Bill Amendment: FL S1402 | 2022 | Regular Session
NOTE: For additional amemendments please see the Bill Drafting List
Bill Title: Domestic Surplus Lines Insurers
Status: 2022-03-14 - Died in Messages [S1402 Detail]
Download: Florida-2022-S1402-Senate_Floor_Amendment_Delete_All_906044.html
Bill Title: Domestic Surplus Lines Insurers
Status: 2022-03-14 - Died in Messages [S1402 Detail]
Download: Florida-2022-S1402-Senate_Floor_Amendment_Delete_All_906044.html
Florida Senate - 2022 SENATOR AMENDMENT
Bill No. SB 1402
Ì906044ÇÎ906044
LEGISLATIVE ACTION
Senate . House
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Senator Burgess moved the following:
1 Senate Amendment (with title amendment)
2
3 Delete everything after the enacting clause
4 and insert:
5 Section 1. Section 626.914, Florida Statutes, is amended to
6 read:
7 626.914 Definitions.—As used in this Surplus Lines Law, the
8 term:
9 (5)(1) “Surplus lines agent” means an individual licensed
10 as provided in this part to handle the placement of insurance
11 coverages with unauthorized insurers and to place such coverages
12 with authorized insurers as to which the licensee is not
13 licensed as an agent.
14 (2) “Domestic surplus lines insurer” means a nonadmitted
15 insurer domiciled in this state that:
16 (a) Has been deemed eligible and authorized by the office
17 to write surplus lines insurance; and
18 (b) May write surplus lines insurance in any jurisdiction,
19 including this state. The authorization to write surplus lines
20 insurance is not contingent on the company’s holding of an
21 existing certificate of authority.
22
23 The term does not include an authorized insurer as defined in s.
24 624.09.
25 (3)(2) “Eligible surplus lines insurer” means:
26 (a) An unauthorized insurer that which has been made
27 eligible by the office to issue insurance coverage under this
28 Surplus Lines Law; or
29 (b) A domestic surplus lines insurer.
30 (4)(3) “Export” “To export” means to place, in an
31 unauthorized insurer under this Surplus Lines Law, insurance
32 covering a subject of insurance resident, located, or to be
33 performed in this state.
34 (1)(4) “Diligent effort” means seeking coverage from and
35 having been rejected by at least three authorized insurers
36 currently writing this type of coverage and documenting these
37 rejections. However, if the residential structure has a dwelling
38 replacement cost of $700,000 or more, the term means seeking
39 coverage from and having been rejected by at least one
40 authorized insurer currently writing this type of coverage and
41 documenting this rejection.
42 Section 2. Section 626.91805, Florida Statutes, is created
43 to read:
44 626.91805 Domestic surplus lines insurers.—
45 (1) As used in this section, the term “nonadmitted insurer”
46 has the same meaning as provided in the federal Nonadmitted and
47 Reinsurance Reform Act of 2010.
48 (2) Notwithstanding any other law, a nonadmitted insurer
49 possessing a policyholder surplus of at least $15 million may,
50 under a resolution by its board of directors and with the
51 written approval of the office, be eligible to transact
52 insurance as a domestic surplus lines insurer. A domestic
53 surplus lines insurer must maintain surplus of at least $15
54 million at all times.
55 (3) Notwithstanding s. 626.918(2), a domestic surplus lines
56 insurer shall be deemed an eligible surplus lines insurer and
57 shall be included in the list of eligible surplus lines insurers
58 required by s. 626.918(3). Eligible surplus lines insurers
59 listed in s. 626.918(3) may write any kind of insurance that an
60 unauthorized insurer not domiciled in this state is eligible to
61 write.
62 (4) For purposes of writing surplus lines insurance
63 pursuant to the Surplus Lines Law, a domestic surplus lines
64 insurer shall be considered an unauthorized insurer.
65 (5) For purposes of the federal Nonadmitted and Reinsurance
66 Reform Act of 2010, a domestic surplus lines insurer shall be
67 considered a nonadmitted insurer.
68 (6) A domestic surplus lines insurer may write only surplus
69 lines insurance in this state which is procured from a surplus
70 lines agent pursuant to the Surplus Lines Law. Such insurer may
71 not simultaneously hold any certificate of authority authorizing
72 it to operate as an admitted insurer.
73 (7) A domestic surplus lines insurer may write surplus
74 lines insurance in any jurisdiction if such insurer complies
75 with the requirements of that jurisdiction.
76 (8) All requirements imposed by the Florida Insurance Code
77 on admitted domestic insurers apply to domestic surplus lines
78 insurers unless otherwise exempted in this section.
79 (9) A domestic surplus lines insurer is exempt from s.
80 624.408.
81 (10) A surplus lines insurance policy issued by a domestic
82 surplus lines insurer is exempt from all statutory requirements
83 relating to insurance rating and rating plans; policy forms;
84 premiums charged to insureds; policy cancellation, nonrenewal,
85 and renewal; and other statutory requirements in the same manner
86 and to the same extent as surplus lines policies issued by a
87 surplus lines insurer domiciled in another state.
88 (11) Notwithstanding any other law, a policy issued by a
89 domestic surplus lines insurer is subject to taxes assessed upon
90 surplus lines policies issued by nonadmitted insurers, including
91 surplus lines premium taxes, but is not subject to other taxes
92 levied upon admitted insurers, whether domestic or foreign.
93 (12) A policy issued by a domestic surplus lines insurer is
94 not subject to the protections or requirements of the Florida
95 Insurance Guaranty Association Act, the Florida Life and Health
96 Insurance Guaranty Association Act, the Florida Workers’
97 Compensation Insurance Guaranty Association Act, or the Florida
98 Hurricane Catastrophe Fund.
99 (13) A domestic surplus lines insurer may not issue a
100 homeowner’s policy covering a personal residential property
101 located in this state within 12 months after the effective date
102 of a nonrenewal or cancellation of a previous policy if the
103 nonrenewal or cancellation of the previous policy was initiated
104 by an affiliate of an admitted insurer. This restriction does
105 not apply to a nonrenewal or cancellation provided at the
106 insured’s request. A domestic surplus lines insurer may not
107 issue a policy designed to satisfy the motor vehicle financial
108 responsibility requirements of this state under chapter 324, the
109 Workers’ Compensation Law under chapter 440, or any other law of
110 this state mandating insurance coverage by an admitted insurer.
111 Section 3. Paragraph (b) of subsection (1) and paragraph
112 (b) of subsection (2) of section 458.320, Florida Statutes, are
113 amended to read:
114 458.320 Financial responsibility.—
115 (1) As a condition of licensing and maintaining an active
116 license, and prior to the issuance or renewal of an active
117 license or reactivation of an inactive license for the practice
118 of medicine, an applicant must by one of the following methods
119 demonstrate to the satisfaction of the board and the department
120 financial responsibility to pay claims and costs ancillary
121 thereto arising out of the rendering of, or the failure to
122 render, medical care or services:
123 (b) Obtaining and maintaining professional liability
124 coverage in an amount not less than $100,000 per claim, with a
125 minimum annual aggregate of not less than $300,000, from an
126 authorized insurer as defined under s. 624.09, from a surplus
127 lines insurer as defined under s. 626.914 s. 626.914(2), from a
128 risk retention group as defined under s. 627.942, from the Joint
129 Underwriting Association established under s. 627.351(4), or
130 through a plan of self-insurance as provided in s. 627.357. The
131 required coverage amount set forth in this paragraph may not be
132 used for litigation costs or attorney’s fees for the defense of
133 any medical malpractice claim.
