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Florida Statutes 1983, Volume 3 - Florida State University College of ...

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F.S.<strong>1983</strong> AMBULANCE SERVICE CONTRACTS Ch.638<br />

638.021<br />

638.031<br />

638.041<br />

638.051<br />

638.061<br />

638.081<br />

638.091<br />

638.111<br />

638.121<br />

638.122<br />

638.125<br />

638.131<br />

638.141<br />

638.151<br />

638.161<br />

638.181<br />

638.191<br />

638.201<br />

638.211<br />

638.221<br />

638.231<br />

638.241<br />

638.251<br />

638.261<br />

638.271<br />

638.282<br />

Definitions.<br />

Powers <strong>of</strong> department; rules.<br />

Certificate <strong>of</strong> authority required.<br />

Certificate <strong>of</strong> authority; annual statement;<br />

renewal.<br />

Capital funds required.<br />

Required deposit or bond.<br />

Suspension or revocation <strong>of</strong>, or refusal to<br />

renew, certificate <strong>of</strong> authority.<br />

Notice <strong>of</strong> suspension or revocation <strong>of</strong> certificate<br />

<strong>of</strong> authority.<br />

Duration <strong>of</strong> suspension; obligations <strong>of</strong> association<br />

during suspension period; reinstatement.<br />

Administrative fine in lieu <strong>of</strong> suspension or<br />

revocation <strong>of</strong> certificate <strong>of</strong> authority.<br />

Unfair trade practices.<br />

Filing <strong>of</strong> contracts, forms, and rates.<br />

Tax on premiums and assessments.<br />

Examination <strong>of</strong> associations.<br />

Service <strong>of</strong> process.<br />

Registration <strong>of</strong> sales representatives.<br />

Grounds for compulsory refusal, suspension,<br />

or revocation <strong>of</strong> registration <strong>of</strong> sales<br />

representative.<br />

Grounds for discretionary refusal, suspension,<br />

or revocation <strong>of</strong> registration <strong>of</strong> sales<br />

representative.<br />

Refusal, suspension, or revocation <strong>of</strong> registration<br />

<strong>of</strong> sales representative.<br />

Administrative fine in lieu <strong>of</strong> suspension or<br />

revocation <strong>of</strong> registration.<br />

Disposition <strong>of</strong> taxes and fees.<br />

Insurance business not authorized.<br />

Fronting not permitted. .<br />

Certain ambulance service associations' relations<br />

with funeral directors prohibited.<br />

Penalty for violation.<br />

Investigatory records.<br />

'638.021 Definitions.-As used in this chapter,<br />

the term:<br />

(1) "Ambulance service association" or "association"<br />

means any person issuing ambulance service<br />

contracts as defined in this section, other than an authorized<br />

insurer.<br />

(2) "Ambulance service contract" or "preneed ambulance<br />

service contract" means any contract or<br />

agreement whereby, for an agreed premium or specified<br />

consideration paid in advance or by installments,<br />

any person undertakes to compensate or indemnify<br />

the contract or agreement holder for any type <strong>of</strong> ambulance<br />

service or undertakes to provide any type <strong>of</strong><br />

ambulance service on a preneed basis.<br />

(3) "Department" means the Department <strong>of</strong> Insurance<br />

<strong>of</strong> this state.<br />

(4) "Insurance code" means the <strong>Florida</strong> Insurance<br />

Code, as defined in s. 624.01.<br />

(5) "Insurer" means any property or casualty insurer<br />

duly authorized to transact such business in<br />

this state.<br />

CHAPTER 638<br />

AMBULANCE SERVICE CONTRACTS<br />

751<br />

(6) "Sales representative" means any person employed<br />

or otherwise retained by an insurer or ambulance<br />

service association for the purpose <strong>of</strong> selling or<br />

issuing ambulance service contracts.<br />

Hi.tory.-8. 2, ch. 61-387; 88. 13, 35, ch. 69-106; 8. 270, ch. 71-377; 8. 2, ch.<br />

81-318; 88. 2, 30, 31, ch. 83-314.<br />

'Note.-Expire8 Octoher 1, 1993, pursuant to 8. 31, ch. 83-314, and is scheduled<br />

for review pursuant to 8. 11.61 in advance <strong>of</strong> that date.<br />

'638.031 Powers <strong>of</strong> department; rules.-The<br />

department shall administer this chapter; and to that<br />

end it may adopt, promulgate, and enforce rules necessary<br />

and proper to effectuate any provisions <strong>of</strong> this<br />

chapter.<br />

Hi.tory.-8. 3, ch. 61-387; 88. 13,35, ch. 69-106; 8. 2, ch. 81-318; 88. 3, 30, 31,<br />

ch.83-314.<br />

'Note.-Expire8 Octoher 1, 1993, pursuant to 8. 31, ch. 83-314, and is scheduled<br />

for review pursuant to 8. 11.61 in advance <strong>of</strong> that date.<br />

'638.041 Certificate <strong>of</strong> authority require d.­<br />

(1) No person may receive, hold, control, or manage<br />

any funds tendered as payment on any ambulance<br />

service contract until such person has a subsisting<br />

certificate <strong>of</strong> authority issued by the department.<br />

The certificate <strong>of</strong> authority shall expire on June 1<br />

succeeding its issuance; and annually thereafter, or<br />

before June 1, a renewal there<strong>of</strong> shall be issued under<br />

conditions herein set forth.<br />

(2) An insurer authorized to transact property or<br />

casualty insurance in this state may transact an ambulance<br />

service contract business without additional<br />

qualification or authority subject to the applicable<br />

provisions <strong>of</strong> this chapter.<br />

Hi.tory.-8. 4, ch. 61-387; 88.13,35, ch. 69-106; 8. 2, ch. 81-318; 88. 4, 30, 31,<br />

ch.83-314.<br />

'Note.-Expires Octoher 1, 1993, pursuant to 8. 31, ch. 83-314, and is scheduled<br />

for review pursuant to 8. 11.61 in advance <strong>of</strong> that date.<br />

'638.051 Certificate <strong>of</strong> authority; annual<br />

statement; renewal.-<br />

(1) An application to the department for a certificate<br />

<strong>of</strong> authority shall be accompanied by:<br />

(a) The deposit required by s. 638.081;<br />

(b) The ambulance service contracts proposed to<br />

be written;<br />

(c) The name and address <strong>of</strong> the place <strong>of</strong> business<br />

<strong>of</strong> the person <strong>of</strong>fering to write the ambulance contracts;<br />

(d) Evidence <strong>of</strong> compliance with s. 638.061; .<br />

(e) Biographical information relating to the <strong>of</strong>ficers<br />

and directors 20f the association; and<br />

(f) Such other information as may be considered<br />

necessary by the department in order for it to meet<br />

its obligations under this chapter.<br />

(2) Annually on or before March 1, the ambulance<br />

service association shall file a statement <strong>of</strong> its<br />

financial condition, transactions, and affairs as <strong>of</strong> the<br />

preceding December 31 as certified by a certified<br />

public accountant. The statement shall contain a certification<br />

that the ambulance service association has<br />

sufficient funds available to perform obligations under<br />

its contracts.<br />

(3) An insurer required to file statements under<br />

chapter 624 may include therein any statement <strong>of</strong>


Ch.638 AMBULANCE SERVICE CONTRACTS F.S.<strong>1983</strong><br />

business written under this chapter rather than complying<br />

with the provisions <strong>of</strong> subsections (1) and (2).<br />

(4) The annual fee payable to the department for<br />

the issuance <strong>of</strong> a certificate <strong>of</strong> authority shall be $100<br />

payable on initial application and thereafter no later<br />

than March 1 <strong>of</strong> each year for renewal.<br />

(5) When the required information has been submitted<br />

and the department determines that the ambulance<br />

service association is in compliance with this<br />

chapter, the department shall issue the certificate <strong>of</strong><br />

authority or renewal there<strong>of</strong>.<br />

History.-s. 5, cb. 61-387; ss. 13, 35, cb. 69-106; 8. 2, cb. 81-318; ss. 5, 30, 31,<br />

cb.83-314.<br />

'Note.-Expires October I, 1993, pursuant to 8.31, cb. 83-314, and is scbeduled<br />

for review pur8uant to 8. 11.61 in advance <strong>of</strong> that date.<br />

'Note.- Tbe words "<strong>of</strong> lbe association" were inserted by the editors.<br />

1638.061 Capital funds required.-<br />

(1) Any person applying for a certificate <strong>of</strong> authority<br />

'under s. 638.051 shall possess unimpaired<br />

paid-in capital or paid-in capital stock, if a stock association;<br />

or unimpaired surplus, if a foreign mutual<br />

or foreign reciprocal association; or a net trust fund,<br />

if a business trust association, in an amount not less<br />

than $50,000.<br />

(2) After issuance <strong>of</strong> a certificate <strong>of</strong> authority, an<br />

ambulance service association shall maintain unimpaired<br />

paid-in capital stock, if a stock association; or<br />

unimpaired surplus, if a foreign mutual or foreign reciprocal<br />

association; or a net trust fund, if a business<br />

trust association, in an amount not less than $25,000.<br />

History.-s. 6, cb. 61-387; s. 2, cb. 81-318; ss. 6, 30, 31, cb. 83-314.<br />

'Note.-Expires October I, 1993, pursuant to •. 31, cb. 83-314, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> tbat date.<br />

