Bill Text: FL S1622 | 2024 | Regular Session | Comm Sub


Bill Title: Insurance

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2024-03-06 - Laid on Table, refer to CS/CS/HB 1611 [S1622 Detail]

Download: Florida-2024-S1622-Comm_Sub.html
       Florida Senate - 2024                      CS for CS for SB 1622
       
       
        
       By the Committees on Fiscal Policy; and Banking and Insurance;
       and Senator Trumbull
       
       
       
       
       594-03833-24                                          20241622c2
    1                        A bill to be entitled                      
    2         An act relating to insurance; amending s. 624.3161,
    3         F.S.; revising the entities for which the Office of
    4         Insurance Regulation is required to conduct market
    5         conduct examinations; amending s. 624.424, F.S.;
    6         beginning on a specified date, requiring insurers and
    7         insurer groups to file a specified supplemental report
    8         on a monthly basis; requiring that such report include
    9         certain information for each zip code; amending s.
   10         624.4305, F.S.; authorizing the Financial Services
   11         Commission to adopt rules related to notice of
   12         nonrenewal of residential property insurance policies;
   13         amending s. 624.46226, F.S.; revising the requirements
   14         for public housing authority self-insurance funds;
   15         amending s. 626.9201, F.S.; prohibiting insurers from
   16         canceling or nonrenewing certain insurance policies
   17         under certain circumstances; providing exceptions;
   18         providing construction; authorizing the commission to
   19         adopt rules and the Commissioner of Insurance
   20         Regulation to issue orders; amending s. 627.062, F.S.;
   21         specifying requirements for rate filings if certain
   22         models are used; amending s. 627.351, F.S.; revising
   23         requirements for certain policies that are not subject
   24         to certain rate increase limitations; amending s.
   25         627.7011, F.S.; revising the definition of the term
   26         “authorized inspector”; amending s. 628.011, F.S.;
   27         conforming provisions to changes made by the act;
   28         amending s. 628.061, F.S.; conforming a provision to
   29         changes made by the act; revising the persons that the
   30         office is required to investigate in connection with a
   31         proposal to organize or incorporate a domestic
   32         insurer; amending s. 628.801, F.S.; revising
   33         requirements for rules adopted for insurers that are
   34         members of an insurance holding company; deleting an
   35         obsolete date; authorizing the commission to adopt
   36         rules; amending s. 629.011, F.S.; defining terms;
   37         repealing s. 629.021, F.S., relating to the definition
   38         of the term “reciprocal insurer”; repealing s.
   39         629.061, F.S., relating to the term “attorney”;
   40         amending s. 629.081, F.S.; revising the procedure for
   41         persons to organize as a domestic reciprocal insurer;
   42         specifying requirements for the permit application;
   43         requiring that the application be accompanied by a
   44         specified fee and other pertinent information and
   45         documents; requiring the office to evaluate and grant
   46         or deny the permit application in accordance with
   47         specified provisions; amending s. 629.091, F.S.;
   48         providing that a domestic reciprocal insurer may seek
   49         a certificate of authority only under certain
   50         circumstances; providing requirements for an
   51         application for a certificate of authority to operate
   52         as a domestic reciprocal insurer; requiring the office
   53         to grant authorization to issue nonassessable policies
   54         under certain circumstances; requiring that a
   55         certificate of authority be issued in the name of the
   56         reciprocal insurer to its attorney in fact; creating
   57         s. 629.094, F.S.; requiring a domestic reciprocal
   58         insurer to meet certain requirements to maintain its
   59         eligibility for a certificate of authority; amending
   60         s. 629.101, F.S.; revising requirements for the power
   61         of attorney given by subscribers of a domestic
   62         reciprocal insurer to its attorney in fact; requiring
   63         that such power of attorney contain certain
   64         provisions; creating s. 629.225, F.S.; providing
   65         applicability; prohibiting persons from concluding a
   66         tender offer or exchange offer or acquiring securities
   67         of certain attorneys in fact and controlling companies
   68         of certain attorneys in fact; providing an exception;
   69         providing applicability; authorizing certain persons
   70         to request that the office waive certain requirements;
   71         providing that the office may waive certain
   72         requirements if specified determinations are made;
   73         specifying the requirements of an application to the
   74         office relating to certain acquisitions; requiring
   75         that such application be accompanied by a specified
   76         fee; requiring that amendments be filed with the
   77         office under certain circumstances; specifying the
   78         manner in which the acquisition application must be
   79         reviewed; authorizing the office, and requiring the
   80         office if a request for a proceeding is filed, to
   81         conduct a proceeding within a specified timeframe to
   82         consider the appropriateness of such application;
   83         requiring that certain time periods be tolled;
   84         requiring that written requests for a proceeding be
   85         filed within a certain timeframe; authorizing certain
   86         persons to take all steps to conclude the acquisition
   87         during the pendency of the proceeding or review
   88         period; requiring the office to order a proposed
   89         acquisition disapproved and that actions to conclude
   90         the acquisition be ceased under certain circumstances;
   91         prohibiting certain persons from making certain
   92         changes during the pendency of the office’s review of
   93         an acquisition; providing an exception; defining the
   94         terms “material change in the operation of the
   95         attorney in fact” and “material change in the
   96         management of the attorney in fact”; requiring the
   97         office to approve or disapprove certain changes upon
   98         making certain findings; requiring that a proceeding
   99         be conducted within a certain timeframe; requiring
  100         that recommended orders and final orders be issued
  101         within a certain timeframe; specifying the
  102         circumstances under which the office may disapprove an
  103         acquisition; specifying that certain persons have the
  104         burden of proof; requiring the office to approve an
  105         acquisition upon certain findings; specifying that
  106         certain votes are not valid and that certain
  107         acquisitions are void; specifying that certain
  108         provisions may be enforced by an injunction; creating
  109         a private right of action in favor of the attorney in
  110         fact or the controlling company to enforce certain
  111         provisions; providing that a certain demand upon the
  112         office is not required before certain legal actions;
  113         providing that the office is not a necessary party to
  114         certain actions; specifying the persons who are deemed
  115         designated for service of process and who have
  116         submitted to the administrative jurisdiction of the
  117         office; providing that approval by the office does not
  118         constitute a certain recommendation; providing that
  119         certain actions are unlawful; providing criminal
  120         penalties; providing a statute of limitations;
  121         authorizing a person to rebut a presumption of control
  122         by filing certain disclaimers; specifying the contents
  123         of such disclaimer; specifying that, after a
  124         disclaimer is filed, the attorney in fact is relieved
  125         of a certain duty; authorizing the office to order
  126         certain persons to cease acquisition of the attorney
  127         in fact or controlling company and divest themselves
  128         of any stock or ownership interest under certain
  129         circumstances; requiring the office to suspend or
  130         revoke the reciprocal certificate of authority under
  131         certain circumstances; creating s. 629.227, F.S.;
  132         specifying the information as to the background and
  133         identity of certain persons which must be furnished by
  134         such persons; creating s. 629.229, F.S.; prohibiting
  135         certain persons who served in certain capacities
  136         before a specified date from serving in certain other
  137         roles or having certain control over certain
  138         selections; providing an exception; amending s.
  139         629.261, F.S.; requiring the office to revoke certain
  140         authorization under certain circumstances; prohibiting
  141         insurers subject to such action from issuing or
  142         renewing nonassessable policies or converting
  143         assessable policies to nonassessable policies;
  144         providing that specified provisions apply to such
  145         insurers; deleting provisions regarding the office’s
  146         authority to issue a certificate authorizing the
  147         insurer to extinguish the contingent liability of
  148         subscribers; deleting a prohibition regarding the
  149         office’s authorization to extinguish the contingent
  150         liability of certain subscribers; amending s. 629.291,
  151         F.S.; providing that certain insurers that merge are
  152         governed by the insurance code; prohibiting domestic
  153         stock insurers from being converted to reciprocal
  154         insurers; requiring that specified plans be filed with
  155         the office and that such plans contain certain
  156         information; deleting a provision regarding a stock or
  157         mutual insurer’s capital and surplus requirements and
  158         rights; authorizing the conversion of assessable
  159         reciprocal insurers to nonassessable reciprocal
  160         insurers under certain circumstances; creating s.