134 (2) Physicians who perform surgery in an ambulatory
135 surgical center licensed under chapter 395 and, as a continuing
136 condition of hospital staff privileges, physicians who have
137 staff privileges must also establish financial responsibility by
138 one of the following methods:
139 (b) Obtaining and maintaining professional liability
140 coverage in an amount not less than $250,000 per claim, with a
141 minimum annual aggregate of not less than $750,000 from an
142 authorized insurer as defined under s. 624.09, from a surplus
143 lines insurer as defined under s. 626.914 s. 626.914(2), from a
144 risk retention group as defined under s. 627.942, from the Joint
145 Underwriting Association established under s. 627.351(4),
146 through a plan of self-insurance as provided in s. 627.357, or
147 through a plan of self-insurance which meets the conditions
148 specified for satisfying financial responsibility in s. 766.110.
149 The required coverage amount set forth in this paragraph may not
150 be used for litigation costs or attorney attorney’s fees for the
151 defense of any medical malpractice claim.
152
153 This subsection shall be inclusive of the coverage in subsection
154 (1).
155 Section 4. Paragraph (b) of subsection (1) and paragraph
156 (b) of subsection (2) of section 459.0085, Florida Statutes, are
157 amended to read:
158 459.0085 Financial responsibility.—
159 (1) As a condition of licensing and maintaining an active
160 license, and prior to the issuance or renewal of an active
161 license or reactivation of an inactive license for the practice
162 of osteopathic medicine, an applicant must by one of the
163 following methods demonstrate to the satisfaction of the board
164 and the department financial responsibility to pay claims and
165 costs ancillary thereto arising out of the rendering of, or the
166 failure to render, medical care or services:
167 (b) Obtaining and maintaining professional liability
168 coverage in an amount not less than $100,000 per claim, with a
169 minimum annual aggregate of not less than $300,000, from an
170 authorized insurer as defined under s. 624.09, from a surplus
171 lines insurer as defined under s. 626.914 s. 626.914(2), from a
172 risk retention group as defined under s. 627.942, from the Joint
173 Underwriting Association established under s. 627.351(4), or
174 through a plan of self-insurance as provided in s. 627.357. The
175 required coverage amount set forth in this paragraph may not be
176 used for litigation costs or attorney’s fees for the defense of
177 any medical malpractice claim.
178 (2) Osteopathic physicians who perform surgery in an
179 ambulatory surgical center licensed under chapter 395 and, as a
180 continuing condition of hospital staff privileges, osteopathic
181 physicians who have staff privileges must also establish
182 financial responsibility by one of the following methods:
183 (b) Obtaining and maintaining professional liability
184 coverage in an amount not less than $250,000 per claim, with a
185 minimum annual aggregate of not less than $750,000 from an
186 authorized insurer as defined under s. 624.09, from a surplus
187 lines insurer as defined under s. 626.914 s. 626.914(2), from a
188 risk retention group as defined under s. 627.942, from the Joint
189 Underwriting Association established under s. 627.351(4),
190 through a plan of self-insurance as provided in s. 627.357, or
191 through a plan of self-insurance that meets the conditions
192 specified for satisfying financial responsibility in s. 766.110.
193 The required coverage amount set forth in this paragraph may not
194 be used for litigation costs or attorney’s fees for the defense
195 of any medical malpractice claim.
196
197 This subsection shall be inclusive of the coverage in subsection
198 (1).
199 Section 5. Paragraph (a) of subsection (2) of section
200 464.0123, Florida Statutes, is amended to read:
201 464.0123 Autonomous practice by an advanced practice
202 registered nurse.—
203 (2) FINANCIAL RESPONSIBILITY.—
204 (a) An advanced practice registered nurse registered under
205 this section must, by one of the following methods, demonstrate
206 to the satisfaction of the board and the department financial
207 responsibility to pay claims and costs ancillary thereto arising
208 out of the rendering of, or the failure to render, nursing care,
209 treatment, or services:
210 1. Obtaining and maintaining professional liability
211 coverage in an amount not less than $100,000 per claim, with a
212 minimum annual aggregate of not less than $300,000, from an
213 authorized insurer as defined in s. 624.09, from a surplus lines
214 insurer as defined in s. 626.914(3) s. 626.914(2), from a risk
215 retention group as defined in s. 627.942, from the Joint
216 Underwriting Association established under s. 627.351(4), or
217 through a plan of self-insurance as provided in s. 627.357; or
218 2. Obtaining and maintaining an unexpired, irrevocable
219 letter of credit, established pursuant to chapter 675, in an
220 amount of not less than $100,000 per claim, with a minimum
221 aggregate availability of credit of not less than $300,000. The
222 letter of credit must be payable to the advanced practice
223 registered nurse as beneficiary upon presentment of a final
224 judgment indicating liability and awarding damages to be paid by
225 the advanced practice registered nurse or upon presentment of a
226 settlement agreement signed by all parties to such agreement
227 when such final judgment or settlement is a result of a claim
228 arising out of the rendering of, or the failure to render,
229 nursing care and services.
230 Section 6. Paragraph (b) of subsection (6) of section
231 629.401, Florida Statutes, is amended to read:
232 629.401 Insurance exchange.—
233 (6)
234 (b) In addition to the insurance laws specified in
235 paragraph (a), the office shall regulate the exchange pursuant
236 to the following powers, rights, and duties:
237 1. General examination powers.—The office shall examine the
238 affairs, transactions, accounts, records, and assets of any
239 security fund, exchange, members, and associate brokers as often
240 as it deems advisable. The examination may be conducted by the
241 accredited examiners of the office at the offices of the entity
242 or person being examined. The office shall examine in like
243 manner each prospective member or associate broker applying for
244 membership in an exchange.
245 2. Office approval and applications of underwriting
246 members.—No underwriting member shall commence operation without
247 the approval of the office. Before commencing operation, an
248 underwriting member shall provide a written application
249 containing:
250 a. Name, type, and purpose of the underwriting member.
251 b. Name, residence address, business background, and
252 qualifications of each person associated or to be associated in
253 the formation or financing of the underwriting member.
254 c. Full disclosure of the terms of all understandings and
255 agreements existing or proposed among persons so associated
256 relative to the underwriting member, or the formation or
257 financing thereof, accompanied by a copy of each such agreement
258 or understanding.
259 d. Full disclosure of the terms of all understandings and
260 agreements existing or proposed for management or exclusive
261 agency contracts.
