Bill Text: FL S0454 | 2017 | Regular Session | Comm Sub
Bill Title: Regulation of Insurance Companies
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Introduced - Dead) 2017-05-04 - Laid on Table, companion bill(s) passed, see CS/HB 359 (Ch. 2017-132) [S0454 Detail]
Download: Florida-2017-S0454-Comm_Sub.html
Florida Senate - 2017 CS for CS for SB 454 By the Committees on Appropriations; and Banking and Insurance; and Senator Brandes 576-03479-17 2017454c2 1 A bill to be entitled 2 An act relating to the regulation of insurance 3 companies; amending s. 177.041, F.S.; providing that a 4 specified property information report, rather than a 5 specified certification by an abstractor or a title 6 company, may be submitted as part of certain 7 information required in relation to the plat or replat 8 of a subdivision; amending ss. 177.091 and 197.502, 9 F.S.; conforming provisions to changes made by the 10 act; amending s. 215.555, F.S.; deleting a future 11 repeal of an exemption of medical malpractice 12 insurance premiums from certain emergency assessments 13 by the State Board of Administration relating to the 14 Florida Hurricane Catastrophe Fund; amending s. 15 624.407, F.S.; specifying the minimum surplus as to 16 policyholders for insurers that only transact in 17 specified forms of residential property insurance; 18 amending s. 624.424, F.S.; revising a requirement for 19 audit committees established by the boards of 20 directors of insurers, relating to relationships that 21 would interfere with the exercise of independent 22 judgment of committee members; amending s. 625.012, 23 F.S.; revising the allowable assets of insurers 24 relating to specified levied assessments; amending s. 25 627.062, F.S.; revising requirements for certain rate 26 filings by medical malpractice insurers; amending s. 27 627.0645, F.S.; adding certain medical malpractice 28 insurance to casualty insurance excluded from an 29 annual base rate filing requirement for rating 30 organizations; amending s. 627.4035, F.S.; revising 31 the methods of paying premiums for insurance 32 contracts; authorizing an insurer to impose a 33 specified insufficient funds fee if certain premium 34 payment methods are returned, are declined, or cannot 35 be processed; providing an exception; amending s. 36 627.421, F.S.; providing that an electronically 37 delivered document in an insurance policy meets 38 formatting requirements for printed documents under 39 certain conditions; amending s. 627.7295, F.S.; 40 conforming provisions to changes made by the act; 41 amending s. 627.7843, F.S.; replacing provisions 42 relating to ownership and encumbrance reports with 43 provisions relating to property information reports; 44 defining the term “property information report”; 45 prohibiting property information reports from setting 46 forth or implying certain assurances; providing 47 construction; specifying a limitation on the 48 contractual liability of issuers of property 49 information reports; requiring a specified disclosure 50 in property information reports; providing 51 applicability; providing an effective date. 52 53 Be It Enacted by the Legislature of the State of Florida: 54 55 Section 1. Subsection (2) of section 177.041, Florida 56 Statutes, is amended to read: 57 177.041 Boundary survey and title certification required. 58 Every plat or replat of a subdivision submitted to the approving 59 agency of the local governing body must be accompanied by: 60 (2) A title opinion of an attorney at law licensed in 61 Florida or a property information reportcertification by an62abstractor or a title companyshowing that record title to the 63 land as described and shown on the plat is in the name of the 64 person, persons, corporation, or entity executing the 65 dedication. The title opinion or property information report 66 mustcertification shallalso show all mortgages not satisfied 67 or released of record nor otherwise terminated by law. 68 Section 2. Subsection (16) of section 177.091, Florida 69 Statutes, is amended to read: 70 177.091 Plats made for recording.—Every plat of a 71 subdivision offered for recording shall conform to the 72 following: 73 (16) Location and width of proposed easements and existing 74 easements identified in the title opinion or property 75 information reportcertificationrequired by s. 177.041(2) must 76shallbe shown on the plat or in the notes or legend, and their 77 intended use shall be clearly stated. Where easements are not 78 coincident with property lines, they must be labeled with 79 bearings and distances and tied to the principal lot, tract, or 80 right-of-way. 81 Section 3. Paragraph (a) of subsection (5) of section 82 197.502, Florida Statutes, is amended to read: 83 197.502 Application for obtaining tax deed by holder of tax 84 sale certificate; fees.