CHAPTER 629

629.011 “Reciprocal insurance” defined.

History. — s. 671, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429.

629.021 “Reciprocal insurer” defined.

History. — s. 672, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 666, 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429.

629.031 Scope of chapter.

History. — s. 673, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 667, 681, 809(1st), ch. 82-243; s. 123, ch. 83-216; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429.

629.041 Insuring powers of reciprocals.

(1) A reciprocal insurer may transact any kind of insurance other than life or title.

(2) Such an insurer may purchase reinsurance, and may grant reinsurance as to any kind of insurance it is authorized to transact directly.

History. — s. 674, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 668, 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429.

629.051 Name; suits.

(1) Have and use a business name. The name shall include the word “reciprocal,” or “interinsurer,” or “interinsurance,” or “exchange,” or “underwriters,” or “underwriting,” but this requirement shall not apply as to any insurer holding a certificate of authority to transact insurance in this state immediately prior to the effective date of this code.

(2) Sue and be sued in its own name.

History. — s. 675, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429.

629.061 Attorney.

(1) “Attorney,” as used in this chapter, refers to the attorney in fact of a reciprocal insurer. The attorney may be an individual, corporation, or other person.

(2) The attorney of a foreign or alien reciprocal insurer, which insurer is duly authorized to transact insurance in this state, shall not, by virtue of discharge of its duties as such attorney with respect to the insurer’s transactions in this state, be thereby deemed to be doing business in this state within the meaning of any laws of this state applying to foreign firms or corporations.

(3) The office of the attorney shall be maintained at such place as is designated by the subscribers in the power of attorney.

History. — s. 676, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 669, 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429.

629.071 Surplus funds required.

(1) A domestic reciprocal insurer hereunder formed, if it has otherwise complied with the applicable provisions of this code, may be authorized to transact insurance if it has and thereafter maintains surplus funds of not less than $250,000.

(2) In addition to the surplus required to be maintained under subsection (1), the insurer shall have, when first so authorized, an expendable surplus of not less than $750,000.

History. — s. 677, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 116, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 670, 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429.

629.081 Organization of reciprocal insurer.

(1) Twenty-five or more persons domiciled in this state may organize a domestic reciprocal insurer and make application to the office for a certificate of authority to transact insurance.

(2) The proposed attorney shall fulfill the requirements of and shall execute and file with the office, when applying for a certificate of authority, a declaration setting forth:

History. — s. 678, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 671, 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 1316, ch. 2003-261.

629.091 Certificate of authority.

History. — s. 679, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 672, 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429.

629.101 Power of attorney.

(1) The rights and powers of the attorney of a reciprocal insurer shall be as provided in the power of attorney given it by the subscribers.

(2) The power of attorney must set forth:

(3) The power of attorney may:

(4) The terms of any power of attorney or agreement collateral thereto shall be reasonable and equitable, and no such power or agreement shall be used or be effective in this state unless filed with the office.

History. — s. 680, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 673, 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 1317, ch. 2003-261.

629.111 Modifications.

History. — s. 681, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429.

629.121 Attorney’s bond.

(1) Concurrently with the filing of the declaration provided for in s. 629.081, the attorney of a domestic reciprocal insurer shall file with the office a bond in favor of this state for the benefit of all persons damaged as a result of breach by the attorney of the conditions of his or her bond as set forth in subsection (2). The bond shall be executed by the attorney and by an authorized corporate surety and shall be subject to the approval of the office.

(2) The bond shall be in the sum of $100,000, aggregate in form, the bond conditioned that the attorney will faithfully account for all moneys and other property of the insurer coming into his or her hands, and that he or she will not withdraw or appropriate to his or her own use from the funds of the insurer any moneys or property to which he or she is not entitled under the power of attorney.

(3) The bond shall provide that it is not subject to cancellation unless 30 days’ advance notice in writing of cancellation is given both the attorney and the office.

History. — s. 682, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 674, 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 389, ch. 97-102; s. 1318, ch. 2003-261.