262 3. Investigation of underwriting member applications.—In
263 connection with any proposal to establish an underwriting
264 member, the office shall make an investigation of:
265 a. The character, reputation, financial standing, and
266 motives of the organizers, incorporators, or subscribers
267 organizing the proposed underwriting member.
268 b. The character, financial responsibility, insurance
269 experience, and business qualifications of its proposed
270 officers.
271 c. The character, financial responsibility, business
272 experience, and standing of the proposed stockholders and
273 directors, or owners.
274 4. Notice of management changes.—An underwriting member
275 shall promptly give the office written notice of any change
276 among the directors or principal officers of the underwriting
277 member within 30 days after such change. The office shall
278 investigate the new directors or principal officers of the
279 underwriting member. The office’s investigation shall include an
280 investigation of the character, financial responsibility,
281 insurance experience, and business qualifications of any new
282 directors or principal officers. As a result of the
283 investigation, the office may require the underwriting member to
284 replace any new directors or principal officers.
285 5. Alternate financial statement.—In lieu of any financial
286 examination, the office may accept an audited financial
287 statement.
288 6. Correction and reconstruction of records.—If the office
289 finds any accounts or records to be inadequate, or inadequately
290 kept or posted, it may employ experts to reconstruct, rewrite,
291 post, or balance them at the expense of the person or entity
292 being examined if such person or entity has failed to maintain,
293 complete, or correct such records or accounts after the office
294 has given him or her or it notice and reasonable opportunity to
295 do so.
296 7. Obstruction of examinations.—Any person or entity who or
297 which willfully obstructs the office or its examiner in an
298 examination is guilty of a misdemeanor of the second degree,
299 punishable as provided in s. 775.082 or s. 775.083.
300 8. Filing of annual statement.—Each underwriting member
301 shall file with the office a full and true statement of its
302 financial condition, transactions, and affairs. The statement
303 shall be filed on or before March 1 of each year, or within such
304 extension of time as the office for good cause grants, and shall
305 be for the preceding calendar year. The statement shall contain
306 information generally included in insurer financial statements
307 prepared in accordance with generally accepted insurance
308 accounting principles and practices and in a form generally
309 utilized by insurers for financial statements, sworn to by at
310 least two executive officers of the underwriting member. The
311 form of the financial statements shall be the approved form of
312 the National Association of Insurance Commissioners or its
313 successor organization. The commission may by rule require each
314 insurer to submit any part of the information contained in the
315 financial statement in a computer-readable form compatible with
316 the office’s electronic data processing system. In addition to
317 information furnished in connection with its annual statement,
318 an underwriting member must furnish to the office as soon as
319 reasonably possible such information about its transactions or
320 affairs as the office requests in writing. All information
321 furnished pursuant to the office’s request must be verified by
322 the oath of two executive officers of the underwriting member.
323 9. Record maintenance.—Each underwriting member shall have
324 and maintain its principal place of business in this state and
325 shall keep therein complete records of its assets, transactions,
326 and affairs in accordance with such methods and systems as are
327 customary for or suitable to the kind or kinds of insurance
328 transacted.
329 10. Examination of agents.—If the department has reason to
330 believe that any agent, as defined in s. 626.015 or s.
331 626.914(5) s. 626.914, has violated or is violating any
332 provision of the insurance law, or upon receipt of a written
333 complaint signed by any interested person indicating that any
334 such violation may exist, the department shall conduct such
335 examination as it deems necessary of the accounts, records,
336 documents, and transactions pertaining to or affecting the
337 insurance affairs of such agent.
338 11. Written reports of office.—The office or its examiner
339 shall make a full and true written report of any examination.
340 The report shall contain only information obtained from
341 examination of the records, accounts, files, and documents of or
342 relative to the person or entity examined or from testimony of
343 individuals under oath, together with relevant conclusions and
344 recommendations of the examiner based thereon. The office shall
345 furnish a copy of the report to the person or entity examined
346 not less than 30 days prior to filing the report in its office.
347 If such person or entity so requests in writing within such 30
348 day period, the office shall grant a hearing with respect to the
349 report and shall not file the report until after the hearing and
350 after such modifications have been made therein as the office
351 deems proper.
352 12. Admissibility of reports.—The report of an examination
353 when filed shall be admissible in evidence in any action or
354 proceeding brought by the office against the person or entity
355 examined, or against his or her or its officers, employees, or
356 agents. The office or its examiners may at any time testify and
357 offer other proper evidence as to information secured or matters
358 discovered during the course of an examination, whether or not a
359 written report of the examination has been either made,
360 furnished, or filed in the office.
361 13. Publication of reports.—After an examination report has
362 been filed, the office may publish the results of any such
363 examination in one or more newspapers published in this state
364 whenever it deems it to be in the public interest.
365 14. Consideration of examination reports by entity
366 examined.—After the examination report of an underwriting member
367 has been filed, an affidavit shall be filed with the office, not
368 more than 30 days after the report has been filed, on a form
369 furnished by the office and signed by the person or a
370 representative of any entity examined, stating that the report
371 has been read and that the recommendations made in the report
372 will be considered within a reasonable time.
373 15. Examination costs.—Each person or entity examined by
374 the office shall pay to the office the expenses incurred in such
375 examination.
376 16. Exchange costs.—An exchange shall reimburse the office
377 for any expenses incurred by it relating to the regulation of
378 the exchange and its members, except as specified in
379 subparagraph 15.
380 17. Powers of examiners.—Any examiner appointed by the
381 office, as to the subject of any examination, investigation, or
382 hearing being conducted by him or her, may administer oaths,
383 examine and cross-examine witnesses, and receive oral and
384 documentary evidence, and shall have the power to subpoena
385 witnesses, compel their attendance and testimony, and require by
386 subpoena the production of books, papers, records, files,
387 correspondence, documents, or other evidence which the examiner
388 deems relevant to the inquiry. If any person refuses to comply
389 with any such subpoena or to testify as to any matter concerning
390 which he or she may be lawfully interrogated, the Circuit Court
391 of Leon County or the circuit court of the county wherein such
392 examination, investigation, or hearing is being conducted, or of
393 the county wherein such person resides, on the office’s
394 application may issue an order requiring such person to comply
395 with the subpoena and to testify; and any failure to obey such
396 an order of the court may be punished by the court as a contempt
397 thereof. Subpoenas shall be served, and proof of such service
398 made, in the same manner as if issued by a circuit court.
399 Witness fees and mileage, if claimed, shall be allowed the same
400 as for testimony in a circuit court.
401 18. False testimony.—Any person willfully testifying
402 falsely under oath as to any matter material to any examination,
403 investigation, or hearing shall upon conviction thereof be
404 guilty of perjury and shall be punished accordingly.
