Florida Senate - 2023 SB 7052 By the Committee on Banking and Insurance 597-03563-23 20237052__ Page 1 of 46 CODING: Words stricken are deletions; words underlined are additions. A bill to be entitled 1

An act relating to insurer accountability; amending s. 2 624.307, F.S.; authorizing electronic responses to 3 certain requests from the Division of Consumer 4 Services of the Department of Financial Services 5 concerning consumer complaints; revising the timeframe 6 in which responses must be made; revising 7 administrative penalties; amending s. 624.315, F.S.; 8 specifying reporting requirements for the Office of 9 Insurance Regulation’s internal auditor in the 10 office’s annual report relating to the enforcement of 11 insurer compliance; creating s. 624.3152, F.S.; 12 specifying requirements for the office to report 13 quarterly to the Legislature relating to the 14 enforcement of insurer compliance; amending s. 15 624.316, F.S.; requiring the office to create a 16 specified methodology for scheduling examinations of 17 insurers; specifying requirements for such 18 methodology; providing construction; amending s. 19 624.3161, F.S.; providing that authorized property 20 insurers must, rather than may, be subject to an 21 additional market conduct examination after a 22 hurricane if specified conditions are met; revising 23 the applicability of such conditions; requiring the 24 office to create, and the Financial Services 25 Commission to adopt by rule, a specified methodology 26 for scheduling examinations of insurers; specifying 27 requirements for such methodology; providing 28 construction; amending s. 624.4211, F.S.; revising 29

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 2 of 46 CODING: Words stricken are deletions; words underlined are additions. administrative fines the office may impose in lieu of 30 revocation or suspension; amending s. 624.424, F.S.; 31 revising reporting requirements for insurers that pay 32 financial consideration or payment to affiliates; 33 revising factors the office must consider in 34 determining whether such financial consideration or 35 payment is fair and reasonable; specifying reporting 36 requirements for insurers relating to agreements with 37 affiliates; creating s. 624.4301, F.S.; specifying 38 requirements for insurers temporarily suspending 39 writing new policies in notifying the office; amending 40 s. 626.207, F.S.; revising a condition for 41 disqualification of an insurance representative 42 applicant or licensee; amending s. 626.9521, F.S.; 43 revising and specifying applicable fines for unfair 44 methods of competition and unfair or deceptive acts or 45 practices; amending s. 626.9541, F.S.; adding an 46 unfair claim settlement practice by an insurer; 47 prohibiting an officer or a director of an impaired 48 insurer to authorize or permit the insurer to pay a 49 bonus to any officer or director of the insurer; 50 defining the term “bonus”; providing a criminal 51 penalty; amending s. 626.9743, F.S.; revising 52 applicability of provisions relating to motor vehicle 53 insurance claim settlement practices; specifying 54 requirements, procedures, and authorized actions for 55 insurers relating to communications, investigations, 56 estimates, and recordkeeping; defining the terms 57 “factors beyond the control of the insurer” and 58

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 3 of 46 CODING: Words stricken are deletions; words underlined are additions. “insurer”; specifying required notices by insurers; 59 specifying requirements and procedures for insurers in 60 paying or denying claims; providing construction and 61 applicability; amending s. 626.989, F.S.; revising a 62 reporting requirement for the department’s Division of 63 Investigative and Forensic Services; requiring the 64 division to submit an annual performance report to the 65 Legislature; specifying requirements for the report; 66 amending s. 627.0629, F.S.; specifying requirements 67 for residential property insurers in providing certain 68 hurricane mitigation discount information to 69 policyholders in a specified manner; specifying 70 requirements for the office in reevaluating and 71 updating certain fixtures and construction techniques; 72 deleting obsolete dates; amending s. 627.351, F.S.; 73 prohibiting Citizens Property Insurance Corporation 74 from determining that a risk is ineligible for 75 coverage solely on a specified basis; amending s. 76 627.410, F.S.; prohibiting the office from exempting 77 specified insurers from form filing requirements; 78 creating s. 627.4108, F.S.; providing legislative 79 intent; specifying requirements for insurers in 80 submitting claims-handling manuals to the office; 81 authorizing the office to conduct examinations; 82 authorizing the commission to adopt emergency rules; 83 amending s. 627.4133, F.S.; revising prohibitions on 84 insurers against the cancellation or nonrenewal of 85 property insurance policies; revising applicability; 86 providing construction; defining the term “insurer”; 87

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 4 of 46 CODING: Words stricken are deletions; words underlined are additions. amending s. 627.426, F.S.; requiring the office to 88 ensure that each liability insurer, upon receiving 89 certain notice, takes specified actions; providing 90 construction; amending s. 627.701, F.S.; providing 91 that if a roof deductible is applied under a personal 92 lines residential property insurance policy, no other 93 deductible under the policy may be applied to any 94 other loss to the property caused by the same covered 95 peril; amending s. 627.70132, F.S.; providing for the 96 tolling of certain timeframes for filing notices of 97 property insurance claims for servicemembers; amending 98 s. 627.7019, F.S.; providing that surplus lines 99 insurers are subject to the commission’s rulemaking 100 authority as to requirements of insurers after natural 101 disasters; amending s. 627.782, F.S.; revising rate 102 filing requirements for title insurers; providing that 103 the office, rather than the commission, must review 104 premium rates; providing construction relating to 105

chapter 2022-271, Laws of Florida; requiring 106 residential property insurers and motor vehicle 107 insurer rate filings to reflect certain savings and 108 reductions in expenses; specifying requirements for 109 the office in reviewing rate filings; authorizing the 110 office to develop certain factors and contract with a 111 vendor for a certain purpose; providing 112 appropriations; providing an effective date. 113 114 Be It Enacted by the Legislature of the State of Florida: 115 116

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 5 of 46 CODING: Words stricken are deletions; words underlined are additions.

Section 1. Paragraph (

b) of subsection (10) of

section 117 624.307, Florida Statutes, is amended to read: 118 624.307 General powers; duties.— 119 (10) 120 (

b) Any person licensed or issued a certificate of 121 authority by the department or the office shall respond, in 122 writing or electronically, to the division within 14 20 days 123 after receipt of a written request for documents and information 124 from the division concerning a consumer complaint. The response 125 must address the issues and allegations raised in the complaint 126 and include any requested documents concerning the consumer 127 complaint not subject to attorney-client or work-product 128 privilege.

The division may impose an administrative penalty for 129 failure to comply with this paragraph of up to $5,000 $2,500 per 130 violation upon any entity licensed by the department or the 131 office and $250 for the first violation, $500 for the second 132 violation, and up to $1,000 per for the third or subsequent 133 violation by upon any individual licensed by the department or 134 the office. 135

Section 2. Present subsection (4) of

section 624.315, 136 Florida Statutes, is redesignated as subsection (5), and a new 137 subsection (4) is added to that section, to read: 138 624.315 Annual report.— 139

(4) The internal auditor of the office shall detail all 140 actions of the office to enforce insurer compliance during the 141 previous year. For each of the following, the report must detail 142 the insurer or other licensee or registrant against whom such 143 action was taken; whether the office found any violation of law 144 or rule by such party, and, if so, detail such violation; and 145

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 7 of 46 CODING: Words stricken are deletions; words underlined are additions. such action, including any penalties imposed by the office. The 175 report is due on or before April 30, July 31, October 31, and 176 January 31, respectively, for the immediately preceding quarter. 177 The report must include, but need not be limited to: 178

(1) The revocation, denial, or suspension of any license or 179 registration issued by the office. 180

(2) All actions taken pursuant to s. 624.310. 181

(3) Fines imposed by the office for violations of this 182 code. 183

(4) Consent orders entered into by the office. 184

(5) Examinations and investigations conducted and completed 185 by the office pursuant to ss. 624.316 and 624.3161. 186

(6) Investigations conducted and completed, by line of 187 insurance, for which the office found violations of law or rule 188 but did not take enforcement action. 189

Section 4. Subsection (3) is added to

section 624.316, 190 Florida Statutes, to read: 191 624.316 Examination of insurers.— 192

