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 Appropriations
BILL: CS/CS/SB 1874
INTRODUCER: Appropriations Committee (Recommended by Appropriations Subcommittee on
Agriculture, Environment, and General Government); Banking and Insurance
Committee; and Senator Boyd
SUBJECT: Department of Financial Services
DATE: March 2, 2022 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Johnson Knudson BI Fav/CS
2. Sanders Betta AEG Recommend: Fav/CS
3. Sanders Sadberry AP Fav/CS
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/CS/SB 1874 amends sections of Florida Statutes relating to the powers and duties of the
Department of Financial Services (DFS). The Chief Financial Officer (CFO) is the head of the
DFS. The bill, as originally filed, revises service of process requirements by providing the
service of process is valid and binding upon the insurer on the date the process served on the
CFO is delivered to the insurer, or the insurer has been notified by the DFS that such information
has made been made available on the DFS online portal. In addition, the committee substitute
provides the following additional changes:
Division of Insurance Agents and Agencies
Adds an exemption to the examination requirements for an all-lines adjuster who has
received the designation of a Certified All Lines Adjuster from Kaplan Financial Education;
Authorizes an adjuster who holds an adjuster license and who is an unaffiliated insurance
agent to obtain an adjuster appointment while maintaining his or her unaffiliated agent
appointment. This will allow the adjuster to adjust claims and receive compensation;
Limits the appointment of a public adjuster apprentice to a public adjusting firm who may
appoint a public adjuster apprentice. Currently a public adjuster may also appoint an
apprentice;
Revises provisions relating to fingerprinting requirements to comply with federal law;
BILL: CS/CS/SB 1874 Page 2
Creates notice requirements for agencies that cease doing business, and creates penalties for
noncompliance;
Increases the authority of the DFS to investigate and prosecute violations committed by a
licensee while licensed under ch. 626, F.S., even if the license has expired, is not renewed, or
is surrendered; and
Revises compensation for public adjusters by requiring the compensation be based on the
recovery allocated to the insured for covered damage, exclusive of attorney fees and costs.
Funeral, Cemetery, and Consumer Services
Eliminates the fee cap of $50 for a consumer transferring the burial rights from one purchaser
to another and revises the licensure requirements for embalmers and funeral directors.
State Fire Marshal
Authorizes expenditure of funds from the Firefighter Assistance Grant Program for the
purchase of other equipment and tools and protective clothing and equipment compliant with
certain standards;
Revises firefighter certification requirements; and
Revises provisions relating to the inspection of boiler rooms.
Division of Workers’ Compensation
Clarifies the definition of employer;
Clarifies an employer applying for an exemption from workers’ compensation coverage to
provide a valid driver license or valid identification card. An applicant is also required to
complete an online the FS coverage and compliance tutorial as a condition for application;
Revises the formula for calculating coverage penalties to reduce the period subject to a
penalty with exceptions;
Provides a penalty credit for an employer who has been issued a stop-work order or an
enforcement action if the employer successfully completes an online coverage and
compliance tutorial;
Extends the deadline for an employer to produce requested business records from 10 business
days to 21 days before the DFS can take an administrative action;
Requires an employer to pay any outstanding assessed payment prior to entering into a new
penalty payment program with the DFS;
Requires the carrier to send an informational brochure to the injured worker within three
business days, instead of three days, after the employee or employer notifies the carrier of an
injury. A carrier or its third party administrator is authorized to provide the informational
brochure to an injured worker or an employer by e-mail or regular mail; and
Revises onsite audit requirements for construction classes by requiring such annual audits if
the estimated annual premium is $10,000 or more. Currently, there is no minimum threshold.
Division of Accounting and Auditing
Amends provisions relating to the Planning and Accounting, Ledger Management system
(PALM) and local government financial reporting.
BILL: CS/CS/SB 1874 Page 3
Division of Rehabilitation and Liquidation
Provides employees and retired employees of the Division of Rehabilitation and Liquidation
or their surviving spouses are enrollees of the state group insurance program.
Florida Patient’s Compensation Fund (Fund)
Revises structure and authority of the Fund by eliminating the board of governors of the
Fund and transferring the supervision of the Fund to the CFO or his or her designee.
Prescribes duties of the CFO and the DFS to wind down the Fund, and to dissolve the Fund
on or before December 31, 2023.
The bill may have an insignificant but indeterminate impact on state revenues and expenditures.
See Section V. Fiscal Impact Statement.