405 19. Self-incrimination.—
406 a. If any person asks to be excused from attending or
407 testifying or from producing any books, papers, records,
408 contracts, documents, or other evidence in connection with any
409 examination, hearing, or investigation being conducted by the
410 office or its examiner, on the ground that the testimony or
411 evidence required of the person may tend to incriminate him or
412 her or subject him or her to a penalty or forfeiture, and the
413 person notwithstanding is directed to give such testimony or
414 produce such evidence, he or she shall, if so directed by the
415 office and the Department of Legal Affairs, nonetheless comply
416 with such direction; but the person shall not thereafter be
417 prosecuted or subjected to any penalty or forfeiture for or on
418 account of any transaction, matter, or thing concerning which he
419 or she may have so testified or produced evidence, and no
420 testimony so given or evidence so produced shall be received
421 against him or her upon any criminal action, investigation, or
422 proceeding; except that no such person so testifying shall be
423 exempt from prosecution or punishment for any perjury committed
424 by him or her in such testimony, and the testimony or evidence
425 so given or produced shall be admissible against him or her upon
426 any criminal action, investigation, or proceeding concerning
427 such perjury, nor shall he or she be exempt from the refusal,
428 suspension, or revocation of any license, permission, or
429 authority conferred, or to be conferred, pursuant to the
430 insurance law.
431 b. Any such individual may execute, acknowledge, and file
432 with the office a statement expressly waiving such immunity or
433 privilege in respect to any transaction, matter, or thing
434 specified in such statement, and thereupon the testimony of such
435 individual or such evidence in relation to such transaction,
436 matter, or thing may be received or produced before any judge or
437 justice, court, tribunal, grand jury, or otherwise; and if such
438 testimony or evidence is so received or produced, such
439 individual shall not be entitled to any immunity or privileges
440 on account of any testimony so given or evidence so produced.
441 20. Penalty for failure to testify.—Any person who refuses
442 or fails, without lawful cause, to testify relative to the
443 affairs of any member, associate broker, or other person when
444 subpoenaed and requested by the office to so testify, as
445 provided in subparagraph 17., shall, in addition to the penalty
446 provided in subparagraph 17., be guilty of a misdemeanor of the
447 second degree, punishable as provided in s. 775.082 or s.
448 775.083.
449 21. Name selection.—No underwriting member shall be formed
450 or authorized to transact insurance in this state under a name
451 which is the same as that of any authorized insurer or is so
452 nearly similar thereto as to cause or tend to cause confusion or
453 under a name which would tend to mislead as to the type of
454 organization of the insurer. Before incorporating under or using
455 any name, the underwriting syndicate or proposed underwriting
456 syndicate shall submit its name or proposed name to the office
457 for the approval of the office.
458 22. Capitalization.—An underwriting member approved on or
459 after July 2, 1987, shall provide an initial paid-in capital and
460 surplus of $3 million and thereafter shall maintain a minimum
461 policyholder surplus of $2 million in order to be permitted to
462 write insurance. Underwriting members approved prior to July 2,
463 1987, shall maintain a minimum policyholder surplus of $1
464 million. After June 29, 1988, underwriting members approved
465 prior to July 2, 1987, must maintain a minimum policyholder
466 surplus of $1.5 million to write insurance. After June 29, 1989,
467 underwriting members approved prior to July 2, 1987, must
468 maintain a minimum policyholder surplus of $1.75 million to
469 write insurance. After December 30, 1989, all underwriting
470 members, regardless of the date they were approved, must
471 maintain a minimum policyholder surplus of $2 million to write
472 insurance. Except for that portion of the paid-in capital and
473 surplus which shall be maintained in a security fund of an
474 exchange, the paid-in capital and surplus shall be invested by
475 an underwriting member in a manner consistent with ss. 625.301
476 625.340. The portion of the paid-in capital and surplus in any
477 security fund of an exchange shall be invested in a manner
478 limited to investments for life insurance companies under the
479 Florida insurance laws.
480 23. Limitations on coverage written.—
481 a. Limit of risk.—No underwriting member shall expose
482 itself to any loss on any one risk in an amount exceeding 10
483 percent of its surplus to policyholders. Any risk or portion of
484 any risk which shall have been reinsured in an assuming
485 reinsurer authorized or approved to do such business in this
486 state shall be deducted in determining the limitation of risk
487 prescribed in this section.
488 b. Restrictions on premiums written.—If the office has
489 reason to believe that the underwriting member’s ratio of actual
490 or projected annual gross written premiums to policyholder
491 surplus exceeds 8 to 1 or the underwriting member’s ratio of
492 actual or projected annual net premiums to policyholder surplus
493 exceeds 4 to 1, the office may establish maximum gross or net
494 annual premiums to be written by the underwriting member
495 consistent with maintaining the ratios specified in this sub
496 subparagraph.
497 (I) Projected annual net or gross premiums shall be based
498 on the actual writings to date for the underwriting member’s
499 current calendar year, its writings for the previous calendar
500 year, or both. Ratios shall be computed on an annualized basis.
501 (II) For purposes of this sub-subparagraph, the term “gross
502 written premiums” means direct premiums written and reinsurance
503 assumed.
504 c. Surplus as to policyholders.—For the purpose of
505 determining the limitation on coverage written, surplus as to
506 policyholders shall be deemed to include any voluntary reserves,
507 or any part thereof, which are not required by or pursuant to
508 law and shall be determined from the last sworn statement of
509 such underwriting member with the office, or by the last report
510 or examination filed by the office, whichever is more recent at
511 the time of assumption of such risk.
512 24. Unearned premium reserves.—An underwriting member must
513 at all times maintain an unearned premium reserve equal to 50
514 percent of the net written premiums of the subscribers on
515 policies having 1 year or less to run, and pro rata on those for
516 longer periods, except that all premiums on any marine or
517 transportation insurance trip risk shall be deemed unearned
518 until the trip is terminated. For the purpose of this
519 subparagraph, the term “net written premiums” means the premium
520 payments made by subscribers plus the premiums due from
521 subscribers, after deducting the amounts specifically provided
522 in the subscribers’ agreements for expenses, including
523 reinsurance costs and fees paid to the attorney in fact,
524 provided that the power of attorney agreement contains an
525 explicit provision requiring the attorney in fact to refund any
526 unearned subscribers fees on a pro-rata basis for canceled
527 policies. If there is no such provision, the unearned premium
528 reserve shall be calculated without any adjustment for fees paid
529 to the attorney in fact. If the unearned premium reserves at any
530 time do not amount to $100,000, there shall be maintained on
531 deposit at the exchange at all times additional funds in cash or
532 eligible securities which, together with the unearned premium
533 reserves, equal $100,000. In calculating the foregoing reserves,
534 the amount of the attorney’s bond, as filed with the office and
535 as required by s. 629.121, shall be included in such reserves.
536 If at any time the unearned premium reserves are less than the
537 foregoing requirements, the subscribers, or the attorney in
538 fact, shall advance funds to make up the deficiency. Such
539 advances shall only be repaid out of the surplus of the exchange
540 and only after receiving written approval from the office.
541 25. Loss reserves.—All underwriting members of an exchange
542 shall maintain loss reserves, including a reserve for incurred
543 but not reported claims. The reserves shall be subject to review
544 by the office, and, if loss experience shows that an
545 underwriting member’s loss reserves are inadequate, the office
546 shall require the underwriting member to maintain loss reserves
547 in such additional amount as is needed to make them adequate.