629.131 Deposit in lieu of bond.

History. — s. 683, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 681, 809(1st), ch. 82-243; s. 19, ch. 85-245; ss. 184, 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 1319, ch. 2003-261.

629.141 Action on bond.

History. — s. 684, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429.

629.161 Contributions to insurer.

History. — s. 686, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 1320, ch. 2003-261.

629.171 Annual statement.

(1) The annual statement of a reciprocal insurer shall be made and filed by its attorney.

(2) The statement shall be supplemented by such information as may be required by the office relative to the affairs and transactions of the attorney insofar as they relate to the reciprocal insurer.

History. — s. 687, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 1321, ch. 2003-261.

629.181 Financial condition; method of determining.

(1) The surplus deposits of subscribers shall be allowed as assets, except that any premium deposits delinquent for 90 days shall first be charged against such surplus deposit.

(2) An assessment levied upon subscribers, but not collected, shall not be allowed as an asset.

(3) The contingent liability of subscribers shall not be allowed as an asset.

History. — s. 688, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 676, 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 1322, ch. 2003-261.

629.191 Who may be subscribers.

History. — s. 689, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 677, 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429.

629.201 Subscribers’ advisory committee.

(1) The advisory committee of a domestic reciprocal insurer exercising the subscribers’ rights shall be selected under such rules as the subscribers adopt.

(2) Not less than two-thirds of such committee shall be subscribers other than the attorney, or any person employed by, representing, or having a financial interest in the attorney.

(3) The committee shall:

History. — s. 690, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429.

629.211 Subscribers’ liability.

(1) The liability of each subscriber, other than as to a nonassessable policy, for the obligations of the reciprocal insurer shall be an individual, several, and proportionate liability, and not joint.

(2) Except as to a nonassessable policy, each subscriber shall have a contingent assessment liability, in the amount provided for in the power of attorney or in the subscribers’ agreement, for payment of actual losses and expenses incurred while his or her policy was in force.

(3) Each assessable policy issued by the insurer shall contain a statement of the contingent liability.

History. — s. 691, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 678, 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 390, ch. 97-102.

629.221 Subscribers’ liability; on judgment.

(1) No action shall lie against any subscriber upon any obligation claimed against the insurer until a final judgment has been obtained against the insurer and remains unsatisfied for 30 days.

(2) Any such judgment shall be binding upon each subscriber only in such proportion as his or her interests may appear and in amount not exceeding his or her contingent liability, if any.

History. — s. 692, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 391, ch. 97-102.

629.231 Assessments.

(1) Assessments may from time to time be levied upon subscribers of a domestic reciprocal insurer liable therefor under the terms of their policies by the attorney upon approval in advance by the subscribers’ advisory committee and the office, or by the department as receiver of the insurer.

(2) Each subscriber’s share of a deficiency for which an assessment is made, but not exceeding in any event his or her aggregate contingent liability as computed in accordance with s. 629.251, shall be computed by applying, to the premium earned on the subscriber’s policy or policies during the period to be covered by the assessment, the ratio of the total deficiency to the total premiums earned during such period upon all policies subject to the assessment.

(3) In computing the earned premiums for the purposes of this section, the gross premium received by the insurer for the policy shall be used as a base, deducting therefrom solely charges not recurring upon the renewal or extension of the policy.

(4) No subscriber shall have an offset against any assessment for which he or she is liable, on account of any claim for unearned premium or losses payable.

History. — s. 693, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 392, ch. 97-102; s. 1323, ch. 2003-261.

629.241 Time limit for assessments.

(1) While his or her policy is in force or within 4 years after its termination, the subscriber is notified by either the attorney or the office of its intentions to levy such assessment; or

(2) An order to show cause why a receiver, conservator, rehabilitator, or liquidator of the insurer should not be appointed is issued while the subscriber’s policy is in force or within 4 years after its termination.

History. — s. 694, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 679, 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 393, ch. 97-102; s. 1324, ch. 2003-261.

629.251 Aggregate liability.

History. — s. 695, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429.

