The Office of Insurance Regulation is updating Chapter 69O-196.

 

DEPARTMENT OF FINANCIAL SERVICES

OIR – Insurance Regulation

RULE NOS.:RULE TITLES:

69O-196.001Standard Cancellation Notice

69O-196.005Filing Surety Bond in Lieu of Net Worth

69O-196.007Annual Reports

69O-196.009Other Reports and Corrective Action Plans

69O-196.015Forms Incorporated by Reference

69O-196.020Premium Financing of Products Not Regulated by the Insurance Code and Related Unfair Trade Practices Prohibited

69O-196.021Disclosure Requirements for Insurance Coverages Financed With Personal Injury Protection

69O-196.023Insurance Agent Penalties

69O-196.025Statement of Account; Receipts

69O-196.035Required Books and Records

PURPOSE AND EFFECT: The Office of Insurance Regulation is updating Chapter 69O-196.

SUMMARY: Rule 69O-196.001, F.A.C. is amended to change grammar and add rulemaking authority. Rule 69O-196.005, F.A.C. is amended to update the Office’s website information. Rule 69O-196.007 is amended to update the annual reports requirements. Rule 69O-196.009, F.A.C. is amended to change “certificate of authority” to “license” and add rulemaking authority. Rule 69O-196.015 is amended to include all applications for premium finance companies in one rule. Rule 69O-196.020, F.A.C. is amended to make references to the Florida Insurance Code consistent. Rule 69O-196.021, F.A.C. is amended to incorporate the financing disclosure form. Rule 69O-196.035, F.A.C. is amended to create a new subsection. Rule 69O-196.023, F.A.C. and Rule 69O-196.025, F.A.C. are repealed.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: Agency personnel familiar with the subject matter of the rule amendment have performed an economic analysis of the rule amendment that shows that the rule amendment is unlikely to have an adverse impact on the State economy in excess of the criteria established in Section 120.541(2)(a), Florida Statutes.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 624.308(1), 627.828(2), 627.836(2), 627.8405, 627.848(3) FS.

LAW IMPLEMENTED: 624.124, 624.307(1), 624.321(1)(a), 624.424, 624.80, 624.81, 626.753, 626.794, 626.838, 626.9541, 627.828, 627.829, 627.832, 627.834, 627.836, 627.838, 627.840, 627.8405, 627.841, 627.844, 627.845, 627.848, 627.849, 628.4615 FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Michael Lawrence, Jr., Chief Legal Counsel, Office of Insurance Regulation, E-mail [e-mail], [phone].

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

69O-196.001 Standard Cancellation Notice.

When a premium finance agreement contains a power of attorney or other authority enabling the premium finance company to cancel any insurance contract or contracts listed in the agreement, all premium finance companies licensed to do business in this state shall effect cancellation of such policies by the use of a form containing the wording and information set forth below and shall be printed on a color paper of a shade of pink, to include all parts of any multi-part form:

STANDARD CANCELLATION NOTICE

PREMIUM FINANCE COMPANY IMPRINT

________________________________________________________________________________________________________

NOTICE OF CANCELLATION  

Insured

Agent

 

Insurance Company

Policy Number ___________

Cancellation Date ___________

Account Number ___________

Unpaid Premium Balance Due ___________

You are hereby notified that the policy described above is cancelled for non-payment of an installment in accordance with the conditions and terms of the premium finance agreement Premium Finance Agreement which incorporates a power of attorney. This cancellation is effective one day after the above captioned date, at the hour indicated in the policy as the effective time.

The Florida Insurance Code, part XV of chapter 627, F.S., recognizes this as a valid notice of cancellation and provides that the gross unearned premium be returned to the premium finance company.

If the policy or any statute requires the insurer to give notice to a mortgagee, governmental agency, or other third party before the policy can be cancelled, the insurer shall give the prescribed notice in behalf of itself or the insured to any governmental agency, mortgagee, or other third party on or before the second business day after the day it receives the notice of cancellation from the premium finance company and shall determine the effective date of cancellation taking into consideration the number of days notice required to complete the cancellation.

IF THE ABOVE-CAPTIONED INSURANCE CONTRACT PROVIDES MOTOR VEHICLE LIABILITY INSURANCE REQUIRED BY THE FINANCIAL RESPONSIBILITY LAW, PROOF OF FINANCIAL RESPONSIBILITY IS REQUIRED TO BE MAINTAINED CONTINUOUSLY FOR A PERIOD OF THREE (3) YEARS, PURSUANT TO CHAPTER 324, F.S., AND THE OPERATION OF A VEHICLE WITHOUT SUCH FINANCIAL RESPONSIBILITY IS UNLAWFUL.

Rulemaking Authority 624.308(1), 627.848(3) FS. Law Implemented 624.307(1), 627.848 FS. History–New 12-23-65, Repromulgated 12-24-74, Formerly 4-18.01, 4-18.001, Amended 7-27-95, Formerly 4-196.001, _________.

 

69O-196.005 Filing Surety Bond in Lieu of Net Worth.