548 26. Distribution of profits.—An underwriting member shall
549 not distribute any profits in the form of cash or other assets
550 to owners except out of that part of its available and
551 accumulated surplus funds which is derived from realized net
552 operating profits on its business and realized capital gains. In
553 any one year such payments to owners shall not exceed 30 percent
554 of such surplus as of December 31 of the immediately preceding
555 year, unless otherwise approved by the office. No distribution
556 of profits shall be made that would render an underwriting
557 member either impaired or insolvent.
558 27. Stock dividends.—A stock dividend may be paid by an
559 underwriting member out of any available surplus funds in excess
560 of the aggregate amount of surplus advanced to the underwriting
561 member under subparagraph 29.
562 28. Dividends from earned surplus.—A dividend otherwise
563 lawful may be payable out of an underwriting member’s earned
564 surplus even though the total surplus of the underwriting member
565 is then less than the aggregate of its past contributed surplus
566 resulting from issuance of its capital stock at a price in
567 excess of the par value thereof.
568 29. Borrowing of money by underwriting members.—
569 a. An underwriting member may borrow money to defray the
570 expenses of its organization, provide it with surplus funds, or
571 for any purpose of its business, upon a written agreement that
572 such money is required to be repaid only out of the underwriting
573 member’s surplus in excess of that stipulated in such agreement.
574 The agreement may provide for interest not exceeding 15 percent
575 simple interest per annum. The interest shall or shall not
576 constitute a liability of the underwriting member as to its
577 funds other than such excess of surplus, as stipulated in the
578 agreement. No commission or promotion expense shall be paid in
579 connection with any such loan. The use of any surplus note and
580 any repayments thereof shall be subject to the approval of the
581 office.
582 b. Money so borrowed, together with any interest thereon if
583 so stipulated in the agreement, shall not form a part of the
584 underwriting member’s legal liabilities except as to its surplus
585 in excess of the amount thereof stipulated in the agreement, nor
586 be the basis of any setoff; but until repayment, financial
587 statements filed or published by an underwriting member shall
588 show as a footnote thereto the amount thereof then unpaid,
589 together with any interest thereon accrued but unpaid.
590 30. Liquidation, rehabilitation, and restrictions.—The
591 office, upon a showing that a member or associate broker of an
592 exchange has met one or more of the grounds contained in part I
593 of chapter 631, may restrict sales by type of risk, policy or
594 contract limits, premium levels, or policy or contract
595 provisions; increase surplus or capital requirements of
596 underwriting members; issue cease and desist orders; suspend or
597 restrict a member’s or associate broker’s right to transact
598 business; place an underwriting member under conservatorship or
599 rehabilitation; or seek an order of liquidation as authorized by
600 part I of chapter 631.
601 31. Prohibited conduct.—The following acts by a member,
602 associate broker, or affiliated person shall constitute
603 prohibited conduct:
604 a. Fraud.
605 b. Fraudulent or dishonest acts committed by a member or
606 associate broker prior to admission to an exchange, if the facts
607 and circumstances were not disclosed to the office upon
608 application to become a member or associate broker.
609 c. Conduct detrimental to the welfare of an exchange.
610 d. Unethical or improper practices or conduct, inconsistent
611 with just and equitable principles of trade as set forth in, but
612 not limited to, ss. 626.951-626.9641 and 626.973.
613 e. Failure to use due diligence to ascertain the insurance
614 needs of a client or a principal.
615 f. Misstatements made under oath or upon an application for
616 membership on an exchange.
617 g. Failure to testify or produce documents when requested
618 by the office.
619 h. Willful violation of any law of this state.
620 i. Failure of an officer or principal to testify under oath
621 concerning a member, associate broker, or other person’s affairs
622 as they relate to the operation of an exchange.
623 j. Violation of the constitution and bylaws of the
624 exchange.
625 32. Penalties for participating in prohibited conduct.—
626 a. The office may order the suspension of further
627 transaction of business on the exchange of any member or
628 associate broker found to have engaged in prohibited conduct. In
629 addition, any member or associate broker found to have engaged
630 in prohibited conduct may be subject to reprimand, censure,
631 and/or a fine not exceeding $25,000 imposed by the office.
632 b. Any member which has an affiliated person who is found
633 to have engaged in prohibited conduct shall be subject to
634 involuntary withdrawal or in addition thereto may be subject to
635 suspension, reprimand, censure, and/or a fine not exceeding
636 $25,000.
637 33. Reduction of penalties.—Any suspension, reprimand,
638 censure, or fine may be remitted or reduced by the office on
639 such terms and conditions as are deemed fair and equitable.
640 34. Other offenses.—Any member or associate broker that is
641 suspended shall be deprived, during the period of suspension, of
642 all rights and privileges of a member or of an associate broker
643 and may be proceeded against by the office for any offense
644 committed either before or after the date of suspension.
645 35. Reinstatement.—Any member or associate broker that is
646 suspended may be reinstated at any time on such terms and
647 conditions as the office may specify.
648 36. Remittance of fines.—Fines imposed under this section
649 shall be remitted to the office and shall be paid into the
650 Insurance Regulatory Trust Fund.
651 37. Failure to pay fines.—When a member or associate broker
652 has failed to pay a fine for 15 days after it becomes payable,
653 such member or associate broker shall be suspended, unless the
654 office has granted an extension of time to pay such fine.
655 38. Changes in ownership or assets.—In the event of a major
656 change in the ownership or a major change in the assets of an
657 underwriting member, the underwriting member shall report such
658 change in writing to the office within 30 days of the effective
659 date thereof. The report shall set forth the details of the
660 change. Any change in ownership or assets of more than 5 percent
661 shall be considered a major change.
662 39. Retaliation.—
663 a. When by or pursuant to the laws of any other state or
664 foreign country any taxes, licenses, or other fees, in the
665 aggregate, and any fines, penalties, deposit requirements, or
666 other material obligations, prohibitions, or restrictions are or
667 would be imposed upon an exchange or upon the agents or
668 representatives of such exchange which are in excess of such
669 taxes, licenses, and other fees, in the aggregate, or which are
670 in excess of such fines, penalties, deposit requirements, or
671 other obligations, prohibitions, or restrictions directly
672 imposed upon similar exchanges or upon the agents or
673 representatives of such exchanges of such other state or country
674 under the statutes of this state, so long as such laws of such
675 other state or country continue in force or are so applied, the
676 same taxes, licenses, and other fees, in the aggregate, or
677 fines, penalties, deposit requirements, or other material
678 obligations, prohibitions, or restrictions of whatever kind
679 shall be imposed by the office upon the exchanges, or upon the
680 agents or representatives of such exchanges, of such other state
681 or country doing business or seeking to do business in this
682 state.
683 b. Any tax, license, or other obligation imposed by any
684 city, county, or other political subdivision or agency of a
685 state, jurisdiction, or foreign country on an exchange, or on
686 the agents or representatives on an exchange, shall be deemed to
687 be imposed by such state, jurisdiction, or foreign country
688 within the meaning of sub-subparagraph a.