  161         629.525, F.S.; requiring the commission to adopt,
  162         amend, or repeal certain rules; amending ss. 163.01
  163         and 626.9531, F.S.; conforming cross-references;
  164         providing effective dates.
  165          
  166  Be It Enacted by the Legislature of the State of Florida:
  167  
  168         Section 1. Subsection (1) of section 624.3161, Florida
  169  Statutes, is amended to read:
  170         624.3161 Market conduct examinations.—
  171         (1) As often as it deems necessary, the office shall
  172  examine each licensed rating organization, each advisory
  173  organization, each group, association, carrier, as defined in s.
  174  440.02, or other organization of insurers which engages in joint
  175  underwriting or joint reinsurance, the attorney in fact of each
  176  reciprocal insurer, and each authorized insurer transacting in
  177  this state any class of insurance to which the provisions of
  178  chapter 627 are applicable. The examination shall be for the
  179  purpose of ascertaining compliance by the person examined with
  180  the applicable provisions of chapters 440, 624, 626, 627, and
  181  635.
  182         Section 2. Paragraph (a) of subsection (10) of section
  183  624.424, Florida Statutes, is amended to read:
  184         624.424 Annual statement and other information.—
  185         (10)(a) By January 1, 2025, and each month thereafter, each
  186  insurer or insurer group doing business in this state shall file
  187  on a monthly quarterly basis in conjunction with financial
  188  reports required by paragraph (1)(a) a supplemental report on an
  189  individual and group basis on a form prescribed by the
  190  commission with information on personal lines and commercial
  191  lines residential property insurance policies in this state. The
  192  supplemental report must shall include separate information for
  193  personal lines property policies and for commercial lines
  194  property policies and totals for each item specified, including
  195  premiums written for each of the property lines of business as
  196  described in ss. 215.555(2)(c) and 627.351(6)(a). The report
  197  must shall include the following information for each zip code
  198  county on a monthly basis:
  199         1. Total number of policies in force at the end of each
  200  month.
  201         2. Total number of policies canceled.
  202         3. Total number of policies nonrenewed.
  203         4. Number of policies canceled due to hurricane risk.
  204         5. Number of policies nonrenewed due to hurricane risk.
  205         6. Number of new policies written.
  206         7. Total dollar value of structure exposure under policies
  207  that include wind coverage.
  208         8. Number of policies that exclude wind coverage.
  209         9. Number of claims open each month.
  210         10. Number of claims closed each month.
  211         11. Number of claims pending each month.
  212         12. Number of claims in which either the insurer or insured
  213  invoked any form of alternative dispute resolution, and
  214  specifying which form of alternative dispute resolution was
  215  used.
  216         Section 3. Section 624.4305, Florida Statutes, is amended
  217  to read:
  218         624.4305 Nonrenewal of residential property insurance
  219  policies.—Any insurer planning to nonrenew more than 10,000
  220  residential property insurance policies in this state within a
  221  12-month period shall give notice in writing to the Office of
  222  Insurance Regulation for informational purposes 90 days before
  223  the issuance of any notices of nonrenewal. The notice provided
  224  to the office must set forth the insurer’s reasons for such
  225  action, the effective dates of nonrenewal, and any arrangements
  226  made for other insurers to offer coverage to affected
  227  policyholders. The commission may adopt rules to administer this
  228  section.
  229         Section 4. Effective upon becoming a law, paragraph (d) of
  230  subsection (1) of section 624.46226, Florida Statutes, is
  231  amended to read:
  232         624.46226 Public housing authorities self-insurance funds;
  233  exemption for taxation and assessments.—
  234         (1) Notwithstanding any other provision of law, any two or
  235  more public housing authorities in the state as defined in
  236  chapter 421 may form a self-insurance fund for the purpose of
  237  pooling and spreading liabilities of its members as to any one
  238  or combination of casualty risk or real or personal property
  239  risk of every kind and every interest in such property against
  240  loss or damage from any hazard or cause and against any loss
  241  consequential to such loss or damage, provided the self
  242  insurance fund that is created:
  243         (d) Maintains a continuing program of excess insurance
  244  coverage and reinsurance reserve evaluation to protect the
  245  financial stability of the fund in an amount and manner
  246  determined by a qualified and independent actuary. The program
  247  must, at a minimum, this program must:
  248         1. Include a net retention in an amount and manner selected
  249  by the administrator, ratified by the governing body, and
  250  certified by an independent qualified actuary;
  251         2.Include reinsurance or Purchase excess insurance from
  252  authorized insurance carriers or eligible surplus lines
  253  insurers; and.
  254         3.Be certified by a qualified and independent actuary as
  255  to the program’s adequacy. This certification must be submitted
  256  simultaneously with the certifications required under paragraphs
  257  (b) and (c).
  258         2. Retain a per-loss occurrence that does not exceed
  259  $350,000.
  260  
  261  A for-profit or not-for-profit corporation, limited liability
  262  company, or other similar business entity in which a public
  263  housing authority holds an ownership interest or participates in
  264  its governance under s. 421.08(8) may join a self-insurance fund
  265  formed under this section in which such public housing authority
  266  participates. Such for-profit or not-for-profit corporation,
  267  limited liability company, or other similar business entity may
  268  join the self-insurance fund solely to insure risks related to
  269  public housing.
  270         Section 5. Subsection (2) of section 626.9201, Florida
  271  Statutes, is amended to read:
  272         626.9201 Notice of cancellation or nonrenewal.—
  273         (2) An insurer issuing a policy providing coverage for
  274  property, casualty, surety, or marine insurance must give the
  275  named insured written notice of cancellation or termination
  276  other than nonrenewal at least 45 days before the effective date
  277  of the cancellation or termination, including in the written
  278  notice the reasons for the cancellation or termination, except
  279  that:
  280         (a) If cancellation is for nonpayment of premium, at least
  281  10 days’ written notice of cancellation accompanied by the
  282  reason for cancellation must be given. As used in this
  283  paragraph, the term “nonpayment of premium” means the failure of
  284  the named insured to discharge when due any of his or her
  285  obligations in connection with the payment of premiums on a
  286  policy or an installment of such a premium, whether the premium
  287  or installment is payable directly to the insurer or its agent
  288  or indirectly under any plan for financing premiums or extension
  289  of credit or the failure of the named insured to maintain
  290  membership in an organization if such membership is a condition
  291  precedent to insurance coverage. The term also includes the
  292  failure of a financial institution to honor the check of an
  293  applicant for insurance which was delivered to a licensed agent
  294  for payment of a premium, even if the agent previously delivered
  295  or transferred the premium to the insurer. If a correctly
  296  dishonored check represents payment of the initial premium, the
  297  contract and all contractual obligations are void ab initio
  298  unless the nonpayment is cured within the earlier of 5 days
  299  after actual notice by certified mail is received by the
  300  applicant or 15 days after notice is sent to the applicant by
  301  certified mail or registered mail, and, if the contract is void,
  302  any premium received by the insurer from a third party must
  303  shall be refunded to that party in full; and
  304         (b) If cancellation or termination occurs during the first
  305  90 days during which the insurance is in force and if the
  306  insurance is canceled or terminated for reasons other than
  307  nonpayment, at least 20 days’ written notice of cancellation or
  308  termination accompanied by the reason for cancellation or
  309  termination must be given, except if there has been a material
  310  misstatement or misrepresentation or failure to comply with the
  311  underwriting requirements established by the insurer; and
  312         (c)1.Upon a declaration of an emergency pursuant to s.
  313  252.36 and the filing of an order by the Commissioner of
  314  Insurance Regulation, an insurer may not cancel or nonrenew a
  315  personal residential or commercial residential property
  316  insurance policy covering a dwelling or residential property
  317  located in this state which has been damaged as a result of a
  318  hurricane or wind loss that is the subject of the declaration of
  319  emergency for 90 days after the dwelling or residential property
  320  has been repaired. A dwelling or residential property is deemed
  321  to be repaired when substantially completed and restored to the
  322  extent that the dwelling or residential property is insurable by
  323  another insurer that is writing policies in this state.
