Bill Text: FL S1556 | 2024 | Regular Session | Introduced
Bill Title: Insurance
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2024-03-08 - Died in Banking and Insurance [S1556 Detail]
Download: Florida-2024-S1556-Introduced.html
Florida Senate - 2024 SB 1556 By Senator Davis 5-01705-24 20241556__ 1 A bill to be entitled 2 An act relating to insurance; creating s. 11.91, F.S.; 3 creating the Property Insurance Commission; providing 4 membership of the commission; providing powers and 5 duties of the commission; amending s. 20.121, F.S.; 6 providing for the election of the Commissioner of 7 Insurance Regulation; providing for the commissioner’s 8 term of office; conforming provisions to changes made 9 by the act; creating s. 112.3134, F.S.; prohibiting 10 the commissioner from engaging in certain activities 11 or employment for a specified period after leaving 12 office; providing sanctions for violations; 13 authorizing specified entities to collect penalties; 14 amending s. 494.0026, F.S.; requiring that interest 15 earned on insurance proceeds received by mortgagees 16 and assignees be paid to insureds; making a technical 17 change; amending s. 624.401, F.S.; prohibiting 18 property insurers from claiming insolvency under 19 specified circumstances; authorizing persons who 20 engage in property insurance activities in other 21 states to engage in insurance activities in this state 22 under certain circumstances; amending s. 627.0629, 23 F.S.; requiring residential property insurers to 24 release specified information to insureds upon 25 request; amending s. 627.701, F.S.; prohibiting 26 property insurers from using specified factors as a 27 defense for denial of a claim; amending s. 627.715, 28 F.S.; requiring insurance agents to advise insurance 29 applicants of flood risk; creating s. 627.71555, F.S.; 30 providing duties of the Office of Insurance 31 Regulation; requiring the Department of Financial 32 Services to adopt rules regarding allegations of 33 insurance fraud made by insurers or their employees or 34 contractors; providing requirements for such rules; 35 providing fines; requiring the Office of Program 36 Policy Analysis and Government Accountability to 37 conduct a study of the effectiveness of the property 38 insurance mediation program; providing requirements 39 for the study; requiring a report to the Legislature; 40 amending ch. 2022-268, Laws of Florida; increasing an 41 appropriation to the My Safe Florida Home Program; 42 providing an effective date. 43 44 Be It Enacted by the Legislature of the State of Florida: 45 46 Section 1. Section 11.91, Florida Statutes, is created to 47 read: 48 11.91 Property Insurance Commission.— 49 (1)(a) There is created the Property Insurance Commission, 50 which shall be composed of the following six members: 51 1. Two members appointed by the President of the Senate. 52 2. One member appointed by the Minority Leader of the 53 Senate. 54 3. Two members appointed by the Speaker of the House of 55 Representatives. 56 4. One member appointed by the Minority Leader of the House 57 of Representatives. 58 (b) Each member shall serve at the pleasure of the officer 59 who appointed the member. A vacancy on the commission must be 60 filled in the same manner as the original appointment. From 61 November of each odd-numbered year through October of each even 62 numbered year, the chair of the commission must be appointed by 63 the President of the Senate, and the vice chair of the 64 commission must be appointed by the Speaker of the House of 65 Representatives. From November of each even-numbered year 66 through October of each odd-numbered year, the chair of the 67 commission must be appointed by the Speaker of the House of 68 Representatives, and the vice chair of the commission must be 69 appointed by the President of the Senate. The terms of members 70 must be for 2 years and run from the organization of one 71 Legislature to the organization of the next Legislature. 72 (2) The commission is governed by joint rules of the Senate 73 and the House of Representatives, which must remain in effect 74 until repealed or amended by concurrent resolution. 75 (3) The commission may conduct its meetings through 76 teleconferences or other similar means. 77 (4) The commission must be staffed by legislative staff 78 members, as assigned by the President of the Senate and the 79 Speaker of the House of Representatives. 80 (5) The commission has the power and duty to do all of the 81 following: 82 (a) Review and evaluate the insurance marketplace and 83 studies of the various insurance markets. 84 (b) Review and comment on market data produced by the 85 Office of Insurance Regulation. 86 (c) Review and comment on the setting of reserve 87 requirements for insurers. 88 (d) Exercise all other powers and perform any other duties 89 prescribed by the Legislature. 90 Section 2. Paragraphs (a) and (d) of subsection (3) of 91 section 20.121, Florida Statutes, are amended to read: 92 20.121 Department of Financial Services.