629.261 Nonassessable policies.

(1) If a reciprocal insurer has a surplus as to policyholders required of a domestic stock insurer authorized to transact like kinds of insurance, upon application of the attorney and as approved by the subscribers’ advisory committee the office shall issue its certificate authorizing the insurer to extinguish the contingent liability of subscribers under its policies then in force in this state and to omit provisions imposing contingent liability in all policies delivered or issued for delivery in this state for so long as all such surplus remains unimpaired.

(2) Upon impairment of such surplus, the office shall forthwith revoke the certificate. Such revocation shall not render subject to contingent liability any policy then in force and for the remainder of the period for which the premium has theretofore been paid; but, after such revocation, no policy shall be issued or renewed without providing for contingent assessment liability of the subscriber.

(3) The office shall not authorize a domestic reciprocal insurer so to extinguish the contingent liability of any of its subscribers or in any of its policies to be issued, unless it qualifies to and does extinguish such liability of all its subscribers and in all such policies for all kinds of insurance transacted by it; except that, if required by the laws of another state in which the insurer is transacting insurance as an authorized insurer, the insurer may issue policies providing for the contingent liability of such of its subscribers as may acquire such policies in such state, and need not extinguish the contingent liability applicable to policies theretofore in force in such state.

History. — s. 696, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 681, 809(1st), ch. 82-243; ss. 79, 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 1325, ch. 2003-261.

629.271 Distribution of savings.

(1) A reciprocal insurer may return to its subscribers any unused premiums, savings, or credits accruing to their accounts. Such distribution may not unfairly discriminate between classes of risks or policies, or between subscribers, but may vary as to classes of subscribers based on the experience of the classes.

(2) In addition to the option provided in subsection (1), a domestic reciprocal insurer may, upon the prior written approval of the office, pay to its subscribers a portion of unassigned funds of up to 10 percent of surplus, with distribution limited to 50 percent of net income from the previous calendar year. Such distribution may not unfairly discriminate between classes of risks or policies, or between subscribers, but may vary as to classes of subscribers based on the experience of the classes.

History. — s. 697, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 1, ch. 2016-168.

629.281 Subscribers’ share in assets.

History. — s. 698, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 1326, ch. 2003-261.

629.291 Merger or conversion.

(1) A domestic reciprocal insurer, upon affirmative vote of not less than two-thirds of its subscribers who vote on such merger pursuant to due notice and the approval of the office of the terms therefor, may merge with another reciprocal insurer or be converted to a stock or mutual insurer.

(2) Such a stock or mutual insurer shall be subject to the same capital or surplus requirements and shall have the same rights as a like domestic insurer transacting like kinds of insurance.

(3) The office shall not approve any plan for such merger or conversion which is inequitable to subscribers or which, if for conversion to a stock insurer, does not give each subscriber preferential right to acquire stock of the proposed insurer proportionate to his or her interest in the reciprocal insurer, as determined in accordance with s. 629.281, and a reasonable length of time within which to exercise such right.

(4) Reinsurance of all or substantially all of the insurance in force of a domestic reciprocal insurer in another insurer shall be deemed to be a merger for the purposes of this section.

History. — s. 699, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 394, ch. 97-102; s. 1327, ch. 2003-261.

629.301 Impaired reciprocal insurers.

(1) If the assets of a domestic reciprocal insurer are at any time insufficient to discharge its liabilities, other than any liability on account of funds contributed by the attorney or others, and to maintain the required surplus, its attorney shall forthwith make up the deficiency or levy an assessment upon the subscribers for the amount needed to make up the deficiency, but subject to the limitation set forth in the power of attorney or policy.

(2) If the attorney fails to make up such deficiency or to make the assessment within 30 days after the office orders him or her to do so, or if the deficiency is not fully made up within 60 days after the date the assessment was made, the insurer shall be deemed insolvent and shall be proceeded against as authorized by this code.

