposits Act.16
8 S. 17.57(1)(a), F.S., defines “pecuniary factor” as a factor that the CFO, or other party authorized to invest on his or her behalf,
prudently determines is expected to have a material effect on the risk or returns of an investment based on appropriate
investment horizons consistent with applicable investment objectives and funding policy.
9 S. 17.57(1)(c), F.S.
10 S. 17.57(2), F.S.
11 Id.
12 Id.
13 Ss. 280.01, F.S. and 280.03(1)(b), F.S. Certain public deposits, including those that are fully collateralized under other laws
and moneys contributions to the state retirement system that are held in the System Trust Fund, are exempt pursuant to s.
280.03(3), F.S.
14 12 U.S.C. ss. 1811 et. seq.
15 12 U.S.C. ss. 1783 et. seq.
16 Ch. 280, F.S.
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HB 1039
QPDs must secure public deposits with a pledge of eligible collateral, to protect the deposit against losses that
could occur in the event of insolvency or default.17 The amount of collateral required is based on statutory
guidelines and the QPD’s overall financial condition.18
Public deposits include, but are not limited to, time deposit accounts, demand deposit accounts, and nonnegotiable
certificates of deposits; they do not include moneys in deposit notes, securities, mutual funds, and similar
investments.19
Cryptocurrency
Virtual currency, or cryptocurrency, is a digital representation of value that functions as a medium of exchange but
lacks legal tender status.20 In some environments, virtual currency operates like “real” currency21 (i.e., the coin and
paper money of the United States or of any other country that is designated as legal tender, circulates, and is
customarily used and accepted as a medium of exchange in the country of issuance).22
Virtual currency that has an equivalent value in real currency, or that acts as a substitute for real currency, is
referred to as “convertible” virtual currency. 23 Bitcoin is one example of a convertible virtual currency, as it can be
digitally traded between users and can be purchased for, or exchanged into, U.S. dollars, Euros, and other real or
virtual currencies.24
Virtual currencies generally operate on networks of computers (nodes) that enable, validate, and record
transactions on a distributed digital ledger (blockchain).25 To transfer an asset on a blockchain, the transferor uses
an alphanumeric code known only to the transferor (a private key) to create a request that the network software
validate a new ledger entry, which assigns control of the asset to the recipient.26 Once the network has validated
this transfer, the ledger is updated and the recipient may transfer the asset to another recipient using their own
private key.27 Ledger entries are cryptographically secured, and accounts on a blockchain are identified by
alphanumeric ‘‘public keys’’ rather than by personal names.28 Virtual currency wallets are interfaces that store and
transfer virtual currency.29
Federal law
On March 6, 2025, President Trump signed an executive order (“Executive Order”) that established a Strategic
Bitcoin Reserve which is capitalized with all Bitcoin held by the Department of Treasury that was finally forfeited
as part of criminal or civil asset forfeiture proceedings or in satisfaction of any civil money penalty imposed by any
executive department or agency and is not needed for other specified reasons. The Strategic Bitcoin Reserve
consists of approximately 207,189 Bitcoin with an estimated value of $13.7 billion.30
17 Ss. 280.04 and 280.041(6), F.S.
18 S. 280.04, F.S., and Rule 69C-2.024, F.A.C.
19 S. 280.02(23), F.S.
20 S. 560.103(36), F.S.
21 Often referred to as “fiat” currency.
22 IRS, Digital assets, https://www.irs.gov/filing/digital-assets (last visited Feb. 5, 2026).
23 Id.
24 Id.
25 Office of the Federal Register, National Archives and Records Administration, Requirements for Certain Transactions
Involving Convertible Virtual Currency or Digital Assets, GovInfo, (Dec. 23, 2020), https://www.govinfo.gov/app/details/FR-
2020-12-23/2020-28437/summary (last visited Feb. 5, 2026).
26 Id.
27 Id.
28 Id.
29 FinCEN, Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies, (May 9,
2019), https://www.fincen.gov/system/files/2019-05/FinCEN%20Guidance%20CVC%20FINAL%20508.pdf (last visited Feb.
5, 2026).
30 BiTBO, USA Bitcoin Reserve Tracker, available at: US Bitcoin Reserve (last visited Feb. 5, 2026).
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HB 1039
The Executive Order also established an office known as the “United States Digital Asset Stockpile” (“Stockpile”) to
administer and maintain control of custodial accounts that are capitalized with all digital assets owned by the
Department of Treasury, other than Bitcoin that were finally forfeited as part of criminal or civil asset forfeiture
proceedings and that are not needed to satisfy certain requirements.31 The Stockpile consists of cryptocurrencies
(such as Ethereum or Solana), stablecoin, non-fungible tokens, and potentially other tokenized assets.32
State reserves
Florida does not currently have a virtual currency or cryptocurrency reserve. Texas33, New Hampshire34, and
Arizona35 have adopted laws creating a reserve for Bitcoin or digital assets, or both. Several states have pending
legislation creating a digital asset or cryptocurrency reserve or authorizing public funds to be invested in such
assets.36
BILL HISTORY
STAFF
DIRECTOR/ ANALYSIS
COMMITTEE REFERENCE ACTION DATE POLICY CHIEF PREPARED BY
Insurance & Banking Brackett Highsmith
Subcommittee
Government Operations
Subcommittee
State Administration Budget
Subcommittee
Commerce Committee
31 Authenticated U.S. Government Information GPO, Executive Order 14233-Establishment of the Strategic Bitcoin Reserve and
United States Digital Asset Stockpile, March 6, 2025, available at: DCPD-202500335.pdf (last visited Feb. 5, 2026).
32 DigitalFinanceNews.com, Managing the U.S. Digital Asset Stockpile: Operational Complexities, Accounting Challenges, and
Regulatory Implications, July 1, 2025, available at: Managing the U.S. Digital Asset Stockpile: Operational Complexities,
Accounting Challenges, and Regulatory Implications – Digital Finance News (last visited Jan. 18, 2026).
33 Tex. Gov’t Code Ann ss. 403.701-403.709 (Subchapter V) (2025) (establishing Texas Strategic Bitcoin Reserve).
34 N.H. Rev. Stat. Ann. (RSA) s. 6:8-d (2025) (establishing the Strategic Reserve).
35 Ariz. Rev. Stat. Ann. s. 41-180 (2025) (establishing Bitcoin and Digital Assets Reserve Fund).
36 See AZ S.B. 1042 (2026), IL H.B. 1844 (2025-2026), MD H.B. 51 (2026), MI H.B. 4087 (2025-2026), OH H.B. 18 (136th GA), OH
S.B. 57 (136th GA), PA H.B. 2664 (2025), TN H.B. 1695 (2026), WV S.B. 143 (2026).
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7
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 1039 2026
1 A bill to be entitled
2 An act relating to the establishment and
3 administration of a state cryptocurrency reserve;
4 creating s. 17.613, F.S.; providing definitions;
5 establishing the Florida Strategic Cryptocurrency
6 Reserve as a special fund outside the State Treasury;
7 providing sources of the reserve; providing for the
8 administration and management of the reserve;
9 authorizing the Chief Financial Officer to pay certain
10 costs using the cryptocurrency in the reserve or the
11 net proceed from the sale of cryptocurrency in the
12 reserve; providing for investment of money in the
13 reserve; authorizing transfer of the reserve money to
14 the State Treasury under certain circumstances;
15 providing exceptions; providing requirements for
16 cryptocurrency to be purchased for the reserve;
17 authorizing contracts with third parties for the
18 administration and management of the reserve;
19 authorizing the Chief Financial Officer to use
20 derivatives under certain circumstances; authorizing
21 contracts with certified public accountants for
22 independent audits; authorizing temporary transfers of
23 money from the reserve for specified purposes;
24 establishing the Florida Strategic Cryptocurrency
25 Reserve Advisory Committee within the Department of
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26 Financial Affairs; providing for committee membership;
27 providing duties of committee members; providing
28 reporting requirements; requiring the Chief Financial
29 Officer to adopt rules; providing an effective date.
30
31 WHEREAS, cryptocurrencies are assets with strategic
32 potential for enhancing this state's financial resilience and
33 positioning this state for the future digital economy, and
34 WHEREAS, cryptocurrencies can serve as a hedge against
35 inflation and economic volatility, and
36 WHEREAS, the establishment of a cryptocurrency reserve
37 serves the public purpose of providing enhanced financial
38 security to residents of this state, NOW, THEREFORE,
39
40 Be It Enacted by the Legislature of the State of Florida:
41
42 Section 1. Section 17.613, Florida Statutes, is created to
43 read:
44 17.613 State cryptocurrency reserve.—
45 (1) DEFINITIONS.—As used in this section, the term:
46 (a) "Airdrop" means a gratuitous distribution of
47 cryptocurrency to users of a blockchain or protocol, generally
48 made in a broad, equitable, and nondiscretionary manner.
49 (b) "Committee" means the Florida Strategic Cryptocurrency
50 Reserve Advisory Committee established in this section.
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51 (c) "Cryptocurrency" means a type of virtual currency, as
52 defined in s. 896.101(2), which uses cryptography to secure
53 transactions that are digitally recorded on a distributed
54 ledger, such as blockchain.
55 (d) "Fork" means a change to the protocol of a distributed
56 ledger system which creates a separate ledger, which may result
57 in a new cryptocurrency that shares a common transaction history
58 with the previous cryptocurrency up to the point of change.
59 (e) "Private key" means a unique element of cryptographic
60 data used for signing transactions on blockchain, known only to
61 the owner.
62 (f) "Qualified custodian" means a state or federally
63 chartered financial institution or other entity regulated by
64 this state which is authorized to have custody of virtual
65 currencies on behalf of its clients.
66 (g) "Qualified liquidity provider" means an entity that
67 meets all of the following requirements:
68 1. Is licensed or regulated under applicable federal or
69 state law.
70 2. Maintains audited financial statements prepared by a
71 regulated auditor.
72 3. Has at least 5 years of experience trading in the
73 digital assets industry.
74 4. Maintains an office and has registered principal in
75 this state.
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76 5. Has certified in a manner prescribed by the Chief
77 Financial Officer that the provider meets the requirements of
78 subparagraphs 1.-4.
79 (h) "Reserve" means the Florida Strategic Cryptocurrency
80 Reserve established is this section.
81 (i) "Secure custody solution" means a technological
82 product or blended product and service meeting all of the
83 following criteria:
84 1. The cryptographic private keys are:
85 a. Exclusively known by and accessible to the governmental
86 entity.
87 b. Contained within an encrypted environment and
88 accessible only through end-to-end encrypted channels.
89 c. Never stored on or accessible through a smartphone.
90 2. The hardware containing the cryptographic private keys
91 is maintained in a secure data center.
92 3. A multiparty governance structure for authorizing
93 transactions is implemented, user access control is enforced,
94 and all user-initiated actions are logged.
95 4. The provider of the technological product or blended
96 product and service has implemented a disaster recovery protocol
97 ensuring state access to assets if the provider becomes
98 unavailable.
99 5. The technological product or blended product and
100 service undergoes regular code audits and penetration testing,
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101 with identified vulnerabilities promptly addressed.
102 (2) ESTABLISHMENT; ADMINISTRATION.—
103 (a) The Florida Strategic Cryptocurrency Reserve is
104 established as a special fund outside the State Treasury. The
105 Chief Financial Officer has custody of and shall administer and
106 manage the reserve. The reserve consists of:
107 1. Money transferred or deposited to the credit of the
108 reserve by legislative appropriation.
109 2. Revenue that the Legislature by general law dedicates
110 for deposit to the credit of the reserve.
111 3. Cryptocurrency purchased using money in or received by
112 the reserve, including any cryptocurrency:
113 a. Derived from the fork of a distributed ledger; or
114 b. Distributed pursuant to an airdrop to this state's
115 cryptocurrency addresses.
116 4. Investment earnings and interest or rewards earned on
117 assets in the reserve.
118 (b) To administer and manage the reserve, the Chief
119 Financial Officer may acquire, exchange, sell, supervise,
120 manage, or retain any kind of investments that a prudent
121 investor exercising reasonable care, skill, and caution would
122 acquire, exchange, sell, supervise, manage, or retain in light
123 of the purposes, terms, distribution requirements, and other
124 circumstances then prevailing for the reserve, taking into
125 consideration the investment of all the assets of the reserve
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126 rather than a single investment.
127 (c) The Legislature may appropriate funds for deposit to
128 the credit of the reserve for the purposes of:
129 1. Investing in cryptocurrency.
130 2. Administering and managing the reserve.
131 (d) The Chief Financial Officer may spend cryptocurrency
132 in the reserve or use the net proceed from the sale of
133 cryptocurrency in the reserve to pay the reasonable costs
134 associated with administering and managing the reserve.
135 (e) Money in the reserve may be invested with the State
136 Treasury pool.
137 (f) Except as provided in s. 250.26, the Chief Financial
138 Officer may transfer money in the reserve to the State Treasury
139 only when authorized by the Legislature in the General
140 Appropriations Act or other law.
141 (3) MARKET CAPITALIZATION REQUIREMENT.—To be eligible to
142 be purchased for the reserve, a cryptocurrency must have an
143 average market capitalization of at least $500 billion over the
144 most recent 24-month period.
145 (4) THIRD-PARTY CONTRACTS AND PERMISSIBLE TRANSACTIONS;
146 AUDITS.—
147 (a) The Chief Financial Officer may contract with one or
148 more third-party entities for the administration or management
149 of the reserve, including:
150 1. A technology provider of a secure custody solution.
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151 2. A qualified custodian that uses a secure custody
152 solution.
153 3. A qualified liquidity provider to facilitate the
154 purchase and sale of assets in the reserve.
155 (b) If the Chief Financial Officer determines it is in the
156 best interest of the reserve, the Chief Financial Officer may
157 use derivatives.
158 (c) The Chief Financial Officer may contract with a
159 certified public accountant to perform an independent audit of
160 the reserve.
161 (5) TEMPORARY TRANSFER FOR CASH MANAGEMENT.—
162 (a) The Chief Financial Officer may liquidate the
163 reserve's assets and temporarily transfer money from the reserve
164 to the State Treasury if necessary for the purposes described in
165 s. 250.26.
166 (b) The Chief Financial Officer shall, as soon as
167 practicable after a transfer under paragraph (a), return the
168 transferred money to the reserve along with the interest, if
169 any, earned on the money while held in the State Treasury.
170 (6) FLORIDA STRATEGIC CRYPTOCURRENCY RESERVE ADVISORY
171 COMMITTEE.—
172 (a) There is established the Florida Strategic
173 Cryptocurrency Reserve Advisory Committee within the Department
174 of Financial Affairs.
175 (b) The committee shall be composed of the following five
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176 members:
177 1. The Chief Financial Officer, who shall serve as the
178 chair.
179 2. Four members appointed by the Chief Financial Officer
180 as follows:
181 a. Three members with expertise in cryptocurrency
182 investments.
183 b. One member with expertise in digital asset security.
184 (c) The committee shall advise the Chief Financial Officer
185 regarding the administration and management of the reserve,
186 including:
187 1. Recommendations for valuing assets in the reserve.
188 2. The establishment of prudent investment policies
189 relating to the investment objectives of and asset allocation in
190 the reserve.
191 3. Recommendations for the establishment of prudent
192 custody and security policies for the reserve.
193 (d) A member of the committee is not entitled to receive
194 compensation for service on the committee.
195 (e) Members appointed by the Chief Financial Officer serve
196 at the will of the Chief Financial Officer.
197 (7) BIENNIAL REPORT.—
198 (a) No later than December 31 of each even-numbered
199 calendar year, the Chief Financial Officer shall publish and
200 submit to the President of the Senate and the Speaker of the
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201 House of Representatives a report that includes:
202 1. The amount of cryptocurrency held in the reserve on the
203 last day of the preceding fiscal year biennium.
204 2. An estimate of the monetary value of the cryptocurrency
205 held in the reserve on the last day of the preceding fiscal year
206 biennium.
207 3. Any changes in the amount and estimated monetary value
208 of cryptocurrency in the reserve during the period the
209 cryptocurrency has been held in the reserve, disaggregated by
210 the cryptocurrency type.
211 4. A description of the actions taken by the Chief
212 Financial Officer to administer and manage the reserve during
213 the preceding fiscal year biennium.
214 (8) RULEMAKING.—The Chief Financial Officer shall adopt
215 rules as necessary to administer the Florida Strategic
216 Cryptocurrency Reserve.
217 Section 2. This act shall take effect July 1, 2026.
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INSURANCE & BANKING SUBCOMMITTEE
HB 1039 by Rep. Snyder
Establishment and Administration of a State Cryptocurrency Reserve
AMENDMENT SUMMARY
February 11, 2026
Amendment #475123 by Rep. Snyder (strike-all):
• Changes the administrator of the reserve from the Chief Financial Officer to the State
Board of Administration.
• Establishes the cryptocurrency reserve as a separate fund within the State Board of
Administration.
• Removes a provision that would have authorized the Chief Financial Officer to
temporarily transfer funds from the reserve to the State Treasury for purposes of funding
Florida’s National Guard during emergencies because existing law does not authorize
the State Board of Administration to make such transfers.
• Modifies the definition for “secure custody solution.”
• Modifies the definition for “cryptocurrency.”
• Adds definitions for “blockchain,” “distributed ledger,” and “governmental entity.”
• Changes market capitalization requirement from $500 billion in the most recent 24-
months to $100 billion in the most recent 12-months.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1039 (2026)
Amendment No.
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 Snyder offered the following:
4
5 Amendment (with title amendment)
6 Remove everything after the enacting clause and insert:
7 Section 1. Section 215.987, Florida Statutes, is created
8 to read:
9 215.987 State cryptocurrency reserve.—
10 (1) DEFINITIONS.—As used in this section, the term:
11 (a) "Airdrop" means a gratuitous distribution of
12 cryptocurrency to users of a blockchain or protocol, generally
13 made in a broad, equitable, and nondiscretionary manner.
14 “Blockchain” means a mathematically secured, chronological,
15 decentralized, distributed, and digital ledger or database that
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1039 (2026)
Amendment No.
16 consists of records of transactions that cannot be altered
17 retroactively.
18 (b) "Committee" means the Florida Strategic Cryptocurrency
19 Reserve Advisory Committee established in this section.
20 (c) "Cryptocurrency" means a virtual currency that is not
21 issued by any central authority, is designed to function as a
22 medium of exchange, and uses encryption technology to regulate
23 the generation of units of currency, to verify fund transfers,
24 and to prevent counterfeiting.
25 (d) “Distributed ledger” means technology in which data is
26 shared across a network that creates a public digital ledger of
27 verified transactions or information among network participants
28 and cryptography is used to link the data to maintain the
29 integrity of the public ledger and execute other functions.
30 (e) "Fork" means a change to the protocol of a distributed
31 ledger system which creates a separate ledger, which may result
32 in a new cryptocurrency that shares a common transaction history
33 with the previous cryptocurrency up to the point of change.
34 (f) “Governmental entity” has the same meaning as in s.
35 215.986.
36 (g) "Private key" means a unique element of cryptographic
37 data used for signing transactions on blockchain, known only to
38 the owner.
39 (h) "Qualified custodian" means a state or federally
40 chartered financial institution or other entity regulated by
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1039 (2026)
Amendment No.
41 this state which is authorized to have custody of virtual
42 currencies on behalf of its clients.
43 (i) "Qualified liquidity provider" means an entity that
44 meets all of the following requirements:
45 1. Is licensed or regulated under applicable federal or
46 state law.
47 2. Maintains audited financial statements prepared by a
48 regulated auditor.
49 3. Has at least 5 years of experience trading in the
50 digital assets industry.
51 4. Maintains an office and has registered principal in
52 this state.
53 5. Has certified in a manner prescribed by the State Board
54 of Administration that the provider meets the requirements of
55 subparagraphs 1.-4.
56 (j) "Reserve" means the Florida Strategic Cryptocurrency
57 Reserve established is this section.
58 (k) "Secure custody solution" means a technological
59 product or blended product and service meeting all of the
60 following criteria:
61 1. The cryptographic private keys are:
62 a. Exclusively known by and accessible to the governmental
63 entity or the qualified custodian.
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Bill No. HB 1039 (2026)
Amendment No.
64 b. Contained within an encrypted, hardware-secured
65 environment and used only to sign and authorize cryptocurrency
66 transactions through end-to-end encrypted channels.
67 c. Never stored on or accessible through a smartphone.
68 2. The hardware containing the cryptographic private keys
69 is maintained in a secure data center.
70 3. A multiparty governance structure for authorizing
71 transactions is implemented, user access control is enforced,
72 and all user-initiated actions are logged. A smartphone may be
73 used, but only to authenticate authorized users of the secure
74 custody solution, including through biometric authentication.
75 4. The provider of the technological product or blended
76 product and service has implemented a disaster recovery protocol
77 ensuring state access to assets if the provider becomes
78 unavailable.
79 5. The technological product or blended product and
80 service undergoes regular code audits and penetration testing,
81 with identified vulnerabilities promptly addressed.
82 (l) “Secure Data Center” means a physical facility that
83 maintains third-party certifications, utilizes certified
84 cryptographic hardware, enforces physical and environmental
85 security, and ensures logical isolation.
86 (2) ESTABLISHMENT; ADMINISTRATION.—
87 (a) The Florida Strategic Cryptocurrency Reserve is
88 established as a special fund assigned to the State Board of
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1039 (2026)
Amendment No.
89 Administration. The Executive Director has custody of and shall
90 administer and manage the reserve. The reserve consists of:
91 1. Money transferred or deposited to the credit of the
92 reserve by legislative appropriation.
93 2. Revenue that the Legislature by general law dedicates
94 for deposit to the credit of the reserve.
95 3. Cryptocurrency purchased using money in or received by
96 the reserve, including any cryptocurrency:
97 a. Derived from the fork of a distributed ledger; or
98 b. Distributed pursuant to an airdrop to this state's
99 cryptocurrency addresses.
100 4. Investment earnings and interest or rewards earned on
101 assets in the reserve.
102 (b) To administer and manage the reserve, the Executive
103 Director may acquire, exchange, sell, supervise, manage, or
104 retain any kind of investments that a prudent investor
105 exercising reasonable care, skill, and caution would acquire,
106 exchange, sell, supervise, manage, or retain in light of the
107 purposes, terms, distribution requirements, and other
108 circumstances then prevailing for the reserve, taking into
109 consideration the investment of all the assets of the reserve
110 rather than a single investment.
111 (c) The Legislature may appropriate funds for deposit to
112 the credit of the reserve for the purposes of:
113 1. Investing in cryptocurrency.
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Bill No. HB 1039 (2026)
Amendment No.
114 2. Administering and managing the reserve.
115 (d) The Executive Director may spend cryptocurrency in the
116 reserve or use the net proceed from the sale of cryptocurrency
117 in the reserve to pay the reasonable costs associated with
118 administering and managing the reserve.
119 (e) Money in the reserve may be invested with the State
120 Treasury pool.
121 (f) The Executive Director may transfer money in the
122 reserve to the State Treasury only when authorized by the
123 Legislature in the General Appropriations Act or other law.
124 (3) MARKET CAPITALIZATION REQUIREMENT.—To be eligible to
125 be purchased for the reserve, a cryptocurrency must have an
126 average market capitalization of at least $100 billion over the
127 most recent 12-month period.
128 (4) THIRD-PARTY CONTRACTS AND PERMISSIBLE TRANSACTIONS;
129 AUDITS.—
130 (a) The Executive Director may contract with one or more
131 third-party entities for the administration or management of the
132 reserve, including:
133 1. A technology provider of a secure custody solution.
134 2. A qualified custodian that uses a secure custody
135 solution.
136 3. A qualified liquidity provider to facilitate the
137 purchase and sale of assets in the reserve.
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Bill No. HB 1039 (2026)
Amendment No.
138 (b) If the Executive Director determines it is in the best
139 interest of the reserve, the Executive Director may use
140 derivatives.
141 (c) The Executive Director may contract with a certified
142 public accountant to perform an independent audit of the
143 reserve.
144 (5) FLORIDA STRATEGIC CRYPTOCURRENCY RESERVE ADVISORY
145 COMMITTEE.—
146 (a) There is established the Florida Strategic
147 Cryptocurrency Reserve Advisory Committee within the State Board
148 of Administration.
149 (b) The committee shall be composed of the following five
150 members:
151 1. The State Board of Administration Executive Director,
152 who shall serve as the chair.
153 2. Four members of the committee shall be appointed by the
154 Board as a resource to the Board of Trustees of the State Board
155 of Administration and shall be subject to confirmation by the
156 Senate as follows:
157 a. Three members with expertise in cryptocurrency
158 investments.
159 b. One member with expertise in digital asset security.
160 (c) The committee shall advise the Executive Director
161 regarding the administration and management of the reserve,
162 including:
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1039 (2026)
Amendment No.
163 1. Recommendations for valuing assets in the reserve.
164 2. The establishment of prudent investment policies
165 relating to the investment objectives of and asset allocation in
166 the reserve.
167 3. Recommendations for the establishment of prudent
168 custody and security policies for the reserve.
169 (d) A member of the committee is not entitled to receive
170 compensation for service on the committee.
171 (e) Appointed members shall serve for 4-year terms. A
172 vacancy shall be filled for the remainder of the unexpired term.
173 (6) BIENNIAL REPORT.—
174 (a) No later than December 31 of each even-numbered
175 calendar year, the Executive Director shall publish and submit
176 to the President of the Senate and the Speaker of the House of
177 Representatives a report that includes:
178 1. The amount of cryptocurrency held in the reserve on the
179 last day of the preceding fiscal year biennium.
180 2. An estimate of the monetary value of the cryptocurrency
181 held in the reserve on the last day of the preceding fiscal year
182 biennium.
183 3. Any changes in the amount and estimated monetary value
184 of cryptocurrency in the reserve during the period the
185 cryptocurrency has been held in the reserve, disaggregated by
186 the cryptocurrency type.
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Bill No. HB 1039 (2026)
Amendment No.
187 4. A description of the actions taken by the Executive
188 Director to administer and manage the reserve during the
189 preceding fiscal year biennium.
190 (8) RULEMAKING.—The State Board of Administration shall
191 adopt rules as necessary to administer the Florida Strategic
192 Cryptocurrency Reserve.
193 Section 2. This act shall take effect July 1, 2026.
194
195 -----------------------------------------------------
196 T I T L E A M E N D M E N T
197 Remove everything before the enacting clause and insert:
198 An act relating to the establishment and
199 administration of a state cryptocurrency reserve;
200 creating s. 215.987, F.S.; providing definitions;
201 establishing the Florida Strategic Cryptocurrency
202 Reserve as a special fund outside the State Treasury;
203 providing sources of the reserve; providing for the
204 administration and management of the reserve;
205 authorizing the Executive Director of the State Board
206 of Administration to pay certain costs using the
207 cryptocurrency in the reserve or the net proceed from
208 the sale of cryptocurrency in the reserve; providing
209 for investment of money in the reserve; authorizing
210 transfer of the reserve money to the State Treasury
211 under certain circumstances; providing exceptions;
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1039 (2026)
Amendment No.
212 providing requirements for cryptocurrency to be
213 purchased for the reserve; authorizing contracts with
214 third parties for the administration and management of
215 the reserve; authorizing the Executive Director of the
216 State Board of Administration to use derivatives under
217 certain circumstances; authorizing contracts with
218 certified public accountants for independent audits;
219 authorizing temporary transfers of money from the
220 reserve for specified purposes; establishing the
221 Florida Strategic Cryptocurrency Reserve Advisory
222 Committee within the State Board of Administration;
223 providing for committee membership; providing duties
224 of committee members; providing reporting
225 requirements; requiring the State Board of
226 Administration to adopt rules; providing an effective
227 date.
228
229 WHEREAS, cryptocurrencies are assets with
230 strategic potential for enhancing this state's
231 financial resilience and positioning this state for
232 the future digital economy, and
233 WHEREAS, cryptocurrencies can serve as a hedge
234 against inflation and economic volatility, and
235 WHEREAS, the establishment of a cryptocurrency
236 reserve serves the public purpose of providing
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1039 (2026)
Amendment No.
237 enhanced financial security to residents of this
238 state, NOW, THEREFORE,
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HB 1415
FLORIDA HOUSE OF REPRESENTATIVES
BILL ANALYSIS
This bill analysis was prepared by nonpartisan committee staff and does not constitute an official statement of legislative intent.
BILL #: HB 1415 COMPANION BILL: CS/SB 1568 (DiCeglie)
TITLE: Use of Digital Currency by the Department of LINKED BILLS: None
Financial Services RELATED BILLS: None
SPONSOR(S): Holcomb and Giallombardo
Committee References
Insurance & Banking State Administration Budget Commerce
SUMMARY
Effect of the Bill:
The bill creates a new pilot program within the Department of Financial Services (“DFS”). Through the program,
DFS is authorized to accept, hold, or create eligible payment stablecoin. The bill authorizes DFS to accept eligible
payment stablecoin as payment for regulatory fees submitted by licensees and license applicants. The bill requires
issuers of eligible stablecoin to be licensed money services businesses or authorized to issue payment stablecoin
under federal law. The bill requires DFS to provide a compatible digital wallet address for the receipt of eligible
payment stablecoin. Participation in the pilot program is voluntary. The bill requires DFS to monitor and collect
data on the program and submit a report to the Governor, President of the Senate, Speaker of the House of
Representatives on a specified date.