'Note.-Tbe words "under s. 638.051" were inserted by tbe editors.<br />

1638.081 Required deposit or bond.-<br />

(1) To assure the faithful performance <strong>of</strong> its obligations<br />

to its members or subscribers, every ambulance<br />

service association shall, prior to issuance <strong>of</strong> its<br />

certificate <strong>of</strong> authority by the department, deposit<br />

with the department securities <strong>of</strong> the type eligible for<br />

deposit by insurers under s. 625.52, and having a<br />

market value <strong>of</strong> not less than $20,000. Such deposit<br />

requirement shall be in addition to the capital funds<br />

requirement in s. 638.061. Whenever the market value<br />

<strong>of</strong> the securities deposited with the department is<br />

less than 95 percent <strong>of</strong> the amount required under<br />

this subsection, the association shall deposit addi-<br />

service association insured thereunder shall, within<br />

30 days <strong>of</strong> the filing <strong>of</strong> notice <strong>of</strong> termination, provide<br />

the department with a replacement bond meeting the<br />

requirements <strong>of</strong> this part or deposit additional securities<br />

as required under subsection (1). The cancellation<br />

<strong>of</strong> a bond does not relieve the obligation <strong>of</strong> the<br />

issuer <strong>of</strong> the bond for claims arising out <strong>of</strong> contracts<br />

issued prior to cancellation <strong>of</strong> the bond unless a replacement<br />

bond or securities are filed. In no event<br />

shall the issuer's liability under the bond exceed the<br />

face amount <strong>of</strong> the bond. If within 30 days <strong>of</strong> filing<br />

the notice <strong>of</strong> termination no replacement bond or additional<br />

security is provided, the department shall<br />

suspend the license <strong>of</strong> the association until the deposit<br />

requirements are satisfied.<br />

(3) The state shall be responsible for the safekeeping<br />

<strong>of</strong> all securities deposited with the department<br />

under this chapter. The securities shall not, on<br />

account <strong>of</strong> being deposited in this state, be subject to<br />

taxation, but shall be held exclusively and solely to<br />

guarantee the faithful performance by the association<br />

<strong>of</strong> its obligations to its members or subscribers.<br />

(4) The depositing association shall, during its<br />

solvency, have the right to exchange or substitute<br />

other securities <strong>of</strong> like quality and value for securities<br />

so on deposit, to receive the interest and other income<br />

accruing on such securities, and to inspect the<br />

deposit at all reasonable times.<br />

(5) The deposit or bond shall be maintained unimpaired<br />

as long as the association continues in business<br />

in this state. Whenever the association ceases to<br />

do business in this state and furnishes to the department<br />

satisfactory pro<strong>of</strong> that it has discharged or otherwise<br />

adequately provided for all its obligations to<br />

its members or subscribers in this state, the department<br />

shall release the deposited securities to the entitled<br />

parties, on presentation <strong>of</strong> the receipts <strong>of</strong> the<br />

department for such securities, or release any bond<br />

filed with it in lieu <strong>of</strong> such deposit.<br />

Hislory.-s. 8, ch. 61-387; ss. 13, 35, ch. 69-106; s. 2, ch. 81-318; ss. 8, 30, 31,<br />

cb. 83-314.<br />

'Note.-Expires October I, 1993, pursuant to 8. 31, ch. 83-314, and i8 8cheduled<br />

for review pursuant to •. 11.61 in advance <strong>of</strong> lbat date.<br />

INote.-This sentence appears to have been inadvertently retained in s.<br />

638.031 wben tbe 8ubsection was amended by 8. 8, ch. 83-314, to provide for a<br />

6O-day period <strong>of</strong> advance notice before cancellation <strong>of</strong> lbe bond <strong>of</strong> an ambulance<br />

service association.<br />

tional securities or otherwise increase the deposit to 1638.091 Suspension or revocation <strong>of</strong>, or rethe<br />

amount specified in this subsection. fusal to renew, certificate <strong>of</strong> authority.-<br />

(2) In lieu <strong>of</strong> any deposit <strong>of</strong> securities required (1) The department may, in its discretion, susunder<br />

subsection (1), the association may file with pend, revoke, or refuse to renew the certificate <strong>of</strong> authe<br />

department a surety bond in like amount. The thority <strong>of</strong> any ambulance service association if it<br />

bond shall be one issued by an authorized surety in- finds that the association:<br />

surer, shall be for the same purpose as the deposit in (a) Has violated any lawful order or rule <strong>of</strong> the<br />

lieu <strong>of</strong> which it is filed, and shall be subject to the ap- department or any provision <strong>of</strong> this chapter.<br />

proval <strong>of</strong> the department. 'No such bond shall be (b) Is in unsound financial condition so as to rencanceled<br />

or subject to cancellation unless at least 30 der its further transaction <strong>of</strong> business in this state<br />

days' advance notice there<strong>of</strong> in writing is filed with hazardous or injurious to the public.<br />

the department. The bond shall guarantee that the (c) Is using methods <strong>of</strong> practice in the conduct <strong>of</strong><br />

ambulance service association will faithfully and tru- its business so as to render its future transactions <strong>of</strong><br />

ly perform all the conditions <strong>of</strong> any ambulance ser- business in this state hazardous or injurious to the<br />

vice contract. No such bond shall be canceled or shall public.<br />

be subject to cancellation unless at least 60 days' ad- (d) Has refused to be examined or has refused to<br />

vance notice there<strong>of</strong>, in writing, is filed with the de- produce its accounts, records, and files for examinapartment.<br />

In the event that notice <strong>of</strong> termination <strong>of</strong> tion, or if any <strong>of</strong> its <strong>of</strong>ficers have refused to give inthe<br />

bond is filed with the department, the ambulance formation with respect to its affairs or to perform any<br />

752


F.S.<strong>1983</strong> AMBULANCE SERVICE CONTRACTS Ch.638<br />

other legal obligation as to such examination, when<br />

required by the department.<br />

(e) Has failed to pay any final judgment rendered<br />

against it in this state within 90 days after the judgment<br />

became final.<br />

(f) Has, without just cause, refused to provide<br />

service under its contracts or has, without just cause,<br />

compelled contract holders to employ attorneys to<br />

bring suit against the association to secure service.<br />

(g) Is affiliated with, and under the same general<br />

management or interlocking directorate or ownership<br />

as, another ambulance service association which<br />

transacts direct contracts in this state without having<br />

a license.<br />

(2) The department may, in its discretion, suspend<br />

the certificate <strong>of</strong> authority <strong>of</strong> any ambulance<br />

service association as to which proceedings for receivership,<br />

conservatorship, rehabilitation, or other delinquency<br />

proceedings have been commenced in any<br />

state.<br />

(3) A violation <strong>of</strong> this chapter by an insurer is<br />

grounds for suspension or revocation <strong>of</strong> the insurer's<br />

certificate <strong>of</strong> authority in this state.<br />

History.-s. 9, ch. 61-387; ss. 13, 35, ch. 69-106; s. 21, ch. 78-95; s. 2, ch.<br />

81 -318; ss. 9, 30, 31, ch. 83-314.<br />

'Note.-Expires October I, 1993, pursuant to s. 31, ch. 83-314, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

'638.111 Notice <strong>of</strong> suspension or revocation<br />

<strong>of</strong> certificate <strong>of</strong> authority.-<br />

(1) The department shall promptly give notice <strong>of</strong><br />

the suspension or revocation <strong>of</strong> the certificate <strong>of</strong> authority<br />

<strong>of</strong> an association to its sales representatives in<br />

this state <strong>of</strong> record in the <strong>of</strong>fice <strong>of</strong> the department.<br />

(2) In its discretion, the department may cause<br />

notice <strong>of</strong> any such revocation to be published in one<br />

or more newspapers <strong>of</strong> general circulation published<br />

in this state.<br />

(3) Upon suspension or revocation <strong>of</strong> its certificate<br />

<strong>of</strong> authority, an association and its sales representatives<br />

in their representative capacities shall not<br />

solicit or write any new contracts in this state during<br />

the period <strong>of</strong> any such suspension or revocation, nor<br />

after such revocation renew any business previously<br />

written.<br />

History.-s. 11, ch. 61-387; 88. 13, 35, ch. 69-106; s. 21, ch. 78-95; s. 2, ch.<br />

81-318; ss. 10, 30, 31, ch. 83-314.<br />

'Note.-Expires October I, 1993, pursuant to s. 31, ch. 83-314, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

'638.121 Duration <strong>of</strong> suspension; obligations<br />

<strong>of</strong> association during suspension period; reinstatement.-<br />

(1) The suspension <strong>of</strong> the certificate <strong>of</strong> authority<br />

<strong>of</strong> an association shall be for a period not to exceed 1<br />

year, as specified by the department in the order <strong>of</strong><br />

suspension. The department may subsequently<br />

shorten or rescind a suspension or the order upon<br />

which the suspension is based.<br />

(2) During the period <strong>of</strong> suspension, the association<br />

shall file its annual statement and pay fees, licenses,<br />

and taxes as required under this chapter as if<br />

the certificate <strong>of</strong> authority were continued in full<br />

force.<br />

(3) Upon expiration <strong>of</strong> the suspension period, if<br />

within such period the certificate <strong>of</strong> authority has not<br />

otherwise terminated, the certificate <strong>of</strong> authority <strong>of</strong><br />

the association shall automatically be reinstated un-<br />

753<br />

less the department finds that the causes <strong>of</strong> the suspension<br />

have not been removed, or that the association<br />

is otherwise not in compliance with the requirements<br />

<strong>of</strong> this chapter.<br />

(4) Upon reinstatement <strong>of</strong> the certificate <strong>of</strong> authority<br />

<strong>of</strong> an association or insurer following suspension,<br />

the authority <strong>of</strong> its sales representatives in this<br />

state to represent the association or insurer shall<br />

likewise be reinstated. The department shall promptly<br />

notify the association or insurer and its sales representatives<br />

in this state <strong>of</strong> record in the <strong>of</strong>fice <strong>of</strong> the<br />

department <strong>of</strong> the reinstatement.<br />

History.-B. 12, ch. 61-387; BS. 13, 35, ch. 69-106; B. 2, ch. 81-318; BB. 11, 30,<br />

31, ch. 83-314.<br />

'Note.-Expires October I, 1993, pursuant to B. 31, ch. 83-314, and is Bcheduled<br />

for review pursuant to B. 11.61 in advance <strong>of</strong> that date.<br />

'638.122 Administrative fine in lieu <strong>of</strong> suspension<br />

or revocation <strong>of</strong> certificate <strong>of</strong> authority.<br />

(1) If the department finds that one or more<br />

grounds exist for the revocation or suspension <strong>of</strong> a<br />

certificate <strong>of</strong> authority issued under this chapter, the<br />

department may, in lieu <strong>of</strong> such suspension or revocation,<br />

impose a fine upon the insurer or ambulance<br />

service association.<br />

(2) With respect to any nonwillful violation, such<br />

fine may not exceed $500 per violation. In no event<br />

may such fine exceed an aggregate amount <strong>of</strong> $2,500<br />

for all non willful violations arising out <strong>of</strong> the same<br />

action. When an ambulance service association discovers<br />

a non willful violation, the association shall<br />

correct the violation and, if restitution is due, make<br />

restitution to all affected persons. Such restitution<br />

shall include interest at 12 percent per year from either<br />

the date <strong>of</strong> the violation or the date <strong>of</strong> inception<br />