689 40. Agents.—
690 a. Agents as defined in ss. 626.015 and 626.914(5) 626.914
691 who are broker members or associate broker members of an
692 exchange shall be allowed only to place on an exchange the same
693 kind or kinds of business that the agent is licensed to place
694 pursuant to Florida law. Direct Florida business as defined in
695 s. 626.916 or s. 626.917 shall be written through a broker
696 member who is a surplus lines agent as defined in s. 626.914.
697 The activities of each broker member or associate broker with
698 regard to an exchange shall be subject to all applicable
699 provisions of the insurance laws of this state, and all such
700 activities shall constitute transactions under his or her
701 license as an insurance agent for purposes of the Florida
702 insurance law.
703 b. Premium payments and other requirements.—If an
704 underwriting member has assumed the risk as to a surplus lines
705 coverage and if the premium therefor has been received by the
706 surplus lines agent who placed such insurance, then in all
707 questions thereafter arising under the coverage as between the
708 underwriting member and the insured, the underwriting member
709 shall be deemed to have received the premium due to it for such
710 coverage; and the underwriting member shall be liable to the
711 insured as to losses covered by such insurance, and for unearned
712 premiums which may become payable to the insured upon
713 cancellation of such insurance, whether or not in fact the
714 surplus lines agent is indebted to the underwriting member with
715 respect to such insurance or for any other cause.
716 41. Improperly issued contracts, riders, and endorsements.—
717 a. Any insurance policy, rider, or endorsement issued by an
718 underwriting member and otherwise valid which contains any
719 condition or provision not in compliance with the requirements
720 of this section shall not be thereby rendered invalid, except as
721 provided in s. 627.415, but shall be construed and applied in
722 accordance with such conditions and provisions as would have
723 applied had such policy, rider, or endorsement been in full
724 compliance with this section. In the event an underwriting
725 member issues or delivers any policy for an amount which exceeds
726 any limitations otherwise provided in this section, the
727 underwriting member shall be liable to the insured or his or her
728 beneficiary for the full amount stated in the policy in addition
729 to any other penalties that may be imposed.
730 b. Any insurance contract delivered or issued for delivery
731 in this state governing a subject or subjects of insurance
732 resident, located, or to be performed in this state which,
733 pursuant to the provisions of this section, the underwriting
734 member may not lawfully insure under such a contract shall be
735 cancelable at any time by the underwriting member, any provision
736 of the contract to the contrary notwithstanding; and the
737 underwriting member shall promptly cancel the contract in
738 accordance with the request of the office therefor. No such
739 illegality or cancellation shall be deemed to relieve the
740 underwriting syndicate of any liability incurred by it under the
741 contract while in force or to prohibit the underwriting
742 syndicate from retaining the pro rata earned premium thereon.
743 This provision does not relieve the underwriting syndicate from
744 any penalty otherwise incurred by the underwriting syndicate.
745 42. Satisfaction of judgments.—
746 a. Every judgment or decree for the recovery of money
747 heretofore or hereafter entered in any court of competent
748 jurisdiction against any underwriting member shall be fully
749 satisfied within 60 days from and after the entry thereof or, in
750 the case of an appeal from such judgment or decree, within 60
751 days from and after the affirmance of the judgment or decree by
752 the appellate court.
753 b. If the judgment or decree is not satisfied as required
754 under sub-subparagraph a., and proof of such failure to satisfy
755 is made by filing with the office a certified transcript of the
756 docket of the judgment or the decree together with a certificate
757 by the clerk of the court wherein the judgment or decree remains
758 unsatisfied, in whole or in part, after the time provided in
759 sub-subparagraph a., the office shall forthwith prohibit the
760 underwriting member from transacting business. The office shall
761 not permit such underwriting member to write any new business
762 until the judgment or decree is wholly paid and satisfied and
763 proof thereof is filed with the office under the official
764 certificate of the clerk of the court wherein the judgment was
765 recovered, showing that the judgment or decree is satisfied of
766 record, and until the expenses and fees incurred in the case are
767 also paid by the underwriting syndicate.
768 43. Tender and exchange offers.—No person shall conclude a
769 tender offer or an exchange offer or otherwise acquire 5 percent
770 or more of the outstanding voting securities of an underwriting
771 member or controlling company or purchase 5 percent or more of
772 the ownership of an underwriting member or controlling company
773 unless such person has filed with, and obtained the approval of,
774 the office and sent to such underwriting member a statement
775 setting forth:
776 a. The identity of, and background information on, each
777 person by whom, or on whose behalf, the acquisition is to be
778 made; and, if the acquisition is to be made by or on behalf of a
779 corporation, association, or trust, the identity of and
780 background information on each director, officer, trustee, or
781 other natural person performing duties similar to those of a
782 director, officer, or trustee for the corporation, association,
783 or trust.
784 b. The source and amount of the funds or other
785 consideration used, or to be used, in making the acquisition.
786 c. Any plans or proposals which such person may have to
787 liquidate such member, to sell its assets, or to merge or
788 consolidate it.
789 d. The percentage of ownership which such person proposes
790 to acquire and the terms of the offer or exchange, as the case
791 may be.
792 e. Information as to any contracts, arrangements, or
793 understandings with any party with respect to any securities of
794 such member or controlling company, including, but not limited
795 to, information relating to the transfer of any securities,
796 option arrangements, or puts or calls or the giving or
797 withholding of proxies, naming the party with whom such
798 contract, arrangements, or understandings have been entered and
799 giving the details thereof.
800 f. The office may disapprove any acquisition subject to the
801 provisions of this subparagraph by any person or any affiliated
802 person of such person who:
803 (I) Willfully violates this subparagraph;
804 (II) In violation of an order of the office issued pursuant
805 to sub-subparagraph j., fails to divest himself or herself of
806 any stock obtained in violation of this subparagraph, or fails
807 to divest himself or herself of any direct or indirect control
808 of such stock, within 25 days after such order; or
809 (III) In violation of an order issued by the office
810 pursuant to sub-subparagraph j., acquires additional stock of
811 the underwriting member or controlling company, or direct or
812 indirect control of such stock, without complying with this
813 subparagraph.