Fiscal or Economic Impact:
The bill may have an indeterminate impact on the private sector and state government.
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
ANALYSIS
EFFECT OF THE BILL:
Florida Stablecoin Pilot Program
The bill creates a new program within the Department of Financial Services (“DFS”) for the purpose of accepting
eligible payment stablecoin as payment for government fees. (Section 1).
The bill permits DFS to accept, hold, or create eligible payment stablecoin for use in the pilot program. (Section 1).
The bill defines “eligible payment stablecoin” as a stablecoin meeting the following requirements:
The stablecoin is fully backed by at least $1 billion in reserve assets.1
The stablecoin is redeemable through the issuer at all times for the United States dollar.
The issuer does not charge a fee to mint or create the stablecoin.
The issuer does not charge withdrawal or redemption fees.
The stablecoin meets any additional criteria for a permitted stablecoin under federal law.
The term does not include a central bank backed digital currency issued directly or indirectly by a central
bank, monetary authority, or governmental agency. The term also does not include a security2. (Section 1).
1 This requirement does not apply to stablecoin created by DFS.
2 E.g. notes, stocks and bonds. See S. 517.021, F.S., 15 U.S.C. s. 77b, 15 U.S.C. s. 78c, and 15 U.S.C. s. 80a-2.
STORAGE NAME: h1415.IBS
DATE: 2/9/2026
1
HB 1415
The bill authorizes DFS to accept eligible payment stablecoin as payment for:
Licensing fees3.
Application fees.
Renewal fees.
Other regulatory fees administered by DFS.
Any other money or fee owed to DFS. (Section 1).
The bill provides that upon receipt of payment, DFS may convert the eligible payment stablecoin into United States
currency and credit the applicable licensing account in the same manner as a payment made by other authorized
means. The bill also allows DFS to send eligible payment stablecoins for refunds, reimbursements, or other
disbursements provided by DFS. (Section 1).
The bill provides that any earnings on reserves associated with stablecoin issued by the state must be credited to
the benefit of the state. (Section 1).
Compatible digital wallet address
The bill requires DFS to provide a compatible digital wallet address for the receipt of eligible payment stablecoin.
(Section 1).
The bill defines “compatible digital wallet address” as the address of a software application that securely stores
private keys for accessing and completing transactions with eligible payment stablecoin. (Section 1).
Voluntary participation
The bill provides that participation in the pilot program is voluntary. (Section 1).
The bill provides that an applicant, licensee, or other participant may submit eligible payment stablecoin to a
compatible digital wallet address designated by the department as valid payment to the department. (Section 1).
The bill further provides that a participant receiving funds from the department may also elect to receive refunds,
reimbursements, or other disbursements in eligible payment stablecoin to a compatible digital wallet address
provided by the recipient. (Section 1).
Issuers of eligible payment stablecoin
The bill requires issuers of eligible payment stablecoin designated for use in the pilot program to be licensed as a
money services business under state law, or registered as a payment stablecoin issuer under federal law. (Section
1).
The bill permits DFS to conduct examinations, audits, and investigations of the issuer of an eligible payment
stablecoin designated for use in the pilot program to verify asset backing, redeemability, and adherence to
consumer protection standards, including standards related to fraud prevention and dispute resolution. (Section
1).
Monitoring and reporting requirements
The bill requires DFS to monitor and evaluate the pilot program, collect data on transaction volume, cost savings,
security incidents, regulatory compliance, and economic impacts, as well as any instances of fraud or disputes.
(Section 1).
The bill requires DFS to submit a report to the Governor, President of the Senate, Speaker of the House of
Representatives, beginning on February 1, 2027 and annually thereafter. The report must include findings,
3 The bill defines licensing fees as any fee, assessment, application fee, renewal fee, or other charge imposed by DFS for
licensure, registration, certification, or regulatory oversight.
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
2
HB 1415
recommendations for expansion or termination of the pilot program, and proposed statutory changes, if
appropriate. (Section 1).
Program scope and legislative intent
The bill provides that it does not alter or supersede any existing statutory fee obligations, licensing requirements,
or enforcement authority of the department. Acceptance of eligible payment stablecoin is an optional payment
method and does not require acceptance of any other digital asset. (Section 1).
The bill provides that the Legislature intends for the pilot program to yield critical insights into the operational
feasibility, user adoption, cybersecurity risks, regulatory compliance, and economic benefits of accepting eligible
payment stablecoin for government fees. (Section 1).
Effective date
The bill provides that it will be effective upon becoming law. (Section 2).
RULEMAKING:
The bill authorizes DFS to adopt rules to implement the pilot program.
Lawmaking is a legislative power; however, the Legislature may delegate a portion of such power to executive
branch agencies to create rules that have the force of law. To exercise this delegated power, an agency must
have a grant of rulemaking authority and a law to implement.
FISCAL OR ECONOMIC IMPACT:
STATE GOVERNMENT:
The bill may have an indeterminate fiscal impact on the state government, to the extent that DFS incurs costs to
establish the program or to the extent that accepting payment stablecoins offers higher or lower transaction costs
compared to traditional payment methods.
PRIVATE SECTOR:
The bill may have an indeterminate fiscal impact on the private sector to the extent the bill increases participation
in the payment stablecoin market and provides alternative methods of payment to existing methods.
RELEVANT INFORMATION
SUBJECT OVERVIEW:
Department of Financial Services
The Department of Financial Services (the “Department”) consists of the following divisions:
The Division of Accounting and Auditing.
The Division of Consumer Services.
The Division of Funeral, Cemetery, and Consumer Services.
The Division of Insurance Agent and Agency Services.
The Division of Criminal Investigations.
The Division of Rehabilitation and Liquidation.
The Division of Risk Management.
The Division of State Fire Marshal.
The Division of Treasury.
The Division of Unclaimed Property.
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
3
HB 1415
The Division of Workers’ Compensation.
The Division of Administration.
The Office of Insurance Consumer Advocate.4
DFS is responsible for issuing various licenses under the aforesaid divisions and collecting licensing application
and renewal fees.
Virtual currency
Virtual currency is a digital asset that functions as a medium of exchange but lacks legal tender status.5 In some
environments, virtual currency operates like “real” currency6 (i.e., the coin and paper money of the United States or
of any other country that is designated as legal tender, circulates, and is customarily used and accepted as a
medium of exchange in the country of issuance).7 Virtual currency that has an equivalent value in real currency, or
that acts as a substitute for real currency, is referred to as “convertible” virtual currency. 8 Bitcoin is one example of
a convertible virtual currency, as it can be digitally traded between users and can be purchased for, or exchanged
into, U.S. dollars, Euros, and other real or virtual currencies.9
Virtual currencies generally operate on networks of computers (nodes) that enable, validate, and record
transactions on a distributed digital ledger (blockchain).10 To transfer an asset on a blockchain, the transferor uses
an alphanumeric code known only to the transferor (a private key) to create a request that the network software
validate a new ledger entry, which assigns control of the asset to the recipient.11 Once the network has validated
this transfer, the ledger is updated and the recipient may transfer the asset to another recipient using their own
private key.12 Ledger entries are cryptographically secured, and accounts on a blockchain are identified by
alphanumeric ‘‘public keys’’ rather than by personal names.13 Virtual currency wallets are interfaces that store and
transfer virtual currency.14
Stablecoin
Stablecoins are a type of virtual currency designed to maintain a stable value by pegging the value to a national
currency or other assets.15 Stablecoins aim to eliminate volatility by pegging their value to a stable asset, such as
the United States Dollar.16 As of February 2026, the total market cap for stablecoins is approximately $296 billion.17
The top three stablecoins in terms of market cap are Tether (USDT), USDC (USDC), and USDS (USDS).18
4 S. 20.121, F.S.
5 S. 560.103(36), F.S.
6 Often referred to as “fiat” currency.
7 IRS, Digital assets, https://www.irs.gov/filing/digital-assets (last visited Feb. 5, 2026).
8 Id.
9 Id.
10 Office of the Federal Register, National Archives and Records Administration, Requirements for Certain Transactions
Involving Convertible Virtual Currency or Digital Assets, GovInfo, (Dec. 23, 2020), https://www.govinfo.gov/app/details/FR-
2020-12-23/2020-28437/summary (last visited Feb. 5, 2026).
11 Id.
12 Id.
13 Id.
14 FinCEN, Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies, (May 9,
2019), https://www.fincen.gov/system/files/2019-05/FinCEN%20Guidance%20CVC%20FINAL%20508.pdf (last visited Feb.
5, 2026).
15 Congressional Research Service, Stablecoins: Background and Policy Issues, https://www.congress.gov/crs-
product/IF11968. (last visited Feb. 5, 2026).
16 Congressional Research Service, Stablecoin Policy Issues for the 118th Congress, https://www.congress.gov/crs-
product/IF12450. (last visited Feb. 5, 2026).
17 Forbes, Top Stablecoins Coins Today by Market Cap, https://www.forbes.com/digital-assets/categories/stablecoins/ (last
visited Feb. 6, 2026).
18 Id.
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HB 1415
Federal law
On July 18, 2025, the federal government signed into law the Guiding and Establishing National Innovation for U.S.
Stablecoins Act of 2025 (“GENIUS Act”), establishing the first regulatory framework for payment stablecoin
issuers.19
The GENIUS Act takes effect on the earlier of January 18, 2025 or 120 days after the specified federal payment
stablecoin regulators issue implementing regulations.20
The GENIUS Act defines “payment stablecoin" as a digital asset meeting the following requirements:
Is meant to be used for payments or settling transactions.
The issuer of which:
o Must be ready to convert or redeem it for a fixed amount of money.21
o Represents, or creates a reasonable expectation that the value of the digital asset will remain stable
against a fixed amount of money.22
Under the GENIUS Act, only permitted payment stablecoin issuers (“PPSIs”) may issue a payment stablecoin in the
United States.23 Beginning July 18, 2028, it will be unlawful for digital asset service providers to offer or sell a
payment stablecoin in the United States, unless the provider is a PPSI or a foreign payment stablecoin issuer
meeting certain conditions.24
The GENIUS Act establishes three types of PPSIs, all of which must be formed in the United States:
a subsidiary of an insured depository institution;25
a federal qualified payment stablecoin issuer;26 or
a state qualified stablecoin issuer.27
PPSIs must comply with various requirements under the GENIUS Act, such as:
Maintaining identifiable reserves backing the outstanding payment stablecoin on at least a one- to-one
basis comprising on specified types of reserves, such as U.S. coin and currency.28
Publishing the monthly composition of the issuer’s reserve on its website, including the average maturity
and custody location of each reserve category.
Having monthly reserve reports examined by a registered public accounting firm and attested to by the
issuer’s chief executive officer and chief financial officer.29
19 12. U.S.C. ss. 5901-5916.
20 S.1582 - 119th Congress (2025-2026): GENIUS Act, S.1582, 119th Cong. (2025), https://www.congress.gov/bill/119th-
congress/senate-bill/1582, (last visited Feb. 5, 2026).
21 E.g. 1 United States Dollar for 1 stablecoin.
22 12 U.S.C. s. 5901. A payment stablecoin does not include a national currency, deposits as defined in 12 U.S.C. s. 1813 or
securities.
23 12 U.S.C. 5902.
24 Id.
25 A “subsidiary” is any company which is owned or controlled directly or indirectly by another company. The term includes
any service corporation owned in whole or in part by an insured depository institution or any subsidiary of such a service
corporation. An “insured depository institution” is any bank or savings association the deposits of which are insured by the
Federal Deposit Insurance Corporation pursuant to this chapter. See 12 U.S.C. 5901 and 12 U.S.C. 1813.
26 The term “federal qualified payment stablecoin issuer” means: the following issuers approved by the Comptroller to issue
payment stablecoin: a nonbank entity, other than a State qualified payment stablecoin issuer; an uninsured national bank
chartered pursuant to title LXII of the Revised Statutes; and a federal branch. 12 U.S.C. 5901(11).
27 The term “state qualified payment stablecoin issuer” means an entity that is legally established under the laws of a state and
approved to issue payment stablecoin by a state payment stablecoin regulator; 12 U.S.C. 5901(31).
28 12 U.S.C. s. 5903(a)(2) prohibits the required reserves from being pledged, rehypothecated, or reused by the permitted
payment stablecoin issuer except for as provided in the GENIUS Act.
29 12 U.S.C. s. 5903.
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5
HB 1415
Publicly disclosing the issuer’s redemption policy which must establish clear procedures for timely
redemption of payment stablecoin and clearly disclose all fees30 associated with purchasing or redeeming
payment stablecoin.31
Not engaging in tying practices that condition access to payment stablecoin services on the purchase of
unrelated products or services, or on agreements not to use competitors’ products, unless authorized by
federal law.
Not using deceptive names or marketing that imply association with or endorsement by the U.S.
Government.
Not paying interest or other yield solely for holding or using a payment stablecoin, unless expressly
authorized by federal law.32
The GENIUS Act creates a tiered oversight model between federal and state authorities. The GENIUS Act permits
states to regulate certain payment stablecoin issuers33 if:
The state has a regulatory regime that is substantially similar to the federal regime.
The state stablecoin regulation submits a certification to the Stablecoin Certification Review Committee
attesting that the state-level regulatory regime meets the criteria for substantial similarity.
The state submits additional certifications to the Stablecoin Certification Review Committee confirming
the accuracy of the initial certification.34
The GENIUS Act requires designated federal regulators to implement rules and regulations for implementing the
GENIUS Act. As of February 2026, said rules and regulations have not been implemented.
Money services businesses
The Financial Services Commission (“Commission”) is an executive agency within the Department of Financial
Services and is composed of the Governor, the Attorney General, the Chief Financial Officer, and the Commissioner
of Agriculture.35 The Office of Financial Regulation (“OFR”) is responsible for all activities of the Financial Services
Commission relating to the regulation of banks, credit unions, other financial institutions, finance companies, and
the securities industry.36
The Division of Consumer Finance within OFR licenses and regulates various aspects of the non-depository
financial services industries, including money services businesses.37
A money services business is, “any person located in or doing business in this state, from this state, or into this
state from locations outside this state or country who acts as a payment instrument seller, foreign currency
exchanger, check casher, or money transmitter.”38 Money services businesses must be licensed with OFR.39
30 Fee changes require at least seven days’ prior notice to consumers.
31 12 U.S.C. 5903.
32 Id.
33 The GENIUS Act provides that a state qualified payment stablecoin issuer means an entity that (A) is legally established
under the laws of a State and approved to issue payment stablecoin by a state payment stablecoin regulator; and (B) is not an
uninsured national bank chartered by the Comptroller pursuant to title LXII of the Revised Statutes, a Federal branch, an
insured depository institution, or a subsidiary of such national bank, Federal branch, or insured depository institution. 12
U.S.C. s. 5901.
34 12 U.S.C. 5901.
35 S. 20.121(3), F.S.
36 S. 20.121(3)(a)2., F.S.
37 Office of Financial Regulation, Division of Consumer Finance, Division of Consumer Finance (last visited Feb. 5, 2026).
38 S. 560.103(23), F.S.
39 S. 560.125, F.S.
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6
HB 1415
BILL HISTORY
STAFF
DIRECTOR/ ANALYSIS
COMMITTEE REFERENCE ACTION DATE POLICY CHIEF PREPARED BY
Insurance & Banking Brackett Highsmith
Subcommittee
State Administration Budget
Subcommittee
Commerce Committee
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7
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 1415 2026
1 A bill to be entitled
2 An act relating to the use of digital currency by the
3 Department of Financial Services; creating s. 17.72,
4 F.S.; establishing the Florida Stablecoin Pilot
5 Program within the Department of Financial Services;
6 providing legislative intent; defining terms;
7 authorizing the department to accept eligible payment
8 stablecoins for the payment of licensing fees,
9 application fees, renewal fees, and other regulatory
10 fees; providing eligibility requirements for payment
11 stablecoins; authorizing the department to designate
12 an eligible payment stablecoin and compatible digital
13 wallet addresses; providing for conversion of
14 stablecoins to United States currency; authorizing
15 examinations, audits, and investigations of stablecoin
16 issuers; requiring monitoring and annual reporting to
17 the Governor and Legislature; authorizing rulemaking;
18 providing an effective date.
19
20 Be It Enacted by the Legislature of the State of Florida:
21
22 Section 1. Section 17.72, Florida Statutes, is created to
23 read:
24 17.72 Florida Stablecoin Pilot Program.—There is
25 established within the Department of Financial Services the
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26 Florida Stablecoin Pilot Program. It is the intent of the
27 Legislature that the Florida Stablecoin Pilot Program yield
28 critical insights into the operational feasibility, user
29 adoption, cybersecurity risks, regulatory compliance, and
30 economic benefits of accepting eligible payment stablecoins for
31 governmental fees.
32 (1) As used in this section, the term:
33 (a) "Compatible digital wallet address" means the address
34 of a software application that securely stores private keys for
35 accessing and completing transactions with eligible payment
36 stablecoins.
37 (b) "Department" means the Department of Financial
38 Services.
39 (c) "Eligible payment stablecoin" means a stablecoin that
40 meets all of the following requirements:
41 1. The stablecoin is fully backed by at least $1 billion
42 in reserve assets. This requirement does not apply to a
43 stablecoin created by the department.
44 2. The stablecoin is redeemable through the issuer or its
45 agent at all times for United States dollars.
46 3. The issuer does not charge a fee to mint or create the
47 stablecoin.
48 4. The issuer does not charge withdrawal or redemption
49 fees.
50 5. The stablecoin meets any additional criteria for a
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51 permitted payment stablecoin under federal law.
52 6. The term does not include a central bank digital
53 currency issued directly or indirectly by a central bank,
54 monetary authority, or other governmental agency, whether
55 foreign or domestic. An eligible payment stablecoin is not a
56 security as defined in s. 517.021.
57 (d) "Licensing fee" means any fee, assessment, application
58 fee, renewal fee, or other charge imposed by the department for
59 licensure, registration, certification, or regulatory oversight.
60 (2)(a) The department may allow the acceptance of eligible
61 payment stablecoins as a form of payment for licensing fees,
62 application fees, renewal fees, other regulatory fees
63 administered by the department, or any other money or fee owed
64 to the department. The department may send eligible payment
65 stablecoins for refunds, reimbursements, or other disbursements
66 provided by the department.
67 (b) Participation in the pilot program is voluntary. An
68 applicant, licensee, or other participant may submit eligible
69 payment stablecoin to a compatible digital wallet address
70 designated by the department as valid payment to the department.
71 A participant receiving funds from the department may also elect
72 to receive refunds, reimbursements, or other disbursements in
73 eligible payment stablecoins to a compatible digital wallet
74 address provided by the recipient.
75 (3)(a) The department shall provide a compatible digital
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HB 1415 2026
76 wallet address for the receipt of eligible payment stablecoins
77 for licensing fees. Upon receipt of payment, the department may
78 convert the eligible payment stablecoins into United States
79 currency and credit the applicable licensing account in the same
80 manner as a payment made by other authorized means.
81 (b) The department may accept, hold, or create eligible
82 payment stablecoins for use in the pilot program.
83 (c) Any earnings on reserves associated with stablecoin
84 issued by the state must be credited to the benefit of the
85 state.
86 (d) The department shall ensure that the issuer of the
87 eligible payment stablecoin designated for use in the pilot
88 program is licensed as a money services business under chapter
89 560 or registered as a payment stablecoin issuer under federal
90 law.
91 (e) The department may conduct examinations, audits, and
92 investigations of the issuer of an eligible payment stablecoin
93 designated for use in the pilot program to verify asset backing,
94 redeemability, and adherence to consumer protection standards,
95 including standards related to fraud prevention and dispute
96 resolution.
97 (4)(a) The department shall monitor and evaluate the pilot
98 program, collecting data on transaction volume, cost savings,
99 security incidents, regulatory compliance, and economic impacts,
100 as well as any instances of fraud or disputes.
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101 (b) Beginning February 1, 2027, and annually thereafter,
102 the department shall submit a report to the Governor, the
103 President of the Senate, and the Speaker of the House of
104 Representatives. The report must include findings,
105 recommendations for expansion or termination of the pilot
106 program, and proposed statutory changes, if appropriate.
107 (5) This section does not alter or supersede any existing
108 statutory fee obligations, licensing requirements, or
109 enforcement authority of the department. Acceptance of eligible
110 payment stablecoins is an optional payment method and does not
111 require acceptance of any other digital asset.
112 (6) The department may adopt rules to implement this
113 section.
114 Section 2. This act shall take effect upon becoming a law.
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INSURANCE & BANKING SUBCOMMITTEE
HB 1415 by Rep. Holcomb
Use of Digital Currency by the Department of Financial Services
AMENDMENT SUMMARY
February 11, 2026
Amendment #867485 by Rep. Holcomb (strike-all):
• Removes the provision that allowed DFS to create payment stablecoins.
• Requires DFS to:
o Ensure that any payment stablecoin issuer in the program is a permitted payment
stablecoin issuer under federal or state law.
o Coordinate with the Office of Financial Regulation to avoid duplicative regulation.
• Permits DFS to purchase payment stablecoin in order to pay refunds.
• Permits DFS to designate one or more stablecoins for use in the program.
• Incorporates requirements for payment stablecoin and issuers from the federal Guiding
and Establishing National Innovation for U.S. Stablecoins Act (“GENIUS Act”).
• Replaces the requirement for payment stablecoin issuers eligible for the program to be
backed by at least $1 billion in reserves with the requirements for the issuer to have an
average total dollar value of at least $1 billion during the preceding 12-month period and
to be fully backed by reserve assets.
• Requires program participants electing to receive refunds or similar disbursements from
DFS in payment stablecoin to provide DFS with a compatible digital wallet address
where such payment may be sent.
• Clarifies that the bill does not relieve the Chief Financial Officer or DFS of any obligation
to secure public funds in a secure public depository or to hold payment stablecoin in a
manner similar to how direct United States Treasury obligations are held.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1415 (2026)
Amendment No.
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 Holcomb offered the following:
4
5 Amendment (with title amendment)
6 Remove everything after the enacting clause and insert:
7 Section 1. Section 17.72, Florida Statutes, is created to
8 read:
9 17.72 Florida Stablecoin Pilot Program.—There is
10 established within the Department of Financial Services the
11 Florida Stablecoin Pilot Program. It is the intent of the
12 Legislature that the Florida Stablecoin Pilot Program yield
13 benefits from the acceptance of payment stablecoins as a form of
14 payment for governmental fees through this voluntary pilot
15 program.
16 (1) DEFINITIONS.—As used in this section, the term:
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1415 (2026)
Amendment No.
17 (a) "Blockchain" means a mathematically secured,
18 chronological, decentralized, distributed, and digital ledger or
19 database that consists of records of transactions that cannot be
20 altered retroactively.
21 (b) "Compatible digital wallet address" means the address
22 of a software application that securely stores private keys for
23 accessing and completing transactions with payment stablecoins.
24 (c) "Digital asset" means any digital representation of
25 value that is recorded on a cryptographically secured digital
26 ledger.
27 (d) "Exchange platform" means a company licensed and
28 regulated by the federal or a state government which provides
29 trading, custody, or money transmission services of payment
30 stablecoins or other digital assets.
31 (e) "Federal qualified payment stablecoin issuer" means
32 any of the following:
33 1. A nonbank entity, other than a state qualified payment
34 stablecoin issuer, approved by the Office of the Comptroller of
35 the Currency to issue payment stablecoins.
36 2. An uninsured national bank that is chartered by the
37 Office of the Comptroller of the Currency pursuant to title LXII
38 of the Revised Statutes and is approved to issue payment
39 stablecoins. As used in this subsection, the term "national
40 bank" has the same meaning as in the GENIUS Act, Pub. L. No.
41 119-27.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1415 (2026)
Amendment No.
42 3. A Federal branch that is approved by the Office of the
43 Comptroller of the Currency to issue payment stablecoins. For
44 purposes of this subparagraph, the term "Federal branch" has the
45 same meaning as in section 3 of the Federal Deposit Insurance
46 Act, 12 U.S.C. s. 1813.
47 (f)1. "Payment stablecoin" means a digital asset that
48 meets all of the following requirements:
49 a. Is, or is designed to be, used as a means of payment or
50 settlement.
51 b. The issuer of which:
52 (I) Is obligated to convert, redeem, or repurchase the
53 digital asset for a fixed amount of monetary value, not
54 including a digital asset denominated in a fixed amount of
55 monetary value.
56 (II) Represents that such issuer will maintain, or create
57 the reasonable expectation that it will maintain, a stable value
58 relative to the value of a fixed amount of monetary value.
59 2. The term does not include a digital asset that is any
60 of the following:
61 a. A national currency.
62 b. A deposit as defined in section 3 of the Federal
63 Deposit Insurance Act, 12 U.S.C. s. 1813, including a deposit
64 recorded using distributed ledger technology. For purposes of
65 this subparagraph, the term "distributed ledger" has the same
66 meaning as in the GENIUS Act, Pub. L. No. 119-27.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1415 (2026)
Amendment No.
67 c. A security, as defined in s. 517.021, section 2 of the
68 Securities Act of 1933, 15 U.S.C. s. 77b, section 3 of the
69 Securities and Exchange Act of 1934, 15 U.S.C. s. 78c, or
70 section 2 of the Investment Company Act of 1940, 15 U.S.C. s.
71 80a-2.
72 (g) "Permitted payment stablecoin issuer" means a person
73 formed in the United States which is one of the following:
74 1. A subsidiary of an insured depository institution that
75 has been approved to issue payment stablecoins under the GENIUS
76 Act, Pub. L. No. 119-27. For purposes of this subparagraph, the
77 term "insured depository institution" has the same meaning as in
78 the GENIUS Act, Pub. L. No. 119-27.
79 2. A federal qualified payment stablecoin issuer.
80 3. A state qualified payment stablecoin issuer.
81 (h) "State qualified payment stablecoin issuer" means an
82 entity legally established under the laws of a state and
83 approved by the Office of Financial Regulation to issue payment
84 stablecoins.
85 (2) PROGRAM PARTICIPATION.—
86 (a) The department may engage in any of the following
87 activities that meet the requirements of this section:
88 1. Accept payment stablecoin for the payment of authorized
89 fees as provided in paragraph (c).
90 2. Issue refunds, reimbursements, or other similar
91 disbursements in the form of payment stablecoins to any
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1415 (2026)
Amendment No.
92 participant who elects to receive a payment in such form. The
93 department may purchase payment stablecoins in an amount that is
94 necessary to support such activity.
95 3. Hold payment stablecoin. If such payment stablecoin
96 does not earn any interest or yields, the department may hold
97 payment stablecoin only in the amount that is estimated to be
98 required to issue refunds, reimbursements, or other similar
99 disbursements during a revolving 30-day period. Any direct or
100 indirect yields earned with respect to payment stablecoins shall
101 be credited to the benefit of the state.
102 (b) The department may designate one or more payment
103 stablecoins for activities authorized in paragraph (a). Any
104 payment stablecoin that is accepted, purchased, held, or
105 disbursed by the department pursuant to this section must meet
106 all of the following criteria:
107 1. Have an average market capitalization of at least $1
108 billion during the preceding 12-month period.
109 2. Be fully backed by reserve assets on a one-to-one basis
110 limited to United States currency, demand deposits at insured
111 depository institutions, United States Treasury bills having a
112 remaining maturity of 93 days or less, or reverse repurchase
113 agreements collateralized by such Treasury bills.
114 3. Be redeemable at all times at a one-to-one ratio for
115 United States dollars through the permitted payment stablecoin
116 issuer or its agent.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
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Amendment No.
117 4. Be minted by a permitted payment stablecoin issuer.
118 5. The issuer does not charge withdrawal or redemption
119 fees.
120 6. Be purchased by the department directly from a
121 permitted payment stablecoin issuer through a blockchain network
122 or indirectly through an exchange platform, or received by the
123 department from a program participant.
124 7. Except as otherwise provided in this section, be issued
125 by an issuer that meets any additional criteria for a permitted
126 payment stablecoin issuer under any applicable federal or state
127 law including, but not limited to, the GENIUS Act, Pub. L. No.
128 119-27.
129 (c) The department may accept payment stablecoins as a
130 form of payment for fees that include, but are not limited to,
131 licensing fees, registration fees, certification fees,
132 assessment fees, application fees, renewal fees, other
133 regulatory fees administered by the department, or any other fee
134 owed to the department.