<strong>of</strong> the affected person's policy, at the option <strong>of</strong> the<br />

association. The restitution may be a credit against<br />

future premiums due, provided the interest accumulates<br />

until the premiums are due. If the amount <strong>of</strong><br />

restitution due to any person is $50 or more, and the<br />

association wishes to credit it against future premiums,<br />

it shall notify such person that he may receive a<br />

check instead <strong>of</strong> a credit. If the credit is on a policy<br />

which is not renewed, the association shall pay the<br />

restitution to the person to whom it is due.<br />

(3) With respect to any knowing and willful violation<br />

<strong>of</strong> a lawful order or rule <strong>of</strong> the department or a<br />

provision <strong>of</strong> this chapter, the department may impose<br />

a fine upon the ambulance service association in<br />

an amount not to exceed $2,000 for each such violation.<br />

In no event may such fine exceed an aggregate<br />

amount <strong>of</strong> $10,000 for all knowing and willful violations<br />

arising out <strong>of</strong> the same action. In addition to<br />

such fines, the association shall make restitution<br />

when due in accordance with the provisions <strong>of</strong> subsection<br />

(2).<br />

(4) The failure <strong>of</strong> an ambulance service association<br />

to make restitution when due as required under<br />

this section constitutes a willful violation <strong>of</strong> this<br />

chapter. However, if a corporation in good faith is uncertain<br />

as to whether any restitution is due or as to<br />

the amount <strong>of</strong> such restitution, it shall promptly notify<br />

the department <strong>of</strong> the circumstances, and the<br />

failure to make restitution pending a determination<br />

there<strong>of</strong> will not constitute a violation <strong>of</strong> this chapter.<br />

History.-ss. 12, 31, ch. 83-314.<br />

'Note.-Expires October I, 1993, pursuant to B. 31, ch. 83-314, and is scheduled<br />

for review purBuant to s. 11.61 in advance <strong>of</strong> that date.


Ch.638 AMBULANCE SERVICE CONTRACTS F.S.<strong>1983</strong><br />

1638.125 Unfair trade practices.-Every ambulance<br />

service association and its representatives<br />

and employees shall be subject to the provisions <strong>of</strong><br />

part VIII <strong>of</strong> chapter 626 (unfair insurance trade practices).<br />

History.- ss. 13, 31, ch. 83-314.<br />

'Note_-Expires October 1, 1993, pursuant to s. 31, ch. 83-314, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1638.131 Filing <strong>of</strong> contracts, forms, and<br />

rates.-<br />

(1) No contract form nor related form may be issued<br />

or used in this state unless it has been filed with<br />

and approved by the department.<br />

(2) Every such filing shall be made not less than<br />

30 days in advance <strong>of</strong> issuance or use. At the expiration<br />

<strong>of</strong> 30 days from the date <strong>of</strong> filing, a form so filed<br />

shall be deemed approved unless prior thereto it has<br />

been affirmatively approved or disapproved by written<br />

order <strong>of</strong> the department. The department may<br />

extend by not more than an additional 15 days the<br />

period within which it may so affirmatively approve<br />

or disapprove any such form by giving notice <strong>of</strong> such<br />

extension before the expiration <strong>of</strong> the initial 30-day<br />

period. At the expiration <strong>of</strong> any such period as so extended<br />

and in the absence <strong>of</strong> prior affirmative approval<br />

or disapproval, any such form shall be deemed<br />

approved.<br />

(3) In addition, each ambulance service association<br />

or insurer shall file with the department for informational<br />

purposes the rate to be charged for each<br />

contract and the premium, including all modifications<br />

<strong>of</strong> rates and premiums, to be paid by the contract<br />

holder. Every filing shall state the proposed effective<br />

date <strong>of</strong> the rate to be charged. Such filing<br />

shall be made not fewer than 30 days prior to its effective<br />

date. No rate or modification <strong>of</strong> a rate or premium<br />

shall be used unless filed.<br />

History_-s. 13, ch. 61-387; ss. 13, 35, ch. 69-106; s. 2, ch. 81-318; ss. 14, 30,<br />

31, ch. 83-314.<br />

'Note.-Expires October 1, 1993, pursuant to s. 31, ch. 83-314, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1638.141 Tax on premiums and assessments.<br />

(1) In addition to the taxes provided for in this<br />

chapter for ambulance service associations, and license<br />

taxes as provided in the insurance code as to<br />

insurers, each such association and insurer shall, annually<br />

on or before March 1, file with the department<br />

its annual statement, in a form as prescribed and furnished<br />

by the department, showing all premiums or<br />

assessments received by it from contract holders in<br />

this state during the preceding calendar year, and<br />

shall pay to the Treasurer a tax in an amount equal<br />

to 2 percent <strong>of</strong> the gross amount <strong>of</strong> such premiums or<br />

assessments. The same exemptions and credits as set<br />

forth in ss. 624.512 and 624.514 allowed to insurers<br />

shall apply to insurers and ambulance service associations<br />

under this chapter.<br />

(2) Premiums and assessments received by insurers<br />

and taxed under this section are not subject to<br />

any premium tax provided for in the insurance code.<br />

History.-s_ 14, ch. 61-387; s. 30, ch. 65-269; ss. 13, 35, ch_ 69-106; s. 2, ch.<br />

81 -318; ss. 15, 30, 31, ch. 83-314.<br />

'Note.-Expires October 1, 1993, pursuant to s. 31, ch. 83-314, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

754<br />

1638.151 Examination <strong>of</strong> associations.-Ambulance<br />

service associations shall be subject to periodic<br />

examination by the department in the same<br />

manner and subject to the same terms and conditions<br />

as apply to insurers under part II <strong>of</strong> chapter 624.<br />

History.-s. 15, ch. 61-387; ss. 13, 35, ch. 69-106; s. 2, ch. 81-318; ss_ 16, 30,<br />

31, ch. 83-314.<br />

'Note.-Expires October 1, 1993, pursuant to s. 31, ch. 83-314, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1638.161 Service <strong>of</strong> process.-Ambulance service<br />

associations shall be subject to service <strong>of</strong> process<br />

in the same manner and subject to the same terms,<br />

conditions, and fees as apply to insurers under chapter<br />

624.<br />

ffistory.-s. 16, ch. 61-387; ss. 13, 35, ch. 69-106; s. 2, ch. 81-318; 88. 17, 30,<br />

31, ch. 83-314.<br />

'Note.-Expires October 1, 1993, pursuant to s. 31, ch. 83-314, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1638.181 Registration <strong>of</strong> sales representatives.-Every<br />

ambulance service association or insurer<br />

shall on forms prescribed by the department<br />

register, on or before October 1 <strong>of</strong> each year, the<br />

name and business <strong>of</strong>fice address <strong>of</strong> each sales representative<br />

employed by it, and shall within 30 days after<br />

termination <strong>of</strong> the employment notify the department<br />

<strong>of</strong> such termination. Any sales representative<br />

employed subsequent to the October 1 filing date<br />

shall be registered with the department within 10<br />

days after such employment. No employee or sales<br />

representative <strong>of</strong> an ambulance service association or<br />

insurer shall directly or indirectly solicit or negotiate<br />

insurance contracts, or hold himself out in any manner<br />

to be an insurance agent or solicitor, unless so<br />

qualified and licensed therefor under the insurance<br />

code.<br />

History.-s. 18, ch. 61-387; ss. 13, 35, ch. 69-106; s. 2, ch. 81-318; ss. 19, 30,<br />

31, ch. 83-314.<br />

'Note.-Expires October 1, 1993, pursuant to s. 31, ch_ 83-314, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1638.191 Grounds for compulsory refusal,<br />

suspension, or revocation <strong>of</strong> registration <strong>of</strong><br />

sales representative.-The department shall<br />

deny, suspend, revoke, or refuse to renew the registration<br />

<strong>of</strong> any sales representative if it finds that, as<br />

to the sales representative, anyone or more <strong>of</strong> the<br />

following grounds exist:<br />

(1) Material misstatement, misrepresentation, or<br />

fraud in registration.<br />

(2) Willful use <strong>of</strong> the registration to circumvent<br />

any <strong>of</strong> the requirements or prohibitions <strong>of</strong> this chapter.<br />

(3) Willful misrepresentation or willful deception<br />

with regard to any contract, done either in person or<br />

by any form <strong>of</strong> dissemination <strong>of</strong> information or advertising.<br />

(4) Material misrepresentation to a contract<br />

holder or other interested party <strong>of</strong> the terms and coverage<br />

<strong>of</strong> a contract with intent and for the purpose <strong>of</strong><br />

effecting settlement <strong>of</strong> such claim on less favorable<br />

terms than those provided in and contemplated by<br />

the contract in the adjustment <strong>of</strong> claims arising out<br />

<strong>of</strong> any contract.<br />

(5) Demonstrated lack <strong>of</strong> fitness or trustworthiness<br />

to engage in the business <strong>of</strong> ambulance service<br />

contracts.


