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/SB 7052
INTRODUCER: Fiscal Policy, Banking and Insurance Committee
SUBJECT: Insurer Accountability
DATE: April 24, 2023 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Thomas Knudson BI Submitted as Comm. Bill/Fav.
2. Thomas Yeatman FP Fav/CS
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/SB 7052 contains various provisions intended to increase consumer protection and insurer
accountability in this state.
Regarding insurance coverage, the bill:
 Expands current law prohibiting authorized insurers from cancelling a residential property
insurance policy until 90 days after repairs are complete. Under the bill, for all other types of
losses, authorized insurers are prohibited from cancelling a property insurance policy during
any pending claim until the earlier of when the property has been repaired or 1 year after the
insurer issues the final claim payment;
 Protects policyholders whose insurance company becomes insolvent by requiring that
Citizens Property Insurance Corporation cover property with open claims that are being
handled by the Florida Insurance Guaranty Association;
 Requires insurers that violate the insurance code to obtain prior approval of forms from the
Office of Insurance Regulation (OIR) for 3 years after the violation;
 Clarifies that if a roof deductible is applied, the prohibition on applying any other deductible
under the policy encompasses any other loss to the property caused by the same covered
peril;
 Tolls the time period for filing a property insurance claim during an insured’s term of
deployment to a combat zone or combat support posting; and
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 Clarifies legislative intent that Chapter 2022-271, Laws of Florida, passed during Special
Session A in December 2022, (SB 2-A [2022] on Property Insurance) shall not be construed
to impair any right under an insurance contract in effect on or before the effective date of that
chapter law (December 16, 2022).
Regarding rates charged for insurance, the bill:
 Requires that property insurance and motor vehicle rate filings must include, and the OIR
must consider in reviewing rates, the combined effect of recent legislative reforms;
o Appropriates $500,000 from the Insurance Regulatory Trust Fund for the OIR to obtain
an actuarial study to implement this requirement; and
 Requires that property insurance mitigation discounts be updated at least every 5 years and
requires insurers to provide consumer-friendly information on their website describing
hurricane mitigation discounts available to policyholders.
Regarding insurer claims handling, the bill:
 Requires liability insurers to follow proper claims handling practices on behalf of their
insureds and that violations are subject to a 2.0 multiplier of fines;
 Requires residential property insurers to create and use claims-handling manuals that comply
with the Insurance Code and comport to industry standards. The OIR may request a claims
handling manual at any time and requires that each property insurer attest that their claims
manuals comply with Florida law and that the insurer is able to properly implement their
manual; and
 Strengthens the Unfair Insurance Trade Practices Act by:
o Prohibiting altering or amending an adjuster’s report without providing a detailed
explanation as to why any change that has the effect of reducing the estimate of the loss
was made. The insurer must also either create a list of changes and who made the change
or retain all versions of the report;
o Prohibiting officers and directors of impaired or insolvent insurers from receiving a
bonus from that insurer or other entity under common ownership with that insurer.
Regarding regulatory oversight of insurers, the bill:
 Specifies factors the OIR may consider in determining whether the continued operation of an
insurer may be deemed to be hazardous to its policyholders, creditors, or the general public;
specifies actions the OIR may take in determining an insurer's financial condition and actions
the OIR may order an insurer to take in an effort to improve the insurer’s financial condition.
 Increases maximum administrative fines that may be levied by the OIR on insurers by 250
percent generally, and 500 percent for violations stemming from a state of emergency such as
a hurricane;
 Requires insurers to more promptly respond to the Department of Financial Services (DFS)
Division of Consumer Services and increases fines for noncompliance;
 Increases staffing for the DFS Division of Consumer Services by appropriating funding for 7
full-time equivalent positions;
 Increases staffing at the OIR by appropriating 18 full-time equivalent positions;
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 Specifies objective criteria to be used by the OIR to prioritize necessary financial and market
conduct examinations;
 Provides conditions whereby the OIR must initiate a market conduct examination after a
hurricane;
 Requires property insurers to report to the OIR any temporary suspension of writing new
policies;
 Specifies that insurance fraud referrals may be made to the statewide prosecutor for crimes
that impact two or more judicial circuits; and
 Requires additional reporting from regulators regarding their enforcement actions.
See Section V. Fiscal Impact Statement.
The bill is effective July 1, 2023.
II. Present Situation:
Department of Financial Services
The Department of Financial Services (DFS) has broad duties, including licensure and regulation
of insurance agents, agencies, and adjusters; insurance consumer assistance and protection; and
holding and attempting to return unclaimed property to its rightful owner.1 The DFS has a
number of regulatory responsibilities over the Florida insurance market. The DFS regulates
insurance adjusters, which includes public adjusters, independent adjusters, and company
employee adjusters under Part VI, ch. 626, F.S. The DFS conducts insurance-related consumer
outreach through its Division of Consumer Services. The Division of Workers’ Compensation
within the DFS administers ch. 440, F.S., through enforcement of coverage requirements,2
administration of workers’ compensation health care delivery system,3 data collection,4 and
assisting injured workers, employers, insurers, and providers in fulfilling their responsibilities
under ch. 440, F.S.5 The DFS also administers insurer rehabilitation and liquidation in Florida
under part I of ch. 631, F.S.
DFS Division of Consumer Services
The Division of Consumer Services (Division) provides education, information, and assistance to
consumers for all products or services regulated by the DFS or the Financial Services
Commission (Commission).6 The Division’s duties specifically include:
 Receiving consumer questions and complaints;
1
See, e.g., Department of Financial Services, What is the Purpose of the Department, https://oppaga.fl.gov/ (last accessed
April 2, 2023).
2
Section 440.107(3), F.S.
3
Section 440.13, F.S.