135 (d) An applicant, a licensee, or other program participant
136 may elect to voluntarily participate in the pilot program and
137 remit payment stablecoins to a compatible digital wallet address
138 designated by the department as a valid form of payment for any
139 fee authorized in paragraph (c).
140 (e) A participant that elects to receive from the
141 department a refund, reimbursement, or other similar
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Bill No. HB 1415 (2026)
Amendment No.
142 disbursement in the form of payment stablecoin must provide the
143 department with a compatible digital wallet address where such
144 payment may be sent.
145 (3) DEPARTMENT DUTIES.—
146 (a) The department must comply with all of the following
147 requirements:
148 1. Ensure that any payment stablecoin issuer designated
149 for use in the pilot program is a permitted payment stablecoin
150 issuer.
151 2. Provide a compatible digital wallet address to any
152 participant that elects to participate in the voluntary pilot
153 program for the payment of any fees authorized in paragraph
154 (2)(c) to be paid in the form of payment stablecoins.
155 3. Within a reasonable time after receiving a payment
156 stablecoin from any program participant, convert the payment
157 stablecoin into United States currency and credit the applicable
158 account where the funds would be held in a qualified public
159 depository in the same manner as a payment made by any other
160 authorized means.
161 (b) The department may conduct examinations, audits, or
162 investigations of a permitted payment stablecoin issuer of a
163 payment stablecoin designated for use in the pilot program to
164 verify asset backing, redeemability, and adherence to consumer
165 protection standards, including standards related to fraud
166 prevention and dispute resolution. To the extent that the
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Bill No. HB 1415 (2026)
Amendment No.
167 department intends to engage in such conduct as to a state
168 qualified payment stablecoin issuer, the department must
169 coordinate with the Office of Financial Regulation to avoid
170 duplicated efforts and to efficiently regulate such issuer.
171 (4) REPORTING.—
172 (a) The department shall monitor and evaluate the pilot
173 program and collect data on transaction volume, cost savings,
174 security incidents, regulatory compliance, and economic impacts,
175 as well as any instances of fraud or disputes.
176 (b) Beginning February 1, 2027, and annually thereafter,
177 the department must submit a report to the Governor, the
178 President of the Senate, and the Speaker of the House of
179 Representatives which must include all of the following:
180 1. A summary of the data collected pursuant to paragraph
181 (a).
182 2. Any findings the department makes with respect to the
183 pilot program which include, but are not limited to, findings
184 regarding any trends or patterns relating to financial matters,
185 such as fiscal impacts, or nonfinancial matters, such as
186 utilization analysis.
187 3. Any recommendations for expansion or termination of the
188 pilot program.
189 4. Any proposed statutory changes, if appropriate.
190 (5) CONSTRUCTION.—This section:
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1415 (2026)
Amendment No.
191 (a) Does not alter or supersede any existing statutory fee
192 obligations, licensing requirements, or enforcement authority of
193 the department.
194 (b) Authorizes the acceptance of payment stablecoins as an
195 optional payment method and does not require or authorize the
196 acceptance of any other digital asset.
197 (c) May not be construed to relieve the Chief Financial
198 Officer or the department of any obligation to secure public
199 funds, including any payment stablecoins, in a qualified public
200 depository unless an exemption applies pursuant to s. 280.03 or,
201 with respect to payment stablecoins, to hold such stablecoins in
202 a manner similar to how direct United States Treasury
203 obligations are held pursuant to s. 17.57(2)(a).
204 (6) RULEMAKING.—The department may adopt rules to
205 implement this section.
206 Section 2. This act shall take effect upon becoming law.
207
208
209 -----------------------------------------------------
210 T I T L E A M E N D M E N T
211 Remove everything before the enacting clause and insert:
212 An act relating to the use of digital currency by the
213 Department of Financial Services; creating s. 17.72,
214 F.S.; establishing the Florida Stablecoin Pilot
215 Program within the Department of Financial Services;
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1415 (2026)
Amendment No.
216 providing legislative intent; defining terms;
217 authorizing the department to engage in certain
218 activities; authorizing the department to designate
219 one or more payment stablecoins for certain
220 activities; requiring that certain payment stablecoins
221 meet specified criteria; authorizing the department to
222 accept payment stablecoins; authorizing program
223 participants to elect to voluntarily participate in
224 the program and remit payment stablecoins to a
225 compatible digital wallet address; requiring certain
226 participants to provide the department with a
227 compatible digital wallet address; requiring the
228 department to comply with certain requirements;
229 requiring the department to provide a compatible
230 digital wallet address for a specified purpose;
231 authorizing the department to conduct examinations,
232 audits, and investigations of permitted payment
233 stablecoin issuers; requiring the department to
234 coordinate with the Office of Financial Regulation
235 under certain circumstances; requiring the department
236 to monitor and evaluate the pilot program and collect
237 certain data; requiring the department to submit an
238 annual report containing certain information to the
239 Governor and the Legislature, beginning on a specified
240 date and annually thereafter; providing construction;
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1415 (2026)
Amendment No.
241 authorizing the department to adopt rules; providing
242 an effective date.
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PCS for HB 175
FLORIDA HOUSE OF REPRESENTATIVES
BILL ANALYSIS
This bill analysis was prepared by nonpartisan committee staff and does not constitute an official statement of legislative intent.
BILL #: PCS for HB 175 COMPANION BILL: None
TITLE: Payment Stablecoin LINKED BILLS: None
SPONSOR(S): Insurance & Banking Subcommittee RELATED BILLS: None
Committee References
Orig. Comm.: Insurance & Banking
SUMMARY
Effect of the Bill:
The bill creates a regulatory framework for payment stablecoin issuers, pursuant to the federal Guiding and
Establishing National Innovation for U.S. Stablecoins Act. The bill requires issuers to register with and obtain
approval from the Office of Financial Regulation, as well as comply with prudential requirements. The bill requires
the Office of Financial Regulation to certify to the federal Stablecoin Certification Review Committee that the state
regulatory regime is substantially similar to the federal regulatory regime.
Fiscal or Economic Impact:
The bill may have an indeterminate fiscal impact on the private sector and state government.
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
ANALYSIS
EFFECT OF THE BILL:
Payment stablecoin issuers
Effective January 1, 2027, the bill creates a state-level regulatory framework for payment stablecoin issuers,
pursuant to the federal Guiding and Establishing National Innovation for U.S. Stablecoins Act (“GENIUS Act”)1.
(Sections 1-12).
The bill defines “qualified payment stablecoin issuer” as an entity established under the laws of a state and
approved by the Office of Financial Regulation (“OFR”) to issue payment stablecoin. (Section 1).
The bill defines “payment stablecoin" as a digital asset2 meeting the following requirements:
Is meant to be used for payments or settling transactions.
The issuer of which:
o Must be ready to convert or redeem it for a fixed amount of money.3
o Represents, or creates a reasonable expectation that the value of the digital asset will remain stable
against a fixed amount of money. (Section 1).
1 12. U.S.C. 5901et seq.
2 The bill defines “digital asset” as any digital representation of value that is recorded on a cryptographically secured digital
ledger.
3 E.g. 1 United States Dollar for 1 stablecoin.
STORAGE NAME: PCS0175.IBS
DATE: 2/9/2026
1
PCS for HB 175
The bill provides that the term “payment stablecoin” does not include:
A national currency.4
Deposits.5
Securities.6 (Section 1).
Money services businesses
Effective January 1, 2027, the bill expands the definition of money services business to include qualified payment
stablecoin issuers, thereby incorporating payment stablecoin issuers into Florida’s regulatory framework for
money services businesses. However, unlike other money services businesses, the bill does not require licensure of
payment stablecoin issuers and instead requires said issuers to apply for and obtain a registration from the OFR.
(Sections 1-4).
The bill updates an existing prohibition on unlicensed activity for money services businesses to also cover
operating as a payment stablecoin issuer without required registration. (Section 4).
The bill amends the Florida Control of Money Laundering in Money Services Business Act7 to include payment
stablecoins, requiring issuers to comply with its provisions and subjecting them to enforcement for violations. The
bill also requires state qualified payment stablecoin issuers to comply with any anti-money laundering regulation
provided in the GENIUS Act. (Section 3).
Registration requirements
Effective January 1, 2027, the bill creates part V of ch. 560, F.S., entitled “Payment Stablecoin Issuers” that
establishes regulation of issuers of payment stablecoin. (Section 5).
The bill prohibits engaging in the activity of a qualified payment stablecoin issuer prior to applying for and
obtaining an approval of registration from OFR. The bill requires OFR to provide the applicant with written notice
of OFR’s approval or denial of the application for registration. (Section 6).
Registration applications
Effective January 1, 2027, the bill requires applicants seeking registration as a qualified payment stablecoin issuer
to submit an application to OFR that includes:
The applicant’s legal name, any fictitious or trade names, and physical and mailing addresses.
The date and state of formation, if applicable.
For each control person,8 their name, identification number (such as social security number, alien
identification number, or taxpayer identification number), business and residential addresses, and
employment history for the past 5 years.
A description of the applicant’s organizational structure, including any parent or subsidiary entities and
whether any are publicly traded.
The name and mailing address of the registered agent in the state.
An attestation that the applicant has documented and implemented blockchain analytics policies and
procedures to prevent transfers to wallet addresses linked to known criminal activity, and that these
controls are integrated into the applicant’s compliance program.
4 Such as United States Dollars or other government-issued money.
5 A deposit is money or funds held by a bank or savings association that the bank is obligated to repay to the customer. See 12
U.S.C. 1813(l).
6 E.g. notes, stocks and bonds. S. 517.021, F.S., 15 U.S.C. 77b, 15 U.S.C. 78c, and 15 U.S.C. 80a-2.
7 The Florida Control of Money Laundering in Money Services Businesses Act (“Act”) requires money services businesses to
maintain records of certain financial transactions and file reports with OFR. Money services businesses who violate the Act can
face administrative penalties, fines, and criminal charges. S. 560.123, F.S.
8 The term “control person” includes key employees of a money service business, such as a president, high ranking officers,
and certain shareholders. See S. 560.103, F.S.
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
2
PCS for HB 175
Any other information required by Florida statute or the Financial Services Commission (“Commission”)
rule. (Section 7).
The bill requires applicants to provide any information needed to correct application deficiencies within a
timeframe to be set by Commission rule. (Section 7).
Registrants must report any changes to the information in their initial application or application amendments
within 30 days of the change taking effect. (Section 7).
Registrations must be renewed annually by December 31 of the year before expiration. To renew, a registrant must
either submit updated application information if changes have occurred or an affidavit confirming that no
information has changed since the prior year. (Section 7).
A renewal registration becomes effective on the date OFR approves the application for registration. (Section 7).
If a registrant fails to submit a renewal application within 60 days after the registration becomes inactive, the
registration expires. Once expired, the issuer must submit a new registration application and receive a new
registration from OFR before conducting business in this state. (Section 7).
OFR may deny an initial or renewal application if a control person of the registrant or the registrant has engaged in
unlawful business practices or has been convicted or found guilty of, or pled guilty or nolo contendere to crimes
involving dishonest dealing, fraud, acts of moral turpitude, or other acts showing an inability to engage lawfully as
a qualified payment stablecoin issuer. OFR must deny a renewal application that fails to comply with the
application requirements for a new registration. (Section 7).
Any false statement in a registration application renders the registration void. A void registration does not provide
a defense against prosecution for violations of ch. 560, F.S. (Section 7).
Financial institutions
Effective January 1, 2027, the bill creates a regulatory framework within Florida’s financial institutions codes,
allowing trust companies to issue payment stablecoin. The regulatory framework for trusts company payment
stablecoin issuers is substantially similar to the regulation of money services business payment stablecoin issuers,
such that the two types of issuers must comply with all of the same requirements except that trust companies are
not required to register as issuers since they are already regulated under Florida’s financial institutions codes.9
(Section 12).
The bill provides that a qualified payment stablecoin issuer has the same meaning as it applies to money services
businesses and also specifies that the term does not include an insured depository institution10, an uninsured
national bank, a federal branch of a foreign bank11, or a subsidiary12 of such entities.13 (Section 12).
9 Ch. 658, F.S.
10 The bills defines "insured depository institution" as any bank or savings association the deposits of which are insured by the
Federal Deposit Insurance Corporation and insured credit union means any credit union the member accounts of which are
insured by the National Credit Union Administration Board.
11 The bills defines "federal branch" as a branch of a foreign bank established and operating under 12 U.S.C. 3102.
12 The bills defines "subsidiary" as any company that is owned or controlled directly or indirectly by another company and
includes any service corporation owned in whole or in part by an insured depository institution or any subsidiary of such a
service corporation.
13 Because the definition of a state qualified payment stablecoin issuer in the GENIUS Act excludes insured depository
institutions and all state banks and credit unions are insured, the bill does not include a state regulatory regime of banks or
credit unions as issuers. S. 658.38, F.S., requires all state banks to maintain insurance from the Federal Deposit Insurance
Corporation. S. 657.033, F.S., requires credit union to obtain and maintain insurance of accounts through the National Credit
Union Administration.
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
3
PCS for HB 175
Limitation on payment stablecoin activities
Effective January 1, 2027, the bill provides that unless licensed as a money services business or chartered a
financial institution, a qualified payment stablecoin issuer may engage only in the following activities:
Issue payment stablecoins.
Redeem payment stablecoins.
Manage related reserves, including purchasing, selling, and holding reserve assets or providing custodial
services for reserve assets, consistent with federal law and the laws of this state.
Undertake other activities that directly support any of the activities described above. (Section 8).
Minimum prudential requirements
Effective January 1, 2027, the bill requires payment stablecoin issuers to comply with the requirements of the
GENIUS Act, including the following:
Reserve requirements:
Maintain identifiable reserves equal to at least 100% of outstanding payment stablecoins.
Permissible reserves include:
o U.S. coin or currency or funds held at a Federal Reserve Bank.
o Demand deposits or insured shares at an insured depository institution, subject to federal limits.
o U.S. treasury bills, notes, or bonds with maturities of 93 days or less.
o Overnight repurchase or reverse repurchase agreements backed by short-term U.S. Treasuries,
subject to federal standards and overcollateralization requirements.
o Securities issued by a federally registered investment company or other registered government
money market fund, and that are invested solely in permitted reserve assets.
o Other similarly liquid federal government-issued asset approved by the primary federal payment
stablecoin regulator, in consultation with OFR.
o Certain permitted reserves in tokenized form, if compliant with applicable laws. (Sections 9 and
12).
Redemption Policies and Consumer Disclosures
Publicly disclose a redemption policy with clear procedures for timely redemption of payment stablecoins.
Clearly disclose all fees associated with purchasing or redeeming payment stablecoins.
o Fee changes require at least seven days’ prior notice to consumers. (Sections 9 and 12).
Restrictions on Use of Reserves
Comply with federal prohibitions on pledging, rehypothecating14, or reusing reserve assets, except as
permitted for:
o Satisfying margin obligations related to permitted reserve investments.
o Satisfying obligations associated with custodial services.
o Liquidity management to meet redemption demands, including limited use of Treasury-backed
repurchase agreements, subject to clearance from a clearing agency or prior approval from OFR.
(Sections 9 and 12).
Reserve transparency and reporting
Publish a monthly reserve report on the issuer’s website showing:
o The total number of outstanding payment stablecoins.
o The amount, composition, average maturity and custody location of reserve assets. (Sections 9 and
12).
14 Rehypothecating occurs when an institution reuses required reserve assets that are meant to back customer obligations for
the institution’s own borrowing, lending, or investment purposes.
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
4
PCS for HB 175
Audits, Certifications, and Supervision
Retain a registered public accounting firm15 to conduct a monthly examinations of reserve reports.
Submit monthly certifications to OFR, signed by the issuer's chief executive officer and chief financial
officer, attesting to the accuracy of reserve reports.
Comply with federal and state requirements relating to capital, liquidity, and risk management.
Use only custodians or safekeepers that comply with the GENIUS Act.
Comply with all other federal requirements and implementing regulations under the GENIUS Act. (Sections
9 and 12).
The bill prohibits payment stablecoin issuers from engaging in the following conduct:
Anti-competitive and Tying Practices
Conditioning access to payment stablecoin services on the purchase of unrelated products or services, or
on agreements not to use competitors’ products, unless authorized by federal law. (Sections 9 and 12).
Deceptive Naming and Marketing
Using names or marketing that imply association with or endorsement by the U.S. Government.
Marketing payment stablecoins in a way that would lead a reasonable person to believe they are U.S. legal
tender or government-backed. (Sections 9 and 12).
Interest or Yield Payments
Paying interest or other yield solely for holding or using a payment stablecoin, unless expressly authorized
by federal law. (Sections 9 and 12).
Exemptions
Effective January 1, 2027, the bill exempts licensed money services businesses such as payment instrument sellers,
foreign currency exchangers, check cashers, or money transmitters from registering as a qualified payment
stablecoin issuer, as long as their total outstanding stablecoin issuance does not exceed $10 billion. However, these
licensees still must comply with the bill’s other requirements for qualified payment stablecoin issuers. (Section 6).
The bill exempts trust companies that issue payment stablecoins with a consolidated total outstanding issuance of
$10 billion or less from registration as a qualified payment stablecoin issuer but does require such company to
comply with the bill’s other provisions for qualified payment stablecoin issuers. (Section 12).
The bill also exempts the following transactions from its provisions:
Direct transfers of payment stablecoins between two individuals acting on their own behalf, for lawful
purposes, without an intermediary.
Transfers between an account in the U.S. and an account that is abroad as long as both accounts are owned
by the same individual and under the same parent company.
Transactions using software or hardware wallets that facilitates an individual's own custody of payment
stablecoins. (Sections 6 and 12).
Transition to federal oversight
Effective January 1, 2027, the bill requires state regulated payment stablecoin issuers to comply with the GENIUS
Act’s requirement for state regulated issuers to have a total outstanding issuance not exceeding $10 billion. The bill
15 "Registered public accounting firm" means a public accounting firm registered with the Public Company Accounting
Oversight Board.
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
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PCS for HB 175
provides that unless a federal waiver is granted, a payment stablecoin issuer whose total outstanding payment
stablecoin issuance reaches $10 billion must do one of the following:
Within 360 days of reaching the threshold, transition to the applicable federal regulatory framework jointly
administered by OFR and the U.S. Office of the Comptroller of the Currency; or
Stop issuing new payment stablecoins once the threshold is reached until total issuance falls below $10
billion. (Sections 6 and 12).
If a federal waiver is obtained under the GENIUS Act, the issuer remains subject to state regulation, with OFR
retaining sole responsibility for supervision, unless supervision is shared jointly16 with the U.S. Office of the
Comptroller of the Currency. (Sections 6 and 12).
The bill also allows OFR to enter into agreements with the appropriate federal regulator for joint supervision of
qualified payment stablecoin issuers. (Sections 6 and 12).
State certification
Effective upon becoming law, the bill provides that within 20 days after the federal Stablecoin Certification Review
Committee (“Committee”) begins accepting certifications, or within 20 days after the bill takes effect17 (whichever
is later), OFR must submit an initial certification to the Committee, as is required by the GENIUS Act in for the state
to regulate payment stablecoin issuers.18 (Section 10)
The initial certification must attest that the state regulatory regime for payment stablecoins is substantially similar
to the requirements of the GENIUS Act. (Section 10)
The bill requires OFR to comply with the requirements of the GENIUS Act and submit annual follow-up
certifications confirming the continued accuracy of the initial submission by the annual deadline set by the U.S.
Secretary of the Treasury. (Sections 10 and 12).
Effective date
Except as otherwise provided, the bill provides an effective date of January 1, 2027. (Section 13).
RULEMAKING:
The bill requires the Financial Services Commission (“Commission”) to adopt rules to administer the payment
stablecoin framework. The bill also requires the Commission to adopt rules relating to capital, liquidity, and risk
management which are consistent with the GENIUS Act. The bill permits the Commission to adopt rules
establishing standards for the conduct, supervision, examination, and regulation of qualified payment stablecoin
issuers, including requirements relating to reserves, customer-asset protection, reporting, and compliance, in
order to meet the minimum requirements established by the Stablecoin Certification Review Committee.
Lawmaking is a legislative power; however, the Legislature may delegate a portion of such power to executive
branch agencies to create rules that have the force of law. To exercise this delegated power, an agency must
have a grant of rulemaking authority and a law to implement.
FISCAL OR ECONOMIC IMPACT:
16 12 U.S.C. 5901.
17 The GENIUS Act takes effect on the earlier of January 18, 2027 or the date that is 120 days after the date on which the
primary federal regulators issue any final implementing regulations. S.1582 - 119th Congress (2025-2026): GENIUS Act,
S.1582, 119th Cong. (2025), https://www.congress.gov/bill/119th-congress/senate-bill/1582, (last visited Feb. 5, 2026).
18 12 U.S.C. 5901.
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
6
PCS for HB 175
STATE GOVERNMENT:
The bill may have an indeterminate fiscal impact on the state government, to the extent that the Office of Financial
Regulation incurs costs to promulgate rules and enforce the bill’s provisions.
PRIVATE SECTOR:
The bill may have an indeterminate fiscal impact on the private sector, to the extent that stablecoin issuers incur
costs to comply with the bill’s requirements. The bill may also lead to an expansion of the stablecoin market in
Florida.
RELEVANT INFORMATION
SUBJECT OVERVIEW:
Virtual currency
Virtual currency is a digital asset that functions as a medium of exchange but lacks legal tender status.19 In some
environments, virtual currency operates like “real” currency20 (i.e., the coin and paper money of the United States
or of any other country that is designated as legal tender, circulates, and is customarily used and accepted as a
medium of exchange in the country of issuance).21 Virtual currency that has an equivalent value in real currency, or
that acts as a substitute for real currency, is referred to as “convertible” virtual currency. 22
Virtual currencies generally operate on networks of computers (nodes) that enable, validate, and record
transactions on a distributed digital ledger (blockchain).23 To transfer an asset on a blockchain, the transferor uses
an alphanumeric code known only to the transferor (a private key) to create a request that the network software
validate a new ledger entry, which assigns control of the asset to the recipient.24 Once the network has validated
this transfer, the ledger is updated and the recipient may transfer the asset to another recipient using their own
private key.25 Ledger entries are cryptographically secured, and accounts on a blockchain are identified by
alphanumeric ‘‘public keys’’ rather than by personal names.26 Virtual currency wallets are interfaces that store and
transfer virtual currency.27
Stablecoin
Stablecoins are a type of virtual currency designed to maintain a stable value by pegging the value to a national
currency or other assets.28 As of February 2026, the total market cap for stablecoins is approximately $296
billion.29 The top three stablecoins in terms of market cap are Tether (USDT), USDC (USDC), and USDS (USDS).30
19 S. 560.103(36), F.S.
20 Often referred to as “fiat” currency.
21 IRS, Digital assets, https://www.irs.gov/filing/digital-assets (last visited Feb. 5, 2026).
22 Id.
23 Office of the Federal Register, National Archives and Records Administration, Requirements for Certain Transactions
Involving Convertible Virtual Currency or Digital Assets, GovInfo, (Dec. 23, 2020), https://www.govinfo.gov/app/details/FR-
2020-12-23/2020-28437/summary (last visited Feb. 5, 2026).
24 Id.
25 Id.
26 Id.
27 FinCEN, Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies, (May 9,
2019), https://www.fincen.gov/system/files/2019-05/FinCEN%20Guidance%20CVC%20FINAL%20508.pdf (last visited Feb.
5, 2026).
28 Congressional Research Service, Stablecoins: Background and Policy Issues, https://www.congress.gov/crs-
product/IF11968. (last visited Feb. 5, 2026).
29 Forbes, Top Stablecoins Coins Today by Market Cap, https://www.forbes.com/digital-assets/categories/stablecoins/ (last
visited Feb. 6, 2026).
30 Id.
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PCS for HB 175
The GENIUS Act
On July 18, 2025, the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 (“GENIUS Act”)
was signed into law, establishing the first regulatory framework for payment stablecoin issuers.31
The GENIUS Act takes effect on the earlier of January 18, 2025 or 120 days after the specified federal payment
stablecoin regulators issue implementing regulations.32
The GENIUS Act defines “payment stablecoin" as a digital asset33 meeting the following requirements:
Is meant to be used for payments or settling transactions.
The issuer of which:
o Must be ready to convert or redeem it for a fixed amount of money.34
o Represents, or creates a reasonable expectation that the value of the digital asset will remain stable
against a fixed amount of money.35
Under the GENIUS Act, only permitted payment stablecoin issuers (“PPSIs”) may issue a payment stablecoin in the
United States.36 Beginning July 18, 2028, it will be unlawful for digital asset service providers to offer or sell a
payment stablecoin in the United States, unless the provider is a PPSI or a foreign payment stablecoin issuer
meeting certain conditions.37
The GENIUS Act establishes three types of PPSIs, all of which must be formed in the United States:
a subsidiary of an insured depository institution;38
a federal qualified payment stablecoin issuer; or
a state qualified stablecoin issuer.39
PPSIs must comply with various requirements under the GENIUS Act, such as:
Maintaining identifiable reserves backing the outstanding payment stablecoins on at least a one- to-one
basis comprising on specified types of reserves, such as U.S. coin and currency.40
Publishing the monthly composition of the issuer’s reserve on its website, including the average maturity
and custody location of each reserve category.
Having monthly reserve reports examined by a registered public accounting firm and attested to by the
issuer’s chief executive officer and chief financial officer.41
31 12. U.S.C. ss. 5901-5916.
32 S.1582 - 119th Congress (2025-2026): GENIUS Act, S.1582, 119th Cong. (2025), https://www.congress.gov/bill/119th-
congress/senate-bill/1582, (last visited Feb. 5, 2026).
33 The GENIUS Act defines “digital asset” as any digital representation of value that is recorded on a cryptographically secured
distributed ledger.
34 E.g. 1 United States Dollar for 1 stablecoin.
35 12 U.S.C. 5901. A payment stablecoin does not include a national currency, deposits as defined in 12 U.S.C. 1813 or
securities.
36 12 U.S.C. 5902.
37 Id.
38 A “subsidiary” is any company which is owned or controlled directly or indirectly by another company. The term includes
any service corporation owned in whole or in part by an insured depository institution or any subsidiary of such a service
corporation. An “insured depository institution” is any bank or savings association the deposits of which are insured by the
Federal Deposit Insurance Corporation pursuant to this chapter. See 12 U.S.C. 5901 and 12 U.S.C. 1813.
39 The term “state qualified payment stablecoin issuer” means an entity that is legally established under the laws of a state and
approved to issue payment stablecoins by a state payment stablecoin regulator.
40 12 U.S.C. 5903(a)(2) prohibits the required reserves from being pledged, rehypothecated, or reused by the permitted
payment stablecoin issuer except for as provided in the GENIUS Act.
41 12 U.S.C. 5903.
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PCS for HB 175
Publicly disclosing the issuer’s redemption policy which must establish clear procedures for timely
redemption of payment stablecoins and clearly disclosing all fees42 associated with purchasing or
redeeming payment stablecoins.43
Not engaging in tying practices that condition access to payment stablecoin services on the purchase of
unrelated products or services, or on agreements not to use competitors’ products, unless authorized by
federal law.
Not using deceptive names or marketing that imply association with or endorsement by the U.S.
Government.
Not paying interest or other yield solely for holding or using a payment stablecoin, unless expressly
authorized by federal law.44
The GENIUS Act creates a tiered oversight model between federal and state authorities. The GENIUS Act permits
states to regulate certain payment stablecoin issuers45 if:
The state has a regulatory regime that is substantially similar to the federal regime.
The state stablecoin regulation submits a certification to the Stablecoin Certification Review Committee
(“Committee”) attesting that the state-level regulatory regime meets the criteria for substantial similarity.
o The Committee is comprised of the Secretary of the Treasury, who serves as the Chair, as well as
the Chair of the Board of Governors of the Federal Reserve System and the Chair of the Federal
Deposit Insurance Corporation.
o The GENIUS Act requires the Committee to approve or deny a state certification within 30 days
after receipt. If the Committee denies the certification, the denial must contain detailed information
describing the reasons for the denial. If denied, a state is permitted to resubmit the certification
after making any necessary changes.
The state submits additional certifications to the Committee confirming the accuracy of the initial
certification.46
A state issuer that has consolidated total outstanding issuance of less than $10 billion may choose to be regulated
under a state-level regulatory regime. A state issuer that reaches the $10 billion threshold must either comply with
a specified transition to the federal regulatory framework or cease issuing new payment stablecoins until the
consolidated total outstanding issuance is below $10 billion.
The federal regulator may issue a waiver to allow a state issuer who exceeds the $10 billion threshold to remain
supervised solely by the state regulator. If a state complies with certain requirements, such as establishing a
regulatory regime for the supervision of digital assets or payment stablecoins before the 90-day period ending on
the date of the enactment of the Act, then the state issuer is presumptively approved for a waiver.47
The GENIUS Act requires designated federal regulators48 to implement rules and regulations for implementing the
GENIUS Act, including rules establishing principles for determining whether a state-level regulatory regime is
42 Fee changes require at least seven days’ prior notice to consumers.
43 12 U.S.C. 5903.
