Bill Summary – FastDemocracy

       Florida Senate - 2023                                    SB 1688
       
       
        
       By Senator Jones
       
       
       
       
       
       34-01351-23                                           20231688__
                      A bill to be entitled                      
       An act relating to insurance; creating s. 11.91, F.S.;
       creating the Property Insurance Commission; providing
       membership of the commission; providing powers and
       duties of the commission; amending s. 20.121, F.S.;
       providing for the election of the Commissioner of
       Insurance Regulation; providing terms for the
       commissioner; conforming provisions to changes made by
       the act; creating s. 112.3134, F.S.; prohibiting the
       commissioner from engaging in certain activities or
       employment for a specified period after leaving
       office; providing sanctions for violations;
       authorizing specified entities to collect penalties;
       amending s. 215.5586, F.S.; revising homeowners’
       eligibility criteria for mitigation grants under the
       My Safe Florida Home Program; amending s. 494.0026,
       F.S.; requiring interest earned on insurance proceeds
       received by mortgagees and assignees to be paid to
       insureds; amending s. 624.401, F.S.; prohibiting
       property insurers from claiming insolvency under
       specified circumstances; specifying a condition on
       insurance activities engaged in this state by a person
       who engages in property insurance activities in
       another state; amending s. 627.0629, F.S.; requiring
       residential property insurers to release specified
       information to insureds upon request; amending s.
       627.701, F.S.; prohibiting property insurers from
       using certain defenses for claims denials; amending s.
       627.715, F.S.; requiring insurance agents to advise
       insurance applicants of flood risk; amending s.
       627.7152, F.S.; revising requirements for assignment
       agreements; creating s. 627.7155, F.S.; requiring the
       Office of Insurance Regulation to adopt certain rules;
       requiring the Department of Financial Services to
       adopt rules regarding allegations of insurance fraud
       made by insurers or their employees or contractors;
       providing requirements for such rules; providing
       fines; requiring the Office of Program Policy Analysis
       and Government Accountability to conduct a study of
       the effectiveness of the property insurance mediation
       program; providing requirements for the study;
       requiring a report to the Legislature; amending
       chapter 2022-268, Laws of Florida; extending the My
       Safe Florida Home Program and specifying
       appropriations for a certain fiscal year; providing an
       effective date.
        
Be It Enacted by the Legislature of the State of Florida:

