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2024 Florida Legislative Update Surplus Lines Issues

Friday, March 8, 2024, marked the close of the 2024 Florida Legislative Session. Below are the bills impacting surplus lines that passed both chambers and have been sent to the Governor’s desk.

CS/CS/HB 1611: Insurance

An OIR agency bill that puts cancellation/nonrenewal restrictions on surplus lines carriers after the issuance of an emergency order pursuant to F.S. 252.36.

Specifically, it prohibits a surplus lines insurer from canceling or nonrenewing personal or commercial residential dwellings that have been damaged by a hurricane or wind loss that was subject to the declaration of the emergency order for a period of 90 days after the dwelling has been repaired.

There are exceptions to the cancellation and nonrenewal restrictions in the bill, which include:

• Nonpayment of premium,
• Material misstatement or fraud related to the claim,
• Unreasonable delay in repair by the policyholder,
• Failure of the policyholder to respond to inquiries by the insurer or agent about the status of repairs or if the insurer has paid the policy limits.

Effective Date: After the signature of the Governor, July 1, 2024

CS/CS/HB 1503: Citizens Property Insurance Corporation

Allows surplus lines carriers, under certain requirements, to take out policies from Citizens for second homes. The surplus lines carrier must have a rating of “A-“ or higher from A.M. Best.

Effective Date: After the signature of the Governor, July 1, 2024

CS/CS/CS/HB 989: Chief Financial Officer

The Department of Financial Services (DFS) agency bill allows a surplus lines agent to appoint their general lines license with a single surplus lines appointment to satisfy the licensing requirement of having a valid and appointed general lines license. An agent appointing their general lines license with a surplus lines appointment shall not conduct or transact admitted business.

The bill also includes the following requirements for insurers:

• Surplus lines insurers must file an email address with DFS to be used for consumer complaint resolutions.
• Designation of a contact person at the insurer for DFS to contact regarding escalated complaints.
• Surplus lines insurers in the current law are required to respond to DFS within 14 days regarding a consumer complaint.

Effective Date: Upon signature of the Governor

New Insurers from 2023

Premium Reconciliation

The Premium Reconciliation program was created to help ensure that all taxes and revenues have been submitted per Florida Statutes. The program compares data submitted by surplus lines agents and independently procured coverage (IPC) filers with the data submitted by surplus lines insurers.  

As surplus lines insurers submit policy information to FSLSO, the information is automatically matched through our datacenter with its correlating policy information submitted by Florida surplus lines agents or IPC filers regarding the same policy. Information is linked based on several factors, including policy number, premium amount, insurer name, and effective date. This reconciliation helps uncover variances in reported information and verifies that all taxes, service fees, and assessments have been paid correctly.

On occasion, FSLSO staff may contact Insurers to obtain clarification or additional information and documentation related to specific transactions reported by Insurers. Insurers can reduce these communications by providing accurate and complete information. The top three Insurer filing errors observed are:

• Duplicate transactions
• Incorrect data, such as premium amounts and agent names
• Florida is not listed as the home state

In-House Agents

Do you have Florida surplus and excess agents employed within your company?

If yes, please ensure they are in compliance with Florida’s surplus lines agent rules and requirements

Filing Requirements Update

We recently updated the Insurer Filing Preparation Checklist. This is a helpful, quick reference guide for carriers to use when preparing to submit transactions to FSLSO.

The Insurer Procedures Manual is also available with more detailed information.

Batch Filing Refresh

New Features

In January, the Batch filing platform was updated with some new features.

• In-application onboarding/testing for new Batch filers.
• An in-application XML/XSD schema validation tool.
• The addition of a CSV format Batch filing option

Keep Account Current

With the fourth-quarter 2023 filing deadline rapidly approaching, checking your account to ensure it shows the most up-to-date information is essential.

One of the most common out-of-date information we see is email addresses. We often send emails to Batch account contact persons that get bounced back. It is critical to update email addresses when things change, so we contact the right person via email if any changes need to be made to your Batch file.

Dates to Remember

Have questions? Don't hesitate to contact us anytime: Insurer.Services@fslso.com or 800.562.4496.