— 85 (5)(a) The tax collector may contract with a title company 86 or an abstract company to provide the minimum information 87 required in subsection (4), consistent with rules adopted by the 88 department. If additional information is required, the tax 89 collector must make a written request to the title or abstract 90 company stating the additional requirements. The tax collector 91 may select any title or abstract company, regardless of its 92 location, as long as the fee is reasonable, the minimum 93 information is submitted, and the title or abstract company is 94 authorized to do business in this state. The tax collector may 95 advertise and accept bids for the title or abstract company if 96 he or she considers it appropriate to do so. 97 1. The property informationownership and encumbrance98 report must include the letterhead of the person, firm, or 99 company that makes the search, and the signature of the 100 individual who makes the search or of an officer of the firm. 101 The tax collector is not liable for payment to the firm unless 102 these requirements are met. The report may be submitted to the 103 tax collector in an electronic format. 104 2. The tax collector may not accept or pay for any title 105 search or abstract if financial responsibility is not assumed 106 for the search. However, reasonable restrictions as to the 107 liability or responsibility of the title or abstract company are 108 acceptable. Notwithstanding s. 627.7843(3), the tax collector 109 may contract for higher maximum liability limits. 110 3. In order to establish uniform prices for property 111 informationownership and encumbrancereports within the county, 112 the tax collector must ensure that the contract for property 113 informationownership and encumbrance reportsinclude all 114 requests for title searches or abstracts for a given period of 115 time. 116 Section 4. Paragraph (b) of subsection (6) of section 117 215.555, Florida Statutes, is amended to read: 118 215.555 Florida Hurricane Catastrophe Fund.— 119 (6) REVENUE BONDS.— 120 (b) Emergency assessments.— 121 1. If the board determines that the amount of revenue 122 produced under subsection (5) is insufficient to fund the 123 obligations, costs, and expenses of the fund and the 124 corporation, including repayment of revenue bonds and that 125 portion of the debt service coverage not met by reimbursement 126 premiums, the board shall direct the Office of Insurance 127 Regulation to levy, by order, an emergency assessment on direct 128 premiums for all property and casualty lines of business in this 129 state, including property and casualty business of surplus lines 130 insurers regulated under part VIII of chapter 626, but not 131 including any workers’ compensation premiums or medical 132 malpractice premiums. As used in this subsection, the term 133 “property and casualty business” includes all lines of business 134 identified on Form 2, Exhibit of Premiums and Losses, in the 135 annual statement required of authorized insurers by s. 624.424 136 and any rule adopted under this section, except for those lines 137 identified as accident and health insurance and except for 138 policies written under the National Flood Insurance Program. The 139 assessment shall be specified as a percentage of direct written 140 premium and is subject to annual adjustments by the board in 141 order to meet debt obligations. The same percentage applies to 142 all policies in lines of business subject to the assessment 143 issued or renewed during the 12-month period beginning on the 144 effective date of the assessment. 145 2. A premium is not subject to an annual assessment under 146 this paragraph in excess of 6 percent of premium with respect to 147 obligations arising out of losses attributable to any one 148 contract year, and a premium is not subject to an aggregate 149 annual assessment under this paragraph in excess of 10 percent 150 of premium. An annual assessment under this paragraph continues 151 as long as the revenue bonds issued with respect to which the 152 assessment was imposed are outstanding, including any bonds the 153 proceeds of which were used to refund the revenue bonds, unless 154 adequate provision has been made for the payment of the bonds 155 under the documents authorizing issuance of the bonds. 