       Section 1. Section 11.91, Florida Statutes, is created to
read:
       11.91 Property Insurance Commission.—
       (1)(a) There is created the Property Insurance Commission,
which shall consist of six members:
       1. Two members appointed by the President of the Senate.
       2. One member appointed by the Minority Leader of the
Senate.
       3. Two members appointed by the Speaker of the House of
Representatives.
       4. One member appointed by the House Minority Leader.
       (b) Each member shall serve at the pleasure of the officer
who appointed the member. A vacancy on the commission shall be
filled in the same manner as the original appointment. From
November of each odd-numbered year through October of each even
numbered year, the chair of the commission shall be appointed by
the President of the Senate, and the vice chair of the
commission shall be appointed by the Speaker of the House of
Representatives. From November of each even-numbered year
through October of each odd-numbered year, the chair of the
commission shall be appointed by the Speaker of the House of
Representatives, and the vice chair of the commission shall be
appointed by the President of the Senate. The terms of members
shall be for 2 years and shall run from the organization of one
Legislature to the organization of the next Legislature.
       (2) The commission shall be governed by joint rules of the
Senate and the House of Representatives, which shall remain in
effect until repealed or amended by concurrent resolution.
       (3) The commission may conduct its meetings through
teleconferences or other similar means.
       (4) The commission shall be staffed by legislative staff
members, as assigned by the President of the Senate and the
Speaker of the House of Representatives.
       (5) The commission has the power and duty to:
       (a) Review and evaluate the insurance marketplace and
studies of the various insurance markets.
       (b) Review and comment on market data produced by the
Office of Insurance Regulation.
       (c) Review and comment on the setting of reserve
requirements for insurers.
       (d) Exercise all other powers and perform any other duties
prescribed by the Legislature.
       Section 2. Paragraphs (a) and (d) of subsection (3) of
section 20.121, Florida Statutes, are amended to read:
       20.121 Department of Financial Services.—There is created a
Department of Financial Services.
       (3) FINANCIAL SERVICES COMMISSION.—Effective January 7,
2003, there is created within the Department of Financial
Services the Financial Services Commission, composed of the
Governor, the Attorney General, the Chief Financial Officer, and
the Commissioner of Agriculture, which shall for purposes of
this section be referred to as the commission. Commission
members shall serve as agency head of the Financial Services
Commission. The commission shall be a separate budget entity and
shall be exempt from the provisions of s. 20.052. Commission
action shall be by majority vote consisting of at least three
affirmative votes. The commission shall not be subject to
control, supervision, or direction by the Department of
Financial Services in any manner, including purchasing,
transactions involving real or personal property, personnel, or
budgetary matters.
       (a) Structure.—The major structural unit of the commission
is the office. Each office shall be headed by a director. The
following offices are established:
       1. The Office of Insurance Regulation, which shall be
responsible for all activities concerning insurers and other
risk bearing entities, including licensing, rates, policy forms,
market conduct, claims, issuance of certificates of authority,
solvency, viatical settlements, premium financing, and
administrative supervision, as provided under the insurance code
or chapter 636. The head of the Office of Insurance Regulation
is the Director of the Office of Insurance Regulation, who may
also be known as the Commissioner of Insurance Regulation.
Beginning with the General Election in 2024, the Commissioner of
Insurance Regulation shall be elected. The commissioner elected
in 2024 shall serve a term of 2 years; thereafter, the
commissioner shall serve a term of 4 years.
       2. The Office of Financial Regulation, which shall be
responsible for all activities of the Financial Services
Commission relating to the regulation of banks, credit unions,
other financial institutions, finance companies, and the
securities industry. The head of the office is the Director of
the Office of Financial Regulation, who may also be known as the
Commissioner of Financial Regulation. The Office of Financial
Regulation shall include a Bureau of Financial Investigations,
which shall function as a criminal justice agency for purposes
of ss. 943.045-943.08 and shall have a separate budget. The
bureau may conduct investigations within or outside this state
as the bureau deems necessary to aid in the enforcement of this
section. If, during an investigation, the office has reason to
believe that any criminal law of this state has or may have been
violated, the office shall refer any records tending to show
such violation to state or federal law enforcement or
prosecutorial agencies and shall provide investigative
assistance to those agencies as required.
       (d) Appointment and qualification qualifications of the
Director of the Office of Financial Regulation directors.—The
commission shall appoint or remove the each Director of the
Office of Financial Regulation by a majority vote consisting of
at least three affirmative votes, with both the Governor and the
Chief Financial Officer on the prevailing side. The minimum
qualifications of the directors are as follows:
       1. Prior to appointment as director, the Director of the
Office of Insurance Regulation must have had, within the
previous 10 years, at least 5 years of responsible private
sector experience working full time in areas within the scope of
the subject matter jurisdiction of the Office of Insurance
Regulation or at least 5 years of experience as a senior
examiner or other senior employee of a state or federal agency
having regulatory responsibility over insurers or insurance
agencies.
       Before 2. Prior to appointment as director, the Director of
the Office of Financial Regulation must have had, within the
previous 10 years, at least 5 years of responsible private
sector experience working full time in areas within the subject
matter jurisdiction of the Office of Financial Regulation or at
least 5 years of experience as a senior examiner or other senior
employee of a state or federal agency having regulatory
responsibility over financial institutions, finance companies,
or securities companies.
       Section 3. Section 112.3134, Florida Statutes, is created
to read:
       112.3134 Commissioner of Insurance Regulation; Office of
Insurance Regulation.—
       (1) A person who has served as Commissioner of Insurance
Regulation may not:
       (a) Personally represent another person or entity for
compensation before the Office of Insurance Regulation; or
       (b) Serve as an employee or contractor of an entity
regulated by the Office of Insurance Regulation