(3) The office shall create a risk-based selection 193 methodology for scheduling examinations of insurers subject to 194 this section. This requirement does not restrict the authority 195 of the office to conduct market conduct examinations as often as 196 it deems advisable. Such methodology must include: 197 (

a) Use of currently required risk-based capital reports to 198 prioritize financial examinations of insurers when such 199 reporting indicates a decline in the insurer’s financial 200 condition. 201 (

b) Consideration of any downgrade or threatened downgrade 202 in the insurer’s financial strength rating. 203

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 8 of 46 CODING: Words stricken are deletions; words underlined are additions. (

c) Prioritization of property insurers for which the 204 office identifies significant concerns about an insurer’s 205 solvency pursuant to s. 627.7154. 206 (

d) Any other conditions the office deems necessary for the 207 protection of the public. 208

Section 5. Subsection (7) of

section 624.3161, Florida 209 Statutes, is amended, and subsection (8) is added to that 210 section, to read: 211 624.3161 Market conduct examinations.— 212

(7) Notwithstanding subsection (1), any authorized insurer 213 transacting property insurance business in this state must may 214 be subject to an additional market conduct examination after a 215 hurricane if, at any time more than 90 days after the end of the 216 hurricane, the insurer: 217 (

a) Is among the top 20 percent of insurers based upon a 218 calculation of the ratio of hurricane-related property insurance 219 claims filed to the number of property insurance policies in 220 force; 221 (

b) Is among the top 20 percent of insurers based upon a 222 calculation of the ratio of consumer complaints made to the 223 department to hurricane-related claims; 224 (

c) Has made significant payments to its managing general 225 agent since the hurricane; or 226 (

d) Is identified by the office as necessitating a market 227 conduct exam for any other reason. 228 229 All relevant criteria under this

section and s. 624.316 shall be 230 applied to the market conduct examination under this subsection. 231 Such an examination must be initiated within 18 months after the 232

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 9 of 46 CODING: Words stricken are deletions; words underlined are additions. landfall of a hurricane that results in an executive order or a 233 state of emergency issued by the Governor. This requirement does 234 not limit in any way the authority of the office to conduct at 235 any time a market conduct examination of a property insurer in 236 the aftermath of a hurricane. An examination of an insurer under 237 this subsection must also include an examination of its managing 238 general agent as if it were the insurer. 239

(8) The office shall create, and the commission shall adopt 240 by rule, a risk-based selection methodology for scheduling and 241 conducting market conduct examinations of insurers and other 242 entities regulated by the office. This requirement does not 243 restrict the authority of the office to conduct market conduct 244 examinations as often as it deems necessary. Under such 245 selection methodology, the office must initiate a market conduct 246 examination if any of the following conditions exist relating to 247 an insurer or other entity regulated by the office: 248 (

a) An insurance regulator in another state has initiated 249 or taken regulatory action against the insurer or entity, 250 including, but not limited to: 251 1. A licensure denial, suspension, or revocation; 252 2. Imposition of administrative fines; or 253 3. Issuance of a cease and desist order, consent order, or 254 other order regarding actions or omissions of the insurer or 255 entity. 256 (

b) Given the insurer’s market share in this state, the 257 department or the office has received a disproportionate number 258 of the following types of claims-handling complaints against the 259 insurer: 260 1. Failure to timely communicate with respect to claims; 261

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 10 of 46 CODING: Words stricken are deletions; words underlined are additions. 2. Failure to timely pay claims; 262 3. Untimely payments giving rise to the payment of 263 statutory interest; 264 4. Failure to adjust and pay claims in accordance with the 265 terms and conditions of the policy or contract and in compliance 266 with state law; 267 5. Violations of the Unfair Insurance Trade Practices Act 268 in

part IX of

chapter 626; 269 6. Failure to use licensed and duly appointed claims 270 adjusters; 271 7. Failure to maintain reasonable claims records; or 272 8. Failure to adhere to the company’s claims-handling 273 manual. 274 (

c) The results of a National Association of Insurance 275 Commissioners Market Conduct Annual Statement indicate the 276 insurer is a negative outlier with regard to particular metrics. 277 (

d) There is evidence the insurer is engaged in a pattern 278 or practice of violations of the Unfair Insurance Trade 279 Practices Act. 280 (

e) The insurer meets the criteria in subsection (7). 281 (

f) Any other conditions the office deems necessary for the 282 protection of the public. 283

Section

Section 624.4211, Florida Statutes, is amended 284 to read: 285 624.4211 Administrative fine in lieu of suspension or 286 revocation.— 287

(1) If the office finds that one or more grounds exist for 288 the discretionary revocation or suspension of a certificate of 289 authority issued under this chapter, the office may, in lieu of 290

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 11 of 46 CODING: Words stricken are deletions; words underlined are additions. such revocation or suspension, impose a fine upon the insurer. 291 (2)(

a) With respect to a any nonwillful violation, such 292 fine may not exceed: 293 1. Twenty-five thousand dollars per violation, up to an 294 aggregate amount of $100,000 for all nonwillful violations 295 arising out of the same action, related to a covered loss or 296 claim caused by an emergency for which the Governor declared a 297 state of emergency pursuant to s. 252.36. 298 2. Twelve thousand five hundred dollars $5,000 per 299 violation, up to. In no event shall such fine exceed an 300 aggregate amount of $50,000 $20,000 for all other nonwillful 301 violations arising out of the same action. 302 (

b) If an insurer discovers a nonwillful violation, the 303 insurer shall correct the violation and, if restitution is due, 304 make restitution to all affected persons. Such restitution shall 305 include interest at 12 percent per year from either the date of 306 the violation or the date of inception of the affected person’s 307 policy, at the insurer’s option. The restitution may be a credit 308 against future premiums due provided that interest accumulates 309 until the premiums are due.

If the amount of restitution due to 310 any person is $50 or more and the insurer wishes to credit it 311 against future premiums, it shall notify such person that she or 312 he may receive a check instead of a credit. If the credit is on 313 a policy that is not renewed, the insurer shall pay the 314 restitution to the person to whom it is due. 315 (3)(

a) With respect to a any knowing and willful violation 316 of a lawful order or rule of the office or commission or a 317 provision of this code, the office may impose a fine upon the 318 insurer in an amount not to exceed: 319

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 12 of 46 CODING: Words stricken are deletions; words underlined are additions. 1. Two hundred thousand dollars for each such violation, up 320 to an aggregate amount of $1 million for all knowing and willful 321 violations arising out of the same action, related to a covered 322 loss or claim caused by an emergency for which the Governor 323 declared a state of emergency pursuant to s. 252.36. 324 2. One hundred thousand dollars $40,000 for each such 325 violation, up to.

In no event shall such fine exceed an 326 aggregate amount of $500,000 $200,000 for all other knowing and 327 willful violations arising out of the same action. 328 (

b) In addition to such fines, the insurer shall make 329 restitution when due in accordance with subsection (2). 330

(4) The failure of an insurer to make restitution when due 331 as required under this

section constitutes a willful violation 332 of this code. However, if an insurer in good faith is uncertain 333 as to whether any restitution is due or as to the amount of such 334 restitution, it shall promptly notify the office of the 335 circumstances; and the failure to make restitution pending a 336 determination thereof shall not constitute a violation of this 337 code. 338

Section 7. Subsection (13) of

section 624.424, Florida 339 Statutes, is amended to read: 340 624.424 Annual statement and other information.— 341 (13)(

a) Each insurer doing business in this state which 342 pays a fee, commission, or other financial consideration or 343 payment to any affiliate directly or indirectly must is required 344 upon request to provide to the office documentation supporting 345 that such any information the office deems necessary. The fee, 346 commission, or other financial consideration or payment to any 347 affiliate is must be fair and reasonable for each service being 348

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 13 of 46 CODING: Words stricken are deletions; words underlined are additions. provided by contract. In determining whether the fee, 349 commission, or other financial consideration or payment is fair 350 and reasonable, the office shall consider, at a minimum, the 351 following: 352 1. The actual cost of each service provided by an 353 affiliate; 354 2. The cost of that service, if provided by a nonaffiliate; 355 3. The relative financial condition of the insurer and of 356 the managing general agent; 357 4.