Ch.638 AMBULANCE SERVICE CONTRACTS F.S.<strong>1983</strong><br />

contracts; or otherwise to engage in the business <strong>of</strong><br />

insurance unless the association is authorized as an<br />

insurer under a certificate <strong>of</strong> authority issued by the<br />

department under the insurance code <strong>of</strong> this state.<br />

Hi.tory.-s. 24, cb. 61-387; ... 13, 35, ch. 69-106; s. 2, cb. 81-318; ... 25, 30,<br />

31, cb. 83-314.<br />

'Note.-Expires October 1, 1993, pursuant to s. 31, cb. 83-314, and is scbeduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1638.251 Fronting not permitted.-No insurer<br />

or ambulance service association shall act as a fronting<br />

company for any unauthorized insurer or ambulance<br />

service association. A "fronting company" is an<br />

insurer or ambulance service association which by reinsurance<br />

or otherwise generally transfers to one or<br />

more unauthorized insurers or ambulance service associations<br />

the risk <strong>of</strong> loss under ambulance service<br />

contracts written by it in this state.<br />

Hi.tory.-s. 25, ch. 61-387; s. 2, ch. 81-318; as. 26, 30, 31, cb. 83-314.<br />

'Note.-Expires October 1, 1993, pursuant to s. 31, cb. 83-314, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1638.261 Certain ambulance service associations'<br />

relations with funeral directors prohibited.-<br />

(1) No ambulance service association shall permit<br />

any funeral director or undertaker, or any member <strong>of</strong><br />

his immediate family, to directly or indirectly by association<br />

or incorporation to act as the representative,<br />

adjuster, claim agent, special claim agent, sales<br />

representative, or agent for such association in soliciting,<br />

negotiating, or effecting ambulance service contracts<br />

on any plan or <strong>of</strong> any nature issued by such association<br />

or in collecting premiums from holders <strong>of</strong><br />

any such contracts.<br />

(2) No ambulance service association shall affix,<br />

or permit to be affixed, advertising matter <strong>of</strong> any<br />

kind or character <strong>of</strong> any funeral director or undertaker<br />

to any ambulance service contracts or circulate, or<br />

permit to be circulated, any such advertising matter<br />

756<br />

with such contracts, or attempt in any manner or<br />

form to influence contract holders <strong>of</strong> the association<br />

to employ the services <strong>of</strong> any particular funeral director<br />

or undertaker.<br />

(3) No ambulance service association shall maintain<br />

an <strong>of</strong>fice or place <strong>of</strong> business, or permit its agent<br />

to maintain an <strong>of</strong>fice or place <strong>of</strong> business, in the <strong>of</strong>fice'<br />

establishment, or place <strong>of</strong> business <strong>of</strong> any funeral<br />

director or undertaker in this state.<br />

History.-s. 26, cb. 61-387; s. 2, cb. 81-318; ... 27, 30, 31, cb. 83-314.<br />

'Note.-Expires October 1, 1993, pursuant to s. 31, cb. 83-314, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1638.271 Penalty for violation.-In addition<br />

to any applicable denial <strong>of</strong>, suspension <strong>of</strong>, revocation<br />

<strong>of</strong>, or refusal to renew any certificate <strong>of</strong> authority,<br />

any person who knowingly makes a false or otherwise<br />

fraudulent application for a certificate <strong>of</strong> authority or<br />

registration under this chapter, or who knowingly violates<br />

any provision <strong>of</strong> this chapter, is guilty <strong>of</strong> a misdemeanor<br />

<strong>of</strong> the second degree, punishable as provided<br />

in s. 775.082 or s. 775.083. Each instance <strong>of</strong> violation<br />

shall be considered a separate <strong>of</strong>fense.<br />

History.-s. 27, ch. 61-387; s. 663, cb. 71-138; s. 2, cb. 81-318; as. 28, 30, 31,<br />

cb. 83-314.<br />

'Note.-Expires October 1, 1993, pursuant to s. 31, ch. 83-314, and is scbeduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> tbat date.<br />

1638.282 Investigatory records.-All active<br />

investigatory records <strong>of</strong> the department made or received<br />

pursuant to this chapter, and any active examination<br />

records necessary to complete an active investigation,<br />

shall be confidential and shall not be subject<br />

to public inspection under the provisions <strong>of</strong> chapter<br />

119 for so long as reasonably necessary to complete<br />

the investigation.<br />

History.-as. 29, 31, cb. 83-314.<br />

'Note.-Expires October 1, 1993, pursuant to s. 31, cb. 83-314, and is scbeduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.


F.S.<strong>1983</strong> PRENEED FUNERAL MERCHANDISE OR SERVICE CONTRACTS Ch.639<br />

639.07<br />

639.08<br />

639.09<br />

639.10<br />

639.105<br />

639.11<br />

639.13<br />

639.14<br />

639.15<br />

639.16<br />

639.162<br />

639.165<br />

639.17<br />

639.185<br />

639.20<br />

639.21<br />

639.22<br />

639.23<br />

639.24<br />

639.25<br />

639.26<br />

639.27<br />

639.28<br />

639.29<br />

639.30<br />

639.33<br />

CHAPTER 639<br />

PRE NEED FUNERAL MERCHANDISE OR SERVICE CONTRACTS<br />

Definitions.<br />

Forms and rules.<br />

Certificate <strong>of</strong> authority required.<br />

Certificate <strong>of</strong> authority; annual statement;<br />

renewal.<br />

Approval <strong>of</strong> forms.<br />

Disposition <strong>of</strong> proceeds received on contracts.<br />

Cancellation <strong>of</strong>, or default on, preneed contracts.<br />

Payment <strong>of</strong> funds upon death <strong>of</strong> named<br />

beneficiary.<br />

Examinations and investigations.<br />

Denial, refusal to renew, revocation, or suspension<br />

<strong>of</strong> certificate <strong>of</strong> authority.<br />

Administrative fine in lieu <strong>of</strong> revocation or<br />

suspension <strong>of</strong> certificate <strong>of</strong> authority.<br />

Dissolution or liquidation.<br />

Penalty.<br />

Preneed sales; registration <strong>of</strong> sales agents<br />

and sales persons.<br />

Provisions not applicable to cemeteries<br />

holding certificate <strong>of</strong> authority under<br />

<strong>Florida</strong> Cemetery Act.<br />

Acceptability <strong>of</strong> funeral merchandise.<br />

Unfair methods <strong>of</strong> competition and unfair<br />

or deceptive acts or practices prohibited.<br />

Unfair methods <strong>of</strong> competition and unfair<br />

or deceptive acts or practices defined.<br />

Power <strong>of</strong> department.<br />

Prohibited practices; hearings, witnesses,<br />

appearances, production <strong>of</strong> books, and<br />

service <strong>of</strong> process.<br />

Cease and desist and penalty orders.<br />

Appeals from the department.<br />

Penalty for violation <strong>of</strong> cease and desist order.<br />

Injunctive proceedings.<br />

Civil liability.<br />

Investigatory records confidential.<br />

'639.07 Definitions.-As used in this chapter,<br />

the term:<br />

(1) "Department" means the Department <strong>of</strong> Insurance<br />

<strong>of</strong> this state.<br />

(2) "Direct disposer" means any person who is<br />

registered in this state to practice direct disposition<br />

pursuant to the provisions <strong>of</strong> chapter 470.<br />

(3) "Final disposition" means the final disposal <strong>of</strong><br />

a dead human body whether by interment, entombment,<br />

burial at sea, cremation, or any other means.<br />

(4) "Funeral director" means any person licensed<br />

in this state to practice funeral directing pursuant to<br />

the provisions <strong>of</strong> chapter 470.<br />

(5) "Funeral merchandise" means any personal<br />

property <strong>of</strong>fered or sold by any person for use in connection<br />

with the final disposition or memorialization<br />

<strong>of</strong> a dead human body.<br />

(6) "Preneed contract" means a contract to furnish<br />

funeral merchandise or service in. the future.<br />

757<br />

(7) "Service" means any service <strong>of</strong>fered or provided<br />

by any person in connection with the final disposition<br />

<strong>of</strong> a dead human body.<br />

History.-s. 1, cb. 28211, 1953; 88. 2, 3, cb. 65-393; 88. 13, 35, ch. 69-106; s.<br />

271, cb. 71-377; s. 1, cb. 77-438; s. 245, cb. 79-400; s. 34, cb. 80-238; s. 2, cb.<br />

81-318; 88. 1, 31, 32, cb. 83-316.<br />

'Note.-Expires October 1, 1993, pursuant to s. 32, cb. 83-316, and is scbeduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

'639.08 Forms and rules.-The administration<br />

and enforcement <strong>of</strong> the provisions <strong>of</strong> this chapter are<br />

vested in the department, which shall prepare and<br />

furnish all forms necessary under this chapter, including<br />

forms for applications for certificates <strong>of</strong> authority,<br />

for renewals there<strong>of</strong>, for annual statements,<br />

and for other required reports. The department may<br />

adopt reasonable rules necessary to effect any <strong>of</strong> its<br />

statutory duties pursuant to this chapter.<br />

History.-s. 3, ch. 28211, 1953; s. 24, cb. 57-1; s. 4, cb. 65-393; 88.13,35, ch.<br />

69-106; s. 2, cb. 77-438; s. 2, cb. 81-318; 88. 2, 31, 32, cb. 83-316.<br />

'Note.-Expires October 1, 1993, pursuant to s. 32, cb. 83-316, and is scbeduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> tbat date.<br />

'639.09 Certificate <strong>of</strong> authority require d.­<br />

(1) No person may sell a preneed contract without<br />

first having a valid certificate <strong>of</strong> authority.<br />

(2)(a) No person may receive any funds for payment<br />

on a preneed contract who does not hold a valid<br />

certificate <strong>of</strong> authority.<br />

(b) The provisions <strong>of</strong> paragraph (a) do not apply<br />

to any trust company or to any national or state bank<br />

or savings and loan association having trust powers<br />

which company, bank, or association receives any<br />

money in trust pursuant to the sale <strong>of</strong> a preneed contract.<br />

(3) No person may obtain a certificate <strong>of</strong> authority<br />

under this chapter for the preneed sale <strong>of</strong> services<br />

unless such person holds a license as a funeral establishment<br />

or as a direct disposal establishment under<br />

chapter 470.<br />

History.-s. 4, cb. 28211, 1953; s. 24, cb. 57-1; s. 5, cb. 65-393; 88.13,35, cb.<br />

69-106; s. 3, ch. 77-438; s. 2, ch. 81-318; 88. 3,31, 32, ch. 83-316.<br />

'Note.-Expires October 1, 1993, pursuant to s. 32, ch. 83-316, and is scheduled<br />

for review pursuant 10 s. 11.61 in advance <strong>of</strong> that date.<br />

'639.10 Certificate <strong>of</strong> authority; annual<br />

statement; renewal.-<br />

(1) An application to the department for a certificate<br />

<strong>of</strong> authority shall be accompanied by the statement<br />

and other matters described in this section in<br />

the form prescribed by the department. Annually<br />

thereafter on or before March 1, the person authorized<br />

to engage in the sale <strong>of</strong> preneed contracts shall<br />

file with the department a full and true statement <strong>of</strong><br />

his financial condition, transactions, and affairs as <strong>of</strong><br />

the preceding December 31 or at such other time or<br />

times as the department may provide by rule, together<br />

with information and data which may be required<br />

by the department.<br />

(2) The statement shall include the following:<br />

(a) The types <strong>of</strong> preneed contracts proposed to be<br />

written.<br />

(b) The name and address <strong>of</strong> the place <strong>of</strong> business<br />

<strong>of</strong> the person <strong>of</strong>fering to write preneed contracts.