Except as otherwise expressly provided, this act takes effect July 1, 2022.
II. Present Situation:
The Chief Financial Officer (CFO) is the chief fiscal officer of Florida and is responsible for
settling and approving accounts against the state and keeping all state funds and securities.1 The
CFO serves as the head of the Department of Financial Services (DFS or department). Offices
and divisions within the DFS include:
Insurance Consumer Advocate;
Accounting and Auditing;
Administration;
Consumer Services;
Funeral, Cemetery, and Consumer Services;
Insurance Agent and Agency Services;
Investigative and Forensic Services;
Public Assistance Fraud;
Rehabilitation and Liquidation;
Risk Management;
State Fire Marshal;
Treasury;
Unclaimed Property; and
Workers’ Compensation.2
Division of Accounting and Auditing
Section 215.93, F.S., establishes the Florida Financial Management Information System
(FFMIS) for the state. The intent of the FFMIS is to ensure the efficient operation of an
integrated financial management information system and to provide necessary information for
the effective operation of state government.3 The Florida Accounting Information Resource
1
Section 17.001, F.S.
2
Department of Financial Services, Divisions and Offices https://www.myfloridacfo.com/ (last visited Jan. 17, 2022).
3
Section 215.93(1), F.S.
BILL: CS/CS/SB 1874 Page 4
Subsystem (FLAIR) is the state’s accounting system, and it is a subsystem of the FFMIS. 4 The
functions of FLAIR include accounting and reporting of information to producing financial
statements for the state and auditing and settling claims against the state.5 In 2014, DFS created
the Florida Planning, Accounting, and Ledger Management (PALM) Project to replace the State
of Florida’s current accounting and cash management systems with an integrated, enterprise
financial management solution that will allow the state to organize, define, and standardize its
financial management processes. The Florida PALM Project is a multiyear project.6
The Division of Accounting and Auditing, Bureau of Financial Reporting (Bureau), is
responsible for the oversight of local government financial reports and the Comprehensive
Annual Financial Reports (CAFR). The Chief Financial Officer is required to publish a CAFR in
accordance with generally accepted accounting principles (GAAP).7 The CAFR includes the
audited financial statements, other disclosures, and supplementary information, presenting the
state's financial condition and results of operations during the fiscal year.8 The Government
Accounting Standards Board (GASB) establishes accounting and financial reporting standards
for U.S. state and local governments that follow GAAP and recently changed the term,
“Comprehensive Annual Financial Report” (CAFR)9 to the term, “Annual Comprehensive
Financial Report” (ACFR).
Chapter 218, F.S., prescribes financial management and reporting requirements for local
governments, which include counties, municipalities, and special districts. The Division of
Accounting and Auditing’s website provides resources to assist local governments in fulfilling
their reporting requirements.10 Local governments must submit their annual financial reports
(AFRs) to the DFS and provide their audited financial statements.11 The AFR is available to the
public in the local government electronic reporting (LOGER).
In 2018,12 legislation was enacted to require the DFS to create an interactive repository of
financial statement information, known as the Florida Open Financial Statement System.13 This
system must have standardized taxonomies for state, county, municipal, and special district
financial filings. The Division of Accounting & Auditing and the Office of Information
Technology are designing the Florida Open Financial Statement System.14
4
Section 215.93(1)(b), F.S. The DFS is the functional owner of FLAIR. Section 215.94(2), F.S.
5
Section 215.94(2), F.S.
6
Id.
7
Section 216.102(3), F.S.
8
See Florida’s Comprehensive Annual Financial Report, Fiscal Year ended June 30, 2020,
https://www.myfloridacfo.com/division/aa/reports/documents/DeptofFinServ-StateofFLCAFR2020-FINAL-2-26-2021.pdf
(last visited Feb. 7, 2022).
9
GASB, Statement No. 98, The Annual Comprehensive Financial Report, (Oct. 2021),
https://www.gasb.org/jsp/GASB/Document_C/DocumentPage?cid=1176178723455&acceptedDisclaimer=true (last visited
Feb. 7, 2022).
10
Department of Financial Services, Division of Accounting and Auditing, Local Governments,
https://www.myfloridacfo.com/division/aa/localgovernments/ (last visited Feb. 7, 2022).
11
Section 218.32, F.S.
12
Ch. 2018-102, s. 4, Laws of Fla.
13
Section 218.32(1)(h), F.S.
14
Department of Financial Services, Florida Open Financial Statement Project,
https://www.myfloridacfo.com/division/aa/projects/flopenfinancialstmtproject.htm (last visited Feb. 7, 2021).