814 g. The person or persons filing the statement required by
815 this subparagraph have the burden of proof. The office shall
816 approve any such acquisition if it finds, on the basis of the
817 record made during any proceeding or on the basis of the filed
818 statement if no proceeding is conducted, that:
819 (I) Upon completion of the acquisition, the underwriting
820 member will be able to satisfy the requirements for the approval
821 to write the line or lines of insurance for which it is
822 presently approved;
823 (II) The financial condition of the acquiring person or
824 persons will not jeopardize the financial stability of the
825 underwriting member or prejudice the interests of its
826 policyholders or the public;
827 (III) Any plan or proposal which the acquiring person has,
828 or acquiring persons have, made:
829 (A) To liquidate the insurer, sell its assets, or merge or
830 consolidate it with any person, or to make any other major
831 change in its business or corporate structure or management; or
832 (B) To liquidate any controlling company, sell its assets,
833 or merge or consolidate it with any person, or to make any major
834 change in its business or corporate structure or management
835 which would have an effect upon the underwriting member
836
837 is fair and free of prejudice to the policyholders of the
838 underwriting member or to the public;
839 (IV) The competence, experience, and integrity of those
840 persons who will control directly or indirectly the operation of
841 the underwriting member indicate that the acquisition is in the
842 best interest of the policyholders of the underwriting member
843 and in the public interest;
844 (V) The natural persons for whom background information is
845 required to be furnished pursuant to this subparagraph have such
846 backgrounds as to indicate that it is in the best interests of
847 the policyholders of the underwriting member, and in the public
848 interest, to permit such persons to exercise control over such
849 underwriting member;
850 (VI) The officers and directors to be employed after the
851 acquisition have sufficient insurance experience and ability to
852 assure reasonable promise of successful operation;
853 (VII) The management of the underwriting member after the
854 acquisition will be competent and trustworthy and will possess
855 sufficient managerial experience so as to make the proposed
856 operation of the underwriting member not hazardous to the
857 insurance-buying public;
858 (VIII) The management of the underwriting member after the
859 acquisition will not include any person who has directly or
860 indirectly through ownership, control, reinsurance transactions,
861 or other insurance or business relations unlawfully manipulated
862 the assets, accounts, finances, or books of any insurer or
863 underwriting member or otherwise acted in bad faith with respect
864 thereto;
865 (IX) The acquisition is not likely to be hazardous or
866 prejudicial to the underwriting member’s policyholders or the
867 public; and
868 (X) The effect of the acquisition of control would not
869 substantially lessen competition in insurance in this state or
870 would not tend to create a monopoly therein.
871 h. No vote by the stockholder of record, or by any other
872 person, of any security acquired in contravention of the
873 provisions of this subparagraph is valid. Any acquisition of any
874 security contrary to the provisions of this subparagraph is
875 void. Upon the petition of the underwriting member or
876 controlling company, the circuit court for the county in which
877 the principal office of such underwriting member is located may,
878 without limiting the generality of its authority, order the
879 issuance or entry of an injunction or other order to enforce the
880 provisions of this subparagraph. There shall be a private right
881 of action in favor of the underwriting member or controlling
882 company to enforce the provisions of this subparagraph. No
883 demand upon the office that it perform its functions shall be
884 required as a prerequisite to any suit by the underwriting
885 member or controlling company against any other person, and in
886 no case shall the office be deemed a necessary party to any
887 action by such underwriting member or controlling company to
888 enforce the provisions of this subparagraph. Any person who
889 makes or proposes an acquisition requiring the filing of a
890 statement pursuant to this subparagraph, or who files such a
891 statement, shall be deemed to have thereby designated the Chief
892 Financial Officer as such person’s agent for service of process
893 under this subparagraph and shall thereby be deemed to have
894 submitted himself or herself to the administrative jurisdiction
895 of the office and to the jurisdiction of the circuit court.
896 i. Any approval by the office under this subparagraph does
897 not constitute a recommendation by the office for an
898 acquisition, tender offer, or exchange offer. It is unlawful for
899 a person to represent that the office’s approval constitutes a
900 recommendation. A person who violates the provisions of this
901 sub-subparagraph is guilty of a felony of the third degree,
902 punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
903 The statute-of-limitations period for the prosecution of an
904 offense committed under this sub-subparagraph is 5 years.
905 j. Upon notification to the office by the underwriting
906 member or a controlling company that any person or any
907 affiliated person of such person has acquired 5 percent or more
908 of the outstanding voting securities of the underwriting member
909 or controlling company without complying with the provisions of
910 this subparagraph, the office shall order that the person and
911 any affiliated person of such person cease acquisition of any
912 further securities of the underwriting member or controlling
913 company; however, the person or any affiliated person of such
914 person may request a proceeding, which proceeding shall be
915 convened within 7 days after the rendering of the order for the
916 sole purpose of determining whether the person, individually or
917 in connection with any affiliated person of such person, has
918 acquired 5 percent or more of the outstanding voting securities
919 of an underwriting member or controlling company. Upon the
920 failure of the person or affiliated person to request a hearing
921 within 7 days, or upon a determination at a hearing convened
922 pursuant to this sub-subparagraph that the person or affiliated
923 person has acquired voting securities of an underwriting member
924 or controlling company in violation of this subparagraph, the
925 office may order the person and affiliated person to divest
926 themselves of any voting securities so acquired.
927 k.(I) The office shall, if necessary to protect the public
928 interest, suspend or revoke the certificate of authority of any
929 underwriting member or controlling company:
930 (A) The control of which is acquired in violation of this
931 subparagraph;
932 (B) That is controlled, directly or indirectly, by any
933 person or any affiliated person of such person who, in violation
934 of this subparagraph, has obtained control of an underwriting
935 member or controlling company; or
936 (C) That is controlled, directly or indirectly, by any
937 person who, directly or indirectly, controls any other person
938 who, in violation of this subparagraph, acquires control of an
939 underwriting member or controlling company.
940 (II) If any underwriting member is subject to suspension or
941 revocation pursuant to sub-sub-subparagraph (I), the
942 underwriting member shall be deemed to be in such condition, or
943 to be using or to have been subject to such methods or practices
944 in the conduct of its business, as to render its further
945 transaction of insurance presently or prospectively hazardous to
946 its policyholders, creditors, or stockholders or to the public.
947 l.(I) For the purpose of this sub-sub-subparagraph, the
948 term “affiliated person” of another person means:
949 (A) The spouse of such other person;
950 (B) The parents of such other person and their lineal
951 descendants and the parents of such other person’s spouse and
952 their lineal descendants;
953 (C) Any person who directly or indirectly owns or controls,
954 or holds with power to vote, 5 percent or more of the
955 outstanding voting securities of such other person;
956 (D) Any person 5 percent or more of the outstanding voting
957 securities of which are directly or indirectly owned or
958 controlled, or held with power to vote, by such other person;
959 (E) Any person or group of persons who directly or
960 indirectly control, are controlled by, or are under common
961 control with such other person; or any officer, director,
962 partner, copartner, or employee of such other person;
963 (F) If such other person is an investment company, any
964 investment adviser of such company or any member of an advisory
965 board of such company;
966 (G) If such other person is an unincorporated investment
967 company not having a board of directors, the depositor of such
968 company; or
969 (H) Any person who has entered into an agreement, written
970 or unwritten, to act in concert with such other person in
971 acquiring or limiting the disposition of securities of an
972 underwriting member or controlling company.
973 (II) For the purposes of this section, the term
974 “controlling company” means any corporation, trust, or
975 association owning, directly or indirectly, 25 percent or more
976 of the voting securities of one or more underwriting members.
977 m. The commission may adopt, amend, or repeal rules that
978 are necessary to implement the provisions of this subparagraph,
979 pursuant to chapter 120.
980 44. Background information.—The information as to the
981 background and identity of each person about whom information is
982 required to be furnished pursuant to sub-subparagraph 43.a.