Ch.639 PRENEED FUNERAL MERCHANDISE OR SERVICE CONTRACTS F.S.<strong>1983</strong><br />

(c) Evidence that the person <strong>of</strong>fering the statement:<br />

1. Has the ability to discharge his liabilities as<br />

they become due in the normal course <strong>of</strong> business<br />

and has sufficient funds available during the calendar<br />

year to perform his obligations under his contract;<br />

2. Has complied with the trust requirements for<br />

the funds received under contracts issued by himself<br />

as hereinafter described;<br />

3. Has disbursed interest, dividends, or accretions<br />

earned by trust funds, in accordance with this<br />

chapter and rules promulgated thereunder; and<br />

4. Has complied with this chapter and any rules<br />

<strong>of</strong> the department.<br />

(d) Any other information considered necessary<br />

by the department to meet its responsibilities under<br />

this chapter.<br />

(3) If the person is an individual, the statement<br />

shall be sworn by him; if a firm or association, by all<br />

members there<strong>of</strong>; or, if a corporation, by the president<br />

and secretary there<strong>of</strong>.<br />

(4) The fee payable to the department for issuance<br />

<strong>of</strong> the origmal certificate <strong>of</strong> authority and each<br />

annual renewal there<strong>of</strong> shall be $50, which sum shall<br />

accompany each application for an original certificate<br />

and, thereafter, each annual statement. The fee shall<br />

be payable to the Insurance Commissioner's Regulatory<br />

Trust Fund.<br />

(5) Upon the department's being satisfied that<br />

the statement and matters which may accompany it<br />

meet the requirements <strong>of</strong> this chapter and <strong>of</strong> its<br />

rules, it shall issue or renew the certificate <strong>of</strong> authority<br />

if upon investigation by the department it appears<br />

that the principals, including directors, <strong>of</strong>ficers,<br />

stockholders, employees, and agents <strong>of</strong> such person,<br />

are <strong>of</strong> good moral character and have reputations for<br />

fair dealing in business matters.<br />

(6) The certificate <strong>of</strong> authority shall expire armually<br />

on June 1, unless renewed, or at such other time<br />

or times as the department may provide by rule.<br />

(7) An application for an initial certificate <strong>of</strong> authority<br />

or for the armual renewal <strong>of</strong> the certificate<br />

shall disclose the existence <strong>of</strong> all preneed contracts<br />

for service or merchandise funded by any method<br />

other than a method permitted by this chapter,<br />

which contracts are known to the applicant and name<br />

the applicant or his business as the beneficiary upon<br />

the death <strong>of</strong> the purchaser <strong>of</strong> the preneed contract.<br />

Such disclosure shall include the name and address<br />

<strong>of</strong> the contract purchaser, the name and address <strong>of</strong><br />

the institution where such funds are deposited, and<br />

the number used by the institution to identify the account.<br />

With respect to contracts entered into before<br />

January 1, <strong>1983</strong>, the department may not deny or refuse<br />

to renew a certificate <strong>of</strong> authority solely on the<br />

basis <strong>of</strong> such disclosure. The department may not require<br />

the purchaser <strong>of</strong> any such contract to liquidate<br />

the account if such account was established before<br />

July 1, 1965. The department may use the information<br />

disclosed to notify the contract purchaser and<br />

the institution in which such funds are deposited<br />

should the holder <strong>of</strong> a certificate <strong>of</strong> authority be unable<br />

to fulfill the requirements <strong>of</strong> the contract.<br />

History.-8. 5, ch. 28211, 1953; 88. 6, 7, ch. 65-393; 88_ 13, 35, ch. 69-106; 8. 4,<br />

ch. 77-438; 8. 169, cb. 79-164; 8. 246, ch. 79-400; 8_ 2, ch. 81-318; 88. 4, 31, 32, ch.<br />

83-316.<br />

'Note.-Expir .. October I, 1993, pursuant to 8. 32, ch. 83-316, and is scheduled<br />

for review pursuant to 8. 11.61 in advanoe <strong>of</strong> that date.<br />

Cf.-8. 624.523 Insuranoe Commissioner'8 Regulatory Trust Fund.<br />

758<br />

1639.105 Approval <strong>of</strong> forms.-Preneed contract<br />

forms and related forms shall be med with and<br />

approved by the department, as provided in s.<br />

627.410. The department may not approve any preneed<br />

contract form that does not provide for sequential<br />

numbering thereon.<br />

History.-88. 5, 32, ch. 83-316.<br />

'Note.-Expire8 October I, 1993, pursuant to 8. 32, ch. 83-316, and is scheduled<br />

for review pursuant to 8. 11.61 in advance <strong>of</strong> that date.<br />

639.11 Disposition <strong>of</strong> proceeds received on<br />

contracts.-<br />

1(1) All <strong>of</strong> the funds paid to or collected by any<br />

person under a preneed contract for services, and 70<br />

percent <strong>of</strong> all funds paid to or collected by any person<br />

under a preneed contract for funeral merchandise,<br />

shall, within 30 days after the end <strong>of</strong> the calendar<br />

month in which payment is received, be deposited in<br />

this state under the terms <strong>of</strong> a trust instrument entered<br />

into with a national or state bank or savings<br />

and loan association having trust powers or a trust<br />

company. The trust agreement shall be submitted to<br />

the department for approval and filing. No interest,<br />

dividend, or accretion on the funds deposited in trust<br />

which has been credited to an individual contract<br />

may be withdrawn unless an amount equal to all payments<br />

on the contract is on deposit and maintained<br />

in the trust. Funds deposited pursuant to this section<br />

may not be loaned to a certificateholder or to any<br />

person directly or indirectly engaged in the burial, funeral<br />

home, or cemetery business.<br />

1(2) The delivery <strong>of</strong> funeral merchandise before<br />

the death <strong>of</strong> the person for whom it is purchased does<br />

not constitute performance or fulfillment, either<br />

wholly or in part, <strong>of</strong> any preneed contract entered<br />

into after July 1, 1977.<br />

1(3) At reasonable times, the trustee may disburse<br />

income on, and appreciation <strong>of</strong>, trust funds to<br />

a certificateholder under this chapter. Such disbursement<br />

<strong>of</strong> income and appreciation shall be made in accordance<br />

with the terins <strong>of</strong> the trust instrument and<br />

the preneed contract subject to the provisions <strong>of</strong> this<br />

chapter. The trustee shall make regular valuations <strong>of</strong><br />

assets it holds in trust and provide a report <strong>of</strong> such<br />

valuations to the certificateholder at least quarterly.<br />

Any person who withdraws appreciation in the value<br />

<strong>of</strong> trust, other than the pro rata portion <strong>of</strong> such appreciation<br />

which may be withdrawn upon the death<br />

<strong>of</strong> a contract beneficiary or upon cancellation <strong>of</strong> a<br />

preneed contract, shall be required to make additional<br />

deposits from his own funds to restore the aggregate<br />

value <strong>of</strong> assets to the value <strong>of</strong> funds deposited in<br />

trust, but excluding from the funds deposited those<br />

funds paid out upon preneed contracts which such<br />

person has fully performed or which have been otherwise<br />

withdrawn, as provided for in this chapter.<br />

(4) This section, as amended by s. 6 <strong>of</strong> chapter<br />

83-316, Laws <strong>of</strong> <strong>Florida</strong>, applies only to preneed contracts<br />

entered into on or after October 1, <strong>1983</strong>.<br />

History.-8. 6, ch. 28211, 1953; 8. 8, ch. 65-393; 8. 5, ch. 77-438; 8. 247, ch.<br />

79-400; 8. 2, ch. 81-318; ... 6, 31, 32, 33, ch. 83-316.<br />

'Note.-Expir .. October I, 1993, pursuant to 8. 32, ch. 83-316, and is scheduled<br />

for review pursuant to 8. 11.61 in advanoe <strong>of</strong> that date.<br />

639.13 Cancellation <strong>of</strong>, or default on, preneed<br />

contracts.-


Ch.639 PRENEED FUNERAL MERCHANDISE OR SERVICE CONTRACTS F.S.<strong>1983</strong><br />

(g) Upon proper request, willful failure to cancel<br />

a contract or refund that part <strong>of</strong> the amount paid on<br />

the contract as required by s. 639.13.<br />

(h) Willful failure to secure the release, upon the<br />

death <strong>of</strong> a beneficiary, <strong>of</strong> the entire amount received<br />

on a contract as required by s. 639.14.<br />

(i) Refusal to produce records in connection with<br />

the business.<br />

(j) Revocation, suspension, or denial <strong>of</strong> licensure<br />

to sell preneed contracts by a licensing authority <strong>of</strong><br />

another jurisdiction.<br />

(k) Being convicted or found guilty, regardless <strong>of</strong><br />

adjudication, <strong>of</strong> a crime in any jurisdiction which directly<br />

relates to the sale <strong>of</strong> preneed contracts.<br />

(1) Solicitation by the certificateholder or his<br />

agents, employees, or representatives through the use<br />

<strong>of</strong> fraud, undue influence, intimidation, overreaching,<br />

or any other form <strong>of</strong> vexatious conduct.<br />

(2) The department may deny, refuse to renew,<br />

suspend, or revoke the certificate <strong>of</strong> authority <strong>of</strong> a<br />

person to issue preneed contracts upon a determination<br />

that the person has violated any provision <strong>of</strong> this<br />

chapter or rule or order <strong>of</strong> the department for which<br />

suspension is not mandatory.<br />

(3) A suspension or revocation <strong>of</strong> the certificate<br />

<strong>of</strong> authority shall be by order <strong>of</strong> the department. A<br />

person whose certificate <strong>of</strong> authority has been suspended<br />

or revoked may not solicit or write any new<br />

business in this state during the period <strong>of</strong> any such<br />

suspension or revocation.<br />

(4) In its discretion, the department may cause<br />

notice <strong>of</strong> any such suspension or revocation to be<br />

published in one or more newspapers <strong>of</strong> general circulation<br />

published in this state.<br />

(5) The suspension <strong>of</strong> a certificate <strong>of</strong> authority<br />

shall be for such period, not to exceed 1 year, as is<br />

fixed by the department in the order <strong>of</strong> suspension,<br />

unless the department shortens or rescinds such suspension<br />

or unless the order upon which the suspension<br />

3is based is modified, rescinded, or reversed.<br />

(6) During the period <strong>of</strong> suspension, the person<br />

whose certificate <strong>of</strong> authority has been suspended<br />

shall file the annual statement and pay license fees as<br />

required under this chapter as if the certificate had<br />

continued in full force.<br />

(7) Upon expiration <strong>of</strong> the suspension period, if<br />

within such period the certificate <strong>of</strong> authority has not<br />

otherwise terminated, the certificate <strong>of</strong> authority <strong>of</strong><br />

the person whose certificate <strong>of</strong> authority has been<br />

suspended shall automatically be reinstated unless<br />

the department finds that the causes <strong>of</strong> the suspension<br />

have not been removed or that such person is<br />

otherwise not in compliance with the requirements <strong>of</strong><br />

this chapter. If not so reinstated automatically, the<br />

certificate <strong>of</strong> authority shall be deemed to have expired<br />

as <strong>of</strong> the end <strong>of</strong> the suspension period or upon<br />

the failure <strong>of</strong> the person whose certificate <strong>of</strong> authority<br />

has been suspended to continue the certificate<br />

during the suspension period, whichever event first<br />

occurs.<br />

Hi8tory.-s. 11, ch. 28211, 1953; s. 13, ch. 65·393; ... 11, 13, 35, ch. 69-106; s.<br />

