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/CS/SB 1158
INTRODUCER: Fiscal Policy Committee, Appropriations Committee on Agriculture, Environment, and
General Government, Banking and Insurance Committee and Senator DiCeglie
SUBJECT: Department of Financial Services
DATE: April 21, 2023 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Thomas Knudson BI Fav/CS
2. Sanders Betta AEG Fav/CS
3. Thomas Yeatman FP Fav/CS
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/CS/CS/SB 1158 revises provisions of multiple programs within the Department of Financial
Services (DFS) to:
Amend provisions regarding investigations and prosecutions within the regulatory authority
of the DFS;
Add the State College System to the State Deferred Compensation Program;
Revise provisions relating to the Workers’ Compensation Three Member Panel;
Ratify three DFS rules relating to the Florida Workers’ Compensation Law;
Revises definitions relating to the regulation of funeral, cemetery, and consumer services;
Establish guidelines for board member requirements where the Chief Financial Officer
(CFO) has sole appointment authority;
Provide that insurers pay for mediation of motor vehicle mediation claims;
Create a Direct Support Organization to facilitate and promote firefighter safety;
Revise financial requirements for warranty associations;
Revise the role of reinsurance intermediaries to an appointment instead of a license; and
Revise provisions relating to bail bond agents and agencies; remove authority for temporary
bail bond agents.
The bill has an indeterminate, yet insignificant impact on state government revenues and
expenditures. See Section V. Fiscal Impact Statement.
BILL: CS/CS/CS/SB 1158 Page 2
The bill becomes effective upon becoming a law, except as otherwise provided.
II. Present Situation:
Powers and Duties of the Department of Financial Services
The organizational structure of the Department of Financial Services (DFS) is set forth in
s. 20.121, F.S. The DFS is statutorily responsible for:
Carrying out the state’s accounting and auditing functions, including preparing the state’s
Comprehensive Annual Financial Report; monitoring state contracts; and making payment
for state expenditures.
Implementing state fire prevention and control measures, including the investigation of arson
and other suspicious fires; training and certification of firefighter candidates; and regulation
of explosive storage and use.
Operating the state’s risk management program and securing insurance and reinsurance for
covered state liabilities.
Managing the state Treasury and directing safekeeping and the investment of all state funds.
Managing the deferred compensation program for state employees.
Investigating fraud, including insurance fraud, public assistance fraud, and false claims
against the state.
Regulating cemeteries and funeral homes.
Licensing and oversight of insurance agents and agencies.
Ensuring that Florida employers provide workers’ compensation coverage for their
employees in a cost effective manner.
Assisting consumers in the resolution of issues pertaining to insurance and funeral services.
Collecting and returning unclaimed property belonging to Florida residents.1
The DFS is composed of the following thirteen divisions:
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
1
Florida Department of Financial Services, Statement of Agency Organization and Operation,
https://www.myfloridacfo.com/required/agency-org (last visited March 28, 2023).
BILL: CS/CS/CS/SB 1158 Page 3
Workers’ Compensation.2
Division of Investigative and Forensic Services
The Division of Investigative and Forensic Services (DIFS) functions as a criminal justice
agency for purposes of ss. 943.045-943.08, F.S., and is authorized to conduct investigations
within or outside of Florida, as necessary. The DIFS includes the following office and bureaus:
The Bureau of Forensic Services;
The Bureau of Fire, Arson, and Explosives Investigations;
The Office of Fiscal Integrity;
The Bureau of Insurance Fraud; and
The Bureau of Workers’ Compensation Fraud.
DIFS encompasses all enforcement and forensic components within the DFS, investigating a
wide range of fraudulent and criminal acts including:
Insurance fraud investigations;
Workers’ compensation fraud investigations;
Fire, arson, and explosives investigations;
Theft/misuse of state funds; and
Fire and explosives sample analysis.3
Strategic Markets Research and Assessments Unit
Subsection 20.121(6), F.S., establishes the Strategic Markets Research and Assessments Unit and
charges the Chief Financial Officer (CFO), or designee, with reporting quarterly to the Cabinet,
President of the Senate, and Speaker of the House of Representatives on the status of the state’s
financial services markets. The report must include a summary of the issues, trends, and threats
that broadly impact the condition of the financial services industries and institutions. The CFO is
also responsible for submitting findings and recommendations regarding regulatory and policy
changes with the report.