The level of holding company debt and how that debt is 358 serviced; 359 5. The amount of dividends paid by the managing general 360 agent and for what purpose; and 361 6. Whether the terms of the written contract benefit the 362 insurer and are in the best interest of policyholders. 363 (

b) For each agreement with an affiliate in force on July 364 1, 2023, each insurer shall provide to the office no later than 365 October 1, 2023, the cost incurred by the affiliate to provide 366 each service, the amount charged to the insurer for each 367 service, and the dollar amount of fees forgiven, waived, or 368 reimbursed by the affiliate for the two most recent preceding 369 years. If the total dollar amount charged to the insurer was 370 greater than the total cost to provide services for either year, 371 the insurer must explain how it determined the fee was fair and 372 reasonable.

For any proposed contract with an affiliate 373 effective after July 1, 2023, the insurer may include a proposal 374 for the same services by an unaffiliated third party to support 375 that the fee, commission, or other financial consideration or 376 payment to the affiliate is fair and reasonable among other 377

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 14 of 46 CODING: Words stricken are deletions; words underlined are additions. things, the actual cost of the service being provided. 378

Section

Section 624.4301, Florida Statutes, is created 379 to read: 380 624.4301 Notice of temporary discontinuance of writing new 381 policies.—Any insurer, before temporarily suspending writing new 382 policies in this state, must give written notice to the office 383 of the insurer’s reasons for such action, the effective dates of 384 the temporary suspension, and the proposed communication to its 385 agents.

The insurer shall submit such notice to the office the 386 earlier of 20 business days before the effective date of the 387 temporary suspension of writing or 5 business days before 388 notifying its agents of the temporary suspension of writing. The 389 insurer must provide any other information requested by the 390 office related to the insurer’s temporary suspension of writing. 391

Section 9. Paragraph (

c) of subsection (3) of

section 392 626.207, Florida Statutes, is amended to read: 393 626.207 Disqualification of applicants and licensees; 394 penalties against licensees; rulemaking authority.— 395

(3) An applicant who has been found guilty of or has 396 pleaded guilty or nolo contendere to a crime not included in 397 subsection (2), regardless of adjudication, is subject to: 398 (

c) A 7-year disqualifying period for all misdemeanors 399 directly related to the financial services business or any 400 violation of the Florida Insurance Code. 401

Section 10. Subsections (2) and (3) of

section 626.9521, 402 Florida Statutes, are amended to read: 403 626.9521 Unfair methods of competition and unfair or 404 deceptive acts or practices prohibited; penalties.— 405

(2) Except as provided in subsection (3), any person who 406

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 15 of 46 CODING: Words stricken are deletions; words underlined are additions. violates any provision of this

part is subject to a fine in an 407 amount not greater than $12,500 $5,000 for each nonwillful 408 violation and not greater than $100,000 $40,000 for each willful 409 violation. Fines under this subsection imposed against an 410 insurer may not exceed an aggregate amount of $50,000 $20,000 411 for all nonwillful violations arising out of the same action or 412 an aggregate amount of $500,000 $200,000 for all willful 413 violations arising out of the same action. The fines may be 414 imposed in addition to any other applicable penalty. 415 (3)(

a) If a person violates s. 626.9541(1)(l), the offense 416 known as “twisting,” or violates s. 626.9541(1)(aa), the offense 417 known as “churning,” the person commits a misdemeanor of the 418 first degree, punishable as provided in s. 775.082, and an 419 administrative fine not greater than $12,500 $5,000 shall be 420 imposed for each nonwillful violation or an administrative fine 421 not greater than $187,500 $75,000 shall be imposed for each 422 willful violation. To impose an administrative fine for a 423 willful violation under this paragraph, the practice of 424 “churning” or “twisting” must involve fraudulent conduct. 425 (

b) If a person violates s. 626.9541(1)(ee) by willfully 426 submitting fraudulent signatures on an application or policy-427 related document, the person commits a felony of the third 428 degree, punishable as provided in s. 775.082, and an 429 administrative fine not greater than $12,500 $5,000 shall be 430 imposed for each nonwillful violation or an administrative fine 431 not greater than $187,500 $75,000 shall be imposed for each 432 willful violation. 433 (

c) If a person violates any provision of this part and 434 such violation is related to a covered loss or covered claim 435

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 16 of 46 CODING: Words stricken are deletions; words underlined are additions. caused by an emergency for which the Governor declared a state 436 of emergency pursuant to s. 252.36, such person is subject to a 437 fine in an amount not greater than $25,000 for each nonwillful 438 violation and not greater than $200,000 for each willful 439 violation. Fines under this paragraph imposed against an insurer 440 may not exceed an aggregate amount of $100,000 for all 441 nonwillful violations arising out of the same action or an 442 aggregate amount of $1 million for all willful violations 443 arising out of the same action. 444 (

d) Administrative fines under paragraphs (

a) and (

b) this 445 subsection may not exceed an aggregate amount of $125,000 446 $50,000 for all nonwillful violations arising out of the same 447 action or an aggregate amount of $625,000 $250,000 for all 448 willful violations arising out of the same action. 449

Section 11. Paragraphs (

i) and (

w) of subsection (1) of 450

section 626.9541, Florida Statutes, are amended to read: 451 626.9541 Unfair methods of competition and unfair or 452 deceptive acts or practices defined.— 453

(1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE 454 ACTS.—The following are defined as unfair methods of competition 455 and unfair or deceptive acts or practices: 456 (

i) Unfair claim settlement practices.— 457 1. Attempting to settle claims on the basis of an 458 application, when serving as a binder or intended to become a 459 part of the policy, or any other material document which was 460 altered without notice to, or knowledge or consent of, the 461 insured; 462 2. A material misrepresentation made to an insured or any 463 other person having an interest in the proceeds payable under 464

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 17 of 46 CODING: Words stricken are deletions; words underlined are additions. such contract or policy, for the purpose and with the intent of 465 effecting settlement of such claims, loss, or damage under such 466 contract or policy on less favorable terms than those provided 467 in, and contemplated by, such contract or policy; 468 3. Committing or performing with such frequency as to 469 indicate a general business practice any of the following: 470 a. Failing to adopt and implement standards for the proper 471 investigation of claims; 472 b.

Misrepresenting pertinent facts or insurance policy 473 provisions relating to coverages at issue; 474 c. Failing to acknowledge and act promptly upon 475 communications with respect to claims; 476 d. Denying claims without conducting reasonable 477 investigations based upon available information; 478 e.

Failing to affirm or deny full or partial coverage of 479 claims, and, as to partial coverage, the dollar amount or extent 480 of coverage, or failing to provide a written statement that the 481 claim is being investigated, upon the written request of the 482 insured within 30 days after proof-of-loss statements have been 483 completed; 484 f. Failing to promptly provide a reasonable explanation in 485 writing to the insured of the basis in the insurance policy, in 486 relation to the facts or applicable law, for denial of a claim 487 or for the offer of a compromise settlement; 488 g.

Failing to promptly notify the insured of any additional 489 information necessary for the processing of a claim; 490 h. Failing to clearly explain the nature of the requested 491 information and the reasons why such information is necessary; 492 or 493

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 18 of 46 CODING: Words stricken are deletions; words underlined are additions. i. Failing to pay personal injury protection insurance 494 claims within the time periods required by s. 627.736(4)(b). The 495 office may order the insurer to pay restitution to a 496 policyholder, medical provider, or other claimant, including 497 interest at a rate consistent with the amount set forth in s. 498 55.03(1), for the time period within which an insurer fails to 499 pay claims as required by law.

Restitution is in addition to any 500 other penalties allowed by law, including, but not limited to, 501 the suspension of the insurer’s certificate of authority; or 502 j. Altering or amending an insurance adjuster’s report 503 without including on the report or as an addendum to the report 504 a detailed list of all changes made to the report and the 505 identity of the person who ordered each change. Any change that 506 has the effect of reducing the estimate of the loss must include 507 a detailed explanation why such change was made; or 508 4.

Failing to pay undisputed amounts of partial or full 509 benefits owed under first-party property insurance policies 510 within 60 days after an insurer receives notice of a residential 511 property insurance claim, determines the amounts of partial or 512 full benefits, and agrees to coverage, unless payment of the 513 undisputed benefits is prevented by factors beyond the control 514 of the insurer as defined in s. 627.70131(5). 515 (

w) Soliciting or accepting new or renewal insurance risks 516 or payment of certain bonuses by insolvent or impaired insurer 517 prohibited; penalty.— 518 1. Whether or not delinquency proceedings as to the insurer 519 have been or are to be initiated, but while such insolvency or 520 impairment exists, no director or officer of an insurer, except 521 with the written permission of the office, shall authorize or 522

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 19 of 46 CODING: Words stricken are deletions; words underlined are additions. permit the insurer to solicit or accept new or renewal insurance 523 risks in this state after such director or officer knew, or 524 reasonably should have known, that the insurer was insolvent or 525 impaired. 526 2.