9, ch. 77-438; s. 2, ch. 81-318; ... 10,31,32, ch. 83-316.<br />

'Note.-Expires October I, 1993, pursuant to s. 32, ch. 83-316, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

'Note.-The words "and to disburse" were substituted by the editors for the<br />

word "disbursed."<br />

'Note.-The words "is based" were inserted by the editors.<br />

760<br />

1639.162 Administrative ime in lieu <strong>of</strong> revocation<br />

or suspension <strong>of</strong> certificate <strong>of</strong> authority.<br />

(1) If the department finds that one or more<br />

grounds exist for the discretionary suspension or revocation<br />

<strong>of</strong> a certificate <strong>of</strong> authority issued under this<br />

chapter, it may, in lieu <strong>of</strong> such suspension or revocation,<br />

impose a fine upon the certificateholder in an<br />

amount not to exceed $1,000 for each nonwillful violation<br />

and in an amount not to exceed $10,000 for<br />

each willful violation.<br />

(2) The department may grant not more than 30<br />

days from the date <strong>of</strong> the order for the payment <strong>of</strong><br />

any fine.<br />

(3) The fine shall be deposited into the Insurance<br />

Commissioner's Regulatory Trust Fund.<br />

Hi8tory.-ss. 13, 32, ch. 83-316.<br />

'Note.-Expires October I, 1993, pursuant to s. 32, ch. 83-316, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1639.165 Dissolution or liquidation.-Any<br />

dissolution or liquidation <strong>of</strong> a certificateholder shall<br />

be under the supervision <strong>of</strong> the department, which<br />

shall have all powers with respect thereto granted to<br />

it under the laws <strong>of</strong> the state with respect to the dissolution<br />

and liquidation <strong>of</strong> companies pursuant to<br />

chapter 631, as applicable. The venue <strong>of</strong> delinquency<br />

proceedings against a certificateholder shall be in the<br />

circuit court in the judicial circuit <strong>of</strong> the certificateholder's<br />

principal place <strong>of</strong> business.<br />

Hi8tory.-ss. 12, 32, ch. 83-316.<br />

'Note.-Expires October I, 1993, pursuant to s. 32, ch. 83·316, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1639.17 Penalty.-Any person who violates any<br />

<strong>of</strong> the provisions <strong>of</strong> this chapter or the rules promulgated<br />

under this chapter is guilty <strong>of</strong> a felony <strong>of</strong> the<br />

third degree, punishable as provided in s. 775.082, s.<br />

775.083, or s. 775.084.<br />

Hi8tory.-s. 12, ch. 28211, 1953; s. 14, ch. 65-393; s. 664, ch. 71-136; s. 10, ch.<br />

77-438; s. 248, ch. 79-400; s. 2, ch. 81-318; ss. 14, 31, 32, ch. 83-316.<br />

'Note.-Expires October I, 1993, pursuant to s. 32, ch. 83-316, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1639.185 Preneed sales; registration <strong>of</strong> sales<br />

agents and sales persons.-<br />

(1) Any person selling preneed contracts on or after<br />

April 1, 1984, shall be registered with the department.<br />

The application for registration shall be signed<br />

by the sales agent or other sales person and by the<br />

certificateholder to whom the sales agent or sales<br />

person will be responsible. The department shall register<br />

such person upon receipt <strong>of</strong> the application and<br />

a registration fee <strong>of</strong> $40. The registration shall be renewed<br />

biennially on April 1, and each<br />

even-numbered year thereafter, upon receipt <strong>of</strong> the<br />

renewal fee <strong>of</strong> $40. The certificateholder who has registered<br />

such sales agent or sales person shall notify<br />

the department within 10 days after such person's<br />

status as sales agent or sales person has terminated.<br />

(2) Each certificateholder is subject to discipline<br />

if his sales agent or sales person violates any provision<br />

<strong>of</strong> this chapter. The department may refuse to<br />

register, or may revoke the registration <strong>of</strong>, a sales<br />

agent or sales person who has violated the provisions<br />

<strong>of</strong> this chapter.<br />

(3) All fees collected pursuant to this section


F.S.<strong>1983</strong> PRENEED FUNERAL MERCHANDISE OR SERVICE CONTRACTS Ch.639<br />

shall be payable to the Insurance Commissioner's<br />

Regulatory Trust Fund.<br />

History.-ss. 15, 32, ch. 83·316.<br />

'Note.-Expires October I, 1993, pursuant to s. 32, ch. 83·316, and is sched·<br />

uled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

'639.20 Provisions not applicable to cemeteries<br />

holding certificate <strong>of</strong> authority under<br />

<strong>Florida</strong> Cemetery Act.-The provisions <strong>of</strong> this<br />

chapter do not apply to any person who holds a license<br />

under the provisions <strong>of</strong> chapter 497 or to any<br />

person who is under any contractual relationship<br />

with any person holding such a license as pertains to<br />

any transaction coming within the purview <strong>of</strong> the<br />

<strong>Florida</strong> Cemetery Act, except that preneed funeral<br />

services and direct disposal services shall be made<br />

and proceeds placed in trust pursuant to this chapter.<br />

History.-s. 17, ch. 65·393; s. 35, ch. 80·238; s. 2, ch. 81·318; 88.20,31,32, ch.<br />

83·316.<br />

'Note.-Expires October I, 1993, pursuant to s. 32, ch. 83·316, and is sched·<br />

uled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

cf.-ch. 497 <strong>Florida</strong> Cemetery Act.<br />

'639.21 Acceptability <strong>of</strong> funeral merchandise.-Each<br />

person who engages in preneed sales <strong>of</strong><br />

funeral merchandise shall determine, and notify the<br />

purchaser in writing prior to the completion <strong>of</strong> the<br />

contract, that the merchandise being considered for<br />

purchase will be accepted in the cemetery <strong>of</strong> the purchaser's<br />

choice. The failure to comply with this chapter<br />

shall nullify the agreement, and all moneys paid<br />

in shall be returned, notwithstanding the existence <strong>of</strong><br />

any liquidated damages provision pursuant to s.<br />

639.13(2).<br />

History.-s. 13, ch. 77·438; s. 2, ch. 81·318; ss. 21, 31, 32, ch. 83·316.<br />

'Note.-Expires October I, 1993, pursuant to s. 32, ch. 83·316, and is sched·<br />

uled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1639.22 Unfair methods <strong>of</strong> competition and<br />

unfair or deceptive acts or practices prohibited.<br />

-No person shall engage in this state in any trade<br />

practice which is defined in this chapter as, or determined<br />

pursuant to s. 639.23 to be, an unfair method<br />

<strong>of</strong> competition or an unfair or deceptive act or practice.<br />

History.-ss. 22, 32, ch. 83·316.<br />

'Note.-Expires October I, 1993, pursuant to s. 32, ch. 83·316, and is sched·<br />

uled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1639.23 Unfair methods <strong>of</strong> competition and<br />