  324         2.However, an insurer or its agent may cancel or nonrenew
  325  such a policy before the repair of the dwelling or residential
  326  property:
  327         a.Upon 10 days’ notice for nonpayment of premium; or
  328         b.Upon 45 days’ notice:
  329         (I)For a material misstatement or fraud related to the
  330  claim;
  331         (II) If the insurer determines that the insured has
  332  unreasonably caused a delay in the repair of the dwelling or
  333  residential property;
  334         (III)If the insurer or its agent makes a reasonable
  335  written inquiry to the insured as to the status of repairs, sent
  336  by certified mail, return receipt requested, and the insured
  337  fails within 30 calendar days to provide information that is
  338  responsive to the inquiry to either the address or e-mail
  339  account designated by the insurer; or
  340         (IV) If the insurer has paid policy limits.
  341         3. If the insurer elects to nonrenew a policy covering a
  342  property that has been damaged, the insurer must provide at
  343  least 90 days’ notice to the insured that the insurer intends to
  344  nonrenew the policy 90 days after the dwelling or residential
  345  property has been repaired.
  346         4. This paragraph does not prevent the insurer from
  347  canceling or nonrenewing the policy 90 days after the repair is
  348  completed for the same reasons the insurer would otherwise have
  349  canceled or nonrenewed the policy but for the limitations of
  350  subparagraph 1.
  351         5. The Financial Services Commission may adopt rules, and
  352  the Commissioner of Insurance Regulation may issue orders,
  353  necessary to implement this paragraph.
  354         Section 6. Paragraph (j) of subsection (2) of section
  355  627.062, Florida Statutes, is amended to read:
  356         627.062 Rate standards.—
  357         (2) As to all such classes of insurance:
  358         (j) With respect to residential property insurance rate
  359  filings, the rate filing:
  360         1. Must account for mitigation measures undertaken by
  361  policyholders to reduce hurricane losses and windstorm losses.
  362         2. May use a modeling indication that is the weighted or
  363  straight average of two or more hurricane loss projection models
  364  found by the Florida Commission on Hurricane Loss Projection
  365  Methodology to be accurate or reliable pursuant to s. 627.0628.
  366  If an averaged model is used under this section, the same
  367  averaged model must be used throughout this state. If a weighted
  368  average is used, the insurer must provide the office with an
  369  actuarial justification for using the weighted average which
  370  shows that the weighted average results in a rate that is
  371  reasonable, adequate, and fair.
  372  
  373  The provisions of this subsection do not apply to workers’
  374  compensation, employer’s liability insurance, and motor vehicle
  375  insurance.
  376         Section 7. Paragraph (n) of subsection (6) of section
  377  627.351, Florida Statutes, is amended to read:
  378         627.351 Insurance risk apportionment plans.—
  379         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
  380         (n)1. Rates for coverage provided by the corporation must
  381  be actuarially sound pursuant to s. 627.062 and not competitive
  382  with approved rates charged in the admitted voluntary market so
  383  that the corporation functions as a residual market mechanism to
  384  provide insurance only when insurance cannot be procured in the
  385  voluntary market, except as otherwise provided in this
  386  paragraph. The office shall provide the corporation such
  387  information as would be necessary to determine whether rates are
  388  competitive. The corporation shall file its recommended rates
  389  with the office at least annually. The corporation shall provide
  390  any additional information regarding the rates which the office
  391  requires. The office shall consider the recommendations of the
  392  board and issue a final order establishing the rates for the
  393  corporation within 45 days after the recommended rates are
  394  filed. The corporation may not pursue an administrative
  395  challenge or judicial review of the final order of the office.
  396         2. In addition to the rates otherwise determined pursuant
  397  to this paragraph, the corporation shall impose and collect an
  398  amount equal to the premium tax provided in s. 624.509 to
  399  augment the financial resources of the corporation.
  400         3. After the public hurricane loss-projection model under
  401  s. 627.06281 has been found to be accurate and reliable by the
  402  Florida Commission on Hurricane Loss Projection Methodology, the
  403  model shall be considered when establishing the windstorm
  404  portion of the corporation’s rates. The corporation may use the
  405  public model results in combination with the results of private
  406  models to calculate rates for the windstorm portion of the
  407  corporation’s rates. This subparagraph does not require or allow
  408  the corporation to adopt rates lower than the rates otherwise
  409  required or allowed by this paragraph.
  410         4. The corporation must make a recommended actuarially
  411  sound rate filing for each personal and commercial line of
  412  business it writes.
  413         5. Notwithstanding the board’s recommended rates and the
  414  office’s final order regarding the corporation’s filed rates
  415  under subparagraph 1., the corporation shall annually implement
  416  a rate increase which, except for sinkhole coverage, does not
  417  exceed the following for any single policy issued by the
  418  corporation, excluding coverage changes and surcharges:
  419         a. Twelve percent for 2023.
  420         b. Thirteen percent for 2024.
  421         c. Fourteen percent for 2025.
  422         d. Fifteen percent for 2026 and all subsequent years.
  423         6. The corporation may also implement an increase to
  424  reflect the effect on the corporation of the cash buildup factor
  425  pursuant to s. 215.555(5)(b).
  426         7. The corporation’s implementation of rates as prescribed
  427  in subparagraphs 5. and 8. shall cease for any line of business
  428  written by the corporation upon the corporation’s implementation
  429  of actuarially sound rates. Thereafter, the corporation shall
  430  annually make a recommended actuarially sound rate filing that
  431  is not competitive with approved rates in the admitted voluntary
  432  market for each commercial and personal line of business the
  433  corporation writes.
  434         8. The following New or renewal personal lines policies
  435  that do not cover a primary residence written on or after
  436  November 1, 2023, are not subject to the rate increase
  437  limitations in subparagraph 5., but may not be charged more than
  438  50 percent above, nor less than, the prior year’s established
  439  rate for the corporation:
  440         a. Policies that do not cover a primary residence;
  441         b. New policies under which the coverage for the insured
  442  risk, before the date of application with the corporation, was
  443  last provided by an insurer determined by the office to be
  444  unsound or an insurer placed in receivership under chapter 631;
  445  or
  446         c. Subsequent renewals of those policies, including the new
  447  policies in sub-subparagraph b., under which the coverage for
  448  the insured risk, before the date of application with the
  449  corporation, was last provided by an insurer determined by the
  450  office to be unsound or an insurer placed in receivership under
  451  chapter 631.
  452         9. As used in this paragraph, the term “primary residence”
  453  means the dwelling that is the policyholder’s primary home or is
  454  a rental property that is the primary home of the tenant, and
  455  which the policyholder or tenant occupies for more than 9 months
  456  of each year.
  457         Section 8. Paragraph (a) of subsection (5) of section
  458  627.7011, Florida Statutes, is amended to read:
  459         627.7011 Homeowners’ policies; offer of replacement cost
  460  coverage and law and ordinance coverage.—
  461         (5)(a) As used in this subsection, the term “authorized
  462  inspector” means an inspector who is approved by the insurer and
  463  who is:
  464         1. A home inspector licensed under s. 468.8314;
  465         2. A building code inspector certified under s. 468.607;
  466         3. A general, building, or residential contractor licensed
  467  under s. 489.111 or a roofing contractor;
  468         4. A professional engineer licensed under s. 471.015;
  469         5. A professional architect licensed under s. 481.213; or
  470         6. Any other individual or entity recognized by the insurer
  471  as possessing the necessary qualifications to properly complete
  472  a general inspection of a residential structure insured with a
  473  homeowner’s insurance policy.
  474         Section 9. Section 628.011, Florida Statutes, is amended to
  475  read:
  476         628.011 Scope of part.—This part applies only to domestic
  477  stock insurers, mutual insurers, and captive insurers, except
  478  that s. 628.341(2) applies also as to foreign and alien
  479  insurers.
  480         Section 10. Section 628.061, Florida Statutes, is amended
  481  to read:
  482         628.061 Investigation of proposed organization.—In
  483  connection with any proposal to organize or incorporate a
  484  domestic insurer, the office shall make an investigation of:
  485         (1) The character, reputation, financial standing, and
  486  motives of the organizers, incorporators, and subscribers
  487  organizing the proposed insurer or any attorney in fact.
  488         (2) The character, financial responsibility, insurance
  489  experience, and business qualifications of its proposed
  490  officers, members of its subscribers advisory committee, or
  491  officers of its attorney in fact.
