No. HB 1399
Filed under Insurance.
Property Insurance Affiliates ; Requires insurers to provide to OIR documentation demonstrating that financial considerations & payments to affiliates are fair & reasonable; requires office to consider certain factors to determine whether such considerations & payments are fair & reasonable; requires compensation arrangements between insurers & affiliates to be structured as fees for service; requires insurers to submit, & office to review, audited financial statements; requires contracts between insurers & affiliates to contain certain provisions; authorizes office to issue orders restricting fund transfers from insurers to affiliates under certain circumstances; requires affiliates to make certain refunds under certain circumstances; provides authority of office over affiliate dividends; requires affiliates to register with office.
Plain English Summary
AI-GENERATEDProperty insurers that pay fees, commissions, or other money to an affiliated company must now prove to state regulators that the payment is fair and reasonable, backed by audited financial statements and required factors.
Affiliates themselves must register with the state before doing business here, renew every year, and can lose that registration, or face criminal charges, for violations, including a felony for repeat unregistered operation.
Regulators gain new power to block dividends and asset transfers to affiliates, including an emergency freeze on fund transfers during a declared disaster, and can force affiliates to refund improper payments.
Property insurance rate filings must now account for affiliate profits tied to Florida business, and a filing can be rejected as excessive if it leaves those affiliate profits out.
AIAny property insurer that pays a fee, commission, or other financial consideration to an affiliate must document to the Office of Insurance Regulation that the payment is fair and reasonable, judged against cost, financial condition, debt, dividends, and policyholder interest.
AIThe oversight, dividend-approval, and registration requirements in this bill reach not only parent and subsidiary companies but also managing general agents and attorneys in fact, entities that commonly handle an insurer's day-to-day operations for a fee.
AIDuring a state of emergency declared by the Governor, the office can order a property insurer to stop transferring funds to its affiliate, for up to 60 days unless the office extends the order.
AIA property insurer can no longer declare or pay a dividend to an affiliate without the office's prior approval, which the office must grant or deny within 7 days of receiving all required documents.
AIBefore operating in Florida, an affiliate of a property insurer must register with the Office of Insurance Regulation, submitting organizational documents, background reports on its responsible individuals, and a self-disclosure of insurance-related complaints, with no fee charged for registration.
AIFor property insurance rate filings, the office may find a rate excessive if it fails to reflect the profits, revenue, and investment income of an affiliate that are tied to the insurer's Florida business.
AIAny contract between a property insurer and an affiliate signed on or after July 1, 2026 must automatically expire after three years unless the office approves an extension, which itself cannot run longer than three years without further review.
AIDoing business as an affiliate without a current registration is a first-degree misdemeanor for a first offense; a second or later offense is a third-degree felony.