156 3. Emergency assessments shall be collected from 157 policyholders. Emergency assessments shall be remitted by 158 insurers as a percentage of direct written premium for the 159 preceding calendar quarter as specified in the order from the 160 Office of Insurance Regulation. The office shall verify the 161 accurate and timely collection and remittance of emergency 162 assessments and shall report the information to the board in a 163 form and at a time specified by the board. Each insurer 164 collecting assessments shall provide the information with 165 respect to premiums and collections as may be required by the 166 office to enable the office to monitor and verify compliance 167 with this paragraph. 168 4. With respect to assessments of surplus lines premiums, 169 each surplus lines agent shall collect the assessment at the 170 same time as the agent collects the surplus lines tax required 171 by s. 626.932, and the surplus lines agent shall remit the 172 assessment to the Florida Surplus Lines Service Office created 173 by s. 626.921 at the same time as the agent remits the surplus 174 lines tax to the Florida Surplus Lines Service Office. The 175 emergency assessment on each insured procuring coverage and 176 filing under s. 626.938 shall be remitted by the insured to the 177 Florida Surplus Lines Service Office at the time the insured 178 pays the surplus lines tax to the Florida Surplus Lines Service 179 Office. The Florida Surplus Lines Service Office shall remit the 180 collected assessments to the fund or corporation as provided in 181 the order levied by the Office of Insurance Regulation. The 182 Florida Surplus Lines Service Office shall verify the proper 183 application of such emergency assessments and shall assist the 184 board in ensuring the accurate and timely collection and 185 remittance of assessments as required by the board. The Florida 186 Surplus Lines Service Office shall annually calculate the 187 aggregate written premium on property and casualty business, 188 other than workers’ compensation and medical malpractice, 189 procured through surplus lines agents and insureds procuring 190 coverage and filing under s. 626.938 and shall report the 191 information to the board in a form and at a time specified by 192 the board. 193 5. Any assessment authority not used for a particular 194 contract year may be used for a subsequent contract year. If, 195 for a subsequent contract year, the board determines that the 196 amount of revenue produced under subsection (5) is insufficient 197 to fund the obligations, costs, and expenses of the fund and the 198 corporation, including repayment of revenue bonds and that 199 portion of the debt service coverage not met by reimbursement 200 premiums, the board shall direct the Office of Insurance 201 Regulation to levy an emergency assessment up to an amount not 202 exceeding the amount of unused assessment authority from a 203 previous contract year or years, plus an additional 4 percent 204 provided that the assessments in the aggregate do not exceed the 205 limits specified in subparagraph 2. 206 6. The assessments otherwise payable to the corporation 207 under this paragraph shall be paid to the fund unless the Office 208 of Insurance Regulation and the Florida Surplus Lines Service 209 Office received a notice from the corporation and the fund, 210 which shall be conclusive and upon which they may rely without 211 further inquiry, that the corporation has issued bonds and the 212 fund has no agreements in effect with local governments under 213 paragraph (c). On or after the date of the notice and until the 214 date the corporation has no bonds outstanding, the fund shall 215 have no right, title, or interest in or to the assessments, 216 except as provided in the fund’s agreement with the corporation. 217 7. Emergency assessments are not premium and are not 218 subject to the premium tax, to the surplus lines tax, to any 219 fees, or to any commissions. An insurer is liable for all 220 assessments that it collects and must treat the failure of an 221 insured to pay an assessment as a failure to pay the premium. An 222 insurer is not liable for uncollectible assessments. 223 8. If an insurer is required to return an unearned premium, 224 it shall also return any collected assessment attributable to 225 the unearned premium. A credit adjustment to the collected 226 assessment may be made by the insurer with regard to future 227 remittances that are payable to the fund or corporation, but the 228 insurer is not entitled to a refund. 229 9. If a surplus lines insured or an insured who has 230 procured coverage and filed under s. 626.938 is entitled to the 231 return of an unearned premium, the Florida Surplus Lines Service 232 Office shall provide a credit or refund to the agent or such 233 insured for the collected assessment attributable to the 234 unearned premium before remitting the emergency assessment 235 collected to the fund or corporation. 