44 Id.
45 The GENIUS Act provides that a state qualified payment stablecoin issuer means an entity that (A) is legally established
under the laws of a State and approved to issue payment stablecoins by a state payment stablecoin regulator; and (B) is not an
uninsured national bank chartered by the Comptroller pursuant to title LXII of the Revised Statutes, a Federal branch, an
insured depository institution, or a subsidiary of such national bank, Federal branch, or insured depository institution. 12
U.S.C. 5901.
46 12 U.S.C. 5901.
47 12 U.S.C. 5903(d).
48 The federal regulators include the U.S. Treasury, the Board of Governors of the Federal Reserve System, the Federal Deposit
Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency.
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substantially similar to the federal regulatory framework.49 As of February 2026, said rules and regulations have
not been implemented.
State law
The Financial Services Commission (“Commission”) is an executive agency within the Department of Financial
Services and is composed of the Governor, the Attorney General, the Chief Financial Officer, and the Commissioner
of Agriculture.50 The OFR is responsible for all activities of the Financial Services Commission relating to the
regulation of banks, credit unions, other financial institutions, finance companies, and the securities industry.51
The Division of Consumer Finance within OFR licenses and regulates various aspects of the non-depository
financial services industries, including money services businesses.52
The Bureau of Bank Regulation, which is within OFR’s Division of Financial Institutions, examines and regulates
state-chartered commercial banks, as well as trust companies, trust departments, and international bank offices.53
Florida has dual oversight of the banking system, such that financial institutions are regulated by both state and
federal agencies.54
Money services businesses
A money services business is, “any person located in or doing business in this state, from this state, or into this
state from locations outside this state or country who acts as a payment instrument seller, foreign currency
exchanger, check casher, or money transmitter.”55 Money services businesses must be licensed with OFR.56
Trust companies
In Florida, the Florida Financial Institutions Codes govern all state-authorized and state-chartered banks, trust
companies, and related entities.57 A trust company is a financial institution other than a bank or state or federal
association, that is authorized by lawful authority to act as a fiduciary.58 To create a trust company, persons must
apply for and obtain approval from OFR.59
BILL HISTORY
STAFF
DIRECTOR/ ANALYSIS
COMMITTEE REFERENCE ACTION DATE POLICY CHIEF PREPARED BY
Orig. Comm.: Insurance & Banking Brackett Highsmith
Subcommittee
49 12 U.S.C. 5903.
50 S. 20.121(3), F.S.
51 S. 20.121(3)(a)2., F.S.
52 Office of Financial Regulation, Division of Consumer Finance, Division of Consumer Finance (last visited Feb. 5, 2026).
53 Office of Financial Regulation, Division of Financial Institutions,Division of Financial Institutions (last visited Feb. 5,
2026).
54 Id.
55 S. 560.103(23), F.S.
56 S. 560.125, F.S.
57 S. 655.005(1)(k), F.S., states that the Financial Institutions Codes includes: Ch. 655, financial institutions generally; Ch. 657,
credit unions; Ch. 658, banks and trust companies; Ch. 660, trust business; Ch. 662, family trust companies; Ch. 663,
international banking; Ch. 665, relating to associations; and Ch. 667, savings banks.
58 S. 658.12, F.S.
59 S. 658.19, F.S.
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1 A bill to be entitled
2 An act relating to payment stablecoin; amending s.
3 560.103, F.S.; revising the definition of the term
4 "money services business"; defining terms; amending s.
5 560.114, F.S.; revising the actions by a money
6 services business which constitute grounds for
7 disciplinary actions; amending s. 560.123, F.S.;
8 revising the Florida Control of Money Laundering in
9 Money Services Business Act to include payment
10 stablecoins; requiring certain payment stablecoin
11 issuers to comply with certain regulations; amending
12 s. 560.125, F.S.; revising the prohibition regarding
13 the business of money services businesses or deferred
14 presentment providers; revising the circumstances
15 relating to violations of certain provisions; creating
16 part V of ch. 560, F.S., entitled "Payment Stablecoin
17 Issuers"; creating s. 560.501, F.S.; prohibiting
18 persons from engaging in the activity of a qualified
19 payment stablecoin issuer without registering and
20 receiving a specified notification; providing that
21 certain money services businesses are exempt from
22 registration requirements; specifying that certain
23 payment stablecoins are not a security and are not
24 subject to certain requirements; specifying that
25 certain transactions are not regulated under certain
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26 provisions; requiring qualified payment stablecoin
27 issuers to comply with certain requirements;
28 specifying that qualified payment stablecoin issuers
29 are subject to certain provisions under certain
30 circumstances; specifying that the Office of Financial
31 Regulation remains solely responsible for supervising
32 qualified payment stablecoin issuers or is jointly
33 responsible with the United States Office of the
34 Comptroller of the Currency for such supervision under
35 certain circumstances; creating s. 560.502, F.S.;
36 requiring applicants seeking to be a qualified payment
37 stablecoin issuer to submit a specified application to
38 the office; requiring applicants to resolve
39 deficiencies found in their applications within a
40 certain timeframe; requiring registrants to report
41 changes in their information within a specified
42 timeframe; requiring registrants to renew registration
43 annually; requiring the registrant to renew
44 registration in a specified manner; specifying that
45 the renewal registration becomes effective on a
46 certain date; requiring the office to approve renewal
47 registration within a specified timeframe; specifying
48 that failure to submit an application within a
49 specified timeframe results in the registration
50 becoming expired; requiring a qualified payment
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51 stablecoin issuer with an expired registration to
52 submit a new application to the office; providing that
53 the office must issue a certification of registration
54 before the qualified payment stablecoin issuer may
55 conduct business in this state; authorizing the office
56 to deny the prospective registrant's renewal
57 application under certain circumstances; requiring the
58 office to deny the application of qualified payment
59 stablecoin issuers under certain circumstances;
60 specifying that any false statement in the application
61 renders the registration void; providing construction;
62 prohibiting registration and registration renewal
63 fees; creating s. 560.503, F.S.; specifying that
64 qualified payment stablecoin issuers may only engage
65 in certain activities; creating s. 560.504, F.S.;
66 requiring qualified payment stablecoin issuers to
67 comply with certain requirements; prohibiting
68 qualified payment stablecoin issuers from engaging in
69 certain conduct; creating s. 560.505, F.S.; requiring
70 the office to submit initial and additional
71 certifications to a specified committee under certain
72 circumstances; requiring the office to comply with
73 certain requirements; creating s. 560.506, F.S.;
74 requiring the Financial Services Commission to adopt
75 specified rules; creating s. 658.997, F.S.; defining
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76 terms; specifying that certain trust companies are
77 exempt from registration as qualified payment
78 stablecoin issuers but are subject to certain
79 provisions; specifying that certain payment
80 stablecoins are not securities and are not subject to
81 certain requirements; specifying that certain
82 transactions are not regulated by certain provisions;
83 requiring qualified payment stablecoin issuers to
84 comply with certain requirements; specifying that
85 qualified payment stablecoin issuers remain subject to
86 certain provisions under certain circumstances;
87 authorizing the office to enter into an agreement with
88 specified regulators for joint supervision of
89 qualified payment stablecoin issuers; specifying that
90 the office remains solely responsible for supervising
91 qualified payment stablecoin issuers or is jointly
92 responsible with the United States Office of the
93 Comptroller of the Currency for such supervision under
94 certain circumstances; specifying that qualified
95 payment stablecoin issuers may engage only in certain
96 activities; requiring qualified payment stablecoin
97 issuers to comply with certain requirements; defining
98 the term "registered public accounting firm";
99 prohibiting qualified payment stablecoin issuers from
100 engaging in certain conduct; requiring that the
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101 office's initial and annual recertification include
102 certain information; providing for certain rule
103 adoption by the commission; providing effective dates.
104
105 Be It Enacted by the Legislature of the State of Florida:
106
107 Section 1. Present subsections (33), (34), and (35) and
108 (36) through (39) of section 560.103, Florida Statutes, as
109 amended by chapter 2025-100, Laws of Florida, are redesignated
110 as subsections (34), (35), and (36) and (38) through (41),
111 respectively, new subsections (33) and (37) are added to that
112 section, and subsection (25) of that section is amended, to
113 read:
114 560.103 Definitions.—As used in this chapter, the term:
115 (25) "Money services business" means any person located in
116 or doing business in this state, from this state, or into this
117 state from locations outside this state or country who acts as a
118 payment instrument seller, foreign currency exchanger, check
119 casher, or money transmitter, or qualified payment stablecoin
120 issuer.
121 (33) "Payment stablecoin" means a digital asset that meets
122 all of the following requirements:
123 (a)1. Is, or is designed to be, used as a means of payment
124 or settlement; and
125 2. The issuer of which:
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126 a. Is obligated to convert, redeem, or repurchase the
127 digital asset for a fixed amount of monetary value, not
128 including a digital asset denominated in a fixed amount of
129 monetary value.
130 b. Represents that such issuer will maintain, or create
131 the reasonable expectation that it will maintain, a stable value
132 relative to the value of a fixed amount of monetary value.
133 (b) The term does not include a digital asset that is any
134 of the following:
135 1. A national currency. For purposes of this subparagraph,
136 the term "national currency" means each of the following:
137 a. A Federal Reserve note as the term is used in the first
138 undesignated paragraph of s. 16 of the Federal Reserve Act, 12
139 U.S.C. s. 411.
140 b. Money standing to the credit of an account with a
141 Federal Reserve Bank.
142 c. Money issued by a foreign central bank.
143 d. Money issued by an intergovernmental organization
144 pursuant to an agreement by two or more governments.
145 2. A deposit as defined in s. 3 of the Federal Deposit
146 Insurance Act, 12 U.S.C. s. 1813, including a deposit recorded
147 using distributed ledger technology. For purposes of this
148 subparagraph, the term "distributed ledger" means technology in
149 which data is shared across a network that creates a public
150 digital ledger of verified transactions or information among
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151 network participants and cryptography is used to link the data
152 to maintain the integrity of the public ledger and execute other
153 functions.
154 3. A security, as defined in s. 517.021, s. 2 of the
155 Securities Act of 1933, 15 U.S.C. s. 77b, s. 3 of the Securities
156 and Exchange Act of 1934, 15 U.S.C. s. 78c, or s. 2 of the
157 Investment Company Act of 1940, 15 U.S.C. s. 80a-2.
158 (c) As used in this subsection, the term "digital asset"
159 means any digital representation of value that is recorded on a
160 cryptographically secured digital ledger.
161 (37) "Qualified payment stablecoin issuer" means an entity
162 legally established under the laws of a state and registered
163 with the office to issue payment stablecoins.
164 Section 2. Paragraph (w) of subsection (1) of section
165 560.114, Florida Statutes, is amended to read:
166 560.114 Disciplinary actions; penalties.—
167 (1) The following actions by a money services business,
168 authorized vendor, or affiliated party constitute grounds for
169 the issuance of a cease and desist order; the issuance of a
170 removal order; the denial, suspension, or revocation of a
171 license; or taking any other action within the authority of the
172 office pursuant to this chapter:
173 (w) Engaging or advertising engagement in the business of
174 a money services business or deferred presentment provider
175 without a license or registration, unless exempted from
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176 licensure or registration.
177 Section 3. Present subsection (9) of section 560.123,
178 Florida Statutes, is redesignated as subsection (10), a new
179 subsection (9) is added to that section, and subsections (2),
180 (3), and (8) of that section are amended, to read:
181 560.123 Florida Control of Money Laundering in Money
182 Services Business Act.—
183 (2) The purpose of this section is to require the
184 maintenance of certain records of transactions involving
185 currency, monetary value, payment instruments, or virtual
186 currency, or payment stablecoins in order to deter the use of a
187 money services business to conceal proceeds from criminal
188 activity and to ensure the availability of such records for
189 criminal, tax, or regulatory investigations or proceedings.
190 (3) A money services business shall keep a record, as
191 prescribed by the commission, of each financial transaction
192 occurring in this state which it knows to involve currency,
193 monetary value, a payment instrument, or virtual currency, or a
194 payment stablecoin having a value greater than $10,000; to
195 involve the proceeds of specified unlawful activity; or to be
196 designed to evade the reporting requirements of this section or
197 chapter 896. The money services business must maintain
198 appropriate procedures to ensure compliance with this section
199 and chapter 896.
200 (a) Multiple financial transactions shall be treated as a
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201 single transaction if the money services business has knowledge
202 that they are made by or on behalf of any one person and result
203 in value in or value out totaling a value of more than $10,000
204 during any day.
205 (b) A money services business may keep a record of any
206 financial transaction occurring in this state, regardless of the
207 value, if it suspects that the transaction involves the proceeds
208 of unlawful activity.
209 (c) The money services business must file a report with
210 the office of any records required by this subsection, at such
211 time and containing such information as required by rule. The
212 timely filing of the report required by 31 U.S.C. s. 5313 with
213 the appropriate federal agency shall be deemed compliance with
214 the reporting requirements of this subsection unless the reports
215 are not regularly and comprehensively transmitted by the federal
216 agency to the office.
217 (d) A money services business, or control person,
218 employee, or agent thereof, that files a report in good faith
219 pursuant to this section is not liable to any person for loss or
220 damage caused in whole or in part by the making, filing, or
221 governmental use of the report, or any information contained
222 therein.
223 (8)(a) Except as provided in paragraph (b), a person who
224 willfully violates any provision of this section commits a
225 misdemeanor of the first degree, punishable as provided in s.
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226 775.082 or s. 775.083.
227 (b) A person who willfully violates any provision of this
228 section, if the violation involves:
229 1. Currency, monetary value, payment instruments, or
230 virtual currency, or payment stablecoins of a value exceeding
231 $300 but less than $20,000 in any 12-month period, commits a
232 felony of the third degree, punishable as provided in s.
233 775.082, s. 775.083, or s. 775.084.
234 2. Currency, monetary value, payment instruments, or
235 virtual currency, or payment stablecoins of a value totaling or
236 exceeding $20,000 but less than $100,000 in any 12-month period,
237 commits a felony of the second degree, punishable as provided in
238 s. 775.082, s. 775.083, or s. 775.084.
239 3. Currency, monetary value, payment instruments, or
240 virtual currency, or payment stablecoins of a value totaling or
241 exceeding $100,000 in any 12-month period, commits a felony of
242 the first degree, punishable as provided in s. 775.082, s.
243 775.083, or s. 775.084.
244 (c) In addition to the penalties authorized by s. 775.082,
245 s. 775.083, or s. 775.084, a person who has been convicted of,
246 or entered a plea of guilty or nolo contendere, regardless of
247 adjudication, to having violated paragraph (b) may be sentenced
248 to pay a fine of up to the greater of $250,000 or twice the
249 value of the currency, monetary value, payment instruments, or
250 virtual currency, or payment stablecoins, except that on a
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251 second or subsequent conviction for or plea of guilty or nolo
252 contendere, regardless of adjudication, to a violation of
253 paragraph (b), the fine may be up to the greater of $500,000 or
254 quintuple the value of the currency, monetary value, payment
255 instruments, or virtual currency, or payment stablecoins.
256 (d) A person who violates this section is also liable for
257 a civil penalty of up to the greater of the value of the
258 currency, monetary value, payment instruments, or virtual
259 currency, or payment stablecoins involved or $25,000.
260 (9) A state qualified payment stablecoin issuer must
261 comply with any anti-money laundering regulation provided in the
262 GENIUS Act under Pub. L. No. 119-27, which includes, but is not
263 limited to, provisions relating to economic sanctions,
264 prevention of money laundering, customer identification, and due
265 diligence in the Bank Secrecy Act, s. 21 of the Federal Deposit
266 Insurance Act, 12 U.S.C. s. 1813, chapter 2 of Title I of Pub.
267 L. No. 91-508, and subchapter II of chapter 53 of Title 31,
268 United States Code.
269 Section 4. Subsection (1), paragraph (a) of subsection
270 (5), and subsection (6) of section 560.125, Florida Statutes,
271 are amended to read:
272 560.125 Unlicensed activity; penalties.—
273 (1) A person may not engage in the business of a money
274 services business or deferred presentment provider in this state
275 unless the person is licensed, registered, or exempted from
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276 licensure or registration under this chapter. A deferred
277 presentment transaction conducted by a person not authorized to
278 conduct such transaction under this chapter is void, and the
279 unauthorized person has no right to collect, receive, or retain
280 any principal, interest, or charges relating to such
281 transaction.
282 (5) A person who violates this section, if the violation
283 involves:
284 (a) Currency, monetary value, payment instruments, or
285 virtual currency, or payment stablecoins of a value exceeding
286 $300 but less than $20,000 in any 12-month period, commits a
287 felony of the third degree, punishable as provided in s.
288 775.082, s. 775.083, or s. 775.084.
289 (6) In addition to the penalties authorized by s. 775.082,
290 s. 775.083, or s. 775.084, a person who has been convicted of,
291 or entered a plea of guilty or nolo contendere to, having
292 violated this section may be sentenced to pay a fine of up to
293 the greater of $250,000 or twice the value of the currency,
294 monetary value, payment instruments, or virtual currency, or
295 payment stablecoins, except that on a second or subsequent
296 violation of this section the fine may be up to the greater of
297 $500,000 or quintuple the value of the currency, monetary value,
298 payment instruments, or virtual currency, or payment
299 stablecoins.
300 Section 5. Part V of chapter 560, Florida Statutes,
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301 consisting of ss. 560.501-560.506, Florida Statutes, is created
302 and entitled "Payment Stablecoin Issuers."
303 Section 6. Section 560.501, Florida Statutes, is created
304 to read:
305 560.501 Registration required; exemptions; transition to
306 federal oversight.—
307 (1) REGISTRATION REQUIREMENT.—Unless exempted, a person
308 may not engage in the activity of a qualified payment stablecoin
309 issuer as authorized in s. 560.503 in this state without first
310 registering, or renewing registration, with the office in
311 accordance with s. 560.502 and receiving notification from the
312 office that such person is approved as a qualified payment
313 stablecoin issuer. The office shall give written notice to such
314 person that the agency has approved or denied the application
315 for registration.
316 (2) EXEMPTIONS.—
317 (a) A payment instrument seller, foreign currency
318 exchanger, check casher, or money transmitter that is licensed
319 as a money services business pursuant to s. 560.141 and issues
320 payment stablecoins with a consolidated total outstanding
321 issuance of $10 billion or less is exempt from registration as a
322 qualified payment stablecoin issuer but is subject to ss.
323 560.503 and 560.504.
324 (b) A payment stablecoin that meets the requirements of
325 this part is not a security and is not subject to the
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326 requirements of chapter 517.
327 (c) The following transactions are not regulated under
328 this part:
329 1. The direct transfer of payment stablecoin between two
330 individuals acting on their own behalf and for their own lawful
331 purposes, without the involvement of an intermediary.
332 2. Any transaction involving the receipt of payment
333 stablecoins by an individual between an account owned by the
334 individual in the United States and an account owned by the
335 individual abroad which are offered by the same parent company.
336 3. Any transaction by means of a software or hardware
337 wallet that facilitates an individual's own custody of payment
338 stablecoins.
339 (3) TRANSITION TO FEDERAL OVERSIGHT.—
340 (a) Unless a federal waiver is obtained, a qualified
341 payment stablecoin issuer with a consolidated total outstanding
342 payment stablecoin issuance that reaches the $10 billion
343 threshold must comply with one of the following requirements:
344 1. Not later than 360 days after the payment stablecoin
345 issuance reaches such threshold, transition to the applicable
346 federal regulatory framework administered jointly by the office
347 and the United States Office of the Comptroller of the Currency;
348 or
349 2. Beginning on the date the payment stablecoin issuance
350 reaches such threshold, cease issuing new payment stablecoins
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351 until the payment stablecoin falls below the $10 billion
352 consolidated total outstanding issuance threshold.
353 (b) A qualified payment stablecoin issuer remains subject
354 to this part if a federal waiver of the transition requirements
355 in paragraph (a) is obtained pursuant to the GENIUS Act, Pub. L.
356 No. 119-27, and the office remains solely responsible for
357 supervising the qualified payment stablecoin issuer, or if the
358 office is jointly responsible with the United States Office of
359 the Comptroller of the Currency to supervise the qualified
360 payment stablecoin issuer pursuant to subparagraph (a)1. The
361 office may enter into an agreement with the relevant primary
362 federal payment stablecoin regulator for the joint supervision
363 of any qualified payment stablecoin issuer.
364 Section 7. Section 560.502, Florida Statutes, is created
365 to read:
366 560.502 Registration applications.—
367 (1) To apply to be a qualified payment stablecoin issuer
368 under this part, the applicant must submit a completed
369 registration application on forms prescribed by rule of the
370 commission. The application must include the following
371 information:
372 (a) The legal name of the applicant, including any
373 fictitious or trade names used by the applicant in the conduct
374 of its business, and the physical and mailing addresses of the
375 applicant.
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376 (b) The date of the applicant's formation and the state in
377 which the applicant was formed, if applicable.
378 (c) The name, social security number, alien identification
379 number or taxpayer identification number, business and residence
380 addresses, and employment history for the past 5 years for each
381 control person as defined in s. 560.103.
382 (d) A description of the organizational structure of the
383 applicant, including the identity of any parent or subsidiary of
384 the applicant, and a disclosure of whether any parent or
385 subsidiary is publicly traded.
386 (e) The name and mailing address of the registered agent
387 in this state for service of process.
388 (f) An attestation that the applicant has developed
389 clearly documented policies, processes, and procedures regarding
390 the use of blockchain analytics to prevent transfers to wallet
391 addresses linked to known criminal activity, including the
392 manner in which such blockchain analytics activity will
393 integrate into its compliance controls, and that the applicant
394 will maintain and comply with such blockchain analytics
395 policies, processes, and procedures.
396 (g) Any other information as required by this chapter or
397 commission rule.
398 (2) Any information needed to resolve deficiencies found
399 in the application must be provided within a time period
400 prescribed by rule of the commission.
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401 (3) A registrant shall report, on a form prescribed by
402 rule of the commission, any change in the information contained
403 in an initial application form or an amendment thereto within 30
404 days after the change is effective.
405 (4) A registrant must renew its registration annually on
406 or before December 31 of the year preceding the expiration date
407 of the registration. To renew such registration, the registrant
408 must submit a renewal application that provides the information
409 required in subsection (1) if there are changes in the
410 application information, or an affidavit signed by the
411 registrant that the information remains the same as the prior
412 year's information.
413 (5) Any renewal registration made pursuant to this section
414 becomes effective upon the date the office approves the
415 application for registration. The office shall approve the
416 renewal registration within a timeframe prescribed by rule.
417 (6) Failure to submit an application to renew a qualified
418 payment stablecoin issuer's registration within 60 days after
419 the registration becomes inactive will result in the
420 registration becoming expired. If the registration is expired, a
421 new application to register the qualified payment stablecoin
422 issuer pursuant to subsection (1) must be submitted to the
423 office, and a new registration must be issued by the office
424 before the qualified payment stablecoin issuer may conduct
425 business in this state.
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426 (7) If a control person of a registrant or prospective
427 registrant has engaged in any unlawful business practice, or has
428 been convicted or found guilty of, or pled guilty or nolo
429 contendere to, regardless of adjudication, a crime involving
430 dishonest dealing, fraud, acts of moral turpitude, or other acts
431 that reflect an inability to engage lawfully in the business of
432 a registered qualified payment stablecoin issuer, the office may
433 deny the prospective registrant's initial registration
434 application or the registrant's renewal application.
435 (8) The office shall deny the application of a qualified
436 payment stablecoin issuer that submits a renewal application
437 that fails to comply with subsection (1).
438 (9) Any false statement made by a qualified payment
439 stablecoin issuer in an application for registration under this
440 section renders the registration void. A void registration may
441 not be construed as creating a defense to any prosecution for
442 violation of this chapter.
443 (10) The office may not charge any registration or
444 registration renewal fees and also may not charge any
445 application fees to register or renew a registration.
446 Section 8. Section 560.503, Florida Statutes, is created
447 to read:
448 560.503 Limitation on payment stablecoin activities.—
449 Unless licensed under this chapter or chapter 655 to conduct
450 other financial business activities, a qualified payment
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451 stablecoin issuer may engage only in the following activities:
452 (1) Issue payment stablecoins.
453 (2) Redeem payment stablecoins.
454 (3) Manage related reserves, including purchasing,
455 selling, and holding reserve assets or providing custodial
456 services for reserve assets, consistent with federal law and the
457 laws of this state.
458 (4) Undertake other activities that directly support any
459 of the activities described in this section.
460 Section 9. Section 560.504, Florida Statutes, is created
461 to read:
462 560.504 Minimum prudential requirements.—
463 (1) In accordance with the GENIUS Act, Pub. L. No. 119-27,
464 a qualified payment stablecoin issuer must comply with all of
465 the following requirements:
466 (a) Maintain identifiable reserves backing the outstanding
467 payment stablecoins of the qualified payment stablecoin issuer
468 on at least a one-to-one basis, with reserves consisting of any
469 of the following:
470 1. United States coin or currency or money standing to the
471 credit of an account with a Federal Reserve Bank.
472 2. Funds held as demand deposits or insured shares at an
473 insured depository institution, subject to limitations
474 established by the Federal Deposit Insurance Corporation and the
475 National Credit Union Administration.
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476 3. Treasury bills, notes, or bonds with a remaining
477 maturity or issued with a maturity of 93 days or less.
478 4. Money received under repurchase agreements, with the
479 qualified payment stablecoin issuer acting as a seller of
480 securities and with an overnight maturity, that are backed by
481 Treasury bills with a maturity of 93 days or less.
482 5. Reverse purchase agreements, with the qualified payment
483 stablecoin issuer acting as a purchaser of securities and with
484 an overnight maturity, that are collateralized by Treasury
485 bills, notes, or bonds on an overnight basis, subject to
486 overcollateralization in line with standard market terms that
487 meet federal requirements in the GENIUS Act, Pub. L. No. 119-27.
488 6. Securities issued by an investment company registered
489 under s. 8(a) of the Investment Company Act of 1940, 15 U.S.C.
490 s. 80a-8(a), or other registered government money market fund,
491 and that are invested solely in underlying assets described in
492 subparagraphs 1.-5.
493 7. Any other similarly liquid Federal Government-issued
494 asset approved by the primary federal payment stablecoin
495 regulator, in consultation with the office.
496 8. Any reserve described in subparagraphs 1.-3. or
497 subparagraph 6. or subparagraph 7. in tokenized form, provided
498 that such reserves comply with all applicable laws and
499 regulations.
500 (b) Publicly disclose the issuer's redemption policy,
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501 which must comply with all of the following requirements:
502 1. Establish clear and conspicuous procedures for timely
503 redemption of outstanding payment stablecoins.
504 2. Publicly, clearly, and conspicuously disclose in plain
505 language all fees associated with purchasing or redeeming the
506 payment stablecoins, provided that such fees can be changed only
507 upon not less than 7 days' prior notice to consumers.
508 (c) Publish on the issuer's website a monthly reserve
509 composition of the issuer's reserve which must contain all of
510 the following information:
511 1. The total number of outstanding payment stablecoins
512 issued by the issuer.
513 2. The amount and composition of the reserves described in
514 paragraph (a), including the average tenor and geographic
515 location of custody of each category of reserve instruments.
516 (d) Comply with all federal prohibitions on pledging,
517 rehypothecating, or reusing reserve assets, either directly or
518 indirectly, except for any of the following purposes:
519 1. Satisfying margin obligations in connection with
520 investments in permitted reserves under subparagraph (a)4. or
521 subparagraph (a)5.
522 2. Satisfying obligations associated with the use,
523 receipt, or provision of standard custodial services.
524 3. Creating liquidity to meet reasonable expectations of
525 requests to redeem payment stablecoins, such that reserves in
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526 the form of Treasury bills may be sold as purchased securities
527 for repurchase agreements with a maturity of 93 days or less,
528 provided that either:
529 a. The repurchase agreements are cleared by a clearing
530 agency registered with the Securities and Exchange Commission;
531 or
532 b. The qualified payment stablecoin issuer receives prior
533 approval from the office.
534 (e) Engage a registered public accounting firm to conduct
535 a monthly examination of the previous month-end reserve report.
536 For purposes of this paragraph, the term "registered public
537 accounting firm" means a public accounting firm registered with
538 the Public Company Accounting Oversight Board.
539 (f) Submit to the office each month a certification as to
540 the accuracy of the month-end reserve report by the qualified
541 payment stablecoin issuer's chief executive officer and chief
542 financial officer.
543 (g) Comply with any federal regulations or state rules
544 prescribed by commission rule relating to capital, liquidity,
545 and risk management requirements.
546 (h) Engage only custodians or safekeepers that comply with
547 s. 10 of the GENIUS Act, Pub. L. No. 119-27.
