Florida's Insurance Regulatory Changes: New Oversight Bill Explained
Florida's Proposed Regulatory Changes for Insurance Company Oversight
A recently approved bill by a Florida House subcommittee introduces new regulatory compliance requirements for personnel within the insurance industry. House Bill 1263, proposed by State Representative Linda Chaney, R-St. Petersburg, mandates background checks and fingerprinting for executives, employees, directors, and shareholders of insurance companies. This initiative aims to empower the Office of Insurance Regulation (OIR) with the authority to reject or rescind insurance carriers’ certificates of authority based on these checks.
Under this bill, insurers and prospective insurers must submit comprehensive fingerprint records to state law enforcement for deeper scrutiny. Representative Chaney articulated that this measure aims to safeguard consumers by ensuring the financial accountability of insurance companies' management, thereby enhancing risk management within the industry.
Strengthening Regulatory Compliance and Oversight
The bill proposes granting additional powers to the OIR, enabling it to issue cease-and-desist orders to insurance companies that operate without proper licensure within the state. According to legislative analysis, this authority also extends to individuals who facilitate violations of the Florida Insurance Code, ensuring robust regulatory compliance requirements are met by all parties involved.
Impact on Auto and Property Insurance Operations
The proposed regulation further mandates that auto insurers seeking rate changes adhere to hurricane loss models approved by the Florida Commission on Hurricane Loss Projection Methodology. This change prohibits the use of independent models previously utilized for rate setting. Additionally, the bill requires property insurers to offer a minimum premium reduction for construction practices exceeding state building code criteria, incentivizing better risk management strategies.
The subcommittee unanimously supported the bill, which will undergo further consideration in at least one more House committee hearing. As of now, there is no equivalent bill in the Florida Senate, which may impact its likelihood of enactment during this legislative session.
Additional Legislative Movements
In parallel, Representative Chaney has presented House Bill 1265, proposing an exemption for the National Association of Insurance Commissioners from deposition testimony in Florida's legal proceedings, with adjustments anticipated to address discovery process concerns. Furthermore, the subcommittee passed House Bill 883, aimed at enabling protected-cell captive insurance operations in Florida. This aligns with more favorable captive insurance structures found in regions like North Carolina, as also advanced by Senate Bill 990.
These legislative moves represent significant shifts in Florida's insurance regulatory landscape, with potential impacts on regulatory compliance, underwriting, and operations for insurance providers across the state.