for a period of 7 years after vacating that office.
       (2) A person who violates subsection (1) may be punished
by:
       (a) Public censure and reprimand;
       (b) A civil penalty not to exceed $10,000; or
       (c) Forfeiture of any pecuniary benefits received for
conduct that violates this section. The amount of the pecuniary
benefits must be paid to the General Revenue Fund.
       (3) The Attorney General and Chief Financial Officer are
independently authorized to collect any penalty imposed under
this section.
       Section 4. Paragraph (a) of subsection (2) of section
215.5586, Florida Statutes, is amended to read:
       215.5586 My Safe Florida Home Program.—There is established
within the Department of Financial Services the My Safe Florida
Home Program. The department shall provide fiscal
accountability, contract management, and strategic leadership
for the program, consistent with this section. This section does
not create an entitlement for property owners or obligate the
state in any way to fund the inspection or retrofitting of
residential property in this state. Implementation of this
program is subject to annual legislative appropriations. It is
the intent of the Legislature that the My Safe Florida Home
Program provide trained and certified inspectors to perform
inspections for owners of site-built, single-family, residential
properties and grants to eligible applicants as funding allows.
The program shall develop and implement a comprehensive and
coordinated approach for hurricane damage mitigation that may
include the following:
       (2) MITIGATION GRANTS.—Financial grants shall be used to
encourage single-family, site-built, owner-occupied, residential
property owners to retrofit their properties to make them less
vulnerable to hurricane damage.
       (a) For a homeowner to be eligible for a grant, the
following criteria must be met:
       1. The homeowner must have been granted a homestead
exemption on the home under chapter 196.
       2. The home must be a dwelling with an insured value of
$500,000 or less. Homeowners who are low-income persons, as
defined in s. 420.0004(11), are exempt from this requirement.
       3. The home must have undergone an acceptable hurricane
mitigation inspection after July 1, 2008.
       4. The home must be located in the “wind-borne debris
region” as that term is defined in the Florida Building Code.
       4.5. The building permit application for initial
construction of the home must have been made before January 1,
2008.
       5.6. The homeowner must agree to make his or her home
available for inspection once a mitigation project is completed.

An application for a grant must contain a signed or
electronically verified statement made under penalty of perjury
that the applicant has submitted only a single application and
must have attached documents demonstrating the applicant meets
the requirements of this paragraph.
       Section 5. Subsection (2) of section 494.0026, Florida
Statutes, is amended to read:
       494.0026 Disposition of insurance proceeds.—The following
provisions apply to mortgage loans held by a mortgagee or
assignee that is subject to part II or part III of this chapter.
       (2)(a) Insurance proceeds received by a mortgagee or
assignee that relate to compensation for damage to property or
contents insurance coverage in which the mortgagee or assignee
has a security interest must be promptly deposited into a
segregated account of a federally insured financial institution.
       (b) Any interest earned on insurance proceeds received by a
mortgagee or assignee that relate to compensation for damage to
property or contents insurance coverage in which the mortgagee
or assignee has a security interest must be paid to the insured.

This section may not be construed to prevent an insurance
company from paying the insured directly for additional living
expenses or paying the insured directly for contents insurance
coverage if the mortgagee or assignee does not have a security
interest in the contents.
       Section 6. Subsection (5) is added to section 624.401,
Florida Statutes, to read:
       624.401 Certificate of authority required.—
       (5)(a) A property insurer may not claim insolvency in this
state if the insurer still acts as an insurer, transacts
insurance, or otherwise engages in insurance activities in any
state other than this state, regardless of whether these
insurance activities are property insurance activities.
       (b) Effective January 1, 2024, any person who acts as a
property insurer, transacts property insurance, or otherwise
engages in property insurance activities in any state other than
this state may act as an insurer, transact insurance, or
otherwise engage in insurance activities in this state only if
that person does not exclude property insurance from the
person’s insurance transactions or activities.
       Section 7. Subsection (9) is added to section 627.0629,
Florida Statutes, to read:
       627.0629 Residential property insurance; rate filings.—
       (9) An insurer must release to an insured all information
relating to an inspection or an underwriting report upon the
insured’s request.
       Section 8. Subsection (11) is added to section 627.701,
Florida Statutes, to read:
       627.701 Liability of insureds; coinsurance; deductibles;
prohibited denials of claims.—
       (11) A property insurer that issues or renews an insurance
policy or contract covering real property in this state on or
after January 1, 2024, may not use a property’s preexisting
condition, a date of loss that predates the date of a claim, or
faulty installation or workmanship as a defense for denying a
claim.
       Section 9. Subsection (8) of section 627.715, Florida
Statutes, is amended to read:
       627.715 Flood insurance.—An authorized insurer may issue an
insurance policy, contract, or endorsement providing personal
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