Regardless of whether delinquency proceedings as to the 527 insurer have been or are to be initiated, but while such 528 insolvency or impairment exists, a director or an officer of an 529 impaired insurer may not authorize or permit the insurer to pay 530 a bonus to any officer or director of the insurer. 531 3.

As used in this paragraph, the term: 532 a. “Bonus” means a payment, in addition to an officer’s or 533 a director’s usual compensation, that is in addition to any 534 amounts contracted for or otherwise legally due. 535 b. “Impaired” includes impairment of capital or surplus, as 536 defined in s. 631.011(12) and (13). 537 4.2. Any such director or officer, upon conviction of a 538 violation of this paragraph, commits is guilty of a felony of 539 the third degree, punishable as provided in s. 775.082, s. 540 775.083, or s. 775.084. 541

Section

Section 626.9743, Florida Statutes, is amended 542 to read: 543 626.9743 Claim settlement practices relating to motor 544 vehicle insurance.— 545

(1) This

section shall apply to the adjustment and 546 settlement of first- and third-party personal and commercial 547 motor vehicle insurance claims. 548 (2)(

a) Upon an insurer’s receiving a communication with 549 respect to a claim, the insurer shall within 7 calendar days 550 review and acknowledge receipt of such communication unless 551

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 20 of 46 CODING: Words stricken are deletions; words underlined are additions. payment is made within that period of time or unless the failure 552 to acknowledge is caused by factors beyond the control of the 553 insurer. If the acknowledgment is not in writing, a notification 554 indicating acknowledgement must be made in the insurer’s claim 555 file and dated. A communication made to or by a representative 556 of an insurer with respect to a claim constitutes communication 557 to or by the insurer. 558 (

b) Such acknowledgment must be responsive to the 559 communication. If the communication constitutes notification of 560 a claim, unless the acknowledgment reasonably advises the 561 claimant that the claim appears not to be covered by the 562 insurer, the acknowledgment must provide necessary claim forms 563 and instructions, including an appropriate telephone number. 564 (3)(

a) Unless otherwise provided by the policy of insurance 565 or by law, within 7 days after an insurer receives proof-of-loss 566 statements, the insurer shall begin such investigation as is 567 reasonably necessary unless the failure to begin such 568 investigation is caused by factors beyond the control of the 569 insurer. 570 (

b) If such investigation involves a physical inspection of 571 the motor vehicle, the licensed adjuster assigned by the insurer 572 must provide the policyholder with a printed or electronic 573 document containing his or her name and state adjuster license 574 number. An insurer must conduct any such physical inspection 575 within 7 days after its receipt of the proof-of-loss statements. 576 (

c) Any subsequent communication with the policyholder 577 regarding the claim must also include the name and license 578 number of the adjuster communicating about the claim. 579 Communication of the adjuster’s name and license number may be 580

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 21 of 46 CODING: Words stricken are deletions; words underlined are additions. included with other information provided to the policyholder. 581 (

d) An insurer may use electronic methods to investigate 582 the loss. Such electronic methods may include any method that 583 provides the insurer with clear color pictures or video 584 documenting the loss, including, but not limited to, electronic 585 photographs or video recordings of the loss and video 586 conferencing between the adjuster and the policyholder which 587 includes video recording of the loss. The insurer may also allow 588 the policyholder to use such methods to assist in the 589 investigation of the loss.

An insurer may void the insurance 590 policy if the policyholder or any other person at the direction 591 of the policyholder, with intent to injure, defraud, or deceive 592 any insurer, commits insurance fraud by providing false, 593 incomplete, or misleading information concerning any fact or 594 thing material to a claim using electronic methods. The use of 595 electronic methods to investigate the loss does not prohibit an 596 insurer from assigning a licensed adjuster to physically inspect 597 the motor vehicle. 598 (

e) The insurer must send the policyholder a copy of any 599 detailed estimate of the amount of the loss within 7 days after 600 the estimate is generated by the insurer’s adjuster. This 601 paragraph does not require that an insurer create a detailed 602 estimate of the amount of the loss if such estimate is not 603 reasonably necessary as part of the claim investigation. 604

(4) An insurer shall maintain: 605 (

a) A record or log of each adjuster who communicates with 606 the policyholder as provided in paragraphs (3)(

b) and (

c) and 607 provide a list of such adjusters to the insured, the office, or 608 the department upon request. 609

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b) Claim records, including dates of: 610 1. Any claim-related communication made between the insurer 611 and the policyholder or the policyholder’s representative; 612 2. The insurer’s receipt of the policyholder’s proof of 613 loss statement; 614 3. Any claim-related request for information made by the 615 insurer to the policyholder or the policyholder’s 616 representative; 617 4. Any claim-related inspections of the property made by 618 the insurer, including physical inspections and inspections made 619 by electronic means; 620 5.

Any detailed estimate of the amount of the loss 621 generated by the insurer’s adjuster; 622 6. The beginning and end of any tolling period provided for 623 in subsection (8); and 624 7. The insurer’s payment or denial of the claim. 625

(5) For purposes of this section, the term: 626 (a) “Factors beyond the control of the insurer” means: 627 1. Any of the following events which is the basis for the 628 office issuing an order finding that such event renders all or 629 specified residential property insurers reasonably unable to 630 meet the requirements of this

section in specified locations, 631 and ordering that such insurer or insurers may have additional 632 time as specified by the office to comply with the requirements 633 of this section: a state of emergency declared by the Governor 634 under s. 252.36, a breach of security that must be reported 635 under s. 501.171(3), or an information technology issue. The 636 office may not extend the period for payment or denial of a 637 claim for more than 30 additional days. 638

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 24 of 46 CODING: Words stricken are deletions; words underlined are additions. or applicable law, for the payment, denial, or partial denial of 668 a claim. If the insurer’s claim payment is less than specified 669 in any insurer’s detailed estimate of the amount of the loss, 670 the insurer must provide a reasonable explanation in writing of 671 the difference to the policyholder.

Any payment of an initial or 672 supplemental claim or portion of such claim made 60 days after 673 the insurer receives notice of the claim, or made after the 674 expiration of any additional timeframe provided to pay or deny a 675 claim or a portion of a claim made pursuant to an order of the 676 office finding factors beyond the control of the insurer, 677 whichever is later, bears interest at the rate set forth in s. 678 55.03. Interest begins to accrue from the date the insurer 679 receives notice of the claim. This subsection may not be waived, 680 voided, or nullified by the terms of the insurance policy.

If 681 there is a right to prejudgment interest, the insured must 682 select whether to receive prejudgment interest or interest under 683 this subsection. Interest is payable when the claim or portion 684 of the claim is paid. Failure to comply with this subsection 685 constitutes a violation of this code. However, failure to comply 686 with this subsection does not form the sole basis for a private 687 cause of action. 688

(8) The requirements of this

section are tolled: 689 (

a) During the pendency of any mediation proceeding under 690 s. 627.745 or any alternative dispute resolution proceeding 691 provided for in the insurance contract. The tolling period ends 692 upon the end of the mediation or alternative dispute resolution 693 proceeding. 694 (

b) Upon the failure of a policyholder or a representative 695 of the policyholder to provide material claims information 696

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 25 of 46 CODING: Words stricken are deletions; words underlined are additions. requested by the insurer within 10 days after the request was 697 received. The tolling period ends upon the insurer’s receipt of 698 the requested information. Tolling under this paragraph applies 699 only to requests sent by the insurer to the policyholder or a 700 representative of the policyholder at least 15 days before the 701 insurer is required to pay or deny the claim or a portion of the 702 claim under subsection (7). 703

(9) This

section also applies to surplus lines insurers and 704 surplus lines insurance authorized under ss. 626.913-626.937 705 providing motor vehicle coverage. 706 (10)