23610. The exemption of medical malpractice insurance premiums237from emergency assessments under this paragraph is repealed May23831, 2019, and medical malpractice insurance premiums shall be239subject to emergency assessments attributable to loss events240occurring in the contract years commencing on June 1, 2019.241 Section 5. Subsection (1) of section 624.407, Florida 242 Statutes, is amended to read: 243 624.407 Surplus required; new insurers.— 244 (1) To receive authority to transact any one kind or 245 combinations of kinds of insurance, as defined in part V of this 246 chapter, an insurer applying for its original certificate of 247 authority in this state shall possess surplus as to 248 policyholders at least the greater of: 249 (a) For a property and casualty insurer, $5 million, or 250 $2.5 million for any other insurer; 251 (b) For life insurers, 4 percent of the insurer’s total 252 liabilities; 253 (c) For life and health insurers, 4 percent of the 254 insurer’s total liabilities, plus 6 percent of the insurer’s 255 liabilities relative to health insurance; 256 (d) For all insurers other than life insurers and life and 257 health insurers, 10 percent of the insurer’s total liabilities; 258 (e) Notwithstanding paragraph (a) or paragraph (d), for a 259 domestic insurer that transacts residential property insurance 260 and is: 261 1. Not a wholly owned subsidiary of an insurer domiciled in 262 any other state, $15 million. 263 2. A wholly owned subsidiary of an insurer domiciled in any 264 other state, $50 million;or265 (f) Notwithstanding paragraphs (a), (d), and (e), for a 266 domestic insurer that only transacts limited sinkhole coverage 267 insurance for personal lines residential property pursuant to s. 268 627.7151, $7.5 million; or 269 (g) Notwithstanding paragraphs (a), (b), and (e), for an 270 insurer that only transacts residential property insurance in 271 the form of renter’s insurance, tenant’s coverage, cooperative 272 unit owner insurance, or any combination thereof, $10 million. 273 Section 6. Paragraph (c) of subsection (8) of section 274 624.424, Florida Statutes, is amended to read: 275 624.424 Annual statement and other information.— 276 (8) 277 (c) The board of directors of an insurer shall hire the 278 certified public accountant that prepares the audit required by 279 this subsection and the board shall establish an audit committee 280 of three or more directors of the insurer or an affiliated 281 company. The audit committee shall be responsible for discussing 282 audit findings and interacting with the certified public 283 accountant with regard to her or his findings. The audit 284 committee shall be comprisedsolelyof members who are free from 285 any relationship that, in the opinion of its board of directors, 286 would interfere with the exercise of independent judgment as a 287 committee member. The audit committee shall report to the board 288 any findings of adverse financial conditions or significant 289 deficiencies in internal controls that have been noted by the 290 accountant. The insurer may request the office to waive this 291 requirement of the audit committee membership based upon unusual 292 hardship to the insurer. 293 Section 7. Subsection (15) of section 625.012, Florida 294 Statutes, is amended to read: 295 625.012 “Assets” defined.—In any determination of the 296 financial condition of an insurer, there shall be allowed as 297 “assets” only such assets as are owned by the insurer and which 298 consist of: 299 (15)(a) Assessments levied pursuant to s. 631.57(3)(a) and 300 (e) or s. 631.914 whichthatare paid before policy surcharges 301 are collected and result in a receivable for policy surcharges 302 to be collected in the future. This amount, to the extent it is 303 likely that it will be realized, meets the definition of an 304 admissible asset as specified in the National Association of 305 Insurance Commissioners’ Statement of Statutory Accounting 306 Principles No. 4. The asset shall be established and recorded 307 separately from the liability regardless of whether it is based 308 on a retrospective or prospective premium-based assessment. If 309 an insurer is unable to fully recoup the amount of the 310 assessment because of a reduction in writings or withdrawal from 311 the market, the amount recorded as an asset shall be reduced to 312 the amount reasonably expected to be recouped. 