548 (i) Comply with any other federal requirements of s. 4(a)
549 of the GENIUS Act, Pub. L. No. 119-27, and any implementing
550 federal regulations.
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551 (2) A qualified payment stablecoin issuer is prohibited
552 from engaging in all of the following conduct:
553 (a) Except as may be authorized under federal law, tying
554 arrangements that condition access to stablecoin services on the
555 purchase of unrelated products or services from such qualified
556 payment stablecoin issuer or an agreement not to obtain products
557 or services from a competitor.
558 (b) Using deceptive names, which includes, but is not
559 limited to, any of the following:
560 1. Using any combination of terms relating to the United
561 States Government, except abbreviations directly related to the
562 currency to which a payment stablecoin is pegged, such as "USD."
563 2. Marketing a payment stablecoin in such a way that a
564 reasonable person would perceive the payment stablecoin to be
565 legal tender, as described in 31 U.S.C. s. 5103, issued by the
566 United States, or guaranteed or approved by the United States
567 Government.
568 (c) Unless authorized by federal law, paying the holder of
569 any payment stablecoin any form of interest or yield solely in
570 connection with holding, use, or retention of such payment
571 stablecoin.
572 Section 10. Effective upon becoming law, Section 560.505,
573 Florida Statutes, is created to read:
574 560.505 State certification.—
575 (1) No later than 20 days after the federal Stablecoin
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576 Certification Review Committee begins accepting certifications
577 or no later than 20 days after the effective date of this act,
578 whichever is later, the office must submit an initial
579 certification to such committee on a form prescribed by the
580 committee attesting that the state regulatory regime meets the
581 criteria for substantial similarity established pursuant to the
582 GENIUS Act.
583 (2) No later than the date to be determined by the United
584 States Secretary of the Treasury each year, the office must
585 submit to the Stablecoin Certification Review Committee an
586 additional certification that confirms the accuracy of the
587 initial certification submitted.
588 (3) The office must comply with the requirements of s.
589 4(c)(4) of the GENIUS Act to ensure the state receives
590 certification and annual recertification by the Stablecoin
591 Certification Review Committee of the state regulatory regime.
592 Section 11. Section 560.506, Florida Statutes, is created
593 to read:
594 560.506 Rulemaking authority.—The commission shall adopt
595 rules to administer this part as required in s. 13 of the GENIUS
596 Act, Pub. L. No. 119-27. The commission must also adopt rules
597 relating to capital, liquidity, and risk management which are
598 consistent with s. 4(a)(4) of the GENIUS Act, Pub. L. No. 119-
599 27. The commission may adopt rules establishing standards for
600 the conduct, supervision, examination, and regulation of
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601 qualified payment stablecoin issuers, including requirements
602 relating to reserves, customer-asset protection, reporting, and
603 compliance, in order to meet the minimum requirements
604 established by the Stablecoin Certification Review Committee.
605 Section 12. Section 658.997, Florida Statutes, is created
606 to read:
607 658.997 Qualified payment stablecoin issuers.—
608 (1) DEFINITIONS.—As used in this section, the term:
609 (a) "Payment stablecoin" has the same meaning as in s.
610 560.103.
611 (b) "Qualified payment stablecoin issuer" has the same
612 meaning as in s. 560.103. The term does not include an insured
613 depository institution, an uninsured national bank, a federal
614 branch of a foreign bank, or a subsidiary of such entities. For
615 purposes of this paragraph, the terms:
616 1. "Federal branch" means a branch of a foreign bank
617 established and operating under 12 U.S.C. s. 3102.
618 2. "Insured depository institution" means any bank or
619 savings association the deposits of which are insured by the
620 Federal Deposit Insurance Corporation and insured credit union
621 means any credit union the member accounts of which are insured
622 by the National Credit Union Administration Board.
623 3. "Subsidiary" means any company that is owned or
624 controlled directly or indirectly by another company and
625 includes any service corporation owned in whole or in part by an
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626 insured depository institution or any subsidiary of such a
627 service corporation.
628 (2) EXEMPTIONS.—
629 (a) A trust company that is organized pursuant to this
630 section and issues payment stablecoins with a consolidated total
631 outstanding issuance of $10 billion or less is exempt from
632 registration as a qualified payment stablecoin issuer but is
633 subject to the provisions of this section.
634 (b) A payment stablecoin that meets the requirements of
635 this part is not a security and is not subject to the
636 requirements of chapter 517.
637 (c) The following transactions are not regulated under
638 this part:
639 1. The direct transfer of payment stablecoin between two
640 individuals acting on their own behalf and for their own lawful
641 purposes, without the involvement of an intermediary.
642 2. Any transaction involving the receipt of payment
643 stablecoin by an individual between an account owned by the
644 individual in the United States and an account owned by the
645 individual abroad which are offered by the same parent company.
646 3. Any transaction by means of a software or hardware
647 wallet that facilitates an individual's own custody of payment
648 stablecoin.
649 (3) TRANSITION TO FEDERAL OVERSIGHT.—
650 (a) Unless a federal waiver is obtained, a qualified
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651 payment stablecoin issuer with a consolidated total outstanding
652 payment stablecoin issuance that reaches the $10 billion
653 threshold must comply with one of the following requirements:
654 1. Not later than 360 days after the payment stablecoin
655 issuance reaches such threshold, transition to the applicable
656 federal regulatory framework administered jointly by the office
657 and the United States Office of the Comptroller of the Currency;
658 or
659 2. Beginning on the date the payment stablecoin issuance
660 reaches such threshold, cease issuing new payment stablecoins
661 until the payment stablecoin falls below the $10 billion
662 consolidated total outstanding issuance threshold.
663 (b) A qualified payment stablecoin issuer remains subject
664 to this part if a federal waiver of the transition requirements
665 in paragraph (a) is obtained pursuant to the GENIUS Act, Pub. L.
666 No. 119-27, and the office remains solely responsible for
667 supervising the qualified payment stablecoin issuer, or if the
668 office is jointly responsible with the United States Office of
669 the Comptroller of the Currency to supervise the qualified
670 payment stablecoin issuer pursuant to subparagraph (a)1. The
671 office may enter into an agreement with the relevant primary
672 federal payment stablecoin regulator for the joint supervision
673 of any qualified payment stablecoin issuer.
674 (4) LIMITATION ON PAYMENT STABLECOIN ACTIVITIES.—Unless
675 licensed under chapter 560 or chapter 655 to conduct other
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676 financial business activities, a qualified payment stablecoin
677 issuer may engage only in the following activities:
678 (a) Issue payment stablecoins.
679 (b) Redeem payment stablecoins.
680 (c) Manage related reserves, including purchasing,
681 selling, and holding reserve assets or providing custodial
682 services for reserve assets, consistent with federal law and the
683 laws of this state.
684 (d) Undertake other activities that directly support any
685 of the activities described in this section.
686 (5) MINIMUM PRUDENTIAL REQUIREMENTS.—
687 (a) In accordance with the GENIUS Act, Pub. L. No. 119-27,
688 a qualified payment stablecoin issuer must comply with all of
689 the following requirements:
690 1. Maintain identifiable reserves backing the outstanding
691 payment stablecoins of the qualified payment stablecoin issuer
692 on at least a one-to-one basis, with reserves consisting of any
693 of the following:
694 a. United States coin or currency or money standing to the
695 credit of an account with a Federal Reserve Bank.
696 b. Funds held as demand deposits or insured shares at an
697 insured depository institution, subject to limitations
698 established by the Federal Deposit Insurance Corporation and the
699 National Credit Union Administration.
700 c. Treasury bills, notes, or bonds with a remaining
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701 maturity or issued with a maturity of 93 days or less.
702 d. Money received under repurchase agreements, with the
703 qualified payment stablecoin issuer acting as a seller of
704 securities and with an overnight maturity, that are backed by
705 Treasury bills with a maturity of 93 days or less.
706 e. Reverse purchase agreements, with the qualified payment
707 stablecoin issuer acting as a purchaser of securities and with
708 an overnight maturity, that are collateralized by Treasury
709 bills, notes, or bonds on an overnight basis, subject to
710 overcollateralization in line with standard market terms that
711 meet federal requirements in the GENIUS Act, Pub. L. No. 119-27.
712 f. Securities issued by an investment company registered
713 under s. 8(a) of the Investment Company Act of 1940, 15 U.S.C.
714 s. 80a-8(a), or other registered government money market fund,
715 and that are invested solely in underlying assets described in
716 sub-subparagraphs a.-e.
717 g. Any other similarly liquid Federal Government-issued
718 asset approved by the primary federal payment stablecoin
719 regulator, in consultation with the office.
720 h. Any reserve described in sub-subparagraphs a.-c. or
721 sub-subparagraph f. or sub-subparagraph g. in tokenized form,
722 provided that such reserves comply with all applicable laws and
723 regulations.
724 2. Publicly disclose the issuer's redemption policy, which
725 must comply with all of the following requirements:
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726 a. Establish clear and conspicuous procedures for timely
727 redemption of outstanding payment stablecoins.
728 b. Publicly, clearly, and conspicuously disclose in plain
729 language all fees associated with purchasing or redeeming the
730 payment stablecoins, provided that such fees can be changed only
731 upon not less than 7 days' prior notice to consumers.
732 3. Publish on the issuer's website a monthly reserve
733 composition of the issuer's reserve which must contain all of
734 the following information:
735 a. The total number of outstanding payment stablecoins
736 issued by the issuer.
737 b. The amount and composition of the reserves described in
738 subparagraph 1., including the average tenor and geographic
739 location of custody of each category of reserve instruments.
740 4. Comply with all federal prohibitions on the pledging,
741 rehypothecating, or reusing reserve assets, either directly or
742 indirectly, except for any of the following purposes:
743 a. Satisfying margin obligations in connection with
744 investments in permitted reserves under sub-subparagraph 1.d. or
745 sub-subparagraph 1.e..
746 b. Satisfying obligations associated with the use,
747 receipt, or provision of standard custodial services.
748 c. Creating liquidity to meet reasonable expectations of
749 requests to redeem payment stablecoins, such that reserves in
750 the form of Treasury bills may be sold as purchased securities
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751 for repurchase agreements with a maturity of 93 days or less,
752 provided that either:
753 (I) The repurchase agreements are cleared by a clearing
754 agency registered with the Securities and Exchange Commission;
755 or
756 (II) The qualified payment stablecoin issuer receives
757 prior approval from the office.
758 5. Engage a registered public accounting firm to conduct a
759 monthly examination of the previous month-end reserve report.
760 For purposes of this subparagraph, the term "registered public
761 accounting firm" means a public accounting firm registered with
762 the Public Company Accounting Oversight Board.
763 6. Submit to the office each month a certification as to
764 the accuracy of the month-end reserve report by the qualified
765 payment stablecoin issuer's chief executive officer and chief
766 financial officer.
767 7. Comply with any federal regulations or state rules
768 prescribed by commission rule relating to capital, liquidity,
769 and risk management requirements.
770 8. Engage only custodians or safekeepers that comply with
771 s. 10 of the GENIUS Act, Pub. L. No. 119-27.
772 9. Comply with any other federal requirements of s. 4(a)
773 of the GENIUS Act, Pub. L. No. 119-27, and any implementing
774 federal regulations.
775 (b) A qualified payment stablecoin issuer is prohibited
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776 from engaging in all of the following conduct:
777 1. Except as may be authorized under federal law, tying
778 arrangements that condition access to stablecoin services on the
779 purchase of unrelated products or services from such qualified
780 payment stablecoin issuer or an agreement not to obtain products
781 or services from a competitor.
782 2. Using deceptive names, which includes, but is not
783 limited to, any of the following:
784 a. Using any combination of terms relating to the United
785 States Government, except abbreviations directly related to the
786 currency to which a payment stablecoin is pegged, such as "USD."
787 b. Marketing a payment stablecoin in such a way that a
788 reasonable person would perceive the payment stablecoin to be
789 legal tender, as described in 31 U.S.C. s. 5103, issued by the
790 United States, or guaranteed or approved by the United States
791 Government.
792 3. Unless authorized by federal law, paying the holder of
793 any payment stablecoin any form of interest or yield solely in
794 connection with holding, use, or retention of such payment
795 stablecoin.
796 (6) CERTIFICATION.—The office's initial certification and
797 annual recertification submission to the federal Stablecoin
798 Certification Review Committee pursuant to s. 560.505 must
799 include any relevant information related to the provisions of
800 this chapter in the office's request for certification or
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801 recertification of the state regulatory regime of payment
802 stablecoins.
803 (7) RULEMAKING.—The commission may adopt rules to
804 administer this section as required in s. 13 of the GENIUS Act,
805 Pub. L. No. 119-27. The commission must also adopt rules
806 relating to capital, liquidity, and risk management which are
807 consistent with s. 4(a)(4) of the GENIUS Act, Pub. L. No. 119-
808 27. The commission may adopt rules establishing standards for
809 the conduct, supervision, examination, and regulation of
810 qualified payment stablecoin issuers, including requirements
811 relating to reserves, customer-asset protection, reporting, and
812 compliance in order to meet the minimum requirements established
813 by the Stablecoin Certification Review Committee.
814 Section 13. Except as otherwise expressly provided in this
815 act, this act shall take effect on January 1, 2027.
816
817
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FLORIDA HOUSE OF REPRESENTATIVES
BILL ANALYSIS
This bill analysis was prepared by nonpartisan committee staff and does not constitute an official statement of legislative intent.
BILL #: PCS for HB 1263 COMPANION BILL: None
TITLE: Office of Insurance Regulations LINKED BILLS: PCS for HB 1265
SPONSOR(S): Insurance & Banking Subcommittee RELATED BILLS: None
Committee References
Orig. Comm.: Insurance & Banking
SUMMARY
Effect of the Bill:
The bill addresses several matters related to the regulation of insurance in Florida including:
Granting OIR and the Department of Financial Services (“DFS”) the authority to issue cease and desist
orders for unlicensed activity.
Providing that OIR may examine administrators, which includes Pharmacy Benefit Managers (PBMs).
Requiring background checks for key insurance personnel, and authorizing the Florida Department of Law
Enforcement and the Federal Bureau of Investigations to process fingerprints.
Requiring OIR to be copied in the notice provided to the Department of Legal Affairs in the event of data
breaches that affect insurers or other entities subject to OIR’s jurisdiction.
Requiring private passenger automobile insurers and residential property insurers to use certain models
approved by the Florida Commission on Loss Projection Methodology.
Requiring full rate filings from private passenger automobile insurers after two years of certifying that
current rates are actuarily sound and adequate.
Requiring minimum mitigation discounts for structures that meet or exceed building code requirements.
Aligning Florida law with National Association of Insurance Commissioners (“NAIC”) accreditation
requirements by requiring the ultimate controlling person of an insurer to file an annual group capital
calculation and a liquidity stress test.
Requiring Attorneys in Fact of Reciprocal Insurers to obtain a registration from OIR.
Fiscal or Economic Impact:
The bill may have an indeterminate fiscal impact on state government and the private sector.
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
ANALYSIS
EFFECT OF THE BILL:
Authority of the Office of Insurance Regulation
The bill clarifies that the Office of Insurance Regulation (“OIR”) is responsible for all activities concerning other
entities under its jurisdiction, in addition to their current statutory authority over insurers and other risk bearing
entities.1 (Section 1).
The bill grants OIR and the Department of Financial Services (“DFS”) the authority to issue cease and desist orders
when there is probable cause that a person is performing activities that require a license, registration, or certificate
of authority from OIR or DFS without holding the required authorization. (Section 3).
1 According to OIR, this change is necessary to clarify that OIR has jurisdiction to regulate entities that are within OIR’s
jurisdiction but are not risk bearing. Email from Seth Stubbs, Director of Legislative and Cabinet Affairs, Office of Insurance
Regulation, Explanation of Sections 1 & 22 (Feb. 5, 2026).
STORAGE NAME: PCS1263.IBS
DATE: 2/9/2026
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The authority to issue a cease and desist extends to any person who aids and abets in the violation of the Florida
Insurance Code. To enforce a cease and desist issued under this provision, OIR or DFS may file an action for a court
proceeding seeking an injunction against a person who violates any provision of the cease and desist order.
(Section 3).
The bill provides that OIR may examine administrators, as often as it deems necessary. (Section 5).
Background Checks
The bill authorizes the Florida Department of Law Enforcement (“FDLE”) to accept and process fingerprints and
exchange criminal history records for individuals involved in the insurance industry. The bill requires background
checks for a wide range of persons associated with insurers or insurance-related entities, including organizers,
officers, employees, contractors, volunteers, and others who may influence or control insurance operations.
(Section 6).
Fingerprints must be submitted to OIR, an authorized vendor, or authorized agency and will be processed by both
the FDLE, for the state portion of the criminal background check, and the Federal Bureau of Investigation (“FBI”)
for the national portion of the criminal background check. The results of the background checks will be used by the
OIR to determine whether individuals meet eligibility requirements for licensure, certification, or authority to
operate under the Florida Insurance Code. The bill also provides procedures for submission, retention, and cost
responsibilities associated with fingerprint processing and background checks. (Section 6)
Fees for state and federal fingerprinting processing must be paid by the person submitting them.2 (Section 6).
Cybersecurity
Current law requires certain entities3 to provide a notice to the Department of Legal Affairs whenever there is a
breach of security4 affecting 500 or more individuals in Florida.5 The bill requires entities subject to the jurisdiction
of OIR to copy OIR on the notice provided to the Department of Legal Affairs. (Section 2).
Covered entities that are required to notify OIR of a security breach must provide the following information to OIR
upon request:
A police report, incident report, or computer forensics report.
A copy of the policies in place regarding breaches.
Steps that have been taken to rectify the breach. (Section 2).
Rate Filings
The bill provides that, beginning January 1, 2027, the projected comprehensive losses used to determine a
hurricane catastrophe load for private passenger automobile insurance rate filings must be estimated using a
model or method approved by the Florida Commission on Hurricane Loss Projection Methodology. (Section 7).
The bill provides that, beginning January 1, 2027, projected flood losses for personal residential property
insurance must be estimated using a model or method approved by the Florida Commission on Hurricane Loss
Projection Methodology. (Section 7).
2 According to FDLE, the cost for a statewide criminal history record check is $24, and if the person is required to undergo a
state and national criminal history record check, the total cost is $36. See Florida Department of Law Enforcement, Agency
Analysis of 2026 House Bill 1263, p. 3 (Feb. 5, 2026).
3 These entities are referred to as “covered entities” in statute, and include sole proprietorships, partnerships, corporations,
trusts, estates, cooperatives, associations, or other commercial entities that acquire, maintain, store, or use personal
information. For purpose of notice requirements, it also includes governmental entities.
4 A “breach of security” means “unauthorized access of data in electronic form containing personal information.” S.
501.171(1)(a), F.S.
5 S. 501.171(3)(a), F.S.
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
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Current law provides that if no rate change is proposed, an insurer may file with OIR a certification by an actuary
that existing rate levels produce rates which are actuarily sound and not inadequate. The bill provides that
residential property insurers and private passenger automobile insurers must file with OIR a full rate filing after
two consecutive years of certifying the current rate is adequate. (Section 10).
Mitigation Discounts, Credits, and Other Rate Differentials
The bill provides that OIR must determine minimum discounts, credits, other rate differentials, and appropriate
reductions in deductibles for fixtures and construction techniques that meet or exceed the minimum requirements
of the Florida Building Code. (Section 9).
The bill provides that OIR’s determination of a minimum discount may not prohibit an insurer from seeking
additional actuarily justified credits, discounts, or other rate differentials, or appropriate reductions in deductibles
for fixtures of construction techniques that meet or exceed the minimum requirements of the Florida Building
Code. (Section 9).
The bill provides that the notification form6 sent to policyholders at the time of issuance of an insurance policy and
upon each renewal must notify the policyholder if the insurer offers an enhanced discount for a roof system that
uses a secondary water resistance. (Section 11).
Statewide Database of Uniform Mitigation Verification Inspection Forms
The bill requires OIR to contract with a state university to design, operate, upgrade, and maintain a statewide
database for uniform mitigation verification inspection forms. Beginning January 1, 2027, the bill requires insurers
to electronically file in this database a copy of each uniform mitigation inspection form submitted by a policyholder
within 15 days of receipt. (Section 11).
Assignment of Benefits Data Call
The bill repeals the requirement for insurers to report annually data on each residential and commercial property
insurance claim paid in the prior calendar year under an assignment agreement. (Section 12).
Insurer Experience Reporting
Beginning January 1, 2027, the bill requires each insurer transacting private passenger automobile insurance in
Florida to report monthly to OIR the following information:
Policy coverage categories, including policies in force and total direct premiums earned and written.
The type, location, and limits of writings in this state.
Claims reporting requirements.
Any other information deemed necessary by the Financial Services Commission (“FSC”) to provide OIR with
the ability to track trends occurring in the private passenger automobile insurance market. (Section 13).
The bill deletes a requirement for insurers in various lines of liability7 to annually report to OIR specified
information on premiums, reserves, expenses, losses, income, fees, acquisition costs, general expenses, dividends,
and investments. (Section 13).
Group Capital Calculation and Liquidity Stress Test Framework
6 The form must notify policyholders of the availability of each premium discount, credit, other rate differential, or reductions
in deductibles for windstorm mitigation and home hardening fixtures or techniques. The form must list actions a policyholder
may take to reduce their windstorm premium. See s. 627.711(1), F.S.
7 The lines include: fire, homeowners’ multiple peril, commercial multiple peril, commercial multiple peril, medical
malpractice, products liability, workers’ compensation, private passenger automobile liability, commercial automobile
liability, private passenger automobile physical damage, commercial automobile physical damage, officers’ and directors’
liability insurance, and other liability insurance.
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The bill requires the ultimate controlling person of every insurer that is a member of an insurance holding
company system8 to file an annual group capital calculation report on or before April 1, unless specifically exempt.
Exemptions include:
Insurance holding company systems with only one insurer, that is only licensed and writing business in its
domestic state, and does not assume business from any other insurer.
Insurance holding company systems that are already required to perform a group capital calculation by the
United States Federal Reserve Board.
Insurance holding company systems whose non-U.S. group-wide supervisor9 is located in a reciprocal
jurisdiction that recognizes the United States’ regulatory approach to group supervision and group capital.
An insurance holding company system that meets both of the following:
o It provides information to the lead state that meets the requirements for accreditation under the
National Association of Insurance Commissioners (“NAIC”) Financial Standards and Accreditation
Program, either directly or indirectly, through the group-wide supervisor who has determined that
the information is satisfactory to allow the lead state to comply with the NAIC group supervision
approach, as detailed in the NAIC Financial Analysis Handbook.
o Its non–U.S. group-wide supervisor is not in a reciprocal jurisdiction, as described in section 1103,
and recognizes and accepts, as specified by the director, the group capital calculation as the world-
wide group capital assessment for U.S. insurance groups that operate in that jurisdiction. (Section
14).
If OIR determines that an insurance holding company no longer meets one of the exemptions above, the ultimate
controlling person of the insurer must file the group capital calculation report at the next annual filing date, unless
OIR grants an extension based on reasonable grounds. (Section 14).
If an insurance holding company system has previously filed the annual group capital calculation report at least
once, OIR may exempt the ultimate controlling person from filing the annual group capital calculation report, or
accept a limited group capital filing instead of a full annual group capital calculation report, if the insurance holding
company system meets all of the following criteria:
Has an annual direct and unaffiliated assumed premium10 of less than $1 billion, excluding premiums
reinsured with the Federal Crop Insurance Corporation and Federal Flood Program.
Does not have insurers within its holding company structure that are domiciled outside of the United States
or one of its territories.
Does not have a banking, depository, or other financial entity that is subject to a regulatory capital
framework11 within its holding company structure.
Attests that there are no material changes in the transactions between insurers and noninsurers in the
group which have occurred since the last filing of the annual group capital calculation report.
The noninsurers within the holding company system do not pose a material financial risk to the insurer’s
ability to honor policyholder obligations. (Section 14).
8 An insurance holding company system consists of two or more affiliated persons, one or more of which is an insurer. See R.
69O-143.0465, F.A.C.
9 A group-wide supervisor is defined in the bill as the regulatory official authorized to engage in conducting and coordinating
group-wide supervision activities who is determined or acknowledged by the Insurance Commissioner to have sufficient
contacts with an internationally active insurance group..
10 “Direct written premiums” represent the total amount of premiums for policies sold to customers, before deducting any
reinsurance ceded. “Assumed premiums” are the revenue received for policy coverage that is provided due to a reinsurance
agreement. See Investopedia, Understanding Direct Premiums Written: Definition and Impact (Jan. 9, 2026)
https://www.investopedia.com/terms/d/direct-premiums-written.asp (last visited Feb. 8, 2026). “Unaffiliated assumed
premiums” are assumed premiums, when the insurance company takes on the risk from an insurance company outside its
holding company system.
11 “Regulatory capital framework” means the legal requirements specifying the minimum amount of capital a company must
hold to avoid increased regulatory scrutiny. . The term includes the NAIC risk-based capital frameworks. See 12 CFR §
217.601(2023).
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If an insurance holding company system was granted an exemption due to a previous filing of the annual group
capital calculation report, OIR may require the ultimate controlling person to file an annual group capital
calculation report at any time, if any of the following criteria are met:
An insurer within the holding company system is in a risk-based capital action level event or a similar
standard for a non-United States insurer.
An insurer within the holding company system meets one or more of the standards of an insurer deemed to
be in a hazardous financial condition.
An insurer within the holding company system otherwise exhibits qualities of a troubled insurer as
determined by OIR.
The bill requires the ultimate controlling person of every insurer that is a member of an insurance holding
company system to file the results of a specific year’s liquidity12 stress test annually on or before April 1, provided
that the insurer meets at least one threshold of the scope criteria13 adopted by the NAIC for that year. (Section 15).
The bill provides that the group capital calculation report and the liquidity stress test are regulatory tools to assess
group risks, capital adequacy, and group liquidity risks, and are not intended to rank insurers or insurance holding
company systems.
The bill prohibits insurers, brokers, and any other person engaged in the business of insurance from making any
representation or statement about the results of the group capital calculation or the liquidity stress test. The bill
also provides that an insurer may publish announcements for the sole purpose of rebutting a materially false
representation about the group capital calculation or liquidity stress test results. (Section 16).
Registration of Attorneys in Fact
The bill creates a registration for the attorney in fact of a reciprocal insurer. The application for registration as an
attorney in fact must be made under oath and must include:
All basic organizational documents, and any amendments to such documents, of the applicant dated within
the last year and appropriately certified.
The bylaws, rules, and regulations or similar documents regulating the conduct of the internal affairs of the
applicant, other applicable documents, and all amendments to those documents, dated within the last year
and appropriately certified.
A copy of the most recent financial statement of the applicant, verified under oath by at least two of the
applicant’s principal officers.
A detailed plan of operation.
An e-mail address at which the applicant agrees to accept electronic service from OIR.
Background information for each individual who is responsible for the conduct of the applicant’s affairs.
Any other information OIR may reasonably require. (Section 17).
The bill provides that OIR may not require an applicant to pay a fee for the attorney in fact registration or for filing
an application for the registration. (Section 17).
Once an applicant files the sworn application, OIR must investigate each applicant, and may issue a registration if
OIR finds the applicant:
Is competent and trustworthy, and intends use the registration to act in good faith.
Has management that has a good business reputation and has had experience, training, or education that
qualifies the applicant to conduct business as an Attorney in Fact.
12 Generally, liquidity means an insurer’s or holding company’s ability to promptly meet its short-term financial obligations,
like paying claims, using cash or investments, without incurring significant losses. See Investopedia, Understanding Current
Liquidity in Insurance: Key Concepts Explained, https://www.investopedia.com/terms/c/current-liquidity.asp# (Last visited
Feb. 9, 2026).
13 “Scope criteria” means the exposure bases (activities assumed to be correlated with liquidity risk) designated by the NAIC
for the specified data year. These exposure bases are used to establish a preliminary list of insurers considered scoped into the
Liquidity Stress Test Framework.
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Has a business plan that is consistent with the interests of potential insureds and the public. (Section 17).
The bill provides that the registration renews automatically on March 1 every year, provided the attorney in fact
remains qualified under chapter 629, F.S., which regulates reciprocal insurers. The bill provides that OIR may not
require an attorney in fact to pay a fee for the renewal of the registration. (Section 18).
The bill provides grounds for denial, suspension, or revocation of an attorney in fact’s registration. These grounds
include that OIR determined the attorney in fact:
Has violated any lawful rule or order of the FSC or OIR or any applicable provision of the Insurance Code.
Has used or is using methods or practices in the conduct of its business which render its further transaction
of business in this state hazardous or injurious to insured persons or the public.
Has refused to be examined or to produce its accounts, records, and files for examination.
Is or was affiliated with another attorney in fact which transacts business in Florida without a registration.