(1) A surety bond in the amount of $35,000.00 may be filed with the Office by premium finance companies in conjunction with a $10,000 minimum net worth; and all filings shall be submitted electronically to https://www.floir.com/iportal http://www.floir.com/iportal.

(2) No change.

(3) Such surety bond is subject to approval shall be approved by the Office office and shall not be cancelled without a thirty-day written notice to the Office.

Rulemaking Authority 624.308(1), 627.828(2) FS. Law Implemented 624.424, 627.828 FS. History–New 10-20-73, Repromulgated 12-24-74, Formerly 4-18.05, 4-18.005, Amended 8-29-99, Formerly 4-196.005, Amended 7-30-17, _________.

 

69O-196.007 Annual Reports.

(1) The annual report shall be filed on or before March 1 of each year. The due date is the date by which the report is to be RECEIVED in the Office, NOT THE POSTMARK DATE.

(2) An Annual Report The annual report shall be filed with the Office, on or before March 1 of each year, on Form OIR-A3-107, “Annual Report,” effective 6/20, hereby incorporated by reference and available at www.flrules.org/XXXXX. form OIR-A3-107 (11/97), Annual Report, which is incorporated by reference in rule 69O-196.015, F.A.C. Each page of the form shall be completed and prepared according to the instructions. An incomplete form shall be returned and considered not filed by the Office. Failure to file a complete annual report by the due date shall subject a licensee to fines as set forth in rule 69O-207.001, F.A.C., and discipline as provided in sections 627.832 and 627.833, F.S.  The filings shall be submitted electronically via the Office’s system at https://www.floir.com/iportal. All filings shall be submitted electronically to http://www.floir.com/iportal.

Rulemaking Authority 624.308(1), 627.836(2) FS. Law Implemented 624.424, 627.836 FS. History–New 10-20-73, Repromulgated 12-24-74, Formerly 4-18.07, 4-18.007, Amended 7-27-95, 8-29-99, Formerly 4-196.007, Amended 7-30-17, _________.

 

69O-196.009 Other Reports and Corrective Action Plans.

To aid the Office in determining a licensee’s continued eligibility to hold a premium finance license:

(1) No change.

(2) Changes in senior corporate officers, chief executive officer, chief financial officer, or directors (or members of a properly authorized and appointed executive committee thereof), or, if the licensee is not incorporated, changes in management personnel who have decision or policy-making authority over the premium finance company, shall be reported in writing to the Office within 60 days after the effective date of the change. Such changes will require completion of biographical information in the form required by the Office adopted in rule 69O-196.015, F.A.C., and an independent investigative background report of the person or entity, plus an investigation fee. All filings shall be submitted electronically to https://www.floir.com/iportal http://www.floir.com/iportal.

(3) through (4) No change.

(5) If the premium finance company fails to submit a corrective action plan within 30 days of the Office’s order or submits a plan which is insufficient to correct the premium finance company’s financial condition, the Office shall order the premium finance company to implement one or more of the corrective actions listed in this subsection (4).

(6)(5) If the Office determines that a company is insolvent, the Office shall notify the company of such insolvency. If the company disagrees with the Office’s determination, it shall within 15 calendar days file with the Office all information that proves that the company is not insolvent.

(7)(6) If the company fails within the 15-day period provided in subsection (6) (5) to supply information showing to the satisfaction of the Office that the company is not insolvent, the Office shall:

(a) No change.

(b) Suspend or revoke the company’s license certificate of authority if administrative supervision is not viable due to the severity of the company’s condition or the company’s unwillingness to cooperate with the Office in the development and implementation of a corrective plan; or

(c) No change.

Rulemaking Authority 624.308 FS. Law Implemented 624.307(1), 624.424, 624.80, 624.81, 627.828, 627.829, 627.832, 627.834, 627.836, 627.849, 628.4615 FS. History–New 7-27-95, Formerly 4-196.009, Amended 7-30-17, _________.

 

69O-196.015 Application for and Issuance of License and License Continuance Forms Incorporated by Reference.

Substantial rewording of Rule 69O-196.015, F.A.C. follows.  See Florida Administrative Code for present text.

 

(1) Application for License as a Premium Finance Company

(a) A person applying for a license as a premium finance company shall submit the following:

1. Form OIR-C1-958, “Application for License Premium Finance Company,” effective 12/18, hereby incorporated by reference and available at www.flrules.org/XXXXX;

2. Form OIR-A3-453, “Premium Finance Company Surety Bond,” effective 6/20, hereby incorporated by reference and available at www.flrules.org/XXXXX;

3. Form OIR-C1-144, “Service of Process Consent & Agreement,” effective 6/04, hereby incorporated by reference and available at www.flrules.org/XXXXX;

4. Form OIR-C1-454, “Personal Financial Statement,” effective 6/20, hereby incorporated by reference and available at www.flrules.org/XXXXX;

5. Form OIR-C1-905, “Instructions for Furnishing Background Investigative Reports,” effective 6/20, hereby incorporated by reference and available at www.flrules.org/XXXXX;

6. Form OIR-C1-938, “Fingerprint Payment and Submission Procedures,” effective 6/20, hereby incorporated by reference and available at www.flrules.org/XXXXX;

7. Form OIR-C1-957, “Instructions for Statutory Compliance of Forms,” effective 10/05, hereby incorporated by reference and available at www.flrules.org/XXXXX;

8. Form OIR-C1-1423, “Biographical Affidavit,” effective 6/20, hereby incorporated by reference and available at www.flrules.org/XXXXX; and

9. Form OIR-C1-2221, “Management Information Form,” effective 6/20, hereby incorporated by reference and available at www.flrules.org/XXXXX; and

(b) The applicant shall submit the forms listed in paragraph (1)(a) electronically at https://www.floir.com/iportal.