313 (b) Assessments levied as monthly installments pursuant to 314 s. 631.57(3)(e)3. or s. 631.914 whichthatare paid after policy 315 surcharges are collected so that the recognition of assets is 316 based on actual premium written offset by the obligation to the 317 Florida Insurance Guaranty Association or the Florida Workers’ 318 Compensation Insurance Guaranty Association, Incorporated. 319 Section 8. Paragraph (e) of subsection (7) of section 320 627.062, Florida Statutes, is amended to read: 321 627.062 Rate standards.— 322 (7) The provisions of this subsection apply only to rates 323 for medical malpractice insurance and control to the extent of 324 any conflict with other provisions of this section. 325 (e) For medical malpractice rates subject to paragraph 326 (2)(a), the medical malpractice insurer shall make an annual 327 basearate filing in accordance with s. 627.0645under this328section, sworn to by at least two executive officers of the 329 insurer, at least once each calendar year. 330 Section 9. Subsection (1) of section 627.0645, Florida 331 Statutes, is amended to read: 332 627.0645 Annual filings.— 333 (1) Each rating organization filing rates for, and each 334 insurer writing, any line of property or casualty insurance to 335 which this part applies, except: 336 (a) Workers’ compensation and employer’s liability 337 insurance; 338 (b) Insurance as defined in ss. 624.604 and 624.605, 339 limited to coverage of commercial risks other than commercial 340 residential multiperil and medical malpractice insurance that is 341 subject to s. 627.062(2)(a) and (f); or 342 (c) Travel insurance, if issued as a master group policy 343 with a situs in another state where each certificateholder pays 344 less than $30 in premium for each covered trip and where the 345 insurer has written less than $1 million in annual written 346 premiums in the travel insurance product in this state during 347 the most recent calendar year, 348 349 shall make an annual base rate filing for each such line with 350 the office no later than 12 months after its previous base rate 351 filing, demonstrating that its rates are not inadequate. 352 Section 10. Section 627.4035, Florida Statutes, is amended 353 to read: 354 627.4035CashPayment of premiums; claims.— 355 (1)(a) The premiums for insurance contracts issued in this 356 state or covering risk located in this state mustshallbe paid 357 in cash consisting of coins, currency, checks, electronic 358 checks, drafts, or money orders or by using a debit card, credit 359 card, automatic electronic funds transfer, or payroll deduction 360 plan.By July 1, 2007,Insurers issuing personal lines 361 residential and commercial property policies shall provide a 362 premium payment plan option to their policyholders which allows 363 for a minimum of quarterly and semiannual payment of premiums. 364 Insurers may, but are not required to, offer monthly payment 365 plans. Insurers issuing such policies must submit their premium 366 payment plan option to the office for approval before use. 367 (b) If, due to insufficient funds, a payment of premium 368 under this subsection by debit card, credit card, electronic 369 funds transfer, or electronic check is returned, is declined, or 370 cannot be processed, the insurer may impose an insufficient 371 funds fee of up to $15 per occurrence pursuant to the policy 372 terms. However, the insurer may not charge the policyholder an 373 insufficient funds fee if the failure in payment resulted from 374 fraud or misuse on the policyholder’s account from which the 375 payment was made and such fraud or misuse was not attributed to 376 the policyholder. 377 (2) Subsection (1) is not applicable to: 378 (a) Reinsurance agreements; 379 (b) Pension plans; 380 (c) Premium loans, whether or not subject to an automatic 381 provision; 382 (d) Dividends, whether to purchase additional paid-up 383 insurance or to shorten the dividend payment period; 384 (e) Salary deduction plans; 385 (f) Preauthorized check plans; 386 (g) Waivers of premiums on disability; 387 (h) Nonforfeiture provisions affording benefits under 388 supplementary contracts; or 389 (i) Such other methods of paying for life insurance as may 390 be permitted by the commission pursuant to rule or regulation. 391 (3) All payments of claims made in this state under any 392 contract of insurance shall be paid: 393 (a) In cash consisting of coins, currency, checks, drafts, 394 or money orders and, if by check or draft, shall be in such form 395 as will comply with the standards for cash items adopted by the 396 Federal Reserve System to facilitate the sorting, routing, and 397 mechanized processing of such items; or 398 (b) If authorized in writing by the recipient or the 399 recipient’s representative, by debit card or any other form of 400 electronic transfer. Any fees or costs to be charged against the 401 recipient must be disclosed in writing to the recipient or the 402 recipient’s representative at the time of written authorization. 