Fails at any time to meet the qualifications required for issuance of the registration.
Is under suspension or revocation in Florida or another state for any license related to insurance.
Is under receivership, conservatorship, or rehabilitation proceedings in Florida or another state.
Has financial conditions or business practices that pose a threat to the health, safety, or welfare of the
residents of Florida. (Section 19).
The bill provides that the suspension or revocation of an attorney in fact’s registration takes effect when the order
is mailed by OIR to the attorney in fact by registered or certified mail, and sent electronically to the e-mail address
provided in the application. The bill authorizes OIR to publish notice of the suspension or revocation of an attorney
in fact’s registration in one or more newspapers of general circulation published in Florida. (Section 20).
The bill provides that a suspension may not exceed one year, and that upon the end of the suspension period, the
registration is automatically reinstated. (Section 21).
The bill provides that OIR may impose administrative fines in lieu of suspension, revocation, or nonrenewal. These
fines include:
For nonwillful violations, OIR may impose fines of up to $5,000 for each violation, which may not exceed
$50,000 for all nonwillful violations arising out of the same action.
For knowing and willful violations, OIR may impose fines of up to $25,000 per violation, which may not
exceed $250,000 for all violations arising out of the same action.
For knowing and willful violations of a lawful order issued by OIR or the FSC during a declared state of
emergency, OIR may impose a $200,000 fine for each violation, up to $1,000,000 for all knowing and willful
violations arising out of the same action. (Section 22).
Effective Date
The bill provides an effective date of July 1, 2026.
RULEMAKING:
The bill requires the Financial Services Commission (“FSC”) to adopt rules to implement the statewide database of
uniform mitigation verification inspection forms. (Section 11).
The bill requires the FSC to adopt rules specifying the information private passenger automobile insurers must file
monthly as part of the insurer experience reporting requirement. (Section 13).
The bill allows the FSC to adopt rules for the filing of the annual group capital calculation report in accordance with
the Insurance Holding Company System Regulatory Act of the NAIC and the Insurance Holding Company System
Model Regulation of the NAIC, as adopted in December 2020. (Section 14).
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The bill allows OIR to adopt rules for filing the results of the liquidity stress test in accordance with the Insurance
Holding Company System Regulatory Act of the NAIC and the Insurance Holding Company System Model
Regulation of the NAIC. (Section 16).
Lawmaking is a legislative power; however, the Legislature may delegate a portion of such power to executive
branch agencies to create rules that have the force of law. To exercise this delegated power, an agency must
have a grant of rulemaking authority and a law to implement.
FISCAL OR ECONOMIC IMPACT:
STATE GOVERNMENT:
The bill may have an indeterminate fiscal impact on the Office of Insurance Regulation to the extent it may require
additional resources to ensure compliance with the requirements of the bill, including processing applications for
Attorney in Fact registrations.
PRIVATE SECTOR:
The bill may have an indeterminate economic impact on the private sector to the extent insurers may need to use
additional resources to ensure compliance with the requirements of the bill.
RELEVANT INFORMATION
SUBJECT OVERVIEW:
Office of Insurance Regulation
The Office of Insurance Regulation (“OIR”) regulates all activities relating to insurers and other risk bearing
entities, including licensing, rates, policy forms, marked conduct, claims, issuance of certificates of authority,
solvency, viatical settlements, premium financing, and administrative supervision.14 OIR is responsible for
examining the affairs, transactions, accounts, records, and assets of each authorized insurer in the state. 15 As part of
that process, insurers must make available all records relating to the subject of the examination.16 OIR is also
authorized to carry out market conduct examinations to determine compliance with the Florida Insurance Code.17
Financial Services Commission
The Financial Services Commission is composed of the Governor, the Chief Financial Officer, the Attorney General,
and the Commissioner of Agriculture and it serves as agency head of the OIR for purposes of rulemaking.18 The
Financial Services Commission encompasses two offices: the Office of Insurance Regulation (responsible for
insurers and risk bearing entities) and the Office of Financial Regulation (responsible for the regulation of banks,
credit unions, other financial institutions, finance companies, and the securities industry).19
Administrators
An administrator is a person or entity that markets or arranges insurance coverage, collects premiums or other
charges, or processes, adjusts, or settles claims, in connection with authorized commercial self-insurance funds or
insured or self-insured programs that provide life or health insurance.20 The term includes a person or entity that
under a health care risk contract with an insurer or health maintenance organization provides billing and
14 S. 20.121(3)(a), F.S.
15 S. 624.316(1)(a), F.S.
16 S. 624.318(2), F.S.
17 S. 624.3161, F.S.
18 S. 20.121(3), F.S.
19 Id.
20 S. 626.88(1), F.S.
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collection services to insurers or HMOs on behalf of health care providers.21 The term also includes pharmacy
benefit managers.22
Background Checks
The Florida Department of Law Enforcement (“FDLE”) is responsible for processing criminal history background
checks and fingerprint submissions for a wide range of professions and regulatory programs, including those
involving licensure and employment eligibility.23 FDLE is authorized to exchange fingerprint data with the United
States Department of Justice (“DOJ”) as part of national criminal history checks.24 The Federal Bureau of
Investigation (“FBI”) s is the principal investigative arm of the DOJ.25
As part of Florida’s oversight of the insurance industry, FDLE provides access to criminal history information to
noncriminal justice agencies, such as the Department of Financial Services (“DFS”), for use in evaluating insurance
licensure applications.26 Individuals applying for licenses—such as insurance agents, adjusters, and other regulated
professionals—must submit to fingerprint-based background screenings.27 Fingerprints must be submitted
electronically through a LiveScan vendor approved by FDLE.28 FDLE processes the fingerprints and transmits the
results to the appropriate licensing authority, typically DFS, to determine the applicant’s eligibility.29
The FBI will not approve access to national criminal history record information for the purpose of licensing or
employment unless all of the following criteria are satisfied:30
The statute must exist as a result of a legislative enactment.
It must require the fingerprinting of applicants who are subjected to a national criminal history record
check.
It must authorize the use of FBI records for the screening of applicants.
It must specify the specific categories of licensees or employees falling within its purview, thereby avoiding
overbreadth.
It may not authorize receipt of the criminal history record information to a private entity.
Notice to the Department of Legal Affairs about Security Breach
Current law provides that entities that acquire, maintain, store, or use personal information must provide notice to
the Department of Legal Affairs of any breach of security that affects 500 or more individuals in Florida.31 The
notice must be provided to the Department of Legal Affairs as soon as possible, but no later than 30 days following
the determination of the breach or reason to believe a breach occurred.32 An entity may receive 15 additional days
to provide the required notice if good cause for delay is provided in writing to the Department of Legal Affairs.33
The notice must include:34
A synopsis of the events surrounding the breach at the time the notice is provided.
21 Id.
22 Id.
23 S. 943.053, F.S.
24 S. 943.054, F.S.
25 Federal Bureau of Investigations, What is the FBI, https://www.fbi.gov/about/faqs/what-is-the-fbi (last visited Feb. 7,
2026).
26 S. 943.053(3)(a), F.S.
27 S. 626.171(4), F.S.
28 Florida Department of Financial Services, Fingerprinting Information,
https://www.myfloridacfo.com/division/agents/licensing/agents-and-adjusters/fingerprinting-information. (last visited on
Feb. 7, 2026).
29 Id.
30 Florida Department of Law Enforcement, Agency Analysis of 2026 House Bill 1263, p. 4 (Feb. 5, 2026).
31 S. 501.171, F.S.
32 Id.
33 Id.
34 Id.
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The number of individuals in Florida who were or potentially have been affected by the breach.
Any services related to the breach being offered or scheduled to be offered, without charge, by the entity to
the affected individuals, and instructions on how to use those services.
A copy of the notice sent to the affected individuals.
The name, address, telephone number, and e-mail address of the employee or agent of the entity that can
provide additional information about the breach.
Florida Commission on Hurricane Loss Projection Methodology
The Florida Commission on Hurricane Loss Projection Methodology was created in 1995 by the Legislature to
serve as an independent panel to evaluate computer simulation models and other recently developed or improved
actuarial methodologies for projecting hurricane and flood losses.35
The Legislature determined that the Florida Commission on Hurricane Loss Projection Methodology was necessary
to ensure rates are neither excessive nor inadequate, and that computer modeling has made it possible to improve
the accuracy of hurricane and flood loss projections.36
Rate Filings
Insurers37 are required to submit an annual base rate filing for each line they write. There are two ways an insurer
can satisfy this requirement:38
A rate filing prepared by an actuary, including documentation demonstrating that the proposed rates are
not excessive, inadequate, or unfairly discriminatory.
If no rate change is proposed, a filing which consists of a certification by an actuary that the existing rate
level produces rates which are actuarily sound and which are not inadequate.
Mitigation Discounts, Credits, and Other Rate Differentials
Residential property insurance rate filings must account for mitigation measures undertaken by policyholders to
reduce hurricane losses.39 Specifically, the rate filings must include actuarially reasonable discounts, credits, or
other rate differentials or appropriate reductions in deductibles to consumers who implement windstorm damage
mitigation techniques to their properties.40
Upon their filing by an insurer or rating organization, OIR determines the discounts, credits, other rate differentials
and appropriate reductions in deductibles that reflect the full actuarial value of such revaluation,41 which in turn
may be used in rate filings under the rating law. Windstorm mitigation measures that must be evaluated for
purposes of mitigation discounts include fixtures or construction techniques that enhance roof strength, roof
covering performance, roof-to-wall strength, wall-to-floor-to-foundation strength, opening protection, and
window, door, and skylight strength.42
An insurer is required to notify an applicant or policyholder of any personal lines residential property insurance
policy, at the time of the issuance of the policy and at each renewal, of the availability of each premium discount,
credit, other rate differential for properties on which fixtures or construction techniques demonstrated to reduce
the amount of loss in a windstorm can be or have been installed or implemented.43
35 Florida Commission on Hurricane Loss Projection Methodology, About the FCHLPM, https://fchlpm.sbafla.com/about-the-
fchlpm/ (last visited Feb. 8, 2026).
36 Id.
37 Workers’ compensation carriers, employer’s liability insurers, and most types of commercial property and casualty insurers
are excluded from this requirement. See s. 627.0645(1), F.S.
38 S. 627.0645, F.S.
39 S. 627.062(2), F.S.
40 S. 627.0629, F.S.
41 Id.
42 Id.
43 S. 627.711(1), F.S.
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Uniform Mitigation Verification Inspection Forms
Current law requires the Financial Services Commission (“FSC”) to develop by rule a uniform mitigation
verification inspection form that must be used by all insurers when submitted by policyholders for the purpose of
factoring discounts for wind insurance.44
Insurer Experience Reporting
Each insurer transacting insurance business in Florida must report certain information annually to the OIR.45 The
information for an insurer transacting private passenger automobile insurance must be on direct insurance
writings in Florida alone, represent total limits data, and be divided into the following categories: bodily injury
liability; property damage liability; uninsured motorist; personal injury protection benefits; medical payments;
comprehensive and collision.46
The information for an insurer transacting fire, homeowner’s multiple peril, commercial multiple peril, medical
malpractice, products liability, workers’ compensation, private passenger automobile liability, commercial
automobile liability, private passenger automobile physical damage, commercial automobile physical damage,
officers’ and directors’ liability insurance, or other liability insurance must be reported for direct Florida business
only and be reported on a calendar-year basis annually by April 1 for the preceding calendar year.47
OIR must provide a summary of this information in its annual report.48
Assignment of Benefits Data Call
An assignment is the voluntary transfer of the rights of one party under a contract to another party; the transfer by
a party to another party of some valuable interest.49 In 2022,50 the Legislature prohibited the assignment, in whole
or in part, of any post-loss insurance benefit under any residential property insurance policy or under any
commercial property insurance policy issued on or after January 1, 2023.51
Group Capital Calculation and Liquidity Stress Test
The National Association of Insurance Commissioners (“NAIC”) is the standard-setting and regulatory organization
created and governed by the chief insurance regulators from the 50 states, the District of Columbia, and five United
States territories.52 The organization sets standards and regulatory best practices.
In December 2020, the NAIC adopted amendments to the NAIC Holding Company Model Act. These amendments
included implementing a group capital calculation and liquidity stress framework, with the goal of providing
insurance regulators with more tools for conducting group-wide supervision of holding companies.53 Specifically,
the NAIC has noted that the group capital calculation will:54
provide key financial information on the insurance group;
quantify risk across the insurance group:
support transparency into how capital is allocated; and
aid regulators in understanding whether and to what degree insurance companies are supporting the
operations of non-insurance entities.
44 S. 627.711, F.S.
45 S. 627.915, F.S.
46 S. 627.915(1), F.S.
47 S. 627.915(2), F.S.
48 S. 627.915(4), F.S.
49 Black’s Law Dictionary, 2nd Ed., https://thelawdictionary.org/assignment/ (last visited Feb. 7, 2026).
50 Section 21, ch. 2022-271, L.O.F.
51 S. 627.7152(13), F.S.
52 National Association of Insurance Commissioners (“NAIC”), What is the NAIC and what does it do?,
https://content.naic.org/sites/default/files/about-naic.pdf (last visited Feb. 3, 2026).
53 NAIC, The NAIC Group Capital Calculation, Liquidity Stress Test, and Receivership Provisions (August 2025),
http://content.naic.org/sites/default/files/government-affairs-brief-gccc-liquidity-receivership.pdf (last visited Feb. 2, 2026).
54 Id.
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The NAIC has indicated that implementation of these revisions will likely become an NAIC accreditation
requirement on January 1, 2026.55 According to the NAIC, its accreditation program fosters inter-state cooperation,
reduces duplicative regulation, and provides baseline consumer protections.56 NAIC accreditation allows regulators
of multi-state insurers to rely on the domiciliary state’s solvency regulations to avoid duplication of effort and
expense.57 For example, instead of performing its own examination, a state may accept the examination report
prepared by an insurance department that was accredited at the time of examination.58 According to the NAIC, this
cooperation saves insurance companies, and thus consumers, millions of dollars.59 The loss of accreditation could
lead to the loss of domestic insurers.60
Attorneys in Fact
A reciprocal insurance exchange is an insurance enterprise where subscribers enter into direct agreements with
each other, pledging to contribute proportionally to cover losses experienced by fellow members.61 The customers,
known as subscribers, sign an agreement authorizing an agent to act as their attorney in fact for the purpose of
insurance.62 The attorney in fact is usually a management company, and they are authorized to sign contracts on
behalf of all subscribers.63
BILL HISTORY
STAFF
DIRECTOR/ ANALYSIS
COMMITTEE REFERENCE ACTION DATE POLICY CHIEF PREPARED BY
Orig. Comm.: Insurance & Banking Brackett Miguez
Subcommittee
55 Id.
56 NAIC, The NAIC Accreditation Program (Jan. 2024), https://content.naic.org/sites/default/files/government-affairs-brief-
accreditation-program.pdf (last visited Feb, 3, 2026).
57 Id.
58 Id.
59 Id.
60 Id.
61 Andrew Verstein, Enterprise Without Entities, 116 MICH. L. REV. 247, 249 (2017),
https://repository.law.umich.edu/cgi/viewcontent.cgi?params=/context/mlr/article/1672/&path_info=Enterprise_Without_
Entities_revised_first_page.pdf.
62 Id. at 264.
63 Id. at 251.
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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
PCS for HB 1263 ORIGINAL 2026
1 A bill to be entitled
2 An act relating to the Office of Insurance Regulation;
3 amending s. 20.121, F.S.; providing that the Office of
4 Insurance Regulation is responsible for all activities
5 concerning entities under its jurisdiction; amending
6 s. 501.171, F.S.; requiring entities under the
7 office's jurisdiction to copy the office on certain
8 notices and provide certain information, upon request,
9 to the Department of Legal Affairs; amending s.
10 624.310, F.S.; authorizing the Department of Financial
11 Services and the office to issue cease and desist
12 orders for unlicensed activity; authorizing the
13 department and the office to seek an injunction for
14 enforcement of such order; amending s. 624.316, F.S.;
15 removing a provision allowing the Financial Services
16 Commission to adopt the Market Conduct Examiners
17 Handbook; amending s. 624.3161, F.S.; granting the
18 office the authority to examine administrators;
19 authorizing the commission to adopt by rule the Market
20 Conduct Examiners Handbook; creating s. 624.341, F.S.;
21 providing legislative findings and intent; requiring
22 the Department of Law Enforcement to accept and
23 process fingerprints taken of certain persons;
24 specifying procedures for fingerprinting; authorizing
25 the Department of Law Enforcement to exchange certain
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26 records with the office; specifying that fingerprints
27 must be submitted in accordance with certain rules;
28 requiring the Department of Law Enforcement and the
29 Federal Bureau of Investigation to conduct certain
30 background checks; requiring that certain fingerprints
31 be submitted and entered into a specified system;
32 requiring the office to inform the Department of Law
33 Enforcement of any person whose fingerprints no longer
34 need to be retained; specifying who bears the costs of
35 fingerprint processing; requiring the office to review
36 criminal history background checks and make certain
37 determinations; specifying that certain criminal
38 records be used by the office for certain purposes;
39 amending s. 627.062, F.S.; requiring, rather than
40 authorizing, the office to estimate projected flood
41 losses for residential property insurance using a
42 certain model; requiring the office to consider
43 projected comprehensive losses for certain private
44 passenger automobile insurance using a model approved
45 by the Florida Commission on Hurricane Loss Projection
46 Methodology; amending s. 627.0628, F.S.; requiring
47 private passenger automobile insurance to be
48 adequately projected; amending s. 627.0629, F.S.;
49 requiring the office to determine minimum rate
50 differentials for windstorm damage mitigation
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51 techniques that meet or exceed the minimum
52 requirements of the Florida Building Code; authorizing
53 insurers to seek additional rate differentials;
54 amending s. 627.0645, F.S.; revising requirements of
55 rate filing with the office for certain insurers;
56 amending s. 627.711, F.S.; requiring the notification
57 form sent to insureds at the time of issuance of the
58 insurance policy and renewal to notify the insured of
59 certain discounts; requiring the office to contract
60 with a state university to design, operate, upgrade,
61 and maintain a specified database; requiring property
62 insurers to file certain policyholder forms within a
63 specified timeframe in the database beginning on a
64 specified date; requiring the commission to adopt
65 rules; amending s. 627.7152, F.S.; removing a
66 provision requiring insurers to report on residential
67 and commercial property insurance claims paid in a
68 certain year; amending s. 627.915, F.S.; requiring
69 private passenger automobile insurers to file
70 specified monthly reports beginning on a specified
71 date; requiring the commission to adopt rules;
72 removing the requirement for certain insurers to
73 submit such report; removing an exemption for certain
74 insurers; creating s. 628.8011, F.S.; providing
75 definitions; requiring certain persons to file a group
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76 capital calculation report annually by a specified
77 date; providing requirements for such report;
78 exempting certain insurance holding company systems
79 from filing such report; requiring certain non-United
80 States-based insurance holding company systems to file
81 a group capital calculation report; authorizing the
82 office to exempt certain persons from filing such
83 report under certain circumstances; authorizing the
84 filing of a limited group capital filing instead of
85 the group capital calculation report under certain
86 circumstances; authorizing the office to require
87 certain insurance holding company systems to file such
88 report despite qualifying for an exemption under
89 certain circumstances; requiring the office to adopt
90 certain criteria and publish certain information on
91 its website; authorizing the office to adopt certain
92 rules; creating s. 628.8012, F.S.; providing
93 definitions; requiring certain persons to annually
94 file results of a liquidity stress test in compliance
95 with specified instructions; providing an exemption;
96 authorizing the office to adopt rules; creating s.
97 628.8013, F.S.; providing that a certain report and
98 test are for specified purposes; prohibiting certain
99 representations or statements by certain persons;
100 authorizing an insurer to rebut certain information in
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101 a written publication under certain circumstances;
102 creating s. 629.53, F.S.; requiring attorneys in fact
103 of reciprocal insurers to obtain a registration;
104 providing requirements for the application of such
105 registration; requiring the office to investigate
106 applicants and issue registrations to applicants under
107 certain circumstances; creating s. 629.54, F.S.;
108 providing for automatic renewal of the registration of
109 an attorney in fact; creating s. 629.55, F.S.;
110 authorizing the office to deny, suspend, revoke, or
111 refuse to renew the registration of an attorney in
112 fact under certain circumstances; creating s. 629.56,
113 F.S.; providing for when an order of suspension or
114 revocation of a registration is effected; authorizing
115 the office to publish certain notice in newspapers of
116 general circulation; creating s. 629.57, F.S.;
117 providing a limitation to how long the registration of
118 an attorney in fact may be suspended; providing that a
119 registration is automatically reinstated after the
120 suspension ends; creating s. 629.58, F.S.; authorizing
121 the office to issue administrative fines in lieu of
122 suspension or revocation; prohibiting a fine to be
123 borne by an insurer; amending ss. 634.141, 634.314,
124 and 634.416, F.S.; conforming cross-references;
125 providing an effective date.
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126
127 Be It Enacted by the Legislature of the State of Florida:
128
129 Section 1. Paragraph (a) of subsection (3) of section
130 20.121, Florida Statutes, is amended to read:
131 20.121 Department of Financial Services.—There is created
132 a Department of Financial Services.
133 (3) FINANCIAL SERVICES COMMISSION.—Effective January 7,
134 2003, there is created within the Department of Financial
135 Services the Financial Services Commission, composed of the
136 Governor, the Attorney General, the Chief Financial Officer, and
137 the Commissioner of Agriculture, which shall for purposes of
138 this section be referred to as the commission. Commission
139 members shall serve as agency head of the Financial Services
140 Commission. The commission shall be a separate budget entity and
141 shall be exempt from the provisions of s. 20.052. Commission
142 action shall be by majority vote consisting of at least three
143 affirmative votes. The commission shall not be subject to
144 control, supervision, or direction by the Department of
145 Financial Services in any manner, including purchasing,
146 transactions involving real or personal property, personnel, or
147 budgetary matters.
148 (a) Structure.—The major structural unit of the commission
149 is the office. Each office shall be headed by a director. The
150 following offices are established:
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151 1. The Office of Insurance Regulation, which shall be
152 responsible for all activities concerning insurers, and other
153 risk bearing entities, and other entities under its
154 jurisdiction, including licensing, rates, policy forms, market
155 conduct, claims, issuance of certificates of authority,
156 solvency, viatical settlements, premium financing, and
157 administrative supervision, as provided under the insurance code
158 or chapter 636. The head of the Office of Insurance Regulation
159 is the Director of the Office of Insurance Regulation, who may
160 also be known as the Commissioner of Insurance Regulation.
161 2. The Office of Financial Regulation, which shall be
162 responsible for all activities of the Financial Services
163 Commission relating to the regulation of banks, credit unions,
164 other financial institutions, finance companies, and the
165 securities industry. The head of the office is the Director of
166 the Office of Financial Regulation, who may also be known as the
167 Commissioner of Financial Regulation. The Office of Financial
168 Regulation shall include a Bureau of Financial Investigations,
169 which shall function as a criminal justice agency for purposes
170 of ss. 943.045-943.08 and shall have a separate budget. The
171 bureau may conduct investigations within or outside this state
172 as the bureau deems necessary to aid in the enforcement of this
173 section. If, during an investigation, the office has reason to
174 believe that any criminal law of this state has or may have been
175 violated, the office shall refer any records tending to show
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176 such violation to state or federal law enforcement or
177 prosecutorial agencies and shall provide investigative
178 assistance to those agencies as required.
179 Section 2. Paragraph (f) is added to subsection (3) of
180 section 501.171, Florida Statutes, to read:
181 501.171 Security of confidential personal information.—
182 (3) NOTICE TO DEPARTMENT OF SECURITY BREACH.—
183 (f) If a covered entity is subject to the jurisdiction of
184 the Office of Insurance Regulation, the covered entity must copy
185 the office on the notice provided to the department. The covered
186 entity must provide any information listed in paragraph (c) to
187 the office upon its request.
188 Section 3. Paragraph (g) is added to subsection (5) of
189 section 624.310, Florida Statutes, to read:
190 624.310 Enforcement; cease and desist orders; removal of
191 certain persons; fines.—
192 (5) ADMINISTRATIVE FINES; ENFORCEMENT.—
193 (g) If the department or office has probable cause to
194 believe that a person is performing activities that require a
195 license, registration, certificate of authority, or any other
196 form of authorization from the department or office, and the
197 person performing such activities does not hold the required
198 license, registration, certificate of authority, or other form
199 of authorization, the department or office may issue and deliver
200 to such person a notice to cease and desist from such violation
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201 of the insurance code. In addition, the department or office may
202 issue and deliver a notice to cease and desist to any person who
203 aids and abets the person violating the insurance code. For the
204 purpose of enforcing a cease and desist order under this
205 paragraph, the department or office may file an action for a
206 court proceeding in the name of this state seeking the issuance
207 of an injunction against a person who violates any provision of
208 the cease and desist order.
209 Section 4. Paragraph (c) of subsection (1) of section
210 624.316, Florida Statutes, is amended to read:
211 624.316 Examination of insurers.—
212 (1)
213 (c) The office shall examine each insurer according to
214 accounting procedures designed to fulfill the requirements of
215 generally accepted insurance accounting principles and practices
216 and good internal control and in keeping with generally accepted
217 accounting forms, accounts, records, methods, and practices
218 relating to insurers. To facilitate uniformity in examinations,
219 the commission may adopt, by rule, the Market Conduct Examiners
220 Handbook and the Financial Condition Examiners Handbook of the
221 National Association of Insurance Commissioners, 2002, and may
222 adopt subsequent amendments thereto, if the examination
223 methodology remains substantially consistent.
224 Section 5. Subsections (2) through (9) of section
225 624.3161, Florida Statutes, are renumbered as subsections (3)
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226 through (10), respectively, subsection (1), paragraph (e) of
227 present subsection (8), and paragraph (a) of present subsection
228 (9) are amended, and a new subsection (2) is added to that
229 section, to read:
230 624.3161 Market conduct examinations.—
231 (1) As often as it deems necessary, the office shall
232 examine each licensed rating organization, each advisory
233 organization, administrator, each group, association, carrier,
234 as defined in s. 440.02, or other organization of insurers which
235 engages in joint underwriting or joint reinsurance, the attorney
236 in fact of each reciprocal insurer, and each authorized insurer
237 transacting in this state any class of insurance to which
238 chapter 627 is applicable. The examination must be for the
239 purpose of ascertaining compliance by the person examined with
240 the applicable provisions of this chapter and chapters 440, 626,
241 627, and 635.
242 (2) To facilitate uniformity in examinations, the
243 commission may adopt, by rule, the Market Conduct Examiners
244 Handbook of the National Association of Insurance Commissions,
245 2024, and may adopt subsequent amendments thereto, if the
246 examination methodology remains substantially consistent.
247 (9)(8) The office shall create, and the commission shall
248 adopt by rule, a selection methodology for scheduling and
249 conducting market conduct examinations of insurers and other
250 entities regulated by the office. This requirement does not
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251 restrict the authority of the office to conduct market conduct
252 examinations as often as it deems necessary. Such selection
253 methodology must prioritize market conduct examinations of
254 insurers and other entities regulated by the office to whom any
255 of the following conditions applies:
256 (e) The insurer meets the criteria in subsection (8) (7).
257
258 The office shall present the proposed rule required by this
259 subsection to the commission no later than October 1, 2023. In
260 addition to the methodology required by this subsection, the
261 rule must provide criteria for how the office, in coordination
262 with the department, will determine what constitutes a
263 disproportionate number of claims-handling complaints described
264 in paragraph (b).
265 (10)(9) If the office concludes through an examination
266 pursuant to this section that an insurer providing liability
267 coverage in this state exhibits a pattern or practice of
268 violations of the Florida Insurance Code during any
269 investigation or examination of the insurer, the office must
270 review the insurer's claims-handling practices to determine if
271 the insurer should be subject to the enhanced enforcement
272 penalties of this subsection.
273 (a) A liability insurer may be subject to enhanced
274 enforcement penalties if the office reviews the insurer's
275 claims-handling practices and finds a pattern or practice of the
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276 insurer failing to do the following when responding to covered
277 liability claims under an insurance policy, after receiving
278 actual notice of such claims:
279 1. Assign a licensed and appointed insurance adjuster to
280 investigate whether coverage is provided under the policy and
281 diligently attempt to resolve any questions concerning the
282 extent of the insured's coverage.
283 2. Evaluate the claim fairly, honestly, and with due
284 regard for the interests of the insured based on available
285 information.
286 3. Request from the insured or claimant additional
287 relevant information the insurer reasonably deems necessary to
288 evaluate whether to settle a claim.
289 4. Conduct all oral and written communications with the
290 insured with honesty and candor.
291 5. Make reasonable efforts to explain to persons not
292 represented by counsel matters requiring expertise beyond the
293 level normally expected of a layperson with no training in
294 insurance or claims-handling issues.