(2) An insurer may not, when liability and damages owed 707 under the policy are reasonably clear, recommend that a third-708 party claimant make a claim under his or her own policy solely 709 to avoid paying the claim under the policy issued by that 710 insurer. However, the insurer may identify options to a third-711 party claimant relative to the repair of his or her vehicle. 712 (11)

(3) An insurer that elects to repair a motor vehicle 713 and specifically requires a particular repair shop for vehicle 714 repairs shall cause the damaged vehicle to be restored to its 715 physical condition as to performance and appearance immediately 716 prior to the loss at no additional cost to the insured or third-717 party claimant other than as stated in the policy. 718 (12)

(4) An insurer may not require the use of replacement 719 parts in the repair of a motor vehicle which are not at least 720 equivalent in kind and quality to the damaged parts prior to the 721 loss in terms of fit, appearance, and performance. 722 (13)

(5) When the insurance policy provides for the 723 adjustment and settlement of first-party motor vehicle total 724 losses on the basis of actual cash value or replacement with 725

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 26 of 46 CODING: Words stricken are deletions; words underlined are additions. another of like kind and quality, the insurer shall use one of 726 the following methods: 727 (

a) The insurer may elect a cash settlement based upon the 728 actual cost to purchase a comparable motor vehicle, including 729 sales tax, if applicable pursuant to subsection (17) (9). Such 730 cost may be derived from: 731 1. When comparable motor vehicles are available in the 732 local market area, the cost of two or more such comparable motor 733 vehicles available within the preceding 90 days; 734 2. The retail cost as determined from a generally 735 recognized used motor vehicle industry source such as: 736 a.

An electronic database if the pertinent portions of the 737 valuation documents generated by the database are provided by 738 the insurer to the first-party insured upon request; or 739 b. A guidebook that is generally available to the general 740 public if the insurer identifies the guidebook used as the basis 741 for the retail cost to the first-party insured upon request; or 742 3. The retail cost using two or more quotations obtained by 743 the insurer from two or more licensed dealers in the local 744 market area. 745 (

b) The insurer may elect to offer a replacement motor 746 vehicle that is a specified comparable motor vehicle available 747 to the insured, including sales tax if applicable pursuant to 748 subsection (17) (9), paid for by the insurer at no cost other 749 than any deductible provided in the policy and betterment as 750 provided in subsection (14) (6). The offer must be documented in 751 the insurer’s claim file. For purposes of this subsection, a 752 comparable motor vehicle is one that is made by the same 753 manufacturer, of the same or newer model year, and of similar 754

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 27 of 46 CODING: Words stricken are deletions; words underlined are additions. body type and that has similar options and mileage as the 755 insured vehicle. Additionally, a comparable motor vehicle must 756 be in as good or better overall condition than the insured 757 vehicle and available for inspection within a reasonable 758 distance of the insured’s residence. 759 (

c) When a motor vehicle total loss is adjusted or settled 760 on a basis that varies from the methods described in paragraph 761 (

a) or paragraph (b), the determination of value must be 762 supported by documentation, and any deductions from value must 763 be itemized and specified in appropriate dollar amounts. The 764 basis for such settlement shall be explained to the claimant in 765 writing, if requested, and a copy of the explanation shall be 766 retained in the insurer’s claim file. 767 (

d) Any other method agreed to by the claimant. 768 (14)

(6) When the amount offered in settlement reflects a 769 reduction by the insurer because of betterment or depreciation, 770 information pertaining to the reduction shall be maintained with 771 the insurer’s claim file. Deductions shall be itemized and 772 specific as to dollar amount and shall accurately reflect the 773 value assigned to the betterment or depreciation. The basis for 774 any deduction shall be explained to the claimant in writing, if 775 requested, and a copy of the explanation shall be maintained 776 with the insurer’s claim file. 777 (15)

(7) Every insurer shall, if partial losses are settled 778 on the basis of a written estimate prepared by or for the 779 insurer, supply the insured a copy of the estimate upon which 780 the settlement is based. 781 (16)

(8) Every insurer shall provide notice to an insured 782 before termination of payment for previously authorized storage 783

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 28 of 46 CODING: Words stricken are deletions; words underlined are additions. charges, and the notice shall provide 72 hours for the insured 784 to remove the vehicle from storage before terminating payment of 785 the storage charges. 786 (17)

(9) If sales tax will necessarily be incurred by a 787 claimant upon replacement of a total loss or upon repair of a 788 partial loss, the insurer may defer payment of the sales tax 789 unless and until the obligation has actually been incurred. 790 (18)

(10) Nothing in this

section shall be construed to 791 authorize or preclude enforcement of policy provisions relating 792 to settlement disputes. 793

Section 13. Subsection (6) of

section 626.989, Florida 794 Statutes, is amended, and subsection (10) is added to that 795 section, to read: 796 626.989 Investigation by department or Division of 797 Investigative and Forensic Services; compliance; immunity; 798 confidential information; reports to division; division 799 investigator’s power of arrest.— 800 (6)(

a) Any person, other than an insurer, agent, or other 801 person licensed under the code, or an employee thereof, having 802 knowledge or who believes that a fraudulent insurance act or any 803 other act or practice which, upon conviction, constitutes a 804 felony or a misdemeanor under the code, or under s. 817.234, is 805 being or has been committed may send to the Division of 806 Investigative and Forensic Services a report or information 807 pertinent to such knowledge or belief and such additional 808 information relative thereto as the department may request.

Any 809 professional practitioner licensed or regulated by the 810 Department of Business and Professional Regulation, except as 811 otherwise provided by law, any medical review committee as 812

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 29 of 46 CODING: Words stricken are deletions; words underlined are additions. defined in s. 766.101, any private medical review committee, and 813 any insurer, agent, or other person licensed under the code, or 814 an employee thereof, having knowledge or who believes that a 815 fraudulent insurance act or any other act or practice which, 816 upon conviction, constitutes a felony or a misdemeanor under the 817 code, or under s. 817.234, is being or has been committed shall 818 send to the Division of Investigative and Forensic Services a 819 report or information pertinent to such knowledge or belief and 820 such additional information relative thereto as the department 821 may require. 822 (

b) The Division of Investigative and Forensic Services 823 shall review such information or reports and select such 824 information or reports as, in its judgment, may require further 825 investigation. It shall then cause an independent examination of 826 the facts surrounding such information or report to be made to 827 determine the extent, if any, to which a fraudulent insurance 828 act or any other act or practice which, upon conviction, 829 constitutes a felony or a misdemeanor under the code, or under 830 s. 817.234, is being committed. 831 (

c) The Division of Investigative and Forensic Services 832 shall report any alleged violations of law which its 833 investigations disclose to the appropriate licensing agency and 834 state attorney or other prosecuting agency having jurisdiction, 835 including, but not limited to, the statewide prosecutor for 836 crimes that impact two or more judicial circuits in this state, 837 with respect to any such violation, as provided in s. 624.310. 838 If prosecution by the state attorney or other prosecuting agency 839 having jurisdiction with respect to such violation is not begun 840 within 60 days of the division’s report, the state attorney or 841

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 30 of 46 CODING: Words stricken are deletions; words underlined are additions. other prosecuting agency having jurisdiction with respect to 842 such violation shall inform the division of the reasons for the 843 lack of prosecution. 844

(10) The Division of Investigative and Forensic Services 845 Bureau of Insurance Fraud shall prepare and submit a performance 846 report to the President of the Senate and the Speaker of the 847 House of Representatives by January 1 of each year. The annual 848 report must include, but need not be limited to: 849 (

a) The total number of initial referrals received, cases 850 opened, cases presented for prosecution, cases closed, and 851 convictions resulting from cases presented for prosecution by 852 the Bureau of Insurance Fraud, by type of insurance fraud and 853 circuit. 854 (

b) The number of referrals received from insurers, the 855 office, and the Division of Consumer Services of the department, 856 and the outcome of those referrals. 857 (

c) The number of investigations undertaken by the Bureau 858 of Insurance Fraud which were not the result of a referral from 859 an insurer and the outcome of those referrals. 860 (

d) The number of investigations that resulted in a 861 referral to a regulatory agency and the disposition of those 862 referrals. 863 (

e) The number of cases presented by the Bureau of 864 Insurance Fraud which local prosecutors or the statewide 865 prosecutor declined to prosecute and the reasons provided for 866 declining prosecution. 867 (

f) A

summary of the annual report required under s. 868 626.9896. 869 (

g) The total number of employees assigned to the Bureau of 870

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 31 of 46 CODING: Words stricken are deletions; words underlined are additions. Insurance Fraud, delineated by location of staff assigned; and 871 the number and location of employees assigned to the Bureau of 872 Insurance Fraud who were assigned to work other types of fraud 873 cases. 874 (

h) The average caseload and turnaround time by type of 875 case for each investigator. 876 (

i) The training provided during the year to insurance 877 fraud investigators. 878

Section 14. Subsections (1), (3), and (4) of

section 879 627.0629, Florida Statutes, are amended to read: 880 627.0629 Residential property insurance; rate filings.— 881

(1) It is the intent of the Legislature that insurers 882 provide savings to consumers who install or implement windstorm 883 damage mitigation techniques, alterations, or solutions to their 884 properties to prevent windstorm losses. A rate filing for 885 residential property insurance must include actuarially 886 reasonable discounts, credits, or other rate differentials, or 887 appropriate reductions in deductibles, for properties on which 888 fixtures or construction techniques demonstrated to reduce the 889 amount of loss in a windstorm have been installed or 890 implemented.