4
Sections 440.185 and 440.593, F.S.
5
Section 440.191, F.S.
6
DFS, Department of Financial Services Long Range Program Plan: Fiscal Years 2023-24 through 2027-28, 15 (Oct. 17,
2022), available at http://floridafiscalportal.state.fl.us/Document.aspx?ID=24407&DocType=PDF (last accessed April 2,
2023). See also, DFS, Consumer Guides,
https://www.myfloridacfo.com/Division/Consumers/understandingCoverage/Guides/Default.htm (last visited April 2, 2023).
BILL: CS/SB 7052 Page 4
 Educating the public about insurance-related topics;
 Providing mediation to resolve disputes between a consumer and insurance company; and
 Serving as a conduit for referrals for further legal action by the DFS. 7
Section 624.307(10)(b), F.S., permits the Division to impose an administrative penalty on a
person who holds a license or certificate of authority from the DFS if that person fails to respond
to the Division’s request for information within 20 days. A licensed individual must produce any
requested documents not subject to attorney-client or work product privilege.
Regulation of Insurance in Florida
The Office of Insurance Regulation (OIR) regulates specified insurance products, insurers and
other risk bearing entities in Florida.8 As part of their regulatory oversight, the OIR may suspend
or revoke an insurer’s certificate of authority under certain conditions.9 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.10 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.11 The OIR is also authorized to conduct market conduct examinations
to determine compliance with applicable provisions of the Insurance Code.12
Financial Examinations
The OIR is responsible for all activities concerning insurers and other risk-bearing entities such
as licensing, solvency, rates, and policy forms. Section 624.361, F.S., requires the OIR to
conduct financial examinations of insurers. The scope of the financial examination includes a
review of the affairs, records, transactions, accounting procedures and financial condition of an
insurer. The OIR is charged with conducting an exam once every five years, with the exception
of a domestic insurers that have held a certificate of authority for less than three years, which are
required to be examined on annual basis. The OIR is required to examine an insurer applying for
an initial certificate of authority prior to issuing the certificate of authority.
Market Conduct Exams
The OIR is authorized to perform a market conduct examination of, among other entities, any
authorized insurer.13 The purpose of the examination is to determine the entity’s compliance with
7
Section 624.307(10)(a), F.S.
8
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 Office of Insurance Regulation for
purposes of rulemaking. Further, the Financial Services Commission appoints the commissioner of the Office of Insurance
Regulation.
9
Section 624.418, F.S.
10 Section 624.316(1)(a), F.S.
11
Section 624.318(2), F.S.
12
Section 624.3161, F.S.
13
Section 624.3161(1), F.S.
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Florida law.14 The costs of the examination are to be paid by the subject entity. 15 Section
624.3161, F.S., authorizes the OIR to subject any authorized insurer to a market conduct
examination after a hurricane if the insurer:
 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;
 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;
 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.
The relevant criteria under ss. 624.3161 and s. 624.316, F.S., are to be applied to the market
conduct examination. The market conduct examination, if any, must be started within 18 months
after the landfall of the related hurricane. The insurer’s managing general agent must be included
in the market conduct examination as if it were the insurer.
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.16 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.17 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.”18
Annual Report on Insurer Compliance
The OIR is required to submit an annual report to the Speaker and Minority Leader of the House
of Representatives, the President and Minority Leader of the Senate, the chairs of the legislative
committees with jurisdiction over matters of insurance, and the Governor.19 The report is to
cover information from the preceding calendar year, the following:
 Names of the authorized insurers transacting insurance in this state, with abstracts of their
financial statements including assets, liabilities, and net worth.
 Names of insurers whose business was closed during the year, the cause thereof, and amounts
of assets and liabilities as ascertainable.
 Names of insurers against which delinquency or similar proceedings were instituted and
related information.
 The receipts and estimated expenses of the OIR.
 Other pertinent information as the OIR deems to be in the public interest.
 A compilation of the laws passed by the Legislature relating to insurance.
14
Id.
15
Section 624.3161(4), F.S.
16
Section 624.3161(6), F.S.
17
Id.
18
Id.
19
Section 624.315, F.S.
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 An analysis and summary report of the state of the insurance industry in Florida.
Administrative Fines
The OIR, through its ongoing oversight and examination process, determines whether insurance
companies are operating in compliance with the code. The OIR is authorized to impose
administrative fines in lieu of suspension or revocation if the OIR finds that one or more grounds
exist for the discretionary revocation or suspension of the certificate of authority.20 The OIR may
impose an administrative fine, not to exceed $5,000, per nonwillful violation, with a limit of
$20,000 for all nonwillful violations arising out of the same action. With respect to any willful
violation, the OIR is authorized to assess a fine, not to exceed $40,000 per violation and
$200,000 in aggregate for all willful violations arising out of the same action. Additionally, if an
insurer owes restitution due to a violation, the insurer must provide the restitution and include 12
percent interest from the date of the violation or the inception of the insured’s policy.
Authority for Insurers in Unsound Financial Condition
Section 627.7154, F.S., establishes a property insurer stability unit (unit) within the OIR. The
purpose of the unit is to detect and prevent insurer insolvencies in the homeowners’ and
condominium unit owners’ insurance market. Specifically, the unit is to identify significant
concerns regarding insurer compliance with the insurance code. The unit must, at minimum:
 Conduct target market exams when there is reason to believe that an insurer’s claims
practices, rate requirements, investment activities, or financial statements suggest said insurer
may be in an unsound financial condition.
 Monitor closely all risk-based capital reports, own-risked solvency assessments, reinsurance
agreements, and financial statements filed by insurers.
 Have primary responsibility, coordinating with Florida Commission on Hurricane Loss
Projection Methodology, to c