295 6. Retain all written and recorded communications and
296 create and retain a summary of all verbal communications in a
297 reasonable manner for a period of not less than 2 years after
298 the later of the entry of a final judgment against the insured
299 in excess of policy limits or, if an extracontractual claim is
300 made, the conclusion of that claim and any related appeals.
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301 7. Within 30 days after a request, provide the insured
302 with all communications related to the insurer's handling of the
303 claim which are not privileged as to the insured.
304 8. Provide, upon request and at the insurer's expense,
305 reasonable accommodations necessary to communicate effectively
306 with an insured covered under the Americans with Disabilities
307 Act.
308 9. When handling a third-party claim, communicate each of
309 the following to the insured:
310 a. The identity of any other person or entity the insurer
311 has reason to believe may be liable.
312 b. The insurer's final and completed estimate of the
313 claim.
314 c. The possibility of an excess judgment.
315 d. The insured's right to secure personal counsel at his
316 or her own expense.
317 e. That the insured should cooperate with the insurer,
318 including providing information required by the insurer because
319 of a settlement opportunity or in accordance with the policy.
320 f. Any formal settlement demands or offers to settle by
321 the claimant and any offers to settle on behalf of the insured.
322 10. Respond to any request for insurance information in
323 compliance with s. 626.9372 or s. 627.4137, as applicable.
324 11. Seek to obtain a general release of each insured in
325 making any settlement offer to a third-party claimant.
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326 12. Take reasonable measures to preserve any documentary,
327 photographic, and forensic evidence as needed for the defense of
328 the liability claim if it appears likely that the insured's
329 liability exposure is greater than policy limits and the insurer
330 fails to secure a general release in favor of the insured.
331 13. Comply with subsections (1) and (3) (2), if
332 applicable.
333 14. Comply with the Unfair Insurance Trade Practices Act.
334 Section 6. Section 624.341, Florida Statutes, is created
335 to read:
336 624.341 Authority of Department of Law Enforcement to
337 accept fingerprints of, and exchange criminal history records
338 with respect to, certain persons applying to the Office of
339 Insurance Regulation.—
340 (1) The Legislature finds that criminal activity of
341 insurers poses a particular danger to the residents of this
342 state. Floridians rely, in good faith, on the honest conduct of
343 those who issue and manage insurance policies and other
344 insurance instruments in this state. To safeguard the residents
345 of this state, the Legislature finds it necessary to ensure that
346 organizers, incorporators, officers, employees, contractors,
347 stockholders, directors, owners, managers, or volunteers
348 involved in the organization, operation, or management of any
349 insurer authorized to sell insurance do not have a criminal
350 record.
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351 (2) The Department of Law Enforcement shall accept and
352 process fingerprints taken of organizers, incorporators,
353 officers, employees, contractors, stockholders, directors,
354 owners, managers, or volunteers involved, directly or
355 indirectly, in the organization, operation, or management of
356 any:
357 (a) Insurer or proposed insurer transacting or proposing
358 to transact insurance in this state.
359 (b) Other entity that is examined or investigated, or is
360 eligible to be examined or investigated, under the office's
361 jurisdiction.
362 (c) Other person or entity subject to licensure under the
363 office's jurisdiction.
364 (3) A full set of fingerprints of persons or entities
365 described in subsection (2) must be submitted to the office or
366 to a vendor, an entity, or an agency authorized under s.
367 943.053(13). The office, vendor, entity, or agency shall forward
368 the fingerprints to the Department of Law Enforcement for state
369 processing, and the Department of Law Enforcement shall forward
370 the fingerprints to the Federal Bureau of Investigation for
371 national processing pursuant to s. 624.34(5). Fees for state and
372 federal fingerprint processing must be borne by the person
373 submitting them. The state cost for fingerprint processing is as
374 provided in s. 943.053(3)(e).
375 (4) The Department of Law Enforcement may, to the extent
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376 authorized by federal law, exchange state, multistate, and
377 federal criminal history records with the office for the purpose
378 of the issuance, denial, suspension, or revocation of a
379 certificate of authority, certification, or license to operate
380 in this state.
381 (5) Fingerprints for each person or entity described in
382 subsection (2) must be submitted in accordance with rules
383 adopted by the commission.
384 (a) Fingerprints may be submitted through a third-party
385 vendor authorized by the Department of Law Enforcement.
386 (b) The Department of Law Enforcement shall conduct the
387 state criminal history background check and a federal criminal
388 history background check must be conducted through the Federal
389 Bureau of Investigation.
390 (c) All fingerprints submitted to the Department of Law
391 Enforcement must be submitted and entered into the statewide
392 automated biometric identification system established in s.
393 943.05(2)(b) and be available for use in accordance with s.
394 943.05(2)(g) and (h). The office shall inform the Department of
395 Law Enforcement the name of any person whose fingerprints no
396 longer need to be retained.
397 (d) The costs of fingerprint processing, including the
398 cost of retaining the fingerprints, must be borne by the person
399 subject to the background check.
400 (e) The office shall review the results of the state and
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401 federal criminal history background checks and determine whether
402 the applicant meets the requirements for a certificate of
403 authority, certification, registration, or license to operate in
404 this state.
405 (6) Statewide criminal records obtained through the
406 Department of Law Enforcement, federal criminal records obtained
407 through the Federal Bureau of Investigation, and local criminal
408 records obtained through local law enforcement agencies must be
409 used by the office for the purpose of issuance, denial,
410 suspension, or revocation of certificates of authority,
411 certifications, registrations, or licenses required to operate
412 in this state.
413 Section 7. Paragraph (b) of subsection (2) of section
414 627.062, Florida Statutes, is amended to read:
415 627.062 Rate standards.—
416 (2) As to all such classes of insurance:
417 (b) Upon receiving a rate filing, the office shall review
418 the filing to determine if a rate is excessive, inadequate, or
419 unfairly discriminatory. In making that determination, the
420 office shall, in accordance with generally accepted and
421 reasonable actuarial techniques, consider the following factors:
422 1. Past and prospective loss experience within and without
423 this state.
424 2. Past and prospective expenses.
425 3. The degree of competition among insurers for the risk
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426 insured.
427 4. Investment income reasonably expected by the insurer,
428 consistent with the insurer's investment practices, from
429 investable premiums anticipated in the filing, plus any other
430 expected income from currently invested assets representing the
431 amount expected on unearned premium reserves and loss reserves.
432 The commission may adopt rules using reasonable techniques of
433 actuarial science and economics to specify the manner in which
434 insurers calculate investment income attributable to classes of
435 insurance written in this state and the manner in which
436 investment income is used to calculate insurance rates. Such
437 manner must contemplate allowances for an underwriting profit
438 factor and full consideration of investment income that produces
439 a reasonable rate of return; however, investment income from
440 invested surplus may not be considered.
441 5. The reasonableness of the judgment reflected in the
442 filing.
443 6. Dividends, savings, or unabsorbed premium deposits
444 allowed or returned to policyholders, members, or subscribers in
445 this state.
446 7. The adequacy of loss reserves.
447 8. The cost of reinsurance. The office may not disapprove
448 a rate as excessive solely due to the insurer having obtained
449 catastrophic reinsurance to cover the insurer's estimated 250-
450 year probable maximum loss or any lower level of loss.
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451 9. Trend factors, including trends in actual losses per
452 insured unit for the insurer making the filing.
453 10. Conflagration and catastrophe hazards, if applicable.
454 11. Projected hurricane losses, if applicable, which must
455 be estimated using a model or method found to be acceptable or
456 reliable by the Florida Commission on Hurricane Loss Projection
457 Methodology, and as further provided in s. 627.0628.
458 12. Projected flood losses for personal residential
459 property insurance, if applicable, which must may be estimated
460 using a model or method, or a straight average of model results
461 or output ranges, independently found to be acceptable or
462 reliable by the Florida Commission on Hurricane Loss Projection
463 Methodology and as further provided in s. 627.0628 for filings
464 submitted to the office after January 1, 2027.
465 13. For filings submitted to the office after January 1,
466 2027, projected comprehensive losses, if applicable, used to
467 determine a hurricane catastrophe load for private passenger
468 automobile insurance, which must be estimated using a model or
469 method found to be acceptable or reliable by the Florida
470 Commission on Hurricane Loss Projection Methodology under s.
471 627.0628.
472 14.13. A reasonable margin for underwriting profit and
473 contingencies.
474 15.14. The cost of medical services, if applicable.
475 16.15. Other relevant factors that affect the frequency or
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476 severity of claims or expenses.
477
478 The provisions of this subsection do not apply to workers'
479 compensation, employer's liability insurance, and motor vehicle
480 insurance.
481 Section 8. Paragraph (a) of subsection (1) and paragraph
482 (a) of subsection (3) of section 627.0628, Florida Statutes, are
483 amended to read:
484 627.0628 Florida Commission on Hurricane Loss Projection
485 Methodology; public records exemption; public meetings
486 exemption.—
487 (1) LEGISLATIVE FINDINGS AND INTENT.—
488 (a) Reliable projections of hurricane losses are necessary
489 in order to assure that rates for residential property insurance
490 and private passenger automobile insurance meet the statutory
491 requirement that rates be neither excessive nor inadequate. The
492 ability to accurately project hurricane losses has been enhanced
493 greatly in recent years through the use of computer modeling. It
494 is the public policy of this state to encourage the use of the
495 most sophisticated actuarial methods to assure that consumers
496 are charged lawful rates for residential property insurance and
497 private passenger automobile insurance coverage.
498 (3) ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.—
499 (a) The commission shall consider any actuarial methods,
500 principles, standards, models, or output ranges that have the
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501 potential for improving the accuracy of or reliability of the
502 hurricane loss projections used in residential property
503 insurance and private passenger automobile insurance rate
504 filings and flood loss projections used in rate filings for
505 personal lines residential flood insurance coverage. The
506 commission shall, from time to time, adopt findings as to the
507 accuracy or reliability of particular methods, principles,
508 standards, models, or output ranges.
509 Section 9. Subsection (1) of section 627.0629, Florida
510 Statutes, is amended to read:
511 627.0629 Residential property insurance; rate filings.—
512 (1) It is the intent of the Legislature that insurers
513 provide savings to consumers who install or implement windstorm
514 damage mitigation techniques, alterations, or solutions to their
515 properties to prevent windstorm losses. A rate filing for
516 residential property insurance must include actuarially
517 reasonable discounts, credits, or other rate differentials, or
518 appropriate reductions in deductibles, for properties on which
519 fixtures or construction techniques demonstrated to reduce the
520 amount of loss in a windstorm have been installed or
521 implemented. The fixtures or construction techniques must
522 include, but are not limited to, fixtures or construction
523 techniques that enhance wind uplift prevention, roof strength,
524 roof covering performance, roof-to-wall strength, wall-to-floor-
525 to-foundation strength, opening protection, and window, door,
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526 and skylight strength. Credits, discounts, or other rate
527 differentials, or appropriate reductions in deductibles, for
528 fixtures and construction techniques that meet or exceed the
529 minimum requirements of the Florida Building Code must be
530 included in the rate filing. The office shall determine the
531 minimum discounts, credits, other rate differentials, and
532 appropriate reductions in deductibles that reflect the full
533 actuarial value of such fixtures and construction techniques.
534 The office's determination may not prohibit an insurer from
535 seeking additional actuarily justified credits, discounts or
536 other rate differentials, or appropriate reductions in
537 deductibles for fixtures and construction techniques that meet
538 or exceed the minimum requirements of the Florida Building Code
539 revaluation, which may be used by insurers in rate filings.
540 Effective October 1, 2023, each insurer subject to the
541 requirements of this section must provide information on the
542 insurer's website describing the hurricane mitigation discounts
543 available to policyholders. Such information must be accessible
544 on, or through a hyperlink located on, the home page of the
545 insurer's website or the primary page of the insurer's website
546 for property insurance policyholders or applicants for such
547 coverage in this state. On or before January 1, 2025, and every
548 5 years thereafter, the office shall reevaluate and update the
549 fixtures or construction techniques demonstrated to reduce the
550 amount of loss in a windstorm and the discounts, credits, other
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551 rate differentials, and appropriate reductions in deductibles
552 that reflect the full actuarial value of such fixtures or
553 construction techniques. The office shall adopt rules and forms
554 necessitated by such reevaluation.
555 Section 10. Paragraph (b) of subsection (3) of section
556 627.0645, Florida Statutes, is amended to read:
557 627.0645 Annual filings.—
558 (3) The filing requirements of this section shall be
559 satisfied by one of the following methods:
560 (b) If no rate change is proposed, a filing which consists
561 of a certification by an actuary that the existing rate level
562 produces rates which are actuarially sound and which are not
563 inadequate, as defined in s. 627.062. However, for residential
564 property and private passenger automobile insurers, a full rate
565 filing is required after 2 consecutive years of certification
566 under this paragraph.
567 Section 11. Subsection (1) is amended and paragraphs (c),
568 (d), and (e) are added to subsection (2) of section 627.711,
569 Florida Statutes, to read:
570 627.711 Notice of premium discounts for hurricane loss
571 mitigation; uniform mitigation verification inspection form.—
572 (1) Using a form prescribed by the Office of Insurance
573 Regulation, the insurer shall clearly notify the applicant or
574 policyholder of any personal lines residential property
575 insurance policy, at the time of the issuance of the policy and
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576 at each renewal, of the availability and the range of each
577 premium discount, credit, other rate differential, or reduction
578 in deductibles, and combinations of discounts, credits, rate
579 differentials, or reductions in deductibles, for properties on
580 which fixtures or construction techniques demonstrated to reduce
581 the amount of loss in a windstorm can be or have been installed
582 or implemented. The prescribed form shall describe generally
583 what actions the policyholders may be able to take to reduce
584 their windstorm premium. The prescribed form and a list of such
585 ranges approved by the office for each insurer licensed in the
586 state and providing such discounts, credits, other rate
587 differentials, or reductions in deductibles for properties
588 described in this subsection shall be available for electronic
589 viewing and download from the Department of Financial Services'
590 or the Office of Insurance Regulation's Internet website. The
591 prescribed form must also notify the applicant or policyholder
592 if the insurer offers an enhanced discount for a roof system
593 that uses a secondary water resistance, and the form must
594 generally list the amount of discount by type of secondary water
595 resistance. The Financial Services Commission may adopt rules to
596 implement this subsection.
597 (2)
598 (c) The office shall contract with a state university to
599 design, operate, upgrade, and maintain a statewide database for
600 uniform mitigation verification inspection forms. This database
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601 must be managed by the office to collect and evaluate mitigation
602 features of residential properties within this state.
603 (d) Beginning January 1, 2027, each insurer must
604 electronically file within 15 business days after receipt a copy
605 of each uniform mitigation inspection form submitted by a
606 policyholder in the database created under paragraph (c) using
607 the electronic format prescribed by the office.
608 (e) The Financial Services Commission shall adopt rules to
609 implement this subsection.
610 Section 12. Subsection (13) of section 627.7152, Florida
611 Statutes, is renumbered as subsection (12), and subsection (12)
612 of that section is amended, to read:
613 627.7152 Assignment agreements.—
614 (12) The office shall require each insurer to report by
615 January 30, 2022, and each year thereafter data on each
616 residential and commercial property insurance claim paid in the
617 prior calendar year under an assignment agreement. The Financial
618 Services Commission shall adopt by rule a list of the data
619 required, which must include specific data about claims
620 adjustment and settlement timeframes and trends, grouped by
621 whether litigated or not litigated and by loss adjustment
622 expenses.
623 Section 13. Subsections (2) and (5) of section 627.915,
624 Florida Statutes, are amended to read:
625 627.915 Insurer experience reporting.—
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626 (2)(a) Beginning January 1, 2027, each insurer transacting
627 private passenger automobile insurance in this state must file
628 monthly with the office a report addressing all of the following
629 areas:
630 1. Policy coverage categories, including policies in force
631 and total direct premiums earned and written.
632 2. The type, location, and limits of writings in this
633 state.
634 3. Claims reporting requirements.
635 4. Any other information deemed necessary by the
636 commission to provide the office with the ability to track
637 trends occurring in the private passenger automobile insurance
638 market.
639 (b) The commission shall adopt rules specifying the
640 information required to be reported under this subsection and
641 the format required for the reports fire, homeowner's multiple
642 peril, commercial multiple peril, medical malpractice, products
643 liability, workers' compensation, private passenger automobile
644 liability, commercial automobile liability, private passenger
645 automobile physical damage, commercial automobile physical
646 damage, officers' and directors' liability insurance, or other
647 liability insurance shall report, for each such line of
648 insurance, the information specified in this subsection to the
649 office. The information shall be reported for direct Florida
650 business only and shall be reported on a calendar-year basis
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651 annually by April 1 for the preceding calendar year:
652 (a) Direct premiums written.
653 (b) Direct premiums earned.
654 (c) Loss reserves for all known claims:
655 1. At beginning of the year.
656 2. At end of the year.
657 (d) Reserves for losses incurred but not reported:
658 1. At beginning of the year.
659 2. At end of the year.
660 (e) Allocated loss adjustment expense:
661 1. Reserve at beginning of the year.
662 2. Reserve at end of the year.
663 3. Paid during the year.
664 (f) Unallocated loss adjustment expense:
665 1. Reserve at beginning of the year.
666 2. Reserve at end of the year.
667 3. Paid during the year.
668 (g) Direct losses paid.
669 (h) Underwriting income or loss.
670 (i) Commissions and brokerage fees.
671 (j) Taxes, licenses, and fees.
672 (k) Other acquisition costs.
673 (l) General expenses.
674 (m) Policyholder dividends.
675 (n) Net investment gain or loss and other income gain or
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676 loss allocated pro rata by earned premium to Florida business
677 utilizing the investment allocation formula contained in the
678 National Association of Insurance Commissioner's Profitability
679 Report by line by state.
680 (5) Any insurer or insurer group which does not write at
681 least 0.5 percent of the Florida market based on premiums
682 written shall not have to file any report required by subsection
683 (2) other than a report indicating its percentage of the market
684 share. That percentage shall be calculated by dividing the
685 current premiums written by the preceding year's total premiums
686 written in the state for that line of insurance.
687 Section 14. Section 628.8011, Florida Statutes, is created
688 to read:
689 628.8011 Group capital calculation reports.—
690 (1) As used in this section, the term:
691 (a) "Group capital calculation instructions" means the
692 group capital calculation instructions adopted by the NAIC, as
693 amended from time to time, in accordance with the procedures
694 adopted by the NAIC if the methodology remains substantially
695 consistent.
696 (b) "Group-wide supervisor" means the regulatory official
697 authorized to engage in conducting and coordinating group-wide
698 supervision activities who is determined or acknowledged by the
699 commissioner to have sufficient contacts with an internationally
700 active insurance group. As used in this paragraph, the term
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701 "internationally active insurance group" means an insurance
702 holding company system that includes an insurer registered under
703 s. 628.801(1) and which meets all of the following criteria:
704 1. Premiums written in at least three countries.
705 2. The percentage of gross premiums written outside of the
706 United States is at least 10 percent of the insurance holding
707 company system's total gross written premiums.
708 3. Based on a 3-year rolling average, the total assets of
709 the insurance holding company system are at least $50 billion or
710 the total gross written premiums of the insurance holding
711 company system are at least $10 billion.
712 (2) Except as provided in paragraph (a), the ultimate
713 controlling person of every insurer subject to registration
714 under s. 628.801 must concurrently file with the registration an
715 annual group capital calculation report on or before April 1.
716 The report must be completed in accordance with the group
717 capital calculation instructions, which permit the office to
718 allow a controlling person who is not the ultimate controlling
719 person to file the group capital calculation report. The report
720 must be filed with the lead state regulator of the insurance
721 holding company system as determined by the office in accordance
722 with the procedures within the Financial Analysis Handbook
723 adopted by the NAIC.
724 (a) The following insurance holding company systems are
725 exempt from filing a group capital calculation report:
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726 1. An insurance holding company system that has only one
727 insurer within its holding company structure, is only licensed
728 and writing business in its domestic state, and does not assume
729 business from any other insurer.
730 2. An insurance holding company system that is required to
731 perform a group capital calculation specified by the United
732 States Federal Reserve Board. The office shall request the
733 calculation from the Federal Reserve Board under the terms of
734 information sharing agreements in effect. If the Federal Reserve
735 Board cannot share the calculation with the office, the
736 exemption under this paragraph does not apply to the insurance
737 holding company system.
738 3. An insurance holding company system in which a non-
739 United States group-wide supervisor is located within a
740 reciprocal jurisdiction as described in s. 624.610(4)(a) which
741 recognizes the United States state regulatory approach to group
742 supervision and group capital.
743 4. An insurance holding company system that meets the
744 following criteria:
745 a. It provides information to the lead state that meets
746 the requirements for accreditation under the NAIC financial
747 standards and accreditation program, either directly or
748 indirectly, through the group-wide supervisor who has determined
749 such information is satisfactory to allow the lead state to
750 comply with the NAIC group supervision approach, as detailed in
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751 the NAIC Financial Analysis Handbook.
752 b. A non-United States group-wide supervisor of the
753 insurance holding company system who is not in a reciprocal
754 jurisdiction recognizes and accepts, as specified by the office
755 in regulation, the group capital calculation as the world-wide
756 group capital assessment for United States insurance groups that
757 operate in such jurisdiction.
758 (b) Notwithstanding subparagraphs (a)3. and (a)4., the
759 office shall require the group capital calculation report for
760 United States operations of any non-United States-based
761 insurance holding company system in which, after any necessary
762 consultation with other supervisors or officials, it is deemed
763 appropriate by the office for prudential oversight and solvency
764 monitoring purposes or for ensuring the competitiveness of the
765 insurance marketplace.
766 (c) Notwithstanding the exemptions provided in
767 subparagraphs (a)1.-4., the office may exempt the ultimate
768 controlling person from filing the annual group capital
769 calculation report or may accept a group capital filing or
770 report in accordance with criteria as specified in paragraphs
771 (e) and (f).
772 (d) If the office determines that an insurance holding
773 company system no longer meets one or more of the requirements
774 for an exemption from filing the group capital calculation
775 report under subsection (a), the ultimate controlling person
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776 must file the group capital calculation report at the next
777 annual filing date unless the office provides an extension based
778 on reasonable grounds shown.
779 (e) If an insurance holding company system has previously
780 filed the annual group capital calculation report at least once,
781 the office may exempt the ultimate controlling person from
782 filing the annual group capital calculation report if the office
783 determines based upon the previous filing that the insurance
784 holding company system meets all of the following criteria:
785 1. It has annual direct and unaffiliated assumed premium,
786 including international direct and assumed premium, of less than
787 $1 billion. For purposes of this subparagraph, premiums
788 reinsured with the Federal Crop Insurance Corporation and
789 Federal Flood Program are excluded from the annual direct and
790 unaffiliated assumed premium.
791 2. It does not have insurers within its holding company
792 structure which are domiciled outside of the United States or
793 one of its territories.
794 3. It does not have a banking, depository or other
795 financial entity that is subject to an identified regulatory
796 capital framework within its holding company structure.
797 4. It attests that there are no material changes in the
798 transactions between insurers and noninsurers in the group which
799 have occurred since the last filing of the annual group capital
800 calculation report.
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801 5. The noninsurers within the holding company system do
802 not pose a material financial risk to the insurer's ability to
803 honor policyholder obligations.
804 (f) If an insurance holding company system has previously
805 filed the annual group capital calculation report at least once,
806 the office may accept a limited group capital filing in lieu of
807 the annual group capital calculation report if:
808 1. The insurance holding company system has annual direct
809 written and unaffiliated assumed premium, including
810 international direct and assumed premium, of less than $1
811 billion. For purposes of this subparagraph, premiums reinsured
812 with the Federal Crop Insurance Corporation and Federal Flood
813 Program are excluded.
814 2. The insurance holding company system does not have
815 insurers within its holding company structure who are domiciled
816 outside of the United States or one of its territories.
817 3. The insurance holding company system does not include a
818 banking, depository, or other financial entity that is subject
819 to an identified regulatory capital framework.
820 4. The insurance holding company system attests that there
821 are no material changes in transactions between insurers and
822 noninsurers in the group which have occurred since the last
823 filing of the report to the office and the noninsurers within
824 the holding company system do not pose a material financial risk
825 to the insurer's ability to honor policyholder obligations.
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826 (g) If an insurance holding company system that has
827 previously had an exemption with respect to the group capital
828 calculation report under paragraph (e) or paragraph (f), the
829 office may require at any time the ultimate controlling person
830 to file an annual group capital calculation report, completed in
831 accordance with the group capital calculation instructions, if
832 any of the following criteria are met:
833 1. An insurer within the insurance holding company system
834 is in a risk-based capital action level event as set forth in s.
835 624.4085 or a similar standard for a non-United States insurer.
836 2. An insurer within the insurance holding company system
837 meets one or more of the standards of an insurer deemed to be in
838 a hazardous financial condition as provided in s. 624.805.
839 3. An insurer within the insurance holding company system
840 otherwise exhibits qualities of a troubled insurer as determined
841 by the office based on unique circumstances including, but not
842 limited to, the type and volume of business written, ownership
843 and organizational structure, federal agency requests, and
844 international supervisor requests.
845 (h) The office shall establish by rule criteria for
846 satisfying when a non-United States jurisdiction is considered
847 to "recognize and accept" the group capital calculation report.
848 (i) The office must publish on its website a list of non-
849 United States jurisdictions that "recognize and accept" the
850 group capital calculation report.
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851 (j) The commission may adopt rules for filing the annual
852 group capital calculation report in accordance with the
853 Insurance Holding Company System Regulatory Act of the NAIC and
854 the Insurance Holding Company System Model Regulation of the
855 NAIC, as adopted in December 2020.
856 Section 15. Section 628.8012, Florida Statutes, is created
857 to read:
858 628.8012 Liquidity Stress Test Framework.—
859 (1) As used in this section, the term:
860 (a) "Liquidity Stress Test Framework" means the NAIC
861 Liquidity Stress Test Framework for Life Insurers Meeting the
862 Scope Criteria, the scope criteria applicable for a specific
863 data year, and the liquidity stress test instructions and
864 reporting templates for a specific data year. The term includes
865 amended versions of these documents if the methodology remains
866 substantially consistent.
867 (b) "Scope criteria" means the designated exposure bases
868 along with minimum magnitudes thereof for the specified data
869 year used to establish a preliminary list of insurers considered
870 scoped into the Liquidity Stress Test Framework, and as amended
871 if the methodology remains substantially consistent, for that
872 data year.
873 (c) "Scoped" means meeting at least one threshold of the
874 scope criteria and being subject to the requirements of the
875 Liquidity Stress Test Framework.
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876 (2)(a) The ultimate controlling person of every insurer
877 subject to registration and also scoped into the Liquidity
878 Stress Test Framework shall annually file the results of a
879 specific year's liquidity stress test on or before April 1. The
880 results must be filed with the office as the lead state
881 regulator of the insurance holding company system as determined
882 by the procedures within the Financial Analysis Handbook adopted
883 by the NAIC.
884 (b) Scoped insurers are exempt from the requirement under
885 paragraph (a) if the office, in consultation with the NAIC
886 Financial Stability Task Force or its successor, determines the
887 insurer should not be scoped into the Liquidity Stress Test
888 Framework for that data year.
889 (c) The performance of, and filing of the results from, a
890 specific year's liquidity stress test must comply with the
891 Liquidity Stress Test Framework's instructions and reporting
892 templates for that year and any office determinations, in
893 conjunction with the NAIC Financial Stability Task Force or its
894 successor, provided within the Liquidity Stress Test Framework.
895 (d) The office may adopt rules for filing the results of
896 the liquidity stress test in accordance with the Insurance
897 Holding Company System Regulatory Act of the NAIC and the
898 Insurance Holding Company System Model Regulation of the NAIC,
899 as adopted in December 2020.
900 Section 16. Section 628.8013, Florida Statutes, is created
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901 to read:
902 628.8013 Rebuttal of materially false statements.—
903 (1) The group capital calculation report and resulting
904 group capital ratio and the liquidity stress test, as provided
905 in s. 628.8012, along with its results and supporting
906 disclosures required under this section are regulatory tools for
907 assessing group risks and capital adequacy and group liquidity
908 risks, respectively, and are not intended as a means to rank
909 insurers or insurance holding company systems generally.
910 (2) Any representation or statement by any insurer,
911 broker, or other person engaged in any manner in the business of
912 insurance is prohibited with regard to an insurer’s or insurer's
913 group's:
914 (a) Group capital calculation report.
915 (b) Group capital ratio.
916 (c) Liquidity stress test results.
917 (d) Supporting disclosures for the liquidity stress test.
918 (e) Any component derived in the group capital
919 calculation.
920 (3) If a representation or statement prohibited under
921 subsection (2) is published in a written publication and the
922 insurer is able to demonstrate to the office with substantial
923 proof the falsity or inappropriateness, as the case may be, of
924 such representation or statement then the insurer may publish
925 announcements in a written publication if the sole purpose of
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926 the announcement is to rebut the materially false representation
927 or statement.