403 However, the written authorization requirement may be waived by 404 the recipient or the recipient’s representative if the insurer 405 verifies the identity of the insured or the insured’s recipient 406 and does not charge a fee for the transaction. If the funds are 407 misdirected, the insurer remains liable for the payment of the 408 claim. 409 Section 11. Subsection (5) is added to section 627.421, 410 Florida Statutes, to read: 411 627.421 Delivery of policy.— 412 (5) An electronically delivered document satisfies any 413 font, size, color, spacing, or other formatting requirement for 414 printed documents if the format in the electronically delivered 415 document has reasonably similar proportions or emphasis of the 416 characters relative to the rest of the electronic document or is 417 otherwise displayed in a reasonably conspicuous manner. 418 Section 12. Subsection (9) of section 627.7295, Florida 419 Statutes, is amended to read: 420 627.7295 Motor vehicle insurance contracts.— 421(9)(a) In addition to the methods provided in s.422627.4035(1), premium for motor vehicle insurance contracts423issued in this state or covering risk located in this state may424be paid in cash in the form of a draft or drafts.425(b) If, due to insufficient funds, payment of premium under426this subsection by debit card, credit card, electronic funds427transfer, or electronic check is returned, is declined, or428cannot be processed, the insurer may impose an insufficient429funds fee of up to $15 per occurrence pursuant to the policy430terms.431 Section 13. Section 627.7843, Florida Statutes, is amended 432 to read: 433 627.7843 Property information reportsOwnership and434encumbrance reports.— 435 (1) As used in this section, the term “property information 436 report” means any report that contains the limitations of this 437 section and discloses documents or information appearing in the 438 Official Records as described in s. 28.222, in the records of a 439 county tax collector pertaining to ad valorem real property 440 taxes and special assessments imposed by a governmental 441 authority against real property, in the Secretary of State 442 filing office, or in another governmental filing office 443 pertaining to real or personal property. A property information 444 report may be issued by any person, including a Florida-licensed 445 title insurer, title agent, or title agency“ownership and446encumbrance report” means a report that discloses certain447defined documents imparting constructive notice and appearing in448the official records relating to specified real property. 449 (2) A property informationAn ownership and encumbrance450 report may not directly or indirectly set forth or imply any 451 opinion, warranty, guarantee, insurance, or other similar 452 assurance and does not constitute title insurance as defined in 453 s. 624.608as to the status of title to real property. 454 (3) The contractual liability of the issuer of a property 455 information report is limited to the person or persons expressly 456 identified by name in the property information report as the 457 recipient or recipients of the property information report and 458 may not exceed the amount paid for the property information 459 report. Only contractual remedies are available for an error or 460 omission that arises from a property information report. A 461 property information report must contain the following language: 462 463 “This report is not title insurance. Pursuant to s. 627.7843, 464 Florida Statutes, the maximum liability of the issuer of this 465 property information report for errors or omissions in this 466 property information report is limited to the amount paid for 467 this property information report, and is further limited to the 468 person(s) expressly identified by name in the property 469 information report as the recipient(s) of the property 470 information report.”Any ownership and encumbrance report or471similar report that is relied on or intended to be relied on by472a consumer must be on forms approved by the office, and must473provide for a maximum liability for incorrect information of not474more than $1,000.475 (4) This section is not applicable to an opinion of title 476 issued by an attorney. 477 Section 14. This act shall take effect upon becoming a law.