—There is created a 93 Department of Financial Services. 94 (3) FINANCIAL SERVICES COMMISSION.—Effective January 7, 95 2003, there is created within the Department of Financial 96 Services the Financial Services Commission, composed of the 97 Governor, the Attorney General, the Chief Financial Officer, and 98 the Commissioner of Agriculture, which shall for purposes of 99 this section be referred to as the commission. Commission 100 members shall serve as agency head of the Financial Services 101 Commission. The commission shall be a separate budget entity and 102 shall be exempt from the provisions of s. 20.052. Commission 103 action shall be by majority vote consisting of at least three 104 affirmative votes. The commission shall not be subject to 105 control, supervision, or direction by the Department of 106 Financial Services in any manner, including purchasing, 107 transactions involving real or personal property, personnel, or 108 budgetary matters. 109 (a) Structure.—The major structural unit of the commission 110 is the office. Each office shall be headed by a director. The 111 following offices are established: 112 1. The Office of Insurance Regulation, which shall be 113 responsible for all activities concerning insurers and other 114 risk bearing entities, including licensing, rates, policy forms, 115 market conduct, claims, issuance of certificates of authority, 116 solvency, viatical settlements, premium financing, and 117 administrative supervision, as provided under the insurance code 118 or chapter 636. The head of the Office of Insurance Regulation 119 is the Director of the Office of Insurance Regulation, who may 120 also be known as the Commissioner of Insurance Regulation. 121 Beginning with the general election in 2026, the Commissioner of 122 Insurance Regulation shall be elected. The commissioner elected 123 in 2026 shall serve a term of 2 years; thereafter, the 124 commissioner shall serve a term of 4 years. 125 2. The Office of Financial Regulation, which shall be 126 responsible for all activities of the Financial Services 127 Commission relating to the regulation of banks, credit unions, 128 other financial institutions, finance companies, and the 129 securities industry. The head of the office is the Director of 130 the Office of Financial Regulation, who may also be known as the 131 Commissioner of Financial Regulation. The Office of Financial 132 Regulation shall include a Bureau of Financial Investigations, 133 which shall function as a criminal justice agency for purposes 134 of ss. 943.045-943.08 and shall have a separate budget. The 135 bureau may conduct investigations within or outside this state 136 as the bureau deems necessary to aid in the enforcement of this 137 section. If, during an investigation, the office has reason to 138 believe that any criminal law of this state has or may have been 139 violated, the office shall refer any records tending to show 140 such violation to state or federal law enforcement or 141 prosecutorial agencies and shall provide investigative 142 assistance to those agencies as required. 143 (d) Appointment and qualificationqualificationsof the 144 Director of the Office of Financial Regulationdirectors.—The 145 commission shall appoint or remove theeachDirector of the 146 Office of Financial Regulation by a majority vote consisting of 147 at least three affirmative votes, with both the Governor and the 148 Chief Financial Officer on the prevailing side.The minimum149qualifications of the directors are as follows:1501.Prior to appointment as director, the Director of the151Office of Insurance Regulation must have had, within the152previous 10 years, at least 5 years of responsible private153sector experience working full time in areas within the scope of154the subject matter jurisdiction of the Office of Insurance155Regulation or at least 5 years of experience as a senior156examiner or other senior employee of a state or federal agency157having regulatory responsibility over insurers or insurance158agencies.1592.Before his or herPrior toappointmentas director, the 160 Director of the Office of Financial Regulation must have had, 161 within the previous 10 years, at least 5 years of responsible 162 private sector experience working full time in areas within the 163 subject matter jurisdiction of the Office of Financial 164 Regulation or at least 5 years of experience as a senior 165 examiner or other senior employee of a state or federal agency 166 having regulatory responsibility over financial institutions, 167 finance companies, or securities companies. 168 Section 3. Section 112.3134, Florida Statutes, is created 169 to read: 170 112.3134 Commissioner of Insurance Regulation; Office of 171 Insurance Regulation.