  492         (3) The character, financial responsibility, business
  493  experience, and standing of the proposed stockholders and
  494  directors, including the stockholders and directors of any
  495  attorney in fact.
  496         Section 11. Subsections (1), (2), and (5) of section
  497  628.801, Florida Statutes, are amended to read:
  498         628.801 Insurance holding companies; registration;
  499  regulation.—
  500         (1) An insurer that is authorized to do business in this
  501  state and that is a member of an insurance holding company
  502  shall, on or before April 1 of each year, register with the
  503  office and file a registration statement and be subject to
  504  regulation with respect to its relationship to the holding
  505  company as provided by law or rule. The commission shall adopt
  506  rules establishing the information and statement form required
  507  for registration and the manner in which registered insurers and
  508  their affiliates are regulated. The rules apply to domestic
  509  insurers, foreign insurers, and commercially domiciled insurers,
  510  except for foreign insurers domiciled in states that are
  511  currently accredited by the NAIC. Except to the extent of any
  512  conflict with this code, the rules must include all requirements
  513  and standards of the Insurance Holding Company System Model
  514  Regulation and ss. 4 and 5 of the Insurance Holding Company
  515  System Regulatory Act and the Insurance Holding Company System
  516  Model Regulation of the NAIC, as adopted in December 2020 2010.
  517  The commission may adopt subsequent amendments thereto if the
  518  methodology remains substantially consistent. The rules may
  519  include a prohibition on oral contracts between affiliated
  520  entities. Material transactions between an insurer and its
  521  affiliates must shall be filed with the office as provided by
  522  rule.
  523         (2) Effective January 1, 2015, The ultimate controlling
  524  person of every insurer subject to registration shall also file
  525  an annual enterprise risk report on or before April 1. As used
  526  in this subsection, the term “ultimate controlling person” means
  527  a person who is not controlled by any other person. The report
  528  must, to the best of the ultimate controlling person’s knowledge
  529  and belief, must identify the material risks within the
  530  insurance holding company system that could pose enterprise risk
  531  to the insurer. The report must shall be filed with the lead
  532  state office of the insurance holding company system as
  533  determined by the procedures within the Financial Analysis
  534  Handbook adopted by the NAIC and is confidential and exempt from
  535  public disclosure as provided in s. 624.4212.
  536         (a) An insurer may satisfy this requirement by providing
  537  the office with the most recently filed parent corporation
  538  reports that have been filed with the Securities and Exchange
  539  Commission which provide the appropriate enterprise risk
  540  information.
  541         (b) The term “enterprise risk” means an activity, a
  542  circumstance, an event, or a series of events involving one or
  543  more affiliates of an insurer which, if not remedied promptly,
  544  are likely to have a materially adverse effect upon the
  545  financial condition or liquidity of the insurer or its insurance
  546  holding company system as a whole, including anything that would
  547  cause the insurer’s risk-based capital to fall into company
  548  action level as set forth in s. 624.4085 or would cause the
  549  insurer to be in a hazardous financial condition.
  550         (c)The commission may adopt rules for filing the annual
  551  enterprise risk report in accordance with the Insurance Holding
  552  Company System Regulatory Act and the Insurance Holding Company
  553  System Model Regulation of the NAIC, as adopted in December
  554  2020.
  555         (5) Effective January 1, 2015, The failure to file a
  556  registration statement, or a summary of the registration
  557  statement, or the enterprise risk filing report required by this
  558  section within the time specified for filing is a violation of
  559  this section.
  560         Section 12. Section 629.011, Florida Statutes, is amended
  561  to read:
  562         629.011 Definitions “Reciprocal insurance” defined.—As used
  563  in this part, the term:
  564         (1) “Affiliated person” of another person means any of the
  565  following:
  566         (a) The spouse of the other person.
  567         (b) The parents of the other person, and their lineal
  568  descendants, and the parents of the other person’s spouse, and
  569  their lineal descendants.
  570         (c) A person who directly or indirectly owns or controls,
  571  or holds with power to vote, 10 percent or more of the
  572  outstanding voting securities of the other person.
  573         (d) A person who directly or indirectly owns 10 percent or
  574  more of the outstanding voting securities that are directly or
  575  indirectly owned or controlled, or held with power to vote, by
  576  the other person.
  577         (e) A person or group of persons who directly or indirectly
  578  control, are controlled by, or are under common control with the
  579  other person.
  580         (f) A director, an officer, a trustee, a partner, an owner,
  581  a manager, a joint venturer, an employee, or other person
  582  performing duties similar to those of persons in such positions.
  583         (g) If the other person is an investment company, any
  584  investment adviser of such company or any member of an advisory
  585  board of such company.
  586         (h) If the other person is an unincorporated investment
  587  company not having a board of directors, the depositor of such
  588  company.
  589         (i) A person who has entered into an agreement, written or
  590  unwritten, to act in concert with the other person in acquiring,
  591  or limiting the disposition of:
  592         1. Securities of an attorney in fact or controlling company
  593  that is a stock corporation; or
  594         2. An ownership interest of an attorney in fact or
  595  controlling company that is not a stock corporation.
  596         (2) “Attorney in fact” or “attorney” means the attorney in
  597  fact of a reciprocal insurer. The attorney in fact may be an
  598  individual, a corporation, or another person.
  599         (3) “Controlling company” means a person, a corporation, a
  600  trust, a limited liability company, an association, or another
  601  entity owning, directly or indirectly, 10 percent or more of the
  602  voting securities of one or more attorneys in fact that are
  603  stock corporations, or 10 percent or more of the ownership
  604  interest of one or more attorneys in fact that are not stock
  605  corporations.
  606         (4) “Reciprocal insurance” means is that resulting from an
  607  interexchange among persons, known as subscribers, of
  608  reciprocal agreements of indemnity, the interexchange being
  609  effectuated through an attorney in fact common to all such
  610  persons.
  611         (5) “Reciprocal insurer” means unincorporated aggregation
  612  of subscribers operating individually and collectively through
  613  an attorney in fact to provide reciprocal insurance among
  614  themselves.
  615         Section 13. Section 629.021, Florida Statutes, is repealed.
  616         Section 14. Section 629.061, Florida Statutes, is repealed.
  617         Section 15. Section 629.081, Florida Statutes, is amended
  618  to read:
  619         629.081 Organization of reciprocal insurer.—
  620         (1) Twenty-five or more persons domiciled in this state may
  621  organize a domestic reciprocal insurer by making application to
  622  the office for a permit to do so. A domestic reciprocal insurer
  623  may not be formed unless the persons so proposing have first
  624  received a permit from the office and make application to the
  625  office for a certificate of authority to transact insurance.
  626         (2) The permit application, to be filed by the organizers
  627  or the proposed attorney in fact, must be in writing and made in
  628  accordance with forms prescribed by the commission. In addition
  629  to any applicable requirements of s. 628.051 or other relevant
  630  statutes, the application must include all of the following
  631  shall fulfill the requirements of and shall execute and file
  632  with the office, when applying for a certificate of authority, a
  633  declaration setting forth:
  634         (a) The name of the proposed reciprocal insurer, which
  635  shall be in accordance with s. 629.051.;
  636         (b) The location of the insurer’s principal office, which
  637  shall be the same as that of the proposed attorney in fact and
  638  shall be maintained within this state.;
  639         (c) The kinds of insurance proposed to be transacted.;
  640         (d) The names and addresses of the original 25 or more
  641  subscribers.;
  642         (e) The proposed designation and appointment of the
  643  proposed attorney in fact and a copy of the proposed power of
  644  attorney.;
  645         (f) The names and addresses of the officers and directors
  646  of the proposed attorney in fact, if a corporation, or of its
  647  members, if other than a corporation, as well as the background
  648  information as specified in s. 629.227 for all officers,
  649  directors, and equivalent positions of the proposed attorney in
  650  fact as well as for any person with ownership interests of 10
  651  percent or more in the proposed attorney in fact.;
  652         (g)The articles of incorporation and bylaws, or equivalent
  653  documents, of the proposed attorney in fact, dated within the
  654  last year and appropriately certified.