928 Section 17. Section 629.53, Florida Statutes, is created
929 to read:
930 629.53 Application for registration to operate as an
931 attorney in fact.—
932 (1) It is unlawful for any person to operate as an
933 attorney in fact of a reciprocal insurer without first having
934 obtained a registration from the office.
935 (2) The application for an attorney in fact registration
936 must be made, under oath, to the office by the applicant on a
937 form prescribed by the commission. The office may not require an
938 applicant to pay a fee for the registration or for filing an
939 application for such registration.
940 (3) In the application, the applicant must provide all of
941 the following information:
942 (a) All basic organizational documents, and any amendments
943 to such documents, of the applicant dated within the last year
944 and appropriately certified.
945 (b) The bylaws, rules, and regulations or similar
946 documents regulating the conduct of the internal affairs of the
947 applicant, other applicable documents, and all amendments to
948 those documents, dated within the last year and appropriately
949 certified.
950 (c) A copy of the most recent financial statement of the
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951 applicant, verified under oath by at least two of the
952 applicant's principal officers.
953 (d) A detailed plan of operation.
954 (e) An e-mail address at which the applicant agrees to
955 accept electronic service from the office.
956 (f) The background information specified in s. 629.227 for
957 each individual who is responsible for the conduct of the
958 applicant's affairs, including, but not limited to, any manager,
959 member, member of a board of directors, board of trustees,
960 executive committee, or other governing board or committee and
961 any other person or entity owning or having the right to acquire
962 10 percent or more of the voting securities or ownership
963 interest of the applicant.
964 (g) Any other information as the office reasonably
965 requires.
966 (4) Upon the filing of a sworn application, the office
967 must investigate each applicant and may issue the applicant a
968 registration if the office finds that the applicant:
969 (a) Is competent and trustworthy and intends to act in
970 good faith in the business authorized by the registration for
971 which the applicant applied.
972 (b) Has management that has a good business reputation and
973 has had experience, training, or education that qualifies the
974 applicant to conduct the business authorized by the registration
975 for which the applicant applied.
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976 (c) Has a business plan that is consistent with the
977 interests of potential insureds and the public.
978 Section 18. Section 629.54, Florida Statutes, is created
979 to read:
980 629.54 Registration expiration; renewal.—Each registration
981 for an attorney in fact issued under this chapter automatically
982 renews on March 1 of each year, provided the attorney in fact
983 remains qualified under this chapter. The office may not require
984 an attorney in fact to pay a fee for the renewal of the
985 registration.
986 Section 19. Section 629.55, Florida Statutes, is created
987 to read:
988 629.55 Grounds for denial, suspension, or revocation of
989 registration.—The office may deny, suspend, revoke, or refuse to
990 renew the registration of an attorney in fact if the office
991 determines that the attorney in fact:
992 (1) Has violated any lawful rule or order of the
993 commission or office or any applicable provision of the
994 insurance code.
995 (2) Has used or is using methods or practices in the
996 conduct of its business which render its further transaction of
997 business in this state hazardous or injurious to insured persons
998 or the public.
999 (3) Has refused to be examined or to produce its accounts,
1000 records, and files for examination, or if any of its officers,
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1001 or persons in similar positions, have refused to give
1002 information with respect to its affairs or has refused to
1003 perform any other legal obligation as to such examination when
1004 required by the office.
1005 (4) Is or was affiliated with and under the same general
1006 management or interlocking directorate or ownership as another
1007 attorney in fact who transacts business in this state without
1008 having a registration required by this chapter.
1009 (5) At any time fails to meet any qualification for which
1010 issuance of the registration could have been refused had such
1011 failure then existed and been known to the office.
1012 (6) Is under suspension or revocation in this or any other
1013 state for any license relating to the business of insurance
1014 which the attorney in fact holds.
1015 (7) A proceeding for receivership, conservatorship,
1016 rehabilitation, or other delinquency proceeding regarding the
1017 attorney in fact, or an insurer with which the attorney in fact
1018 has a contractual relationship, has been commenced in any state.
1019 (8) The financial condition or business practices of the
1020 attorney in fact otherwise pose an imminent threat to the
1021 health, safety, or welfare of the residents of this state.
1022 Section 20. Section 629.56, Florida Statutes, is created
1023 to read:
1024 629.56 Order of suspension or revocation of registration;
1025 notice.—
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1026 (1) The suspension or revocation of a registration of an
1027 attorney in fact is effected by order of the office when such
1028 order is mailed to the attorney in fact by registered or
1029 certified mail and sent electronically to the e-mail address
1030 maintained by the attorney in fact with the office for such
1031 purpose.
1032 (2) The office may publish notice of any such revocation
1033 or suspension in one or more newspapers of general circulation
1034 published in this state.
1035 Section 21. Section 629.57, Florida Statutes, is created
1036 to read:
1037 629.57 Period of suspension; obligations during
1038 suspension; reinstatement.—
1039 (1) The registration of an attorney in fact is suspended
1040 for the time period provided in the order of suspension, which
1041 may not exceed 1 year, unless such suspension or the order upon
1042 which the suspension is based is modified, rescinded, or
1043 reversed.
1044 (2) Upon expiration of the suspension period the
1045 registration is automatically reinstated as long as the
1046 registration has not otherwise terminated, unless the reasons
1047 for the suspension have not been remedied.
1048 Section 22. Section 629.58, Florida Statutes, is created
1049 to read:
1050 629.58 Administrative fine in lieu of suspension,
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1051 revocation, or nonrenewal.—
1052 (1) If the office finds that one or more grounds exist for
1053 the suspension, revocation, or nonrenewal of the registration of
1054 an attorney in fact issued under this chapter, the office may,
1055 in lieu of suspension or revocation, impose a fine upon the
1056 attorney in fact.
1057 (2) With respect to any nonwillful violation, the office
1058 may impose a fine upon the attorney in fact in an amount up to
1059 $5,000 for each violation. However, a fine may not exceed an
1060 aggregate amount of $50,000 for all nonwillful violations
1061 arising out of the same action.
1062 (3) With respect to any knowing and willful violation, the
1063 office may impose a fine upon the attorney in fact in an amount
1064 up to $25,000 for each violation. However, a fine may not exceed
1065 an aggregate amount of $250,000 for all knowing and willful
1066 violations arising out of the same action.
1067 (4) With respect to a knowing and willful violation of a
1068 lawful order or rule of the office or commission or of a
1069 provision of this code during a period in which the Governor
1070 declared a state of emergency pursuant to s. 252.36, the office
1071 may impose a $200,000 fine upon an attorney in fact for each
1072 violation, up to an aggregate amount of $1 million for all
1073 knowing and willful violations arising out of the same action
1074 relating to a covered loss or claim caused by the emergency.
1075 (5) A fine imposed by the office on the attorney in fact
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1076 may not be borne by the insurer.
1077 Section 23. Subsection (1) of section 634.141, Florida
1078 Statutes, is amended to read:
1079 634.141 Examination of companies.—
1080 (1) Motor vehicle service agreement companies licensed
1081 under this part may be subject to periodic examination by the
1082 office in the same manner and subject to the same terms and
1083 conditions as apply to insurers under part II of chapter 624.
1084 The office is not required to conduct periodic examinations
1085 pursuant to this section, but may examine a service agreement
1086 company at its discretion. An examination conducted pursuant to
1087 this section may cover a period of only the most recent 5 years.
1088 The costs of examinations conducted pursuant to ss.
1089 624.316(2)(e) and 624.3161(4) ss. 624.316(2)(e) and 624.3161(3)
1090 may not exceed 10 percent of the companies' reported net income
1091 for the prior year. The commission may by rule establish
1092 provisions whereby a company may be exempted from examination.
1093 Section 24. Section 634.314, Florida Statutes, is amended
1094 to read:
1095 634.314 Examination of associations.—Home warranty
1096 associations licensed under this part may be subject to periodic
1097 examinations by the office, in the same manner and subject to
1098 the same terms and conditions as apply to insurers under part II
1099 of chapter 624 of the insurance code. The office is not required
1100 to conduct periodic examinations pursuant to this section, but
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1101 may examine a home warranty company at its discretion. An
1102 examination conducted pursuant to this section may cover a
1103 period of only the most recent 5 years. The costs of
1104 examinations conducted pursuant to ss. 624.316(2)(e) and
1105 624.3161(4) ss. 624.316(2)(e) and 624.3161(3) may not exceed 10
1106 percent of the companies' reported net income for the prior
1107 year.
1108 Section 25. Subsection (1) of section 634.416, Florida
1109 Statutes, is amended to read:
1110 634.416 Examination of associations.—
1111 (1) Service warranty associations licensed under this part
1112 may be subject to periodic examination by the office, in the
1113 same manner and subject to the same terms and conditions that
1114 apply to insurers under part II of chapter 624. The office is
1115 not required to conduct periodic examinations pursuant to this
1116 section, but may examine a service warranty company at its
1117 discretion. An examination conducted pursuant to this section
1118 may cover a period of only the most recent 5 years. The costs of
1119 examinations conducted pursuant to ss. 624.316(2)(e) and
1120 624.3161(4) ss. 624.316(2)(e) and 624.3161(3) may not exceed 10
1121 percent of the companies' reported net income for the prior
1122 year.
1123 Section 26. This act shall take effect July 1, 2026.
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FLORIDA HOUSE OF REPRESENTATIVES
BILL ANALYSIS
This bill analysis was prepared by nonpartisan committee staff and does not constitute an official statement of legislative intent.
BILL #: PCS for HB 1265 COMPANION BILL: None
TITLE: Public Records/Office of Insurance Regulation LINKED BILLS: PCS for HB 1263
SPONSOR(S): Insurance & Banking Subcommittee RELATED BILLS: None
Committee References
Orig. Comm.: Insurance & Banking
SUMMARY
Effect of the Bill:
The bill makes confidential and exempt from Florida public records laws:
Proprietary business information held by the Office of Insurance Regulation (“OIR”) contained in the group
capital calculation and liquidity stress test created by PSC/HB 1263.
Biographical statements, biographical affidavits, or supplementary materials that were provided to or
obtained by OIR pursuant to OIR’s authority under the Florida Insurance Code.
The bill also creates a privilege for any documents, materials, or other information obtained by the Commissioner
of Insurance or the National Association of Insurance Commissioners (“NAIC”) in the course of an examination or
analysis of the financial condition or market conduct of a company.
The bill provides the constitutionally required public necessity statement, and provides that the exemptions will be
automatically repealed on October 2, 2031 unless reenacted by the Legislature.
Fiscal or Economic Impact:
None
Extraordinary Vote Required for Passage:
The bill requires a two-thirds vote of the members present and voting in both houses of the Legislature for final
passage.
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ANALYSIS
EFFECT OF THE BILL:
The bill creates a privilege for any documents, materials, or other information obtained by or disclosed to the
Commissioner of Insurance (“commissioner”) or the National Association of Insurance Commissioners (“NAIC”) in
the course of an examination or analysis of the financial condition or market conduct of a company. This means
that the information may not be subject to subpoena or discovery, and may not be admissible in evidence in any
private civil action. (Section 1).
The bill prohibits the commissioner, or any person acting under the authority of the commissioner, including the
NAIC, from testifying in any private civil action regarding any documents, materials, or information made
privileged by the bill. (Section 1).
The bill allows the commissioner to share privileged documents, materials, or other information with, and receive
from, other state, federal, and international regulatory or law enforcement agencies, the NAIC, and the NAIC’s
STORAGE NAME: PCS1265.IBS
DATE: 2/9/2026
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affiliates and subsidiaries. This sharing of information, or any other disclosure to the commissioner, does not result
in a waiver of the privilege created by the bill. (Section 1).
The public necessity statement provides that the Legislature finds that it is necessary to exempt documents,
materials, and other information obtained by or provided to OIR in the course of examinations, investigations, and
analyses of the financial condition or market conduct to protect sensitive proprietary business information, trade
secrets, and financial data that could affect the competitiveness of insurers if made public. (Section 2).
The bill makes confidential and exempt from Florida’s public records laws any proprietary business information
held by the Office of Insurance Regulation ("OIR") contained in the group capital calculation and the liquidity stress
test created by PCS/HB 1263. (Section 3).
The bill includes the constitutionally required public necessity statement, in which the Legislature finds that
exempting proprietary business information provided to OIR as part of the group capital calculation and liquidity
stress test results is necessary to allow OIR to effectively regulate insurer solvency and valuation without revealing
trade secrets and proprietary data that could impair the competitive business of insurers. (Section 4).
The bill makes confidential and exempt biographical statements, biographical affidavits, or supplementary
materials that were provided to or obtained by OIR pursuant to OIR’s authority under the Florida Insurance Code.
The exemption applies to information provided to or obtained by OIR before, on, or after the effective date of the
bill. (Section 3).
The public necessity statement provides that the Legislature finds that it necessary to exempt biographical
statements, biographical affidavits, or supplementary materials provided to or obtained by OIR to ensure the
confidentiality and safety of the individuals and to ensure that insurers provide complete and candid information
to OIR so that regulators can effectively and efficiently implement the Florida Insurance Code . (Section 4).
Pursuant to the Open Government Sunset Review Act, the exemptions will be automatically repealed October 2,
2031, unless reenacted by the Legislature. (Sections 1 and 3).
The bill provides that it shall take effect on the same date that HB 1263 or similar legislation takes effect, if such
legislation is adopted in the same legislative session and becomes law. HB 1263 has an effective date of July 1,
2026. (Section 5).
RELEVANT INFORMATION
SUBJECT OVERVIEW:
Office of Insurance Regulation ("OIR")
OIR regulates all activities relating to insurers and other risk bearing entities, including licensing, rates, policy
forms, marked conduct, claims, issuance of certificates of authority, solvency, viatical settlements, premium
financing, and administrative supervision.1 OIR is responsible for examining the affairs, transactions, accounts,
records, and assets of each authorized insurer in the state.2 As part of that process, insurers must make available all
records relating to the subject of the examination.3 OIR is also authorized to carry out market conduct
examinations to determine compliance with the Florida Insurance Code.4
1 S. 20.121(3)(a), F.S.
2 S. 624.316(1)(a), F.S.
3 S. 624.318(2), F.S.
4 S. 624.3161, F.S.
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Privilege
Under the law of evidence, certain communications and documents are privileged and therefore protected from
disclosure.5 Privileged communications and information are not subject to discovery and may not be admitted
through testimony.6 These privileges are intended to further public policy goals, including full and candid
communications within certain relationships.7
Financial Examinations and Market Conduct Examinations of Insurers
OIR is required to examine the affairs, transactions, accounts, records, and assets of each authorized insurer and
the attorney in fact of a reciprocal insurer as often as needed.8 Some insurers must be examined more frequently.
High-risk insurers must be examined at least once every three years, and average and low risk insurers must be
examined at least once every five years.9 OIR may extend these examinations to the insurer’s managing general
agents and controlling or controlled person.10
Public Records
Article I, Section 24(a) of the Florida Constitution sets forth the state’s public policy regarding access to
government records. This section guarantees every person the right to inspect or copy any public record of the
legislative, executive, and judicial branches of government.11
The Legislature, however, may provide by general law for exemption12 from public record requirements if two-
thirds vote of each chamber pass the exemption, it states with specificity the public necessity justifying the
exemption, and it is no broader than necessary to meet its public purpose.13
The Florida Statutes also address the public policy regarding access to government records. Section 119.01(1), F.S.,
guarantees every person the right to inspect and copy any state or local record, unless the record is exempt.14
Confidential and Exempt Records
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.15
Public Necessity Statement
The Open Government Sunset Review Act16 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
5 Cornell Law School Legal Information Institute, Privilege (last updated July, 2025),
https://www.law.cornell.edu/wex/privilege (last visited Feb. 3, 2026).
6 Id.
7 Id.
8 S. 624.316(1)(a), F.S.
9 S. 624.316(2), F.S.
10 S. 624.316(1)(a), F.S.
11 Art. I, s. 24(a), Fla. Const.
12 A public record exemption means a provision of general law which provides that a specified record, or a portion of a record,
is not subject to the access requirements of s. 119.07(1) or Art. I, s 24 of the Florida Constitution. See s. 119.011(8), F.S.
13 Art. I, s. 24(c), Fla. Const.
14 See s. 119.071, F.S.
15 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 Op. Att’y Gen. Fla. 85-62 (August 1, 1985).
16 S. 119.15, F.S.
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compelling to override the strong public policy of open government and cannot be accomplished without the
exemption.17 An identifiable public purpose is served if the exemption meets one of the following purposes: 18
allows the state or its political subdivisions to effectively and efficiently administer a governmental
program, which administration would be significantly impaired without the exemption;
protects 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
protects trade or business secrets.
Open Government Sunset Review Act
The Open Government Sunset Review Act provides that 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.19
Group Capital Calculation and Liquidity Stress Test
The National Association of Insurance Commissioners (“NAIC”) is the standard-setting and regulatory organization
created and governed by the chief insurance regulators from the 50 states, the District of Columbia, and five United
States territories.20 The organization sets standards and regulatory best practices.
In December 2020, the NAIC adopted amendments to the NAIC Holding Company Model Act. These amendments
included implementing a group capital calculation and liquidity stress framework, with the goal of providing
insurance regulators with more tools for conducting group-wide supervision of holding companies.21 Specifically,
the NAIC has noted that the group capital calculation will:22
provide key financial information on the insurance group;
quantify risk across the insurance group:
support transparency into how capital is allocated; and
aid regulators in understanding whether and to what degree insurance companies are supporting the
operations of non-insurance entities.
The NAIC has indicated that implementation of these revisions will likely become an NAIC accreditation
requirement on January 1, 2026.23 According to the NAIC, its accreditation program fosters inter-state cooperation,
reduces duplicative regulation, and provides baseline consumer protections.24 NAIC accreditation allows regulators
of multi-state insurers to rely on the domiciliary state’s solvency regulations to avoid duplication of effort and
expense.25 For example, instead of performing its own examination, a state may accept the examination report
prepared by an insurance department that was accredited at the time of examination.26 According to the NAIC, this
cooperation saves insurance companies, and thus consumers, millions of dollars.27 The loss of accreditation could
lead to the loss of domestic insurers.28
17 S. 119.15(6)(b), F.S.
18 Id.
19 S. 119.15(3), F.S.
20 National Association of Insurance Commissioners (“NAIC”), What is the NAIC and what does it do?,
https://content.naic.org/sites/default/files/about-naic.pdf (last visited Feb. 3, 2026).
21 NAIC, The NAIC Group Capital Calculation, Liquidity Stress Test, and Receivership Provisions (August 2025),
http://content.naic.org/sites/default/files/government-affairs-brief-gccc-liquidity-receivership.pdf (last visited Feb. 2, 2026).
22 Id.
23 Id.
24 NAIC, The NAIC Accreditation Program (Jan. 2024), https://content.naic.org/sites/default/files/government-affairs-brief-
accreditation-program.pdf (last visited Feb, 3, 2026).
25 Id.
26 Id.
27 Id.
28 Id.
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Biographical Statements, Biographical Affidavits, and Supplementary Materials
Biographical statements and affidavits are required as an application material for several licenses and certificates
of authority under the Florida Insurance Code, including:
Permit to form a domestic insurer;
o the application requires sworn biographical statements of each person associated in the formation
or financing of the insurer.29
Reciprocal insurers;
o the application to organize requires sworn biographical statements for all officers, directors,
managers, and those in equivalent positions of the proposed attorney in fact as well as for any
person with an ownership interest of 10% or more in the proposed attorney in fact.30
License to operate a captive insurance or reinsurance company;
o the application must include biographical affidavits for all officers and directors of the proposed
company.31
Certificate of authority to act as an administrator;
o the application requires those applicants that are pharmacy benefit managers to submit a complete
biographical statement.32
Prepaid limited health service organization certificate of authority;
o the application must include a complete biographical statement for individuals who are responsible
for conducting the applicant’s affairs, including, but not limited to, all members of the board of
directors, board of trustees, executive committee, or other governing board or committee, the
officers, contracted management company personnel, and any person or entity owning or having
the right to acquire 10 percent or more of the voting securities of the applicant.33
Viatical settlement provider license;
o the application must include a sworn biographical statement of each individual responsible for
conduct of the applicant’s affairs, including members of the board of directors, board of trustees,
executive committee, or other governing board or committee, or anyone having the right to acquire
10% or more of the voting securities of the applicant.34
Life expectancy provider registration;
o the application must include a sworn biographical statement of each individual responsible for
conduct of the applicant’s affairs, including members of the board of directors, board of trustees,
executive committee, or other governing board or committee, or anyone having the right to acquire
10% or more of the voting securities of the applicant.35
BILL HISTORY
STAFF
DIRECTOR/ ANALYSIS
COMMITTEE REFERENCE ACTION DATE POLICY CHIEF PREPARED BY
Orig. Comm.: Insurance & Banking Brackett Miguez
Subcommittee
29 S. 628.051(2)(b), F.S.
30 S. 629.227(1), F.S. and s. 629.081(2)(g), F.S.
31 S. 628.906(1), F.S.
32 S. 626.8805(3)(a), F.S.
33 S. 636.008(4), F.S.
34 S. 626.9912(3)(e), F.S.
35 S. 626.99175(4)(e), F.S.
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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
PCS for HB 1265 ORIGINAL 2026
1 A bill to be entitled
2 An act relating to public records; creating s. 624.28,
3 F.S.; creating a privilege for documents, materials,
4 and other information obtained by the Commissioner of
5 Insurance Regulation or the National Association of
6 Insurance Commissioners in the course of an
7 examination or analysis; prohibiting the commissioner
8 and certain persons from testifying in certain private
9 civil actions; authorizing the commissioner to share
10 certain information under certain circumstances;
11 providing for reciprocity; providing definitions;
12 providing for future legislative review and repeal of
13 the privilege; providing a statement of public
14 necessity; amending s. 624.4212, F.S.; providing an
15 exemption from public records requirements for certain
16 proprietary business information provided to the
17 Office of Insurance Regulation by an insurer;
18 providing an exemption from public records
19 requirements for certain biographical statements,
20 biographical affidavits, and supplementary materials
21 related thereto provided to or obtained by the office;
22 providing for future legislative review and repeal of
23 the exemptions; providing statements of public
24 necessity; providing a contingent effective date.
25
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26 Be It Enacted by the Legislature of the State of Florida:
27
28 Section 1. Section 624.28, Florida Statutes, is created to
29 read:
30 624.28 Privilege for ancillary information.—
31 (1)(a) Documents, materials, or other information,
32 including, but not limited to, all work papers subject to s.
33 624.319(3)(b)1., and copies thereof, created, produced, or
34 obtained by or disclosed to the Commissioner of Insurance
35 Regulation or any other person in the course of an examination
36 made under the Florida Insurance Code, or in the course of an
37 analysis by the commissioner of the financial condition or
38 market conduct of a company, shall be privileged, shall not be
39 subject to subpoena, and shall not be subject to discovery or
40 admissible in evidence in any private civil action. The
41 commissioner may use the documents, materials, or other
42 information in the furtherance of any regulatory or legal action
43 brought as part of the commissioner's official duties.
44 (b) Documents, materials, or other information, including,
45 but not limited to, all work papers subject to s.
46 624.319(3)(b)1., and copies thereof, in the possession or
47 control of the National Association of Insurance Commissioners
48 and its affiliates and subsidiaries shall be privileged, shall
49 not be subject to subpoena, and shall not be subject to
50 discovery or admissible in evidence in any private civil action
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51 if they are created, produced, or obtained by or disclosed to
52 the National Association of Insurance Commissioners and its
53 affiliates and subsidiaries in the course of assisting in an
54 examination or assisting the commissioner in the analysis of the
55 financial condition or market conduct of a company.
56 (2) The commissioner and any person who received the
57 documents, materials, or other information while acting under
58 the authority of the commissioner, including the National
59 Association of Insurance Commissioners and its affiliates and
60 subsidiaries, may not testify in any private civil action
61 concerning any privileged documents, materials, or other
62 information subject to subsection (1).
63 (3) In order to assist in the performance of his or her
64 duties, the commissioner may:
65 (a) Share documents, materials, or other information,
66 including the privileged documents, materials, or other
67 information subject to subsection (1), with other state,
68 federal, and international regulatory agencies, with the
69 National Association of Insurance Commissioners and its
70 affiliates and subsidiaries, and with state, federal, and
71 international law enforcement authorities, provided that the
72 recipient agrees to maintain the privileged status of the
73 document, material, or other information.
74 (b) Receive documents, materials, or other information,
75 including the privileged documents, materials, or other
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76 information subject to subsection (1), from the National
77 Association of Insurance Commissioners and its affiliates and
78 subsidiaries, and from regulatory and law enforcement officials
79 of other foreign or domestic jurisdictions, and shall maintain
80 as confidential or privileged any document, material, or other
81 information received with notice or the understanding that it is
82 confidential or privileged under the laws of the jurisdiction
83 that is the source of the document, material, or other
84 information.
85 (4) A waiver of any applicable privilege or claim of
86 confidentiality in the documents, materials, or other
87 information may not occur as a result of disclosure to the
88 commissioner under this section or as a result of sharing as
89 authorized in subsection (3).
90 (5) A privilege established under the law of any state or
91 jurisdiction that is substantially similar to the privilege
92 established under this section shall be available and enforced
93 in any proceeding in, and in any court of, this state.
94 (6) As used in this section, the terms "Commissioner of
95 Insurance Regulation," "National Association of Insurance
96 Commissioners," "affiliates," and "subsidiaries" include, but
97 are not limited to, their employees, agents, consultants, and
98 contractors.
99 (7) This section is subject to the Open Government Sunset
100 Review Act in accordance with s. 119.15 and is repealed on
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101 October 2, 2031, unless reviewed and saved from repeal through
102 reenactment by the Legislature.
103 Section 2. The Legislature finds that it is a public
104 necessity that documents, materials, and other information
105 obtained by or provided to the Office of Insurance Regulation in
106 the course of examinations, investigations, and analyses of the
107 financial condition or market conduct of insurance companies be
108 made confidential and exempt from s. 119.07(1), Florida
109 Statutes, and s. 24(a), Article I of the State Constitution.
110 This information contains sensitive proprietary business
111 information, trade secrets, and financial data that, if made
112 public, could affect the competitiveness of insurers.
113 Section 3. Paragraph (g) is added to subsection (2) of
114 section 624.4212, Florida Statutes, and subsection (6) is added
115 to that section, to read:
116 624.4212 Confidentiality of proprietary business and other
117 information.—
118 (2) Proprietary business information contained in the
119 following items held by the office is confidential and exempt
120 from s. 119.07(1) and s. 24(a), Art. I of the State
121 Constitution:
122 (g)1. The group capital calculation required under s.
123 628.8011 and information related thereto.
124 2. The liquidity stress test required under s. 628.8012
125 and information related thereto.
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126
127 This paragraph is subject to the Open Government Sunset Review
128 Act in accordance with s. 119.15 and is repealed on October 2,
129 2031, unless reviewed and saved from repeal through reenactment
130 by the Legislature.
131 (6) Biographical statements, biographical affidavits, or
132 supplementary materials related thereto provided to or obtained
133 by the office pursuant to the office's authorities under the
134 Florida Insurance Code are confidential and exempt from s.
135 119.07(1) and s. 24(a), Art. I of the State Constitution. This
136 exemption applies to information provided to or obtained by the
137 office before, on, or after July 1, 2026. This subsection is
138 subject to the Open Government Sunset Review Act in accordance
139 with s. 119.15 and is repealed on October 2, 2031, unless
140 reviewed and saved from repeal through reenactment by the
141 Legislature.
142 Section 4. (1) The Legislature finds that it is a public
143 necessity that proprietary business information provided to the
144 Office of Insurance Regulation by an insurer pursuant to ss.
145 628.8011 and 628.8012, Florida Statutes, be made confidential
146 and exempt from s. 119.07(1), Florida Statutes, and s. 24(a),
147 Article I of the State Constitution. This exemption is necessary
148 to allow the office to effectively regulate insurer solvency and
149 valuation without revealing trade secrets and proprietary data
150 that could impair the competitive business of the insurers.
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151 (2) The Legislature further finds that it is a public
152 necessity that biographical statements, biographical affidavits,
153 and supplementary materials related thereto provided to or
154 obtained by the office be made confidential and exempt from s.
155 119.07(1), Florida Statutes, and s. 24(a), Article I of the
156 State Constitution to ensure the confidentiality and safety of
157 the applicants. This exemption is necessary to ensure that
158 insurers provide complete and candid information to regulators
159 so that they can effectively and efficiently implement the
160 Florida Insurance Code.
161 Section 5. This act shall take effect on the same date
162 that HB 1263 or similar legislation takes effect, if such
163 legislation is adopted in the same legislative session or an
164 extension thereof and becomes a law.
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