The fixtures or construction techniques must 891 include, but are not limited to, fixtures or construction 892 techniques that enhance roof strength, roof covering 893 performance, roof-to-wall strength, wall-to-floor-to-foundation 894 strength, opening protection, and window, door, and skylight 895 strength. Credits, discounts, or other rate differentials, or 896 appropriate reductions in deductibles, for fixtures and 897 construction techniques that meet the minimum requirements of 898 the Florida Building Code must be included in the rate filing. 899

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 32 of 46 CODING: Words stricken are deletions; words underlined are additions. The office shall determine the discounts, credits, other rate 900 differentials, and appropriate reductions in deductibles that 901 reflect the full actuarial value of such revaluation, which may 902 be used by insurers in rate filings. Effective July 1, 2023, 903 each insurer subject to the requirements of this

section must 904 provide information on the insurer’s website describing the 905 hurricane mitigation discounts available to policyholders. Such 906 information must be accessible on, or through a hyperlink 907 located on, the home page of the insurer’s website or the 908 primary page of the insurer’s website for property insurance 909 policyholders or applicants for such coverage in this state.

On 910 or before January 1, 2025, and every 5 years thereafter, the 911 office shall reevaluate and update the fixtures or construction 912 techniques demonstrated to reduce the amount of loss in a 913 windstorm and the discounts, credits, other rate differentials, 914 and appropriate reductions in deductibles that reflect the full 915 actuarial value of such fixtures or construction techniques. The 916 office shall adopt rules and forms necessitated by such 917 reevaluation. 918

(3) A rate filing made on or after July 1, 1995, for mobile 919 home owner insurance must include appropriate discounts, 920 credits, or other rate differentials for mobile homes 921 constructed to comply with American Society of Civil Engineers 922 Standard ANSI/ASCE 7-88, adopted by the United States Department 923 of Housing and Urban Development on July 13, 1994, and that also 924 comply with all applicable tie-down requirements provided by 925 state law. 926

(4) The Legislature finds that separate consideration and 927 notice of hurricane insurance premiums will assist consumers by 928

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 33 of 46 CODING: Words stricken are deletions; words underlined are additions. providing greater assurance that hurricane premiums are lawful 929 and by providing more complete information regarding the 930 components of property insurance premiums. Effective January 1, 931 1997, A rate filing for residential property insurance shall be 932 separated into two components, rates for hurricane coverage and 933 rates for all other coverages. A premium notice reflecting a 934 rate implemented on the basis of such a filing shall separately 935 indicate the premium for hurricane coverage and the premium for 936 all other coverages. 937

Section 15. Paragraph (ll) is added to subsection (6) of 938

section 627.351, Florida Statutes, to read: 939 627.351 Insurance risk apportionment plans.— 940

(6) CITIZENS PROPERTY INSURANCE CORPORATION.— 941 (ll) The corporation may not determine that a risk is 942 ineligible for coverage with the corporation solely because such 943 risk has unrepaired damage caused by a covered loss that is the 944 subject of a claim that has been filed with the Florida 945 Insurance Guaranty Association. 946

Section 16. Subsection (4) of

section 627.410, Florida 947 Statutes, is amended to read: 948 627.410 Filing, approval of forms.— 949

(4) The office may, by order, exempt from the requirements 950 of this

section for so long as it deems proper any insurance 951 document or form or type thereof as specified in such order, to 952 which, in its opinion, this

section may not practicably be 953 applied, or the filing and approval of which are, in its 954 opinion, not desirable or necessary for the protection of the 955 public. The office may not exempt from the requirements of this 956

section the insurance documents or forms of any insurer, against 957

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 34 of 46 CODING: Words stricken are deletions; words underlined are additions. whom the office enters a final order determining that such 958 insurer violated any provision of this code, for a period of 36 959 months after the date of such order. 960

Section

Section 627.4108, Florida Statutes, is created 961 to read: 962 627.4108 Submission of claims-handling manuals; 963 attestation.— 964

(1) This

section is intended to ensure that insurers are 965 able to properly handle insurance claims, particularly during 966 natural disasters, catastrophes, and other emergencies. 967

(2) Each authorized insurer and eligible surplus lines 968 insurer conducting business in this state shall submit any and 969 all claims-handling manuals to the office: 970 (

a) On or before August 1, 2023; 971 (

b) Annually thereafter, on or before May 1 of each 972 calendar year; and 973 (

c) Within 30 days after any updates or amendments to such 974 manual. 975

(3) The insurer shall include with each such submission an 976 attestation on a form prescribed by the commission, stating 977 that: 978 (

a) The insurer’s claims-handling manual complies with the 979 requirements of this code and comports to usual and customary 980 industry claims-handling practices; and 981 (

b) The insurer maintains adequate resources available to 982 implement the requirements of its claims-handling manual at all 983 times, including during extreme catastrophic events. 984

(4) The office may, as often as it deems necessary, conduct 985 market conduct examinations under s. 624.3161 of insurers to 986

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 35 of 46 CODING: Words stricken are deletions; words underlined are additions. ensure compliance with this section. 987

(5) The commission is authorized, and all conditions are 988 deemed met, to adopt emergency rules under s. 120.54(4), for the 989 purpose of implementing this section. Notwithstanding any other 990 law, emergency rules adopted under this

section are effective 991 for 6 months after adoption and may be renewed during the 992 pendency of procedures to adopt permanent rules addressing the 993 subject of the emergency rules. 994

Section 18. Paragraph (

d) of subsection (2) of

section 995 627.4133, Florida Statutes, is amended to read: 996 627.4133 Notice of cancellation, nonrenewal, or renewal 997 premium.— 998

(2) With respect to any personal lines or commercial 999 residential property insurance policy, including, but not 1000 limited to, any homeowner, mobile home owner, farmowner, 1001 condominium association, condominium unit owner, apartment 1002 building, or other policy covering a residential structure or 1003 its contents: 1004 (d)1.

Upon a declaration of an emergency pursuant to s. 1005 252.36 and the filing of an order by the Commissioner of 1006 Insurance Regulation, An authorized insurer or surplus lines 1007 insurer may not cancel or nonrenew a personal residential or 1008 commercial residential property insurance policy covering a 1009 dwelling or residential property located in this state: 1010 a.

For a period of 90 days after the dwelling or 1011 residential property has been repaired, if such property which 1012 has been damaged as a result of a hurricane or wind loss that is 1013 the subject of the declaration of emergency pursuant to s. 1014 252.36 and the filing of an order by the Commissioner of 1015

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 36 of 46 CODING: Words stricken are deletions; words underlined are additions. Insurance Regulation for a period of 90 days after the dwelling 1016 or residential property has been repaired. A structure is deemed 1017 to be repaired when substantially completed and restored to the 1018 extent that it is insurable by another authorized insurer that 1019 is writing policies in this state. 1020 b.

