The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Fiscal Policy
BILL: CS/CS/SB 1622
INTRODUCER: Fiscal Policy Committee; Banking and Insurance Committee; and Senator Trumbull
SUBJECT: Insurance
DATE: February 28, 2024 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Thomas Knudson BI Fav/CS
2. Sanders Betta AEG Favorable
3. Thomas Yeatman FP Fav/CS
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/CS/SB 1622 revises provisions relating to the Office of Insurance Regulation (OIR).
Specifically, the bill:
 Requires each insurer and insurer group, beginning January 1, 2025, to file the required
supplemental reports monthly, rather than quarterly, and to provide such information broken
down by zip code;
 Provides the Financial Services Commission authority to adopt rules to administer certain
provisions;
 Revises financial requirements for a public housing self-insurance fund;
 Provides that, upon a declaration of an emergency, and the filing of an order by the
Commissioner of Insurance Regulation, a surplus lines insurer may not cancel or nonrenew a
personal residential or commercial residential property insurance policy covering a
residential property that has been damaged as a result of a hurricane or wind loss until
90 days after the residential property has been repaired;
 Provides that if an averaged model is used in ratemaking, the same averaged model must be
used throughout this state. If a weighted average is used, the insurer must provide the office
with an actuarial justification for using the weighted average which shows that the weighted
average results in a rate that is reasonable, adequate, and fair;
 Repeals provisions providing that certain coverage under the Citizens Property Insurance
Corporation is not subject to its rate limitations;
BILL: CS/CS/SB 1622 Page 2
 Provides that a licensed roofing contractor is considered an “authorized inspector” for
purposes of s. 672.7011(5), F.S., to provide roof inspections to determine if an insurer may
require the replacement of a roof that is at least 15 years old;
 Amends s. 629.01, F.S., to provide an attorney in fact has a fiduciary duty to the subscribers
of the reciprocal insurer; and
 Provides a substantial rewrite of provisions regulating reciprocal insurers.
The bill has an indeterminate impact to state revenues or expenditures. See Section V. Fiscal
Impact Statement.
Except as expressly provided, the bill becomes effective on July 1, 2024.
II. Present Situation:
Regulation of Insurance in Florida
The Office of Insurance Regulation (OIR) regulates specified insurance products, insurers and
other risk bearing entities in Florida.1 As part of its regulatory oversight, the OIR may suspend or
revoke an insurer’s certificate of authority under certain conditions.2
Financial Examinations
The OIR is responsible for examining the affairs, transactions, accounts, records, and assets of
each insurer that holds a certificate of authority to transact insurance business in Florida.3 As part
of the examination process, all persons being examined must make available to the OIR the
accounts, records, documents, files, information, assets, and matters in their possession or control
that relate to the subject of the examination.4 The OIR is charged with conducting an exam once
every three years for high-risk insurers and once every five years for low-risk insurers.5
However, a domestic insurer that has held a certificate of authority for less than three years must
be examined on an annual basis.6 The OIR is required to examine an insurer applying for an
initial certificate of authority prior to issuing the certificate of authority.7
Market Conduct Exams
The OIR is authorized, as often as it deems necessary, to perform a market conduct examination
of, among other entities, any authorized insurer, to determine compliance with applicable
provisions of the workers’ compensation law and the Insurance Code.8 The costs of the
examination are to be paid by the subject entity.9 Section 624.3161, F.S., authorizes the OIR to
1
Section 20.121(3)(a), F.S. The Financial Services Commission, composed of the Governor, the Attorney General, the Chief
Financial Officer, and the Commissioner of Agriculture, serves as agency head of the OIR for purposes of rulemaking.
Further, the Commission appoints the commissioner of the OIR.
2
Section 624.418, F.S.
3 Section 624.316(1)(a), F.S.
4
Section 624.318(2), F.S.
5
Section 624.316(2)(a), F.S.
6
Section 624.316(2)(f), F.S.
7
Section 624.316(2)(b), F.S.
8
Section 624.3161(1), F.S.
9
Section 624.3161(4), F.S.