983 shall include, but shall not be limited to:
984 a. Such person’s occupations, positions of employment, and
985 offices held during the past 10 years.
986 b. The principal business and address of any business,
987 corporation, or other organization in which each such office was
988 held or in which such occupation or position of employment was
989 carried on.
990 c. Whether, at any time during such 10-year period, such
991 person was convicted of any crime other than a traffic
992 violation.
993 d. Whether, during such 10-year period, such person has
994 been the subject of any proceeding for the revocation of any
995 license and, if so, the nature of such proceeding and the
996 disposition thereof.
997 e. Whether, during such 10-year period, such person has
998 been the subject of any proceeding under the federal Bankruptcy
999 Act or whether, during such 10-year period, any corporation,
1000 partnership, firm, trust, or association in which such person
1001 was a director, officer, trustee, partner, or other official has
1002 been subject to any such proceeding, either during the time in
1003 which such person was a director, officer, trustee, partner, or
1004 other official, or within 12 months thereafter.
1005 f. Whether, during such 10-year period, such person has
1006 been enjoined, either temporarily or permanently, by a court of
1007 competent jurisdiction from violating any federal or state law
1008 regulating the business of insurance, securities, or banking, or
1009 from carrying out any particular practice or practices in the
1010 course of the business of insurance, securities, or banking,
1011 together with details of any such event.
1012 45. Security fund.—All underwriting members shall be
1013 members of the security fund of any exchange.
1014 46. Underwriting member defined.—Whenever the term
1015 “underwriting member” is used in this subsection, it shall be
1016 construed to mean “underwriting syndicate.”
1017 47. Offsets.—Any action, requirement, or constraint imposed
1018 by the office shall reduce or offset similar actions,
1019 requirements, or constraints of any exchange.
1020 48. Restriction on member ownership.—
1021 a. Investments existing prior to July 2, 1987.—The
1022 investment in any member by brokers, agents, and intermediaries
1023 transacting business on the exchange, and the investment in any
1024 such broker, agent, or intermediary by any member, directly or
1025 indirectly, shall in each case be limited in the aggregate to
1026 less than 20 percent of the total investment in such member,
1027 broker, agent, or intermediary, as the case may be. After
1028 December 31, 1987, the aggregate percent of the total investment
1029 in such member by any broker, agent, or intermediary and the
1030 aggregate percent of the total investment in any such broker,
1031 agent, or intermediary by any member, directly or indirectly,
1032 shall not exceed 15 percent. After June 30, 1988, such aggregate
1033 percent shall not exceed 10 percent and after December 31, 1988,
1034 such aggregate percent shall not exceed 5 percent.
1035 b. Investments arising on or after July 2, 1987.—The
1036 investment in any underwriting member by brokers, agents, or
1037 intermediaries transacting business on the exchange, and the
1038 investment in any such broker, agent, or intermediary by any
1039 underwriting member, directly or indirectly, shall in each case
1040 be limited in the aggregate to less than 5 percent of the total
1041 investment in such underwriting member, broker, agent, or
1042 intermediary.
1043 49. “Underwriting manager” defined.—“Underwriting manager”
1044 as used in this subparagraph includes any person, partnership,
1045 corporation, or organization providing any of the following
1046 services to underwriting members of the exchange:
1047 a. Office management and allied services, including
1048 correspondence and secretarial services.
1049 b. Accounting services, including bookkeeping and financial
1050 report preparation.
1051 c. Investment and banking consultations and services.
1052 d. Underwriting functions and services including the
1053 acceptance, rejection, placement, and marketing of risk.
1054 50. Prohibition of underwriting manager investment.—Any
1055 direct or indirect investment in any underwriting manager by a
1056 broker member or any affiliated person of a broker member or any
1057 direct or indirect investment in a broker member by an
1058 underwriting manager or any affiliated person of an underwriting
1059 manager is prohibited. “Affiliated person” for purposes of this
1060 subparagraph is defined in subparagraph 43.
1061 51. An underwriting member may not accept reinsurance on an
1062 assumed basis from an affiliate or a controlling company, nor
1063 may a broker member or management company place reinsurance from
1064 an affiliate or controlling company of theirs with an
1065 underwriting member. “Affiliate and controlling company” for
1066 purposes of this subparagraph is defined in subparagraph 43.
1067 52. Premium defined.—“Premium” is the consideration for
1068 insurance, by whatever name called. Any “assessment” or any
1069 “membership,” “policy,” “survey,” “inspection,” “service” fee or
1070 charge or similar fee or charge in consideration for an
1071 insurance contract is deemed part of the premium.
1072 53. Rules.—The commission shall adopt rules necessary for
1073 or as an aid to the effectuation of any provision of this
1074 section.
1075 Section 7. This act shall take effect July 1, 2022.
1076
1077 ================= T I T L E A M E N D M E N T ================
1078 And the title is amended as follows:
1079 Delete everything before the enacting clause
1080 and insert:
1081 A bill to be entitled
1082 An act relating to domestic surplus lines insurers;
1083 amending s. 626.914, F.S.; defining the term “domestic
1084 surplus lines insurer”; revising the definition of the
1085 term “eligible surplus lines insurer” to include
1086 domestic surplus lines insurers; creating s.
1087 626.91805, F.S.; defining the term “nonadmitted
1088 insurer”; authorizing specified nonadmitted insurers
1089 to transact insurance as domestic surplus lines
1090 insurers under certain circumstances; requiring
1091 domestic surplus lines insurers to maintain a minimum
1092 surplus amount; requiring such insurers to be deemed
1093 eligible surplus lines insurers and to be included in
1094 the list of eligible surplus lines insurers;
1095 authorizing such insurers to write certain kinds of
1096 insurance; requiring such insurers to be considered
1097 unauthorized insurers for specified purposes;
1098 requiring such insurers to be considered nonadmitted
1099 insurers for specified purposes; authorizing domestic
1100 surplus lines insurers to write only surplus lines
1101 insurance under a specified circumstance; prohibiting
1102 such insurers from simultaneously holding any
1103 certificate of authority to operate as admitted
1104 insurers; authorizing such insurers to write surplus
1105 lines insurance in any jurisdiction if specified
1106 requirements are met; providing applicability of
1107 specified requirements of the Florida Insurance Code
1108 to such insurers; providing an exception; providing an
1109 exemption from a specified law for such insurers;
1110 providing exemptions from specified requirements for
1111 surplus lines insurance policies issued by such
1112 insurers; providing that such policies are subject to
1113 specified taxes but are not subject to certain other
1114 taxes; providing that such policies are not subject to
1115 the protections and requirements of specified acts and
1116 a specified fund; prohibiting such insurers from
1117 issuing certain homeowners’ policies under a specified
1118 circumstance; providing nonapplicability; prohibiting
1119 such insurers from issuing certain policies to satisfy
1120 specified laws; amending ss. 458.320, 459.0085, and
1121 464.0123, F.S.; conforming cross-references; amending
1122 s. 629.401, F.S.; specifying cross-references;
1123 providing an effective date.