Until the dwelling or residential property has been 1021 repaired, if such property was damaged by any covered peril and 1022 the provisions of sub-subparagraph a. do not apply. 1023 2. However, an insurer or agent may cancel or nonrenew such 1024 a policy prior to the repair of the dwelling or residential 1025 property: 1026 a. Upon 10 days’ notice for nonpayment of premium; or 1027 b. Upon 45 days’ notice: 1028 (

I) For a material misstatement or fraud related to the 1029 claim; 1030 (II) If the insurer determines that the insured has 1031 unreasonably caused a delay in the repair of the dwelling; or 1032 (III) If the insurer has paid policy limits. 1033 3. If the insurer elects to nonrenew a policy covering a 1034 property that has been damaged, the insurer shall provide at 1035 least 90 days’ notice to the insured that the insurer intends to 1036 nonrenew the policy 90 days after the dwelling or residential 1037 property has been repaired.

Nothing in this paragraph shall 1038 prevent the insurer from canceling or nonrenewing the policy 90 1039 days after the repairs are complete for the same reasons the 1040 insurer would otherwise have canceled or nonrenewed the policy 1041 but for the limitations of subparagraph 1. The Financial 1042 Services Commission may adopt rules, and the Commissioner of 1043 Insurance Regulation may issue orders, necessary to implement 1044

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 37 of 46 CODING: Words stricken are deletions; words underlined are additions. this paragraph. 1045 4. This paragraph shall also apply to personal residential 1046 and commercial residential policies covering property that was 1047 damaged as the result of Hurricane Ian or Hurricane Nicole 1048 Tropical Storm Bonnie, Hurricane Charley, Hurricane Frances, 1049 Hurricane Ivan, or Hurricane Jeanne. 1050 5. For purposes of this paragraph: 1051 a.

A structure is deemed to be repaired when substantially 1052 completed and restored to the extent that it is insurable by 1053 another authorized insurer writing policies in this state. 1054 b. “Insurer” means an authorized insurer or an eligible 1055 surplus lines insurer. 1056

Section 19. Subsection (3) is added to

section 627.426, 1057 Florida Statutes, to read: 1058 627.426 Claims administration.— 1059 (3)(

a) The office shall ensure that each liability insurer, 1060 upon receiving actual notice of an incident or a loss that could 1061 give rise to a covered liability claim under an insurance 1062 policy: 1063 1. Assigns a duly licensed and appointed insurance adjuster 1064 to investigate the extent of the insured’s probable exposure and 1065 diligently attempts to resolve any questions concerning the 1066 existence or extent of the insured’s coverage. 1067 2.

Based on available information, ethically evaluates 1068 every claim fairly, honestly, and with due regard for the 1069 interests of the insured; considers the extent of the claimant’s 1070 recoverable damages; and considers the information in a 1071 reasonable and prudent manner. 1072 3. Requests from the insured or claimant additional 1073

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 38 of 46 CODING: Words stricken are deletions; words underlined are additions. relevant information the insurer reasonably deems necessary to 1074 evaluate whether to settle a claim. 1075 4. Conducts all oral and written communications with the 1076 insured with the utmost honesty and complete candor. 1077 5. Makes reasonable efforts to explain to persons not 1078 represented by counsel matters requiring expertise beyond the 1079 level normally expected of a layperson with no training in 1080 insurance or claims-handling issues. 1081 6. Retains all written communications and notes and retains 1082 a

summary of all verbal communications in a reasonable manner 1083 for a period of not less than 5 years after the later of the 1084 entry of a judgment against the insured in excess of policy 1085 limits becomes final or the conclusion of the extracontractual 1086 claim, if any, including any related appeals. 1087 7. Provides the insured, upon request, with all 1088 communications related to the insurer’s handling of the claim 1089 which are not privileged as to the insured. 1090 8.

Provides, at the insurer’s expense, reasonable 1091 accommodations necessary to communicate effectively with an 1092 insured covered under the Americans with Disabilities Act. 1093 9. In handling third-party claims, communicates to an 1094 insured all of the following: 1095 a. The identity of any other person or entity the insurer 1096 has reason to believe may be liable. 1097 b. The insurer’s evaluation of the claim. 1098 c. The likelihood and possible extent of an excess 1099 judgment. 1100 d.

Steps the insured can take to avoid exposure to an 1101 excess judgment, including the right to secure personal counsel 1102

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 39 of 46 CODING: Words stricken are deletions; words underlined are additions. at the insured’s expense. 1103 e. The insured’s duty to cooperate with the insurer, 1104 including any specific requests required because of a settlement 1105 opportunity or by the insurer in accordance with the policy, the 1106 purpose of the required cooperation, and the consequences of 1107 refusing to cooperate; and any settlement demands or offers. 1108 10.

If, after the expiration of the safe harbor periods in 1109 s. 624.155(4) or (6), as applicable, the facts available to the 1110 insurer indicate that the insured’s liability is likely to 1111 exceed the policy limits, initiates settlement negotiations by 1112 tendering its policy limits to the claimant in exchange for a 1113 general release of the insured. 1114 11.

Gives fair consideration to a settlement offer that is 1115 not unreasonable under the facts available to the insurer and 1116 settle, if possible, when a reasonably prudent person, faced 1117 with the prospect of paying the total probable exposure of the 1118 insured, would do so. The insurer shall provide reasonable 1119 assistance to the insured to comply with the insured’s 1120 obligations to cooperate and act reasonably to attempt to 1121 satisfy any conditions of a claimant’s settlement offer.

If it 1122 is not possible to settle a liability claim within the available 1123 policy limits, the insurer shall act reasonably to attempt to 1124 minimize the excess exposure to the insured. 1125 12. When multiple claims arise out of a single occurrence, 1126 the combined value of all claims exceeds the total of all 1127 applicable policy limits, and the claimants are unwilling to 1128 globally settle within the policy limits, thereafter attempts to 1129 minimize the magnitude of possible excess judgments against the 1130 insured. The insurer is entitled to great discretion to decide 1131

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 40 of 46 CODING: Words stricken are deletions; words underlined are additions. how much to offer each respective claimant in its attempt to 1132 protect the insured. The insurer may, in its effort to minimize 1133 the excess liability of the insured, use its discretion to offer 1134 the full available policy limits to one or more claimants to the 1135 exclusion of other claimants and may leave the insured exposed 1136 to some liability after all the policy limits are paid. An 1137 insurer does not violate this

section simply because it is 1138 unable to settle all claims in a multiple claimant case. 1139 13. When a loss creates the potential for a third-party 1140 claim against more than one insured, attempts to settle the 1141 claim on behalf of all insureds against whom a claim may be 1142 presented. If it is not possible to settle on behalf of all 1143 insureds, the insurer, in consultation with the insureds, must 1144 attempt to enter into reasonable settlements of claims against 1145 certain insureds to the exclusion of other insureds. 1146 14.

Responds to any request for insurance information in 1147 compliance with s. 626.9372 or s. 627.4137, as applicable. 1148 15. Where it appears the insured’s probable exposure is 1149 greater than policy limits, takes reasonable measures to 1150 preserve, for a reasonable period of time, evidence that is 1151 needed for the defense of the liability claim. 1152 16. Complies with s. 627.426, if applicable. 1153 17. Complies with any provision of the Unfair Insurance 1154 Trade Practices Act. 1155 (

b) Violations of this

section constitute violations of the 1156 Florida Insurance Code and are subject to any applicable 1157 enforcement provisions therein. 1158

Section 20. Paragraph (

a) of subsection (10) of

section 1159 627.701, Florida Statutes, is amended to read: 1160

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 41 of 46 CODING: Words stricken are deletions; words underlined are additions. 627.701 Liability of insureds; coinsurance; deductibles.— 1161 (10)(

a) Notwithstanding any other provision of law, an 1162 insurer issuing a personal lines residential property insurance 1163 policy may include in such policy a separate roof deductible 1164 that meets all of the following requirements: 1165 1. The insurer has complied with the offer requirements 1166 under subsection (7) regarding a deductible applicable to losses 1167 from perils other than a hurricane. 1168 2. The roof deductible may not exceed the lesser of 2 1169 percent of the Coverage A limit of the policy or 50 percent of 1170 the cost to replace the roof. 1171 3.

The premium that a policyholder is charged for the 1172 policy includes an actuarially sound credit or premium discount 1173 for the roof deductible. 1174 4. The roof deductible applies only to a claim adjusted on 1175 a replacement cost basis. 1176 5. The roof deductible does not apply to any of the 1177 following events: 1178 a. A total loss to a primary structure in accordance with 1179 the valued policy law under s. 627.702 which is caused by a 1180 covered peril. 1181 b. A roof loss resulting from a hurricane as defined in s. 1182 627.4025(2)(c). 1183 c.