unfair or deceptive acts or practices defined.<br />

-Unfair methods <strong>of</strong> competition and unfair or deceptive<br />

acts or practices are defined as the following:<br />

(1) MISREPRESENTATION AND FALSE AD­<br />

VERTISING OF PRENEED CON­<br />

TRACT.-Knowingly making, issuing, or circulating,<br />

or causing to be made, issued, or circulated, any estimate,<br />

illustration, circular, statement, sales presentation,<br />

omission, or comparison which:<br />

(a) Misrepresents the benefits, advantages, conditions,<br />

or terms <strong>of</strong> any preneed contract.<br />

(b) Is misleading, or is a misrepresentation as to<br />

the financial condition <strong>of</strong> any person.<br />

(c) Uses any name or title <strong>of</strong> any preneed contract<br />

misrepresenting the true nature there<strong>of</strong>.<br />

(d) Is a misrepresentation for the purpose <strong>of</strong> inducing,<br />

or tending to induce, the lapse, forfeiture, ex-<br />

761<br />

change, conversion, or surrender <strong>of</strong> any preneed contract.<br />

(2) FALSE INFORMATION AND ADVERTIS­<br />

ING GENERALLY.-Knowingly making, publishing,<br />

disseminating, circulating, or placing before the<br />

public, or causing, directly or indirectly, to be made,<br />

published, disseminated, circulated, or placed before<br />

the public:<br />

(a) In a newspaper, magazine, or other publication;<br />

(b) In the form <strong>of</strong> a notice, circular, pamphlet,<br />

letter, or poster;<br />

(c) Over any radio or television station; or<br />

(d) In any other way;<br />

an advertisement, announcement, or statement containing<br />

any assertion, representation, or statement<br />

which is untrue, deceptive, or misleading with respect<br />

to any preneed contract.<br />

(3) DEFAMATION.-Knowingly making, publishing,<br />

disseminating, or circulating, directly or indirectly,<br />

or aiding, abetting, or encouraging the making,<br />

publishing, disseminating, or circulating <strong>of</strong>, any oral<br />

or written statement, or any pamphlet, circular, article,<br />

or literature, which is false or maliciously critical<br />

<strong>of</strong>, or derogatory to, any person and which is calculated<br />

to injure such person.<br />

(4) FALSE STATEMENTS AND EN­<br />

TRIES.-Knowingly:<br />

(a) Filing any false statement with any supervisory<br />

or other public <strong>of</strong>ficial;<br />

(b) Making, publishing, disseminating, or circulating<br />

any false statement;<br />

(c) Delivering any false statement to any person;<br />

(d) Placing any false statement before the public;<br />

(e) Causing, directly or indirectly, any false statement<br />

to be made, published, disseminated, circulated,<br />

delivered to any person, or placed before the public;<br />

or<br />

(f) Making any false entry <strong>of</strong> a material fact in<br />

any book, report, or statement <strong>of</strong> any person.<br />

(5) UNFAIR CLAIM SETTLEMENT PRAC­<br />

TICES.-<br />

(a) Attempting to settle a claim on the basis <strong>of</strong> a<br />

material document which was altered without notice<br />

to, or without the knowledge or consent <strong>of</strong>, the contract<br />

purchaser or his representative or legal guardian.<br />

(b) Making a material misrepresentation to a<br />

contract purchaser or his representative or legal<br />

guardian for the purpose and with the intent <strong>of</strong> effecting<br />

settlement <strong>of</strong> a claim or loss under a prepaid<br />

contract on less favorable terms than those provided<br />

in, and contemplated by, the prepaid contract; or<br />

(c) Committing or performing with such frequency<br />

as to indicate a general business practice any <strong>of</strong><br />

the following acts:<br />

1. Failing to adopt and implement standards for<br />

the proper investigation <strong>of</strong> claims;<br />

2. Misrepresenting pertinent facts or prepaid<br />

contract provisions relating to issues on coverage <strong>of</strong><br />

funeral merchandise or services;<br />

3. Failing to acknowledge and act promptly upon<br />

communications with respect to claims;<br />

4. Denying claims without conducting reasonable<br />

investigations based upon available information;


Ch.639 PRENEED FUNERAL MERCHANDISE OR SERVICE CONTRACTS F.S.<strong>1983</strong><br />

5. Failing to affirm or deny coverage <strong>of</strong> a claim<br />

upon written request <strong>of</strong> a contract purchaser or his<br />

representative or legal guardian within a reasonable<br />

time; or<br />

6. Failing to provide promptly a reasonable explanation<br />

to a contract purchaser or his representative<br />

or legal guardian <strong>of</strong> the basis, in the prepaid contract<br />

in relation to the facts or applicable law, for denial<br />

<strong>of</strong> a claim or for the <strong>of</strong>fer <strong>of</strong> a compromise settlement.<br />

(6) FAILURE TO MAINTAIN PROCEDURES<br />

FOR HANDLING COMPLAINTS.-Failing to<br />

maintain a complete record <strong>of</strong> every complaint received<br />

since the date <strong>of</strong> the last examination. For<br />

purposes <strong>of</strong> this subsection, the term "complaint"<br />

means any written communication primarily expressing<br />

a grievance.<br />

(7) DISCRIMINATORY REFUSAL TO ISSUE<br />

A CONTRACT.-Refusing to issue a contract solely<br />

because <strong>of</strong> an individual's race, color, creed, marital<br />

status, sex, or national origin.<br />

Hi8tory.-88. 23, 32, ch. 83-316.<br />

'Note.-Expires Octoher 1, 1993, pursuant to s. 32, ch. 83-316, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1639.24 Power <strong>of</strong> department.-The department<br />

has the power to examine and investigate the<br />

affairs <strong>of</strong> every certificateholder in this state to determine<br />

whether such person has engaged, or is engaging,<br />

in any unfair method <strong>of</strong> competition or in any<br />

unfair or deceptive act or practice prohibited by s.<br />

639.22.<br />

Hi8tory.-88. 24, 32, cb. 83-316.<br />

'Note.-Expires Octoher 1, 1993, pursuant to s. 32, cb. 83-316, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1639.25 Prohibited practices; hearings, witnesses,<br />

appearances, production <strong>of</strong> books, and<br />

service <strong>of</strong> process.-<br />

(1) Whenever the department has reason to believe<br />

that any person has engaged, or is engaging, in<br />

this state in any unfair method <strong>of</strong> competition or any<br />

unfair or deceptive act or practice as defined in s.<br />

639.23, or is engaging in the sale <strong>of</strong> preneed contracts<br />

without being properly licensed as required by this<br />

chapter, and that a proceeding by the department in<br />

respect thereto would be in the interest <strong>of</strong> the public,<br />

the department shall conduct or cause to have conducted<br />

a hearing in accordance with chapter 120.<br />

(2) The department or a duly empowered hearing<br />

<strong>of</strong>ficer shall, during the conduct <strong>of</strong> such hearing, have<br />

those powers enumerated in s. 120.58; however, the<br />

penalties for failure to comply with a subpoena or<br />

with an order directing discovery shall be limited to<br />

a fine not to exceed $1,000 per violation.<br />

(3) A statement <strong>of</strong> charges, notice, or order 20r<br />

other process under this chapter may be served by<br />

anyone duly authorized by the department, either in<br />

the manner provided by law for service <strong>of</strong> process in<br />

civil actions or by certifying and mailing a copy<br />

there<strong>of</strong> to the person affected by such statement, notice,<br />

or order or other process at his or its residence or<br />

principal <strong>of</strong>fice or place <strong>of</strong> business. The verified return<br />

by the person so serving such statement, notice,<br />

or order or other process, setting forth the manner <strong>of</strong><br />

the service, shall be pro<strong>of</strong> <strong>of</strong> the service; and the return<br />

postcard receipt for such statement, notice, or<br />

order or other process, certified and mailed as pro-<br />

762<br />

vided in this subsection, shall be pro<strong>of</strong> <strong>of</strong> service <strong>of</strong><br />

the statement, notice, or order or other process.<br />

HI.tory.-88. 25, 32, cb. 83-316.<br />

'Note.-Expires Octoher 1, 1993, pursuant to s. 32, cb. 83-316, and is scbeduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

INote.-The words "or other process" were inserted by the editors.<br />

1639.26 Cease and desist and penalty orders.<br />

-After the hearing provided in s. 639.25, the department<br />

shall enter a final order in accordance with s.<br />

120.59. If it is determined that the person charged<br />

has engaged in an unfair or deceptive act or practice<br />

or the unlawful transaction <strong>of</strong> preneed contracts, the<br />

department shall also issue an order requiring the violator<br />

to cease and desist from engaging in such<br />

method <strong>of</strong> competition, act, or practice or in the unlawful<br />

sale <strong>of</strong> preneed contracts. Further, the department<br />

may, at its discretion, order anyone or more <strong>of</strong><br />

the following:<br />

(1) Suspension or revocation <strong>of</strong> the charged person's<br />

license, or eligibility for any license, if he knew,<br />

or reasonably should have known, that he was in violation<br />

<strong>of</strong> this chapter.<br />

(2) An administrative penalty not to exceed<br />

$1,000 for each preneed contract <strong>of</strong>fered or effectuated,<br />

if it is determined that the person charged has<br />

provided or <strong>of</strong>fered to sell preneed contracts without<br />

proper licensure.<br />

HI8tory.-88. 26, 32, cb. 83-316.<br />

'Note.-Expires Octoher 1, 1993, pursuant to s. 32, cb. 83-316, and is scbeduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1639.27 Appeals from the department.-Any<br />

person subject to an order <strong>of</strong> the department under s.<br />

639.26 may obtain a review <strong>of</strong> such order by filing an<br />

appeal therefrom in accordance with the provisions<br />

and procedures from appeal from the orders <strong>of</strong> the<br />

department in general under s. 120.68.<br />

HI8tory.-88. 27, 32, ch. 83-316.<br />

'Note.-Expires Octoher 1, 1993, pursuant to s. 32, cb. 83-316, and is scbeduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1639.28 Penalty for violation <strong>of</strong> cease and<br />

desist order.-Any person who violates a cease and<br />

desist order <strong>of</strong> the department under s. 639.26 while<br />

such order is in effect, after notice and hearing as<br />

provided in s. 639.25, shall be subject, at the discretion<br />

<strong>of</strong> the department, to anyone or more <strong>of</strong> the following:<br />

(1) A monetary penalty <strong>of</strong> not more than $50,000<br />

as to all matters determined in such hearing.<br />

(2) Suspension or revocation <strong>of</strong> such person's certificate,<br />

or eligibility to hold a certificate.<br />

HI.tory.-88. 28, 32, ch. 83-316.<br />

'Note.-Expires Octoher 1, 1993, pursuant to s. 32, cb. 83-316, and is scbeduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1639.29 Injunctive proceedings.-In addition<br />

to the penalties and other enforcement provisions <strong>of</strong><br />

this chapter, in the event any person violates any<br />

provision <strong>of</strong> this chapter or any rule adopted or promulgated<br />

pursuant to this chapter, the department is<br />

authorized to resort to proceedings for injunction in<br />

the circuit court <strong>of</strong> the county where such person resides<br />

or has his or its principal place <strong>of</strong> business, and<br />

therein apply for such temporary and permanent orders<br />

as the department may deem necessary to restrain<br />

such person from engaging in any such activi-


Ch.641 HEALTH CARE SERVICE PROGRAMS F.S.<strong>1983</strong><br />

641.01<br />

641.02<br />

641.03<br />

641.04<br />

641.05<br />

641.06<br />

641.08<br />

641.12<br />

641.13<br />

641.14<br />

CHAPTER 641<br />

HEALTH CARE SERVICE PROGRAMS<br />

PART I HEALTH CARE SERVICES PLANS (ss. 641.01-641.14)<br />

PART II HEALTH MAINTENANCE ORGANIZATIONS (ss. 641.17-641.38)<br />

PART I<br />

HEALTH CARE<br />

SERVICES PLANS<br />

Definition and scope.<br />

Incorporation.<br />

Contracts.<br />

Certificate <strong>of</strong> authority.<br />

Amendments to charter, bylaws, contracts,<br />

rates; approval by department.<br />

Annual reports or statements.<br />

Acquisition costs.<br />

Revocation <strong>of</strong> license.<br />

Licenses and taxes.<br />

Regulation <strong>of</strong> employees or representatives.<br />

1641.01 Definition and scope.-Any five or<br />

more persons may form a corporation for the purpose<br />

<strong>of</strong> establishing, maintaining, and operating a nonpr<strong>of</strong>it<br />

health care services plan in the state, whereby<br />

medical, surgical, hospital, or other health care services<br />

related to the treatment or prevention <strong>of</strong> sickness<br />

or injury may be provided by the corporation or<br />

by physicians, surgeons, hospitals, or other providers<br />

<strong>of</strong> such services to members <strong>of</strong> the public who become<br />

subscribers under a contract with the corporation.<br />

The plan shall be governed by the provisions <strong>of</strong><br />

the laws <strong>of</strong> this state regarding health insurance and<br />

health insurers; and the department shall have all<br />

powers pertaining to such plan as it possesses as to<br />

health insurance and health insurers, except as otherwise<br />

provided by this chapter. Health maintenance<br />

organizations shall organize under and be subject to<br />

part II <strong>of</strong> this chapter.<br />

History.-s. I, ch. 22826, 1945; s. I, ch. 25394, 1949; s. I, ch. 69·92; 88. 13, 35,<br />

ch. 69·106; s. 24, ch. 72·264; s. 3, ch. 76·168; s. I, ch. 77-457; ss. 2, 3, ch. 81 -318;<br />