Florida Deferred Compensation Program
Section 112.215, F.S., requires the CFO to create a deferred compensation plan (plan) for
employees of state agencies, the State University System, the State Board of Administration, and
other special district employers (subject to employer election). The plan allows state employees
to defer a portion of their income and place it in an investment account. The employee does not
pay taxes on the deferred amount or any investment gains until the employee withdraws the
money.4
2
Florida Department of Financial Services, Divisions and Offices https://www.myfloridacfo.com/ (last visited
March 28, 2023).
3
Department of Financial Services, Investigative and Forensic Services, About the Division,
https://myfloridacfo.com/Division/DIFS/ (last visited March 28, 2023).
4
See https://www.myfloridacfo.com/DeferredComp/ (last visited March 28, 2023).
BILL: CS/CS/CS/SB 1158 Page 4
The Deferred Compensation Advisory Council (Council) provides assistance and
recommendations to the CFO relating to the provisions of the plan, the insurance or investment
options to be offered under the plan, and any other contracts or appointments deemed necessary.
The Council is composed of seven members.
One member appointed by the Speaker of the House of Representatives and the President of
the Senate jointly, who is an employee of the legislative branch;
One member appointed by the Chief Justice of the Supreme Court, who is an employee of the
judicial branch;
One member appointed by the chair of the Public Employees Relations Commission, who is
a nonexempt public employee;
One member appointed by the Chancellor of the State University System, who is an
employee of the university system;
One member appointed by the CFO, who is an employee of the CFO;
One member appointed by the Governor, who is an employee of the executive branch; and
One member appointed by the Executive Director of the State Board of Administration, who
is an employee of the State Board of Administration.
Annual Report on Economic Impact of a 1-in-100-Year Hurricane
In 2008, the Legislature created section 215.55952, F.S., requiring the DFS to provide a report
on the economic impact on the state of a 1-in-100-year hurricane to the Governor, the President
of the Senate, and the Speaker of the House of Representatives by March 1 of each year.5 The
report is to include:
An estimate of the short-term and long-term fiscal impacts of such a storm on Citizens
Property Insurance Corporation, the Florida Hurricane Catastrophe Fund, the private
insurance and reinsurance markets, the state economy, and the state debt;
An analysis of the average premium increase to fund a 1-in-100-year hurricane event and list
the average cost, in both a percentage and dollar amount, impact to consumers on a county-
level basis; and
Recommendations for preparing for such a hurricane and reducing the economic impact of
such a hurricane on the state.
In preparing the report, the DFS is charged with coordinating with OIR, Citizens Property
Insurance Corporation, the Florida Hurricane Catastrophe Fund, the Florida Commission on
Hurricane Loss Projection Methodology, the State Board of Administration, the Office of
Economic and Demographic Research, and other state agencies.
The DFS has reported difficulty in obtaining the expertise to develop the report and the high cost
to prepare the report.
Tangible Personal Property Owned by Local Governments
Chapter 274, F.S., governs tangible personal property owned by local governments. The CFO is
charged with establishing by rule the requirements for the recording and periodic review of such
property for inventory purposes. Tangible personal property includes all goods of value capable
5
Section 21, ch. 2008-66, L.O.F.
BILL: CS/CS/CS/SB 1158 Page 5
of manual possession and whose chief value is intrinsic to the article itself.6 “Governmental unit”
means the governing board, commission or authority of a county or taxing district of the state or
the sheriff of the county.7
Workers’ Compensation
Workers’ Compensation Maximum Reimbursement Allowances
The Division of Workers’ Compensation within the DFS provides regulatory oversight of
Florida’s workers’ compensation system, which includes the enforcement of coverage
requirements,8 administration of workers’ compensation health care delivery system,9 data
collection,10 and assisting injured workers, employers, insurers, and providers in fulfilling their
responsibilities under ch. 440, F.S.11 Whether an employer is required to have workers’
compensation insurance depends upon the employer’s industry and the number of employees.
Employers may secure coverage by purchasing a workers’ compensation insurance policy or
qualifying as a self-insurer.12 Individuals who elect an exemption are not considered
“employees,” for premium calculation purposes, and are not eligible to receive workers’
compensation benefits if they suffer a workplace injury. Florida’s workers’ compensation law
provides for medically necessary treatment and care of injured employees, including
medications. The law provides reimbursement formulas and methodologies to compensate
providers of health services, subject to maximum reimbursement allowances (MRAs).