— 172 (1) A person who has served as Commissioner of Insurance 173 Regulation may not, for a period of 7 years after vacating that 174 office, do either of the following: 175 (a) Personally represent another person or entity for 176 compensation before the Office of Insurance Regulation. 177 (b) Serve as an employee or contractor of an entity 178 regulated by the Office of Insurance Regulation 179 (2) A person who violates subsection (1) may be punished by 180 any of the following: 181 (a) Public censure and reprimand. 182 (b) A civil penalty not to exceed $10,000. 183 (c) Forfeiture of any pecuniary benefits received for 184 conduct that violates this section. The amount of the pecuniary 185 benefits must be paid to the General Revenue Fund. 186 (3) The Attorney General and Chief Financial Officer are 187 independently authorized to collect any penalty imposed under 188 this section. 189 Section 4. Subsection (2) of section 494.0026, Florida 190 Statutes, is amended to read: 191 494.0026 Disposition of insurance proceeds.—The following 192 provisions apply to mortgage loans held by a mortgagee or 193 assignee that is subject to part II or part III of this chapter. 194 (2)(a) Insurance proceeds received by a mortgagee or 195 assignee whichthatrelate to compensation for damage to 196 property or contents insurance coverage in which the mortgagee 197 or assignee has a security interest must be promptly deposited 198 into a segregated account of a federally insured financial 199 institution. 200 (b) Any interest earned on insurance proceeds received by a 201 mortgagee or assignee which relate to compensation for damage to 202 property or contents insurance coverage in which the mortgagee 203 or assignee has a security interest must be paid to the insured. 204 205 This section may not be construed to prevent an insurance 206 company from paying the insured directly for additional living 207 expenses or paying the insured directly for contents insurance 208 coverage if the mortgagee or assignee does not have a security 209 interest in the contents. 210 Section 5. Subsection (5) is added to section 624.401, 211 Florida Statutes, to read: 212 624.401 Certificate of authority required.— 213 (5)(a) A property insurer may not claim insolvency in this 214 state if it still as an insurer, transacts insurance, or 215 otherwise engages in insurance activities in any state other 216 than this state, regardless of whether such insurance activities 217 are property insurance activities. 218 (b) Effective January 1, 2025, any person who acts as a 219 property insurer, transacts property insurance, or otherwise 220 engages in property insurance activities in any state other than 221 this state may act as an insurer, transact insurance, or 222 otherwise engage in insurance activities in this state only if 223 that person does not exclude property insurance from the 224 person’s insurance transactions or activities. 225 Section 6. Subsection (10) is added to section 627.0629, 226 Florida Statutes, to read: 227 627.0629 Residential property insurance; rate filings.— 228 (10) An insurer shall release to an insured all information 229 relating to an inspection or underwriting report upon the 230 insured’s request. 231 Section 7. Subsection (11) is added to section 627.701, 232 Florida Statutes, to read: 233 627.701 Liability of insureds; coinsurance; deductibles; 234 prohibited denials of claims.— 235 (11) A property insurer that issues or renews an insurance 236 policy or contract covering real property in this state on or 237 after January 1, 2025, may not use a property’s preexisting 238 condition, a date of loss that predates the date of a claim, or 239 faulty installation or workmanship as a defense for denial of a 240 claim. 241 Section 8. Subsection (8) of section 627.715, Florida 242 Statutes, is amended to read: 243 627.715 Flood insurance.—An authorized insurer may issue an 244 insurance policy, contract, or endorsement providing personal 245 lines residential coverage for the peril of flood or excess 246 coverage for the peril of flood on any structure or the contents 247 of personal property contained therein, subject to this section. 248 This section does not apply to commercial lines residential or 249 commercial lines nonresidential coverage for the peril of flood. 250 An insurer may issue flood insurance policies, contracts, 251 endorsements, or excess coverage on a standard, preferred, 252 customized, flexible, or supplemental basis. 253 (8)(a) An agent must provide a written notice to be signed 254 by everytheapplicant advising the applicant of flood risk. 255 (b) Ifbeforethe agent places flood insurance coverage 256 with an admitted or surplus lines insurer for a property 257 receiving flood insurance under the National Flood Insurance 258 Program, the agent must also provide to the applicant, before 259 placing new flood coverage for the property, a written. the260 notice notifyingmust notifythe applicant that, if the 261 applicant discontinues coverage under the National Flood 262 Insurance Program which is provided at a subsidized rate, the 263 full risk rate for flood insurance may apply to the property if 264 the applicant later seeks to reinstate coverage under the 265 program. 