BILL: CS/CS/SB 1622 Page 3
subject any authorized insurer to a market conduct examination after a hurricane if the insurer, at
any time more than 90 days after the end of the hurricane, is among the top 20 percent of insurers
based upon a calculation of the ratio of hurricane-related property insurance claims filed to the
number of property insurance policies in force.10
The OIR must subject any authorized insurer to a market conduct examination after a hurricane
if the insurer, at any time more than 90 days after the end of the hurricane:
 Is among the top 20 percent of insurers based upon a calculation of the ratio of consumer
complaints made to the DFS to hurricane-related claims;
 Is among the top 20 percent of insurers based upon a calculation of the ratio of hurricane
claims closed without payment to the insurer’s total number of hurricane claims on policies
providing wind or windstorm coverage;
 Has made significant payments to its managing general agent since the hurricane; or
 Is identified by the OIR as necessitating a market conduct exam for any other reason. 11
The relevant criteria under ss. 624.3161 and 624.316, F.S., are to be applied to the market
conduct examination after a hurricane.12 Such market conduct examination, if any, must be
started within 18 months after the landfall of the related hurricane.13 The insurer’s managing
general agent must be included in the market conduct examination as if it were the insurer.14
If a market conduct examination reveals that the “insurer has exhibited a pattern or practice of
willful violations of an unfair insurance trade practice related to claims-handling which caused
harm to policyholders,” the OIR may order the insurer to file its claims-handling practices and
procedures with the OIR for review and inspection.15 The practices and procedures are to be held
by the OIR for 36 months and are considered public records, not trade secrets, during the 36-
month period.16 The term “claims-handling practices and procedures” is defined as “any policies,
guidelines, rules, protocols, standard operating procedures, instructions, or directives that govern
or guide how and the manner in which an insured’s claims for benefits under any policy will be
processed.”17
Annual Statement and Other Information
All insurers with a Florida certificate of authority to transact insurance business must file
quarterly and annual reports with the OIR containing various financial data, including audited
financial statements, actuarial opinions, and certain claims data.18 Each year, insurers must file
an annual statement covering the preceding calendar year on or before March 1.19 Quarterly
10
Section 624.3161(7)(a), F.S.
11
Section 624.3161(7)(b), F.S.
12
Section 624.3161(7), F.S.
13
Id.
14
Id.
15
Section 624.3161(6), F.S.
16
Id.
17
Id.
18
Section 624.424, F.S.
19
Section 624.424(1)(a), F.S.
BILL: CS/CS/SB 1622 Page 4
statements covering each period ending on March 31, June 30, and September 30 must be filed
within 45 days after each such date.20
In 2021, the Legislature enacted legislation21 to assist the OIR and the Legislature in identifying
current and emerging property insurance litigation trends that are cost drivers adversely affecting
insurance rates. As of January 1, 2022, each authorized insurer or insurer group issuing personal
lines or commercial lines residential property insurance policies in this state must provide
specific pieces of data regarding closed claims to the OIR on an annual basis.22 The report must
include, excluding liability only claims, the following information on a per claim basis:
 Claim identification number;
 Type of policy;
 Date, location, and type of loss;
 Name and type of vendors utilized for mitigation, repair, or replacement;
 Dates of when the claim was made; initially closed; most recently reopened, if applicable;
when a supplemental claim was made, if applicable; and most recently closed, if different
from the initial date the claim was closed;
 Name of the public adjuster, if any;
 Name and Florida Bar number of the claimant’s attorney, if any;
 Total amounts that the insurer paid for indemnity, loss adjustment expenses,23 and insured’s
attorney fees, including any contingency risk multiplier24 requested by the attorney; and
 Any other information deemed necessary by the Financial Services Commission to provide
the OIR with the ability to track litigation and claims trends occurring in the property
market.25
Section 624.424(10), F.S., requires insurers and insurer groups doing business in Florida to file
quarterly reports with the OIR. These reports, also known as QUASR reports, must include the
following information for each county in Florida, compiled on a quarterly basis:
 The total number of policies in force at the end of each month;
 The total number of policies canceled;
 The total number of policies nonrenewed;
 The number of policies canceled due to hurricane risk;
 The number of policies nonrenewed due to hurricane risk;
 The number of new policies written;
 The total dollar value of structure exposure under policies that include wind coverage;
 The number of policies that exclude wind coverage;
 Number of claims open each month;
 Number of claims closed each month;
20
Id.
21
Chapter 2021-77, L.O.F.
22
Section 624.424(11), F.S.
23
Loss adjustment expenses are the costs associated with investigating and adjusting losses or insurance claims. IRMI,
https://www.irmi.com/term/insurance-definitions/loss-adjustment-expense (last visited January 31, 2024).