A three-member panel (panel), consisting of the CFO or the CFO’s designee and two Governor’s
appointees, sets the MRAs.13 The DFS incorporates the statewide schedules of the MRAs by rule
in reimbursement manuals. In establishing the MRA manuals, the panel considers the usual and
customary levels of reimbursement for treatment, services, and care;14 the cost impact to
employers for providing reimbursement that ensures that injured workers have access to
necessary medical care;15 and the financial impact of the MRAs on healthcare providers and
facilities; Florida law requires the panel to develop MRA manuals that are reasonable, promote
the workers’ compensation system’s healthcare cost containment and efficiency, and are
sufficient to ensure that medically necessary treatment is available for injured workers.16
The panel develops four different reimbursement manuals to determine statewide schedules of
maximum reimbursement allowances. The healthcare provider manual limits the maximum
reimbursement for licensed physicians to 110 percent of Medicare reimbursement,17 while
reimbursement for surgical procedures is limited to 140 percent of Medicare.18 The hospital
6
Section 192.001(11)(d), F.S.
7
Section 274.01(1), F.S.
8
Section 440.107(3), F.S.
9
Section 440.13, F.S.
10
Section 440.185 and 440.593, F.S.
11
Section 440.191, F.S.
12
Section 440.38, F.S.
13
Section 440.13(12)(a), F.S.
14
Section 440.13(12)(d)1., F.S.
15
Section 440.13(12)(d)2., F.S.
16
Section 440.13(12)(d)3., F.S.
17
Section 440.13(12)(b)4., F.S.
18
Section 440.13(12)(b)5., F.S.
BILL: CS/CS/CS/SB 1158 Page 6
manual sets maximum reimbursement for outpatient scheduled surgeries at 60 percent of usual
and customary charges,19 while other outpatient services are limited to 75 percent of usual and
customary charges.20 Reimbursement of inpatient hospital care is limited based on a schedule of
per diem rates approved by the panel.21 The ambulatory surgical centers manual limits
reimbursement to 60 percent of usual and customary charge as such services are generally
scheduled outpatient surgeries. The prescription drug reimbursement manual limits
reimbursement to the average wholesale price plus a $4.18 dispensing fee.22 Repackaged or
relabeled prescription medication dispensed by a dispensing practitioner has a maximum
reimbursement of 112.5 percent of the average wholesale price plus an $8.00 dispensing fee.23
Fees may not exceed the schedules adopted under ch. 440, F.S., and DFS rule.24
Rulemaking Authority and Legislative Ratification
A rule is an “agency statement of general applicability that implements, interprets, or prescribes
law or policy.”25 Rulemaking authority is delegated by the Legislature in law to an agency, and
authorizes an agency to adopt, develop, establish, or otherwise create a rule.26 An agency may
not engage in rulemaking unless it has a legislative grant of authority to do so.27 The statutory
authority for rulemaking must be specific enough to guide an agency’s rulemaking and an
agency rule must not exceed the bounds of authority granted by the Legislature.28
Prior to the adoption, amendment, or repeal of any rule, an agency must file a notice of the
proposed rule in the Florida Administrative Register.29 The notice of the proposed rule must
include:
An explanation of the purpose and effect;
The specific legal authority for the rule;
The full text of the rule; and
A summary of the agency’s statement of estimated regulatory costs (SERC), if one is
prepared.30
Within 21 days of the notice, the public may provide an agency with information regarding the
SERC or provide proposals for a lower cost alternative to the rule.31
19
Section 440.13(12)(b)3., F.S.
20
Section 440.13(12)(a), F.S.
21
Section 440.13(12)(a), F.S.
22
Section 440.13(12)(c), F.S.
23
Id.
24
Section 440.13(13)(b), F.S. The DFS also has broad rulemaking authority under s. 440.591, F.S.
25
Section 120.52(16), F.S.
26
Section 120.52(17), F.S.
27
See ss. 120.52(8) and 120.536, F.S.
28
See Sloban v. Florida Board of Pharmacy, 982 So.2d 26 (Fla. 1st DCA 2008) and Southwest Florida Water Management
District v. Save the Manatee Club, Inc., 773 So.2d 594 (Fla 1st DCA 2000).
29
See ss. 120.54(3)(a)1., F.S.
30
Id.
31
See ss. 120.54(3)(a)1., and 120.541(1)(a), F.S.
BILL: CS/CS/CS/SB 1158 Page 7
SERC Requirements
Agencies must prepare the SERC for a rule that has an adverse impact on small businesses or