  655         (h)(g) The proposed charter powers of the subscribers’
  656  advisory committee, and the names and terms of office of the
  657  members thereof as well as the background information as
  658  specified in s. 629.227 for each proposed member.;
  659         (h)That all moneys paid to the reciprocal shall, after
  660  deducting therefrom any sum payable to the attorney, be held in
  661  the name of the insurer and for the purposes specified in the
  662  subscribers’ agreement;
  663         (i) A copy of the proposed subscribers’ agreement.;
  664         (j)A statement that each of the original subscribers has
  665  in good faith applied for insurance of a kind proposed to be
  666  transacted, and that the insurer has received from each such
  667  subscriber the full premium or premium deposit required for the
  668  policy applied for, for a term of not less than 6 months at an
  669  adequate rate theretofore filed with and approved by the office;
  670         (k)A statement of the financial condition of the insurer,
  671  a schedule of its assets, and a statement that the surplus as
  672  required by s. 629.071 is on hand; and
  673         (j)(l) A copy of each policy, endorsement, and application
  674  form the insurer it then proposes to issue or use.
  675         (3)The filing must be accompanied by the application fee
  676  required under s. 624.501(1)(a) and such other pertinent
  677  information and documents as reasonably requested by the office.
  678         (4)The office shall evaluate and grant or deny the permit
  679  application in accordance with ss. 628.061 and 628.071 and other
  680  relevant provisions of the code.
  681  
  682  Such declaration shall be acknowledged by the attorney before an
  683  officer authorized to take acknowledgments.
  684         Section 16. Section 629.091, Florida Statutes, is amended
  685  to read:
  686         629.091 Reciprocal certificate of authority.—
  687         (1)A domestic reciprocal insurer may seek a certificate of
  688  authority only after obtaining a permit.
  689         (2)To apply for a certificate of authority as a domestic
  690  reciprocal insurer, the attorney in fact of an applicant who has
  691  previously received a permit from the office may file an
  692  application for a certificate of authority in accordance with
  693  forms prescribed by the commission that, in addition to
  694  applicable requirements of ss. 624.404, 624.411, and 624.413 and
  695  other relevant statutes, consist of all of the following:
  696         (a)Executed copies of any proposed or draft documents
  697  required as part of the permit application.
  698         (b)A statement affirming that all moneys paid to the
  699  reciprocal insurer shall, after deducting therefrom any sum
  700  payable to the attorney in fact, be held in the name of the
  701  insurer and for the purposes specified in the subscribers’
  702  agreement.
  703         (c)A statement that each of the original subscribers has
  704  in good faith applied for insurance of a kind proposed to be
  705  transacted, and that the insurer has received from each such
  706  subscriber the full premium or premium deposit required for the
  707  policy applied for, for a term of not less than 6 months at an
  708  adequate rate theretofore filed with and approved by the office.
  709         (d)A copy of the bond required under s. 629.121.
  710         (e)A statement of the financial condition of the insurer,
  711  a schedule of its assets, and a statement that the surplus as
  712  required by s. 629.071 is on hand.
  713         (f)Such other pertinent information or documents as
  714  reasonably requested by the office.
  715         (3)If the reciprocal insurer intends to issue
  716  nonassessable policies upon the receipt of a certificate of
  717  authority, and the office determines that the reciprocal insurer
  718  meets the legal requirements to issue nonassessable policies,
  719  including the surplus requirements, the office must grant
  720  authorization to issue nonassessable policies.
  721         (4) The certificate of authority of a reciprocal insurer
  722  shall be issued to its attorney in the name of the reciprocal
  723  insurer to its attorney in fact.
  724         Section 17. Section 629.094, Florida Statutes, is created
  725  to read:
  726         629.094Continued eligibility for certificate of
  727  authority.In order to maintain its eligibility for a
  728  certificate of authority, a domestic reciprocal insurer shall
  729  continue to meet all applicable conditions required for
  730  receiving the initial permit and certificate of authority under
  731  this code and the rules adopted thereunder.
  732         Section 18. Section 629.101, Florida Statutes, is amended
  733  to read:
  734         629.101 Power of attorney.—
  735         (1) The rights and powers of the attorney in fact of a
  736  reciprocal insurer are shall be as provided in the power of
  737  attorney given it by the subscribers.
  738         (2) The power of attorney must set forth all of the
  739  following:
  740         (a) The powers of the attorney in fact.;
  741         (b) That the attorney in fact is empowered to accept
  742  service of process on behalf of the insurer in actions against
  743  the insurer upon contracts exchanged.;
  744         (c) The place where the office of the attorney in fact is
  745  maintained.
  746         (d) The general services to be performed by the attorney in
  747  fact.;
  748         (e)That the attorney in fact has a fiduciary duty to the
  749  subscribers of the reciprocal insurer.
  750         (f)(d) The maximum amount to be deducted from advance
  751  premiums or deposits to be paid to the attorney in fact and the
  752  general items of expense in addition to losses, to be paid by
  753  the insurer.; and
  754         (g)(e) Except as to nonassessable policies, a provision for
  755  a contingent several liability of each subscriber in a specified
  756  amount, which amount may shall be not be less than 5 or nor more
  757  than 10 times the premium or premium deposit stated in the
  758  policy.
  759         (3) The power of attorney may do all of the following:
  760         (a) Provide for the right of substitution of the attorney
  761  in fact and revocation of the power of attorney and rights
  762  thereunder.;
  763         (b) Impose such restrictions upon the exercise of the power
  764  as are agreed upon by the subscribers.;
  765         (c) Provide for the exercise of any right reserved to the
  766  subscribers directly or through their advisory committee.; and
  767         (4)(d)The power of attorney must contain other lawful
  768  provisions deemed advisable.
  769         (5)(4) The terms of any power of attorney or agreement
  770  collateral thereto must shall be reasonable and equitable, and
  771  no such power or agreement may shall be used or be effective in
  772  this state unless filed with the office.
  773         Section 19. Section 629.225, Florida Statutes, is created
  774  to read:
  775         629.225Acquisitions.—The provisions of this section apply
  776  to domestic reciprocal insurers and the attorney in fact of
  777  domestic reciprocal insurers.
  778         (1) A person may not, individually or in conjunction with
  779  any affiliated person of such person, directly or indirectly,
  780  conclude a tender offer or exchange offer for, enter into any
  781  agreement to exchange securities for, or otherwise finally
  782  acquire, 10 percent or more of the outstanding voting securities
  783  of an attorney in fact which is a stock corporation or of a
  784  controlling company of an attorney in fact which is a stock
  785  corporation; or conclude an acquisition of, or otherwise finally
  786  acquire, 10 percent or more of the ownership interest of an
  787  attorney in fact which is not a stock corporation or of a
  788  controlling company of an attorney which is not a stock
  789  corporation, unless all of the following conditions are met:
  790         (a) The person or affiliated person has filed with the
  791  office and sent to the principal office of the attorney in fact,
  792  and any controlling company of the attorney in fact, the
  793  subscribers advisory committee, and the domestic reciprocal
  794  insurer a letter of notification regarding the transaction or
  795  proposed transaction no later than 5 days after any form of
  796  tender offer or exchange offer is proposed, or no later than 5
  797  days after the acquisition of the securities or ownership
  798  interest if a tender offer or exchange offer is not involved.
  799  The notification must be provided on forms prescribed by the
  800  commission containing information determined necessary to
  801  understand the transaction and identify all purchasers and
  802  owners involved.
  803         (b)The subscribers advisory committee has provided the
  804  notification required under paragraph (a) on a form prescribed
  805  by the commission, explaining what the notification is and
  806  letting the subscribers know of the filing deadlines for
  807  objecting to the acquisition.
  808         (c) The person or affiliated person has filed with the
  809  office an application signed under oath and prepared on forms
  810  prescribed by the commission which contains the information
  811  specified in subsection (4). The application must be completed
  812  and filed within 30 days after any form of tender offer or
  813  exchange offer is proposed, or after the acquisition of the
  814  securities if a tender offer or exchange offer is not involved.
  815         (d) The office has approved the tender offer or exchange
  816  offer, or acquisition if a tender offer or exchange offer is not
  817  involved.
  818         (2)This section does not apply to any acquisition of
  819  voting securities or ownership interest of an attorney in fact
  820  or of a controlling company by any person who is the owner of a
  821  majority of the voting securities or ownership interest with the
  822  approval of the office under this section or s. 629.091.