266 Section 9. Section 627.71555, Florida Statutes, is created 267 to read: 268 627.71555 Office rulemaking.—By January 1, 2025, the office 269 must adopt rules: 270 (1) Requiring that, each time legislation creating or 271 amending law to reform property insurance takes effect, property 272 insurers must offer mandatory premium rate reduction for their 273 insureds. 274 (2) Ensuring that insurance fraud committed by any person 275 can be easily reported, investigated, and, if necessary, 276 prosecuted. 277 (3) Redetermining flood zones statewide for use when 278 assigning flood risks. 279 Section 10. The Department of Financial Services shall, no 280 later than October 1, 2025, adopt rules regarding any allegation 281 made by an insurer or an employee or contractor thereof of 282 insurance fraud in violation of s. 626.9892(2), Florida 283 Statutes. Such rules must include requirements that: 284 (1) Insurers notify the Division of Investigative and 285 Forensic Services within the Department of Financial Services of 286 any such allegation. 287 (2) The department promptly investigate such allegations. 288 (3) If the department determines that there was no fraud, 289 the insurer alleging such fraud may be appropriately sanctioned 290 by a fine of up to $100,000. 291 (4) All documents relating to such sanctions are public 292 records. 293 Section 11. (1) The Office of Program Policy Analysis and 294 Government Accountability (OPPAGA) shall conduct a study to 295 evaluate the effectiveness of the property insurance mediation 296 program provided under s. 627.7015, Florida Statutes. The 297 study’s scope must include, but need not be limited to: 298 (a) Improving public awareness of the program and the 299 advantages of participation. 300 (b) The need for additional resources for the program. 301 (2) The study must include recommendations for any changes 302 needed to improve the efficiency of the program to maximize its 303 usefulness as an alternative to litigation. 304 (3) In conducting the study, OPPAGA shall consult with the 305 Department of Financial Services, insurers, and organizations 306 representing insurance consumers. 307 (4) OPPAGA shall submit a report on its findings to the 308 President of the Senate and the Speaker of the House of 309 Representatives by December 1, 2025. 310 Section 12. Section 4 of chapter 2022-268, Laws of Florida, 311 is amended to read: 312 Section 4. (1) For the 2024-20252022-2023fiscal year, the 313 sum of $300$150million in nonrecurring funds is appropriated 314 from the General Revenue Fund to the Department of Financial 315 Services for the My Safe Florida Home Program. The funds shall 316 be placed in reserve. The department shall submit budget 317 amendments requesting release of the funds held in reserve 318 pursuant to chapter 216, Florida Statutes. The budget amendments 319 shall include a detailed spending plan. 320 (2) The funds shall be allocated as follows: 321 (a) FiftyTwenty-fivemillion dollars for hurricane 322 mitigation inspections. 323 (b) Two hundred thirtyOne hundred fifteenmillion dollars 324 for mitigation grants. 325 (c) EightFourmillion dollars for education and consumer 326 awareness. 327 (d) TwoOnemillion dollars for public outreach for 328 contractors and real estate brokers and sales associates. 329 (e)TenFivemillion dollars for administrative costs. 330 (3) Any unexpended balance of funds from this appropriation 331 remaining on June 30, 20252023, shall revert and is 332 appropriated to the Department of Financial Services for the 333 2025-20262023-2024fiscal year for the same purpose. 334 (4) The department may adopt emergency rules pursuant to s. 335 120.54, Florida Statutes, at any time, as are necessary to 336 implement this section and s. 215.5586, Florida Statutes, as 337 amended by this act. The Legislature finds that such emergency 338 rulemaking authority is necessary to address a critical need in 339 the state’s problematic property insurance market. The 340 Legislature further finds that the uniquely short timeframe 341 needed to effectively implement this section for the 2024-2025 3422022-2023fiscal year requires that the department adopt rules 343 as quickly as practicable. Therefore, in adopting such emergency 344 rules, the department need not make the findings required by s. 345 120.54(4)(a), Florida Statutes. Emergency rules adopted under 346 this section are exempt from s. 120.54(4)(c), Florida Statutes, 347 and shall remain in effect until replaced by rules adopted under 348 the nonemergency rulemaking procedures of chapter 120, Florida 349 Statutes, which must occur no later than July 1, 20252023. 350 (5) This section shall expire on October 1, 20262024. 351 Section 13. This act shall take effect July 1, 2024.