(3) If liquidation of such an insurer is ordered, an assessment shall be levied upon the subscribers for such an amount, subject to limits as provided by this chapter, as the office determines to be necessary to discharge all liabilities of the insurer, exclusive of any funds contributed by the attorney or other persons, but including the reasonable cost of the liquidation.

History. — s. 700, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 681, 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 395, ch. 97-102; s. 1328, ch. 2003-261.

629.401 Insurance exchange.

(1) There may be created one or more insurance exchanges, with one or more offices each, subject to such rules as are adopted by the commission. For the purposes of this section, the term “exchange” applies to any such insurance exchange proposed or created under this section. The purposes of the exchange are:

(2) The operation of this subsection shall become effective with respect to any exchange only after a determination by the office that the exchange may operate in an economic and beneficial manner. A committee shall be appointed to write the constitution and bylaws of the proposed exchange, to make such other recommendations as may be necessary to assure maximum coordination of the operations of the exchange with existing insurance industry operations, and to assure maximum economic benefits to the state from the operations of the exchange.

The committee shall consist of 13 members, 6 to be appointed by the Chief Financial Officer, 2 each to be appointed by the Speaker of the House of Representatives and the President of the Senate, 1 each to be appointed by the minority leader of the House of Representatives and the minority leader of the Senate, and 1 to be the Chief Financial Officer or his or her designated representative. The chair shall be elected by a majority of the committee.

The committee shall transmit such proposed constitution and bylaws and such other recommendations to the office and to the Legislature no later than 5 days prior to the adjournment of a regular annual legislative session or no later than 5 days prior to the commencement of any special or organizational legislative session. Subject to the disapproval of the constitution and bylaws by either house of the Legislature by resolution before the end of such legislative session, the exchange shall have full authority to function pursuant to its constitution and bylaws 60 days after the end of the session.

The initial board of governors of the exchange shall consist of 14 members, 3 appointed by the Chief Financial Officer, 3 by the Speaker of the House of Representatives, 3 by the President of the Senate, 1 by the minority leader of the House of Representatives, 1 by the minority leader of the Senate, and 3 by the Governor, to serve until the first election pursuant to the constitution or bylaws.

(3) The constitution and bylaws of the exchange shall provide for, but shall not be limited to:

(4) Any insurance exchange formed under the provisions of this

section shall not be subject to any state or local taxes or fees measured by income, premiums, or gross receipts; except that for purposes of taxation under s. 624.509, direct premiums written, procured, or received by a member or members through the exchange on risks located in this state shall be construed to be written, procured, or received by the exchange, and the premium tax due on said premium shall be reported and paid by the exchange.

(5) The exchange shall reimburse the office for any expenses incurred by the office relating to the regulation of the exchange and its members.

(6)(a)1. The provisions of ss. 625.012 and 625.031 shall be applicable to the underwriting members of an exchange in the same manner as those sections apply to domestic insurers authorized to do business in this state.

(7) The performance of the contractual obligations of the exchange or its members entered into pursuant to subsection (1) shall not be covered by any of the Florida state security or guaranty funds.

History. — ss. 3, 4, ch. 79-394; ss. 23, 24, ch. 80-236; ss. 1, 2, ch. 80-272; s. 432, ch. 81-259; s. 47, ch. 83-215; s. 3, ch. 84-65; s. 2, ch. 85-274; s. 1, ch. 87-250; s. 201, ch. 90-363; s. 188, ch. 91-108; s. 257, ch. 91-224; s. 4, ch. 91-429; s. 11, ch. 93-289; s. 396, ch. 97-102; s. 44, ch. 99-3; s. 7, ch. 99-388; s. 42, ch. 2002-206; s. 1329, ch. 2003-261; s. 12, ch. 2018-131.

629.5011 Tax on premiums.

History. — s. 7, ch. 88-206; s. 188, ch. 91-108; s. 4, ch. 91-429.

629.520 Authority of a limited reciprocal insurer.

History. — ss. 81, 188, ch. 91-108; s. 4, ch. 91-429; s. 9, ch. 2000-333; s. 1330, ch. 2003-261.