  823         (3)The person or affiliated person filing the notice
  824  required by paragraph (1)(a) may request that the office waive
  825  the requirements of paragraph (1)(b), provided that there is no
  826  change in the ultimate controlling shareholders, and no change
  827  in the ownership percentages of the ultimate controlling
  828  shareholders, and no unaffiliated parties acquire any direct or
  829  indirect interest in the attorney in fact. The office may waive
  830  the filing required by paragraph (1)(b) if it determines that
  831  there is no change in the ultimate controlling shareholders, and
  832  no change in the ownership percentages of the ultimate
  833  controlling shareholders, and no unaffiliated parties will
  834  acquire any direct or indirect interest in the attorney in fact.
  835         (4) The application to be filed with the office and
  836  furnished to the attorney in fact must contain the following
  837  information and any additional information as the office deems
  838  necessary to determine the character, experience, ability, and
  839  other qualifications of the person or affiliated person of such
  840  person for the protection of the reciprocal insurer’s
  841  subscribers and of the public:
  842         (a) The identity and background information specified in s.
  843  629.227 of:
  844         1. Each person by whom, or on whose behalf, the acquisition
  845  is to be made; and
  846         2. Any person who controls, directly or indirectly, such
  847  other person, including each director, officer, trustee,
  848  partner, owner, manager, or joint venturer, or other person
  849  performing duties similar to those of persons in such positions,
  850  for the person.
  851         (b) The source and amount of the funds or other
  852  consideration used, or to be used, in making the acquisition.
  853         (c) Any plans or proposals which such persons may have made
  854  to liquidate the attorney in fact or controlling company, to
  855  sell any of their assets or merge or consolidate them with any
  856  person, or to make any other major change in their business or
  857  corporate structure or management.
  858         (d) The nature and the extent of the controlling interest
  859  which the person or affiliated person of such person proposes to
  860  acquire, the terms of the proposed acquisition, and the manner
  861  in which the controlling interest is to be acquired of an
  862  attorney in fact or controlling company which is not a stock
  863  corporation.
  864         (e) The number of shares or other securities which the
  865  person or affiliated person of such person proposes to acquire,
  866  the terms of the proposed acquisition, and the manner in which
  867  the securities are to be acquired.
  868         (f) Information as to any contract, arrangement, or
  869  understanding with any party with respect to any of the
  870  securities of the attorney in fact or controlling company,
  871  including, but not limited to, information relating to the
  872  transfer of any of the securities, option arrangements, puts or
  873  calls, or the giving or withholding of proxies, which
  874  information names the party with whom the contract, arrangement,
  875  or understanding has been entered into and gives the details
  876  thereof.
  877         (g)The filing must be accompanied by the fee required
  878  under s. 624.501(1)(a).
  879         (5) If any material change occurs in the facts provided in
  880  the application filed with the office pursuant to this section
  881  or the background information required under s. 629.227, an
  882  amendment specifying such changes must be filed immediately with
  883  the office, and a copy of the amendment must be sent to the
  884  principal office of the attorney in fact and to the principal
  885  office of the controlling company.
  886         (6)(a)The acquisition application must be reviewed in
  887  accordance with chapter 120. The office may on its own initiate,
  888  or, if requested to do so in writing by a substantially affected
  889  person, shall conduct a proceeding to consider the
  890  appropriateness of the proposed filing. Time periods for
  891  purposes of chapter 120 shall be tolled during the pendency of
  892  the proceeding. Any written request for a proceeding must be
  893  filed with the office within 10 days after the date notice of
  894  the filing is given, or 10 days after notice of the filing is
  895  sent to the subscribers by the subscribers advisory committee,
  896  whichever is later. During the pendency of the proceeding or
  897  review period by the office, any person or affiliated person
  898  complying with the filing requirements of this section may
  899  proceed and take all steps necessary to conclude the acquisition
  900  so long as the acquisition becoming final is conditioned upon
  901  obtaining office approval. However, at any time it finds an
  902  immediate danger to the public health, safety, and welfare of
  903  the reciprocal insurer’s subscribers exists, the office shall
  904  immediately order, pursuant to s. 120.569(2)(n), the proposed
  905  acquisition disapproved and any further steps to conclude the
  906  acquisition ceased.
  907         (b) During the pendency of the office’s review of any
  908  acquisition subject to the provisions of this section, the
  909  acquiring person may not make any material change in the
  910  operation of the attorney in fact or controlling company unless
  911  the office has specifically approved the change, nor shall the
  912  acquiring person make any material change in the management of
  913  the attorney in fact unless advance written notice of the change
  914  in management is furnished to the office. The term material
  915  change in the operation of the attorney in fact” means a
  916  transaction that disposes of or obligates 5 percent or more of
  917  the capital and surplus of the attorney in fact or of any
  918  domestic reciprocal insurer. The term material change in the
  919  management of the attorney in fact means any change in
  920  management involving officers or directors of the attorney in
  921  fact or any person of the attorney or controlling company having
  922  authority to dispose of or obligate 5 percent or more of the
  923  attorney in fact’s capital or surplus. The office shall approve
  924  a material change in operations if it finds the applicable
  925  provisions of subsection (8) have been met. The office may
  926  disapprove a material change in management if it finds that the
  927  applicable provisions of subsection (8) have not been met and in
  928  such case the attorney in fact shall promptly change management
  929  as acceptable to the office.
  930         (c) If a request for a proceeding is filed, the proceeding
  931  must be conducted within 60 days after the date the written
  932  request for a proceeding is received by the office. A
  933  recommended order must be issued within 20 days after the date
  934  of the close of the proceedings. A final order shall be issued
  935  within 20 days after the date of the recommended order or, if
  936  exceptions to the recommended order are filed, within 20 days
  937  after the date the exceptions are filed.
  938         (7) The office may disapprove any acquisition subject to
  939  this section by any person or any affiliated person of such
  940  person who:
  941         (a) Willfully violates this section;
  942         (b) In violation of an order of the office issued pursuant
  943  to subsection (11), fails to divest himself or herself of any
  944  stock or ownership interest obtained in violation of this
  945  section or fails to divest himself or herself of any direct or
  946  indirect control of such stock or ownership interest, within 25
  947  days after such order; or
  948         (c) In violation of an order issued by the office pursuant
  949  to subsection (12), acquires an additional stock or ownership
  950  interest in an attorney in fact or controlling company or direct
  951  or indirect control of such stock or ownership interest, without
  952  complying with this section.
  953         (8) The person or persons filing the application required
  954  by this section have the burden of proof. The office shall
  955  approve any such acquisition if it finds, on the basis of the
  956  record made during any proceeding or on the basis of the filed
  957  application if no proceeding is conducted, that:
  958         (a) The financial condition of the acquiring person or
  959  persons will not jeopardize the financial stability of the
  960  attorney in fact or prejudice the interests of the reciprocal
  961  insurer’s subscribers or the public.
  962         (b) Any plan or proposal which the acquiring person has, or
  963  acquiring persons have, made:
  964         1. To liquidate the attorney in fact, sell its assets, or
  965  merge or consolidate it with any person, or to make any other
  966  major change in its business or corporate structure or
  967  management, is fair and free of prejudice to the reciprocal
  968  insurer’s subscribers or to the public; or
  969         2. To liquidate any controlling company, sell its assets,
  970  or merge or consolidate it with any person, or to make any major
  971  change in its business or corporate structure or management
  972  which would have an effect upon the attorney in fact, is fair
  973  and free of prejudice to the reciprocal insurer’s subscribers or
  974  to the public.
  975         (c) The competence, experience, and integrity of those
  976  persons who will control directly or indirectly the operation of
  977  the attorney in fact indicate that the acquisition is in the
  978  best interest of the reciprocal insurer’s subscribers and in the
  979  public interest.
  980         (d) The natural persons for whom background information is
  981  required to be furnished pursuant to this section have such
  982  backgrounds as to indicate that it is in the best interests of
  983  the reciprocal insurer’s subscribers and in the public interest
  984  to permit such persons to exercise control over the attorney in
  985  fact.