88. 759, 777, 809(lst), ch. 82-243.<br />

'Note.-Expires October I, 1991, pursuant to s. 809(lst), ch. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.02 Incorporation.-<br />

(1) Any health care services plan shall be incorporated<br />

under chapter 617; and every charter or certificate<br />

<strong>of</strong> incorporation <strong>of</strong> the plan shall be subject<br />

to the approval <strong>of</strong> the department, and its approval<br />

shall be endorsed thereon.<br />

(2) The directors <strong>of</strong> every health care services<br />

plan shall include members <strong>of</strong> the general public,<br />

physicians contracting with the plan, and administrators<br />

or trustees <strong>of</strong> hospitals contracting with the plan.<br />

At least a majority <strong>of</strong> the directors <strong>of</strong> every such plan<br />

shall be representatives <strong>of</strong> the general public and not<br />

<strong>of</strong> the health or insurance industries.<br />

History.-s. 2, ch. 22826, 1945; 88. 13,35, ch. 69-106; s. 3, ch. 76-168; s. I, ch.<br />

77-457; 88. 2, 3, ch. 81-318; 88. 760, 777, 809(lst), ch. 82-243.<br />

'Note.-Expires October I, 1991, pursuant to s. 809(lst), ch. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

764<br />

1641.03 Contracts.-<br />

(1) Any health care services plan may contract<br />

with licensed physicians, hospitals, and other health<br />

care providers to render service to, or accept payment<br />

on behalf <strong>of</strong>, its subscribers. Such contracts and<br />

amendments thereto shall be filed with the department.<br />

(2) The rates charged by a health care services<br />

plan to the subscribers for medical, surgical, hospital,<br />

or other health care services shall at all times be subject<br />

to the approval <strong>of</strong> the department. All rates <strong>of</strong><br />

payments made by a health care services plan pursuant<br />

to the contracts provided for in subsection (1)<br />

shall be approved by the department.<br />

HI.tory.-s. 3, ch. 22826, 1945; 88. 13,35, ch. 69-106; s. 3, ch. 76-168; s. I, ch.<br />

77-457; 88. 2, 3, ch. 81-318; 88. 716, 777, 809(1st), ch. 82-243.<br />

'Note.-Expires October I, 1991, pursuant to s. 809(lst), ch. 82-243, and i8<br />

scheduled for review pursuant to 8. 11.61 in advance <strong>of</strong> that date.<br />

1641.04 Certificate <strong>of</strong> authority.-<br />

(1) No health care services plan shall issue contracts<br />

to subscribers until the department has, by<br />

formal certificate <strong>of</strong> authority, authorized it to do so.<br />

Application for a certificate shall be niade on forms<br />

supplied by the department, containing such information<br />

as it deems necessary.<br />

(2) Each application for such certificate, as a part<br />

there<strong>of</strong>, sha1I be accompanied by copies <strong>of</strong> the following<br />

documents, duly certified to by at least two <strong>of</strong> the<br />

executive <strong>of</strong>ficers <strong>of</strong> the plan:<br />

(a) Charter or certificate <strong>of</strong> incorporation, with<br />

all amendments thereto.<br />

(b) Bylaws with all amendments thereto.<br />

(c) Proposed contracts between the plan and any<br />

party for the provision <strong>of</strong>, or the payment in whole or<br />

in part for, hQspital, medical, surgical, or other health<br />

care services provided the subscribers.<br />

(d) Proposed contracts to be issued to subscribers<br />

to the plan showing the benefits to which they are entitled,<br />

together with a table <strong>of</strong> the rates to be charged<br />

to subscribers for each form <strong>of</strong> contract.<br />

(e) Financial statement <strong>of</strong> the plan which shall<br />

include the amounts <strong>of</strong> each contribution paid or<br />

agreed to be paid to the plan for working capital, the<br />

name or names <strong>of</strong> each contributor, and the terms <strong>of</strong><br />

each contribution.<br />

(3) The department shall issue a certificate to<br />

each applicant upon the payment <strong>of</strong> the fees provided<br />

for in s. 624.501 and upon being satisfied as to the<br />

following:<br />

(a) That the applicant has been organized bona<br />

fide for the purpose <strong>of</strong> establishing, maintaining, and<br />

operating a nonpr<strong>of</strong>it health care services plan.<br />

(b) That each contract executed or proposed to<br />

be executed by the applicant and the physician, hospital,<br />

or other health care service provider obligates,<br />

or will when executed obligate, each physician, hospi-


F.S.<strong>1983</strong> HEALTH CARE SERVICE PROGRAMS Ch.641<br />

tal, or other health care service provider to render the<br />

service, or accept payment for the service, to which<br />

each subscriber may be entitled under the terms <strong>of</strong><br />

the contract issued to the subscriber.<br />

(c) That each contract issued or proposed to be<br />

issued to subscribers complies with statutory provisions<br />

relating to health insurance policies.<br />

(d) That no contributions to the funds <strong>of</strong> the plan<br />

for working capital are repayable by the plan except<br />

out <strong>of</strong> earned income over and above operating expenses<br />

and medical, surgical, hospital, or other health<br />

care service expenses and such reserve as the department<br />

may deem adequate.<br />

(e) That the amount <strong>of</strong> money actually received<br />

by the applicant, upon the terms specified in paragraph<br />

(d), for working capital is sufficient to carryall<br />

acquisition costs and operating expenses for a period<br />

<strong>of</strong> at least 6 months from the date <strong>of</strong> the issuance <strong>of</strong><br />

the initial certificate <strong>of</strong> authority.<br />

(4) Such certificate shall be effective until revoked<br />

by the department; and any plan to which such<br />

certificate has been issued, until revocation there<strong>of</strong>,<br />

shall be authorized to issue contracts.<br />

(5) The department shall not renew a certificate<br />

<strong>of</strong> authority unless it is satisfied that the amount <strong>of</strong><br />

money held by the plan for working capital is sufficient<br />

to carryall acquisition costs and operating expenses<br />

for a period <strong>of</strong> at least 3 months from the date<br />

<strong>of</strong> renewal.<br />

Hi.tory.-s. 4, ch. 22826, 1945; s. 22, ch. 65·269; ss. 13, 35, ch. 69·106; s. 3, ch.<br />

76·168; s. 1, ch. 77.457; ss. 2, 3, ch. 81·318; ss. 717, 777, 809(lst), ch. 82·243.<br />

'Note.-Expires October 1, 1991, pursuant to s. 809(lst), ch. 82·243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.05 Amendments to charter, bylaws,<br />

contracts, rates; approval by department.-No<br />

health care services plan shall amend its charter or<br />

certificate <strong>of</strong> incorporation, its bylaws, the terms and<br />

provisions <strong>of</strong> contracts executed or to be executed<br />

with hospitals or physicians, and the terms and provisions<br />

<strong>of</strong> contracts issued or proposed to be issued to<br />

subscribers until such proposed amendments have<br />

been first submitted to and approved by the department;<br />

nor shall any change be made in the table <strong>of</strong><br />

rates charged or proposed to be charged to subscribers<br />

for any form <strong>of</strong> contract issued or to be issued until<br />

such proposed charge has been submitted to and<br />

approved by the department upon the adoption <strong>of</strong><br />

any amendment or change, and following its approval<br />

by the department such corporation shall file a copy<br />

there<strong>of</strong> with the department duly certified by at least<br />

two <strong>of</strong> the executive <strong>of</strong>ficers <strong>of</strong> such corporation.<br />

Hi.tory.-s. 5, ch. 22826, 1945; ss. 13,35, ch. 69·106; s. 3, ch. 76·168; s. 1, ch.<br />

77·457; ss. 2, 3, ch. 81·318; ss. 763, 777, 809(lst), ch. 82·243; s. 76, ch. 82·386.<br />

'Note.-Expires October 1, 1991, pursuant to s. 809(lst), ch. 82·243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.06 Annual reports or statements.-Every<br />

health care services plan shall annually, on or before<br />

March 1, file in the <strong>of</strong>fice <strong>of</strong> the department a<br />

statement verified by at least two <strong>of</strong> the principal <strong>of</strong>ficers<br />

<strong>of</strong> such corporation showing its condition on<br />

December 31 then next preceding, which statement<br />

shall be in such form and shall contain such matters<br />

as the department shall prescribe.<br />

Hi.tory.-s. 6, ch. 22826, 1945; ss. 13,35, ch. 69·106; s. 3, ch. 76·168; s. 1, ch.<br />

77·457; ss. 2, 3, ch. 81·318; ss. 764, 777, 809(lst), ch. 82·243.<br />

'Note.-Expires October 1, 1991, pursuant to s. 809(lst), ch. 82·243, and is<br />

scheduled for review pursuant to 8. 11.61 in advance <strong>of</strong> that date.<br />

765<br />

1641.08 Acquisition costs.-All acquisition<br />

costs in connection with the solicitation <strong>of</strong> subscribers<br />

to such service plan or plans shall at all times be<br />

subject to the approval <strong>of</strong> the Department <strong>of</strong> Insurance.<br />

Hi.tory.-s. 8, ch. 22826, 1945; ss. 13, 35, ch. 69·106; s. 3, ch. 76·168; s. 1, ch.<br />

77·457; ss. 2, 3, ch. 81·318; ss. 766, 809(lst), ch. 82·243; ss. 77, 78, ch. 82·386.<br />

'Note.-Repealed effective