A roof loss resulting from a tree fall or other hazard 1184 that damages the roof and punctures the roof deck. 1185 d. A roof loss requiring the repair of less than 50 percent 1186 of the roof. 1187 1188 If a roof deductible is applied, no other deductible under the 1189

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 42 of 46 CODING: Words stricken are deletions; words underlined are additions. policy may be applied to the loss or to any other loss to the 1190 property caused by the same covered peril. 1191

Section 21. Subsection (2) of

section 627.70132, Florida 1192 Statutes, is amended to read: 1193 627.70132 Notice of property insurance claim.— 1194

(2) A claim or reopened claim, but not a supplemental 1195 claim, under an insurance policy that provides property 1196 insurance, as defined in s. 624.604, including a property 1197 insurance policy issued by an eligible surplus lines insurer, 1198 for loss or damage caused by any peril is barred unless notice 1199 of the claim was given to the insurer in accordance with the 1200 terms of the policy within 1 year after the date of loss.

A 1201 supplemental claim is barred unless notice of the supplemental 1202 claim was given to the insurer in accordance with the terms of 1203 the policy within 18 months after the date of loss. The time 1204 limitations of this subsection are tolled during any term of 1205 federal or state active duty which materially affects the 1206 ability of a servicemember as defined in s. 250.01 to file a 1207 claim, supplemental claim, or reopened claim. 1208

Section

Section 627.7019, Florida Statutes, is amended 1209 to read: 1210 627.7019 Standardization of requirements applicable to 1211 insurers after natural disasters.— 1212

(1) The commission shall adopt by rule, pursuant to s. 1213 120.54(1)-(3), standardized requirements that may be applied to 1214 insurers and surplus lines insurers as a consequence of a 1215 hurricane or other natural disaster. The rules shall address the 1216 following areas: 1217 (

a) Claims reporting requirements. 1218

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 43 of 46 CODING: Words stricken are deletions; words underlined are additions. (

b) Grace periods for payment of premiums and performance 1219 of other duties by insureds. 1220 (

c) Temporary postponement of cancellations and 1221 nonrenewals. 1222

(2) The rules adopted under this

section shall require the 1223 office to issue an order within 72 hours after the occurrence of 1224 a hurricane or other natural disaster specifying, by line of 1225 insurance, which of the standardized requirements apply, the 1226 geographic areas in which they apply, the time at which 1227 applicability commences, and the time at which applicability 1228 terminates. 1229

(3) Any emergency rule adopted under s. 120.54(4) which is 1230 in conflict with any provision of the rules adopted under this 1231

section must be by unanimous vote of the commission. 1232

Section

Section 627.782, Florida Statutes, is amended 1233 to read: 1234 627.782 Adoption of rates.— 1235

(1) Rates for title insurance are subject to the rating 1236 provisions of this section.

Title insurers shall file with the 1237 office under the procedures set forth in s. 627.062(2)(a)1. or 1238 2. rates, rating schedules, rating manuals, premium credits or 1239 discount schedules, and surcharge schedules, and changes 1240 thereto, code, the commission must adopt a rule specifying the 1241 premium to be charged in this state by title insurers for the 1242 respective types of title insurance contracts and, for policies 1243 issued through agents or agencies, the percentage of such 1244 premium required to be retained by the title insurer which shall 1245 not be less than 30 percent.

However, in a transaction subject 1246 to the Real Estate Settlement Procedures Act of 1974, 12 U.S.C. 1247

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 44 of 46 CODING: Words stricken are deletions; words underlined are additions. ss. 2601 et seq., as amended, no portion of the premium 1248 attributable to providing a primary title service shall be paid 1249 to or retained by any person who does not actually perform or is 1250 not liable for the performance of such service. 1251

(2) In reviewing adopting premium rates, the office 1252 commission must give due consideration to the following: 1253 (

a) The title insurers’ loss experience and prospective 1254 loss experience under closing protection letters and policy 1255 liabilities. 1256 (

b) A reasonable margin for underwriting profit and 1257 contingencies, including contingent liability under s. 627.7865, 1258 sufficient to allow title insurers, agents, and agencies to earn 1259 a rate of return on their capital that will attract and retain 1260 adequate capital investment in the title insurance business and 1261 maintain an efficient title insurance delivery system. 1262 (

c) Past expenses and prospective expenses for 1263 administration and handling of risks. 1264 (

d) Liability for defalcation. 1265 (

e) Other relevant factors. 1266

(3) Rates may be grouped by classification or

schedule and 1267 may differ as to class of risk assumed. 1268

(4) Rates may not be excessive, inadequate, or unfairly 1269 discriminatory. 1270

(5) The premium applies to each $100 of insurance issued to 1271 an insured. 1272

(6) The premium rates apply throughout this state. 1273

(7) The commission shall, in accordance with the standards 1274 provided in subsection (2), review the premium as needed, but 1275 not less frequently than once every 3 years, and shall, based 1276

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 45 of 46 CODING: Words stricken are deletions; words underlined are additions. upon the review required by this subsection, revise the premium 1277 if the results of the review so warrant. 1278

(8) Each title insurance agency and insurer licensed to do 1279 business in this state and each insurer’s direct or retail 1280 business in this state shall maintain and submit information, 1281 including revenue, loss, and expense data, as the office 1282 determines necessary to assist in the analysis of title 1283 insurance premium rates, title search costs, and the condition 1284 of the title insurance industry in this state. Such information 1285 shall be transmitted to the office annually by May 31 of the 1286 year after the reporting year. The commission shall adopt rules 1287 relating to the collection and analysis of the data from the 1288 title insurance industry. 1289

Section 24.

Chapter 2022-271, Laws of Florida, shall not be 1290 construed to impair any right under an insurance contract in 1291 effect on or before the effective date of that

chapter law. To 1292 the extent that

chapter 2022-271, Laws of Florida, affects a 1293 right under an insurance contract, that

chapter law applies to 1294 an insurance contract issued or renewed after the effective date 1295 of that

chapter law. This

section is intended to clarify 1296 existing law and is remedial in nature. 1297

Section 25.

(1) Every residential property insurer and 1298 every motor vehicle insurer rate filing made or pending with the 1299 Office of Insurance Regulation on or after July 1, 2023, must 1300 reflect the savings or reduction in claim frequency, claim 1301 severity, and loss adjustment expenses, including for attorney 1302 fees, payment of attorney fees to claimants, and any other 1303 reduction actuarially indicated, due to the combined effect of 1304 the applicable provisions of chapters 2021-77, 2022-268, 2022-1305

Florida Senate - 2023 SB 7052 597-03563-23 20237052__ Page 46 of 46 CODING: Words stricken are deletions; words underlined are additions. 271, and 2023-15, Laws of Florida, in order to provide rate 1306 relief to policyholders as soon as practicable. 1307

(2) The Office of Insurance Regulation must consider in its 1308 review of such rate filings the savings or reduction in claim 1309 frequency, claim severity, and loss adjustment expenses, 1310 including for attorney fees, payment of attorney fees to 1311 claimants, and any other reduction actuarially indicated, due to 1312 the combined effect of the applicable provisions of chapters 1313 2021-77, 2022-268, 2022-271, and 2023-15, Laws of Florida.

The 1314 office may develop a factor or factors using generally accepted 1315 actuarial techniques and standards to be used in its review of 1316 rate filings governed by this section. The office may contract 1317 with an appropriate vendor to advise the office in determining 1318 such factor or factors. 1319

(3) For the 2023-2024 fiscal year, the sum of $500,000 in 1320 nonrecurring funds is appropriated from the Insurance Regulatory 1321 Trust Fund in the Department of Financial Services to the Office 1322 of Insurance Regulation to implement this section. 1323

Section 26. For the 2023-2024 fiscal year, five positions 1324 with associated salary rate of 325,000 and the sum of $494,774 1325 in recurring funds and $23,410 in nonrecurring funds is 1326 appropriated from the Insurance Regulatory Trust Fund to the 1327 Department of Financial Services to implement this act. 1328

Section 27. This act shall take effect July 1, 2023. 1329