  986         (e) The directors and officers, if such attorney in fact or
  987  controlling company is a stock corporation, or the trustees,
  988  partners, owners, managers, joint venturers, or other persons
  989  performing duties similar to those of persons in such positions,
  990  if such attorney in fact or controlling company is not a stock
  991  corporation, to be employed after the acquisition have
  992  sufficient insurance experience and ability to assure reasonable
  993  promise of successful operation.
  994         (f) The management of the attorney in fact after the
  995  acquisition will be competent and trustworthy and will possess
  996  sufficient managerial experience so as to make the proposed
  997  operation of the attorney in fact not hazardous to the
  998  insurance-buying public.
  999         (g) The management of the attorney in fact after the
 1000  acquisition does not include any person who has directly or
 1001  indirectly through ownership, control, reinsurance transactions,
 1002  or other insurance or business relations unlawfully manipulated
 1003  the assets, accounts, finances, or books of any insurer or
 1004  otherwise acted in bad faith with respect thereto.
 1005         (h) The acquisition is not likely to be hazardous or
 1006  prejudicial to the reciprocal insurer’s subscribers or to the
 1007  public.
 1008         (i) The effect of the acquisition would not substantially
 1009  lessen competition in the line of insurance for which the
 1010  reciprocal insurer is licensed or certified in this state or
 1011  would not tend to create a monopoly therein.
 1012         (9) A vote by the stockholder of record, or by any other
 1013  person, of any security acquired in contravention of this
 1014  section is not valid. Any acquisition contrary to this section
 1015  is void. Upon the petition of the attorney in fact, the
 1016  controlling company, or the reciprocal insurer, the circuit
 1017  court for the county in which the principal office of the
 1018  attorney in fact is located may, without limiting the generality
 1019  of its authority, order the issuance or entry of an injunction
 1020  or other order to enforce this section. There shall be a private
 1021  right of action in favor of the attorney in fact, or controlling
 1022  company, to enforce this section. A demand upon the office that
 1023  it performs its functions may not be required as a prerequisite
 1024  to any suit by the attorney in fact or controlling company
 1025  against any other person, and in no case shall the office be
 1026  deemed a necessary party to any action by the attorney in fact
 1027  or controlling company to enforce this section. Any person who
 1028  makes or proposes an acquisition requiring the filing of an
 1029  application pursuant to this section, or who files such an
 1030  application, shall be deemed to have thereby designated the
 1031  Chief Financial Officer, or his or her assistant or deputy or
 1032  another person in charge of his or her office, as such person’s
 1033  agent for service of process under this section and shall
 1034  thereby be deemed to have submitted himself or herself to the
 1035  administrative jurisdiction of the office and to the
 1036  jurisdiction of the circuit court.
 1037         (10) Any approval by the office under this section does not
 1038  constitute a recommendation by the office of the tender offer or
 1039  exchange offer, or acquisition, if no tender offer or exchange
 1040  offer is involved. It is unlawful for a person to represent that
 1041  the office’s approval constitutes a recommendation. A person who
 1042  violates this subsection commits a felony of the third degree,
 1043  punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
 1044  The statute of limitations period for the prosecution of an
 1045  offense committed under this subsection is 5 years.
 1046         (11) A person may rebut a presumption of control by filing
 1047  a disclaimer of control with the office on a form prescribed by
 1048  the commission. The disclaimer must fully disclose all material
 1049  relationships and bases for affiliation between the person and
 1050  the attorney in fact as well as the basis for disclaiming the
 1051  affiliation. In lieu of such form, a person or acquiring party
 1052  may file with the office a copy of a Schedule 13G filed with the
 1053  Securities and Exchange Commission pursuant to Rule 13d-1(b) or
 1054  (c), 17 C.F.R. s. 240.13d-1, under the Securities Exchange Act
 1055  of 1934, as amended. After a disclaimer has been filed, the
 1056  attorney in fact is relieved of any duty to register or report
 1057  under this section which may arise out of the attorney in fact’s
 1058  relationship with the person unless the office disallows the
 1059  disclaimer.
 1060         (12) If the office determines that any person or any
 1061  affiliated person of such person has acquired 10 percent or more
 1062  of the outstanding voting securities of an attorney in fact or
 1063  controlling company which is a stock corporation, or 10 percent
 1064  or more of the ownership interest of an attorney in fact or
 1065  controlling company which is not a stock corporation, without
 1066  complying with this section, the office may order that the
 1067  person and any affiliated person of such person cease
 1068  acquisition of the attorney in fact or controlling company and,
 1069  if appropriate, divest itself of any stock or ownership interest
 1070  acquired in violation of this section.
 1071         (13)(a)The office must, if necessary to protect the public
 1072  interest, suspend or revoke the certificate of authority of the
 1073  reciprocal insurer whose attorney in fact or controlling company
 1074  is acquired in violation of this section.
 1075         (b) If any reciprocal insurer is subject to suspension or
 1076  revocation pursuant to paragraph (a), any other reciprocal
 1077  insurer using the same attorney in fact is also subject to
 1078  suspension or revocation. In such case, the office may offer any
 1079  affected reciprocal insurer, through its subscriber
 1080  representatives, the ability to cure any suspension or
 1081  revocation by procuring another attorney in fact acceptable to
 1082  the office or taking any other action agreed to by the office.
 1083         Section 20. Section 629.227, Florida Statutes, is created
 1084  to read:
 1085         629.227Background information.—The information as to the
 1086  background and identity of each person about whom information is
 1087  required to be furnished pursuant to s. 629.081 or s. 629.225
 1088  must include, but need not be limited to:
 1089         (1)A sworn biographical statement, on forms adopted by the
 1090  commission, which must include, but need not be limited to, the
 1091  following information:
 1092         (a)Occupations, positions of employment, and offices held
 1093  during the past 20 years, including the principal business and
 1094  address of any business, corporation, or organization where each
 1095  occupation, position of employment, or office occurred.
 1096         (b)Whether the person was, at any time during a 10-year
 1097  period, convicted of any crime other than a traffic violation.
 1098         (c)Whether the person has been, during a 10-year period,
 1099  the subject of any proceeding for the revocation of any license
 1100  and, if so, the nature of the proceeding and the disposition of
 1101  the proceeding.
 1102         (d)Whether, during a 10-year period, the person has been
 1103  the subject of any proceeding under the federal Bankruptcy Act.
 1104         (e)Whether, during a 10-year period, any person or other
 1105  business or organization in which the person was a director,
 1106  officer, trustee, partner, owner, manager, or other official has
 1107  been the subject of any proceeding under the federal Bankruptcy
 1108  Act, either during the time of that person’s tenure with the
 1109  business or organization or within 12 months thereafter.
 1110         (f)Whether, during a 10-year period, the person has been
 1111  enjoined, temporarily or permanently, by a court of competent
 1112  jurisdiction from violating any federal or state law regulating
 1113  the business of insurance, securities, or banking, or from
 1114  carrying out any particular practice or practices in the course
 1115  of the business of insurance, securities, or banking, together
 1116  with details as to any such event.
 1117         (g)Whether, during a 20-year period, the person served as
 1118  the attorney in fact, a subscribers’ advisory committee member,
 1119  or any other manager or officer of a reciprocal insurer or an
 1120  insurer that became insolvent or had its certificate of
 1121  authority suspended or revoked.
 1122         (2)A full set of fingerprints, which must be provided to
 1123  the department or to a vendor, entity, or agency authorized by
 1124  s. 943.053(13). The department, vendor, entity, or agency shall
 1125  forward the fingerprints to the Department of Law Enforcement
 1126  for state processing and the Department of Law Enforcement shall
 1127  forward the fingerprints to the Federal Bureau of Investigation
 1128  for national processing as described in s. 624.34. Fees for
 1129  state and federal fingerprint processing must be borne by the
 1130  individual. The state cost for fingerprint processing is as
 1131  provided in s. 943.053(3)(e).
 1132         (3)Authority for release of information in regard to the
 1133  investigation of such person’s background.
 1134         (4)Any additional information as the office deems
 1135  necessary to determine the character, experience, ability, and
 1136  other qualifications of the person or affiliated person of such
 1137  person for the protection of the reciprocal insurer’s
 1138  subscribers and of the public.