24
A contingency risk multiplier is a multiplier applied to attorney fees that reflects the risk of attorneys accepting, on a
contingency fee basis, cases that may be difficult to win. See e.g., Joyce v. Federated Nat'l Ins. Co., 228 So.3d 1122
(Fla. 2017).
25
Section 624.424(11, F.S.
BILL: CS/CS/SB 1622 Page 5
 Number of claims pending each month; and
 Number of claims in which either the insurer or insured invoked any form of alternative
dispute resolution, and specifying which form of alternative dispute resolution was used.
The OIR must aggregate on a statewide basis the data submitted and make such data publicly
available on the OIR website within one month after each quarterly and annual filing.26 The
information must be published on the OIR website within one month after each quarterly and
annual filing.27 This information is not a trade secret as defined in s. 688.002(4), F.S., or
s. 812.081, F.S., and is not subject to the public records exemption for trade secrets provided in
s. 119.0715, F.S.28 The OIR uses this data to track market trends and shares it with the Florida
Division of Emergency Management after natural disasters to help determine where emergency
response is most necessary.29
Nonrenewal of Residential Property Insurance Policies
An insurer that plans to nonrenew more than 10,000 residential property insurance policies
within a 12-month period must give written notice to the OIR for informational purposes 90 days
before the issuance of such notices of nonrenewal.30 The notice provided to the OIR must set
forth the insurer’s reasons for such action, the effective dates of nonrenewal, and any
arrangements made for other insurers to offer coverage to affected policyholders.31
Public Housing Authorities Self-Insurance Funds
Two or more public housing authorities may form a self-insurance fund as to any one or more
risks. Such self-insurance fund that is created must:
 Have annual normal premiums in excess of five million dollars;
 Use a qualified actuary to determine rates and annually submit to the OIR a certification by
the actuary that the rates are actuarially sound and are not inadequate;
 Use a qualified actuary to establish reserves for loss and loss adjustment expenses and
annually submit to the OIR a certification by the actuary that the loss and loss adjustment
expense reserves are adequate;
 Maintain a continuing program of excess insurance coverage and reserve evaluation to
protect the financial stability of the fund in an amount and manner determined by a qualified
and independent actuary. At a minimum, the program must:
o Purchase excess insurance from authorized insurance carriers or eligible surplus lines
insurers;
o Retain a per-loss occurrence that does not exceed $350,000;
 Submit to the OIR annually an audited fiscal year-end financial statement by an independent
certified public accountant;
26
Section 624.424(10)(b), F.S.
27
Id.
28
Id.
29
Office of Insurance Regulation, Amended Agency Analysis of SB 1622 (on file with the Senate Appropriations Committee
on Agriculture, Environment, and General Government).
30
Section 624.4305, F.S.
31
Id.
BILL: CS/CS/SB 1622 Page 6
 Have a governing body which is comprised entirely of commissioners of public housing
authorities that are members of the fund or persons appointed by the commissioners;
 Use knowledgeable persons to administer the fund in the areas of claims administration,
claims adjusting, underwriting, risk management, loss control, policy administration,
financial audit, and legal areas;
 Submit to the OIR copies of contracts used for its members that clearly establish the liability
of each member for the obligations of the fund; and
 Annually submit to the OIR a certification by the governing body of the fund that, to the best
of its knowledge, the requirements of this section are met.
A business entity in which a public housing authority holds an ownership interest or participates
in its governance may join a self-insurance fund solely to insure risks related to public housing.
Surplus Lines Insurance
Surplus lines insurance refers to a category of insurance for which the admitted market is unable
or unwilling to provide coverage.32 There are three basic categories of surplus lines risks:
 Specialty risks that have unusual underwriting characteristics or underwriting characteristics
that admitted insurers view as undesirable;
 Niche risks for which admitted carriers do not have a filed policy form or rate; and
 Capacity risks that are risks where an insured needs higher coverage limits than those that are
available in the admitted market.
Surplus lines insurers are not “authorized” insurers as defined in the Florida Insurance Code,
which means they do not obtain a certificate of authority from the OIR to transact insurance in
Florida.33 Rather, surplus lines insurers are “unauthorized” insurers,34 but may transact surplus
lines insurance if they are made “eligible” by the OIR. Except as specifically stated as
applicable, surplus lines insurers are not subject to regulation under ch. 627, F.S., of the Florida
Insurance Code, which includes, in part, provisions related to ratings standard, contra