(2) Annual License Renewal

(a)1. All premium finance company licenses shall expire on October 1.

2. Failure to submit the application for renewal before October 1 shall result in expiration of the license and will require the filing of a new application for licensure.

(b) A licensee seeking to continue operating as a premium finance company shall submit Form OIR-A3-1563, “Application for Renewal of License Premium Finance Company,” effective 7/03, hereby incorporated by reference and available at www.flrules.org/XXXXX, filed electronically at https://www.floir.com/iportal.

Rulemaking Authority 624.308(1), 627.828(2) FS. Law Implemented 624.321(1)(a), 624.424, 627.828, 627.829, 627.836, 627.845, 628.4615 FS. History–New 5-28-90, Formerly 4-18.015, Amended 7-27-95, 8-29-99, Formerly 4-196.015, Amended 7-30-17, _________.

 

69O-196.020 Premium Financing of Products Not Regulated by the Florida Insurance Code and Related Unfair Trade Practices Prohibited.

(1) through (5) No change.

(6) Section 627.8405(3), F.S., prohibits premium financing of any product not regulated under the Florida Insurance Code including mixed products which contain a part that is not regulated under the Florida Insurance Code.

Rulemaking Authority 624.308(1), 627.8405(3) FS. Law Implemented 624.124, 626.753, 626.794, 626.838, 626.9541, 627.832,  627.8405 FS. History–New 12-27-94, Amended 8-29-99, Formerly 4-196.020, Amended _________.

 

69O-196.021 Disclosure Requirements for Insurance Coverages Financed With Personal Injury Protection.

(1) No change.

(2) The disclosure shall be on Form OIR-A3-1162, “Insurance Premium Financing Disclosure Form,” effective 3/95, hereby incorporated by reference and available at www.flrules.org/XXXXX.  The filings shall be submitted electronically via the Office’s system at https://www.floir.com/iportal. (3/95), “Insurance Premium Financing Disclosure Form,” which is incorporated herein by reference. Forms are available at http://floir.com/iportal. All filings shall be submitted electronically to http://www.floir.com/iportal.

(3) through (4) No change.

Rulemaking Authority 624.308(1), 627.8405 FS. Law Implemented 624.424, 626.9541(1)(a), 627.734, 627.8405 FS. History–New 3-1-95, Amended 8-16-95, Formerly 4-196.021, Amended 7-30-17, _________.

 

69O-196.023 Insurance Agent Penalties.

Rulemaking Authority 624.308 FS. Law Implemented 624.307(1), 626.621(12), Ch. 627 Part XV FS. History–New 12-27-94, Formerly 4-196.023, Repealed _________.

 

69O-196.025 Statement of Account; Receipts.

Rulemaking Authority 624.308 FS. Law Implemented 624.307(1), 624.424, 627.845, 626.9541(1)(a) FS. History–New 7-27-95, Formerly 4-196.025, Amended 7-30-17, Repealed _________.

 

69O-196.035 Required Books and Records.

At a minimum for permanent books and records, each licensed premium finance company shall maintain:

(1) A complete set of accounting records including but not limited to:

(a) through (c) No change.

(d) Accounts payable registers, ; together with supporting documentation evidencing each entry.

(2) A detailed register of premium finance contracts in force. The register shall include:

(a) through (k) No change.

(l) Number of payments; and,

(m) No change.

(3) through (8) No change.

(9) Copies of all contracts with independent contractors or third parties performing services directly or indirectly related to the premium finance business. Each such contract shall be submitted to the Office and shall contain at a minimum the following provisions: All filings shall be submitted electronically to http://www.floir.com/iportal.

(a) through (d) No change.

(10) All filings submitted pursuant to subsection (9) shall be submitted electronically to https://www.floir.com/iportal.

(11)(10) Records maintained in accordance with this rule shall be kept as originals, photocopies, or electronically stored reproductions.

Rulemaking Authority 624.308 FS. Law Implemented 624.307(1), 624.424, 627.828, 627.834, 627.836, 627.838, 627.840, 627.8405, 627.841, 627.844, 627.845, 627.848, 627.849 FS. History–New 7-27-95, Formerly 4-196.035, Amended 7-30-17, _________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Michael Lawrence, Jr., Chief Legal Counsel, Office of Insurance Regulation, E-mail [e-mail], [phone].

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Financial Services Commission

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: February 2, 2021

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: November 5, 2020