 1139         Section 21. Section 629.229, Florida Statutes, is created
 1140  to read:
 1141         629.229Attorney in fact, officers, and directors of
 1142  insolvent reciprocal insurers or other insurers.—Any person who
 1143  served as an attorney in fact, or as an officer, director, or
 1144  manager of an attorney in fact, any member of a subscribers
 1145  advisory committee of a reciprocal insurer doing business in
 1146  this state, or an officer or director of any other insurer doing
 1147  business in this state, and who served in that capacity within
 1148  the 2-year period before the date the insurer or reciprocal
 1149  insurer became insolvent, for any insolvency that occurs on or
 1150  after July 1, 2024, may not thereafter:
 1151         (1)Serve as an attorney in fact, or as an officer,
 1152  director, or manager of an attorney in fact, or a member of a
 1153  subscribers advisory committee of a reciprocal insurer doing
 1154  business in this state, or an officer or director of any other
 1155  insurer doing business in this state; or
 1156         (2)Have direct or indirect control over the selection or
 1157  appointment of an attorney in fact, or of an officer, director,
 1158  or manager of an attorney in fact, or a member of the
 1159  subscribers’ advisory committee of a reciprocal insurer doing
 1160  business in this state, or an officer or director of any insurer
 1161  doing business in this state, through contract, trust, or by
 1162  operation of law,
 1163  
 1164  unless the individual demonstrates that his or her personal
 1165  actions or omissions were not a significant contributing cause
 1166  to the insolvency.
 1167         Section 22. Section 629.261, Florida Statutes, is amended
 1168  to read:
 1169         629.261 Nonassessable policies.—Upon impairment of the
 1170  surplus of a nonassessable reciprocal insurer, the office shall
 1171  revoke the authorization issued under s. 629.091(3) or s.
 1172  629.291(5). Upon revocation of the authority to issue
 1173  nonassessable policies, the reciprocal insurer may not issue or
 1174  renew nonassessable policies or convert assessable policies to
 1175  nonassessable policies, and s. 629.301 applies to such insurer.
 1176         (1) If a reciprocal insurer has a surplus as to
 1177  policyholders required of a domestic stock insurer authorized to
 1178  transact like kinds of insurance, upon application of the
 1179  attorney and as approved by the subscribers’ advisory committee
 1180  the office shall issue its certificate authorizing the insurer
 1181  to extinguish the contingent liability of subscribers under its
 1182  policies then in force in this state and to omit provisions
 1183  imposing contingent liability in all policies delivered or
 1184  issued for delivery in this state for so long as all such
 1185  surplus remains unimpaired.
 1186         (2) Upon impairment of such surplus, the office shall
 1187  forthwith revoke the certificate. Such revocation does shall not
 1188  render subject to contingent liability any policy then in force
 1189  and for the remainder of the period for which the premium has
 1190  theretofore been paid; but, after such revocation, no policy
 1191  shall be issued or renewed without providing for contingent
 1192  assessment liability of the subscriber.
 1193         (3) The office shall not authorize a domestic reciprocal
 1194  insurer so to extinguish the contingent liability of any of its
 1195  subscribers or in any of its policies to be issued, unless it
 1196  qualifies to and does extinguish such liability of all its
 1197  subscribers and in all such policies for all kinds of insurance
 1198  transacted by it; except that, if required by the laws of
 1199  another state in which the insurer is transacting insurance as
 1200  an authorized insurer, the insurer may issue policies providing
 1201  for the contingent liability of such of its subscribers as may
 1202  acquire such policies in such state, and need not extinguish the
 1203  contingent liability applicable to policies theretofore in force
 1204  in such state.
 1205         Section 23. Section 629.291, Florida Statutes, is amended
 1206  to read:
 1207         629.291 Merger or conversion.—
 1208         (1) A domestic reciprocal insurer, upon affirmative vote of
 1209  not less than two-thirds of its subscribers who vote on such
 1210  merger pursuant to due notice, and subject to the approval by of
 1211  the office of the terms therefor, may merge with another
 1212  reciprocal insurer or be converted to a stock or mutual insurer,
 1213  to be thereafter governed by the applicable sections of the
 1214  insurance code. However, a domestic stock insurer may not
 1215  convert to a reciprocal insurer.
 1216         (2) A plan to merge a reciprocal insurer with another
 1217  reciprocal insurer or for conversion of the reciprocal insurer
 1218  to a stock or mutual insurer must be filed on forms adopted by
 1219  the office and contain such information as the office reasonably
 1220  requires to evaluate the transaction Such a stock or mutual
 1221  insurer shall be subject to the same capital or surplus
 1222  requirements and shall have the same rights as a like domestic
 1223  insurer transacting like kinds of insurance.
 1224         (3) The office may shall not approve any plan for such
 1225  merger or conversion which is inequitable to subscribers or
 1226  which, if for conversion to a stock insurer, does not give each
 1227  subscriber preferential right to acquire stock of the proposed
 1228  insurer proportionate to his or her interest in the reciprocal
 1229  insurer, as determined in accordance with s. 629.281, and a
 1230  reasonable length of time within which to exercise such right.
 1231         (4) Reinsurance of all or substantially all of the
 1232  insurance in force of a domestic reciprocal insurer in another
 1233  insurer shall be deemed to be a merger for the purposes of this
 1234  section.
 1235         (5)(a)An assessable reciprocal insurer may convert to a
 1236  nonassessable reciprocal insurer if:
 1237         1.The subscribers advisory committee approves the
 1238  conversion;
 1239         2.The attorney in fact submits the application for
 1240  conversion on the required application form; and
 1241         3.The office finds that the application for conversion
 1242  meets the minimum statutory requirements.
 1243         (b)If the office approves the application for conversion,
 1244  the assessable reciprocal insurer may convert to a nonassessable
 1245  reciprocal insurer by:
 1246         1.Extinguishing the contingent liability of subscribers
 1247  under all policies then in force in this state;
 1248         2.Omitting contingent liability provisions in all policies
 1249  delivered or issued in this state after the conversion; and
 1250         3.Otherwise extinguishing the contingent liability of all
 1251  of its subscribers. However, if the reciprocal insurer is
 1252  transacting insurance as an authorized insurer in another state
 1253  and that state’s laws require the insurer to issue policies with
 1254  contingent liability provisions, the insurer may issue
 1255  contingent liability policies in that other state.
 1256         Section 24. Section 629.525, Florida Statutes, is created
 1257  to read:
 1258         629.525Rulemaking authority.—The commission shall adopt,
 1259  amend, or repeal rules necessary to implement this chapter.
 1260         Section 25. Paragraph (h) of subsection (3) of section
 1261  163.01, Florida Statutes, is amended to read:
 1262         163.01 Florida Interlocal Cooperation Act of 1969.—
 1263         (3) As used in this section:
 1264         (h) “Local government liability pool” means a reciprocal
 1265  insurer as defined in s. 629.011 s. 629.021 or any self
 1266  insurance program created pursuant to s. 768.28(16), formed and
 1267  controlled by counties or municipalities of this state to
 1268  provide liability insurance coverage for counties,
 1269  municipalities, or other public agencies of this state, which
 1270  pool may contract with other parties for the purpose of
 1271  providing claims administration, processing, accounting, and
 1272  other administrative facilities.
 1273         Section 26. Subsection (3) of section 626.9531, Florida
 1274  Statutes, is amended to read:
 1275         626.9531 Identification of insurers, agents, and insurance
 1276  contracts.—
 1277         (3) For the purposes of this section, the term “risk
 1278  bearing entity” means a reciprocal insurer as defined in s.
 1279  629.011 s. 629.021, a commercial self-insurance fund as defined
 1280  in s. 624.462, a group self-insurance fund as defined in s.
 1281  624.4621, a local government self-insurance fund as defined in
 1282  s. 624.4622, a self-insured public utility as defined in s.
 1283  624.46225, or an independent educational institution self
 1284  insurance fund as defined in s. 624.4623. For the purposes of
 1285  this section, the term “risk bearing entity” does not include an
 1286  authorized insurer as defined in s. 624.09.
 1287         Section 27. Except as otherwise expressly provided in this
 1288  act and except for this section, which shall take effect upon
 1289  this act becoming a law, this act shall take effect July 1,
 1290  2024.

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