BILL: CS/CS/SB 1874 Page 5
Division of Rehabilitation and Liquidation
Federal law provides insurance companies may not file for bankruptcy.15 The state, through the
Division of Rehabilitation (division or receiver), is instead responsible for rehabilitating or
liquidating an insurer.16 States primarily regulate insurance companies, and the state of domicile
serves as the primary regulator for insurers. The receiver administers insurance companies
placed into receivership in Florida.17
Insurance companies in receivership fund positions within the division. Since these positions are
not appropriated from state funds, the positions are not state employee positions and are not
eligible for the state group insurance program.18 Because the division must purchase health
insurance in the small group market, it is unable to leverage the economies of scale, and faces
yearly premium increases. The division anticipates these increases will continue to occur in the
future, which ultimately affects the claimants in the receivership estates. The division is a
participating entity of the Florida Retirement System.19 The division also participates in the
State's Deferred Compensation program.
Division of Funeral, Cemetery, and Consumer Services
Section 20.121(4), F.S., creates the Board of Funeral, Cemetery, and Consumer Services (board)
within the Division of Funeral, Cemetery, and Consumer Services of the DFS. The board acts as
the licensing and rulemaking authority for the purposes of certain matters related to examinations
and other substantive requirements for licensure within the death care industry under
ch. 497, F.S., including facility requirements.20
Fees
Current law imposes a maximum charge to consumers of $50 for transference of burial rights
from one purchaser to another.21
15
The Bankruptcy Code expressly provides that "a domestic insurance company" may not be the subject of a federal
bankruptcy proceeding. 11 U.S.C. s. 109(b)(2). The exclusion of insurers from the federal bankruptcy court process is
consistent with federal policy generally allowing states to regulate the business of insurance. See 15 U.S.C. ss. 1011- 1012.
16
Sections 631.051 and 631.061, F.S. Chapter 631, F.S., governs the receivership process for insurance companies in Florida.
17
Id.
18
Department of Financial Services, Division of Rehabilitation and Liquidation,
https://myfloridacfo.com/division/receiver/career-opportunities/humanresources-recruitmentandselection (last visited Feb. 7,
2022).
19
Id.
20
See s. 497.103(1)(a)-(cc), F.S. Licenses available to natural persons include: embalmer apprentice and intern; funeral
directors and intern; funeral director and embalmer, direct disposer, monument establishment sales agent, and preneed sales
agent. Section 497.141(12)(a), F.S. Licenses available to natural persons, corporations, limited liability companies, and
partnerships include: funeral establishment, centralized embalming facility, refrigeration facility, direct disposal
establishment, monument establishment, cinerator facility, removal service, preneed sales business under s. 497.453, F.S.,
and cemetery. Section 497.141(12)(b)-(c), F.S. sets forth who may apply for which licenses.
21
Section 497.277(2), F.S.
BILL: CS/CS/SB 1874 Page 6
Licensure
There are several options available for embalmers or funeral directors to obtain reciprocal
licensure in Florida.22 One method to receive a reciprocal licensure for an embalmer is to hold a
valid licensure in a state that has requirements at the time of original licensure that are
substantially equivalent to or more stringent than Florida’s requirements at the same time.23
A funeral director may apply to obtain a reciprocal licensure in Florida if the provisions of
s. 497.374, F.S., are met. The applicant must hold a valid license to practice funeral directing in
another state, provided that, when the applicant secured her or his original license, the
requirements for licensure were substantially equivalent to or more stringent than those existing
in Florida.24
Current law prescribes the scope of practice of funeral directing a licensed funeral director may
perform.25 These duties include:
Selling or offering to sell funeral services;
Planning or arranging the details of the funeral services;
Embalming, cremation, or other services relating to the final disposition of human remains;
including the removals of such remains from the state;
Setting the time of the service;
Establishing the type of services to be rendered;
Acquiring the services of the clergy;
Obtaining vital information for the filing of death certificates and burial transit permits; or
Directing any memorial services that is held prior to or within 72 hours of the burial or
cremation if such service is old or arranged by the licensee.
Division of Insurance Agents and Agencies
Chapter 626, F.S., governs the regulation of insurance field representatives, navigators, insurance
administrators, unauthorized insurers and surplus lines, viatical settlements, structured
settlements, and operations.26 The powers and duties of the CFO and the DFS in part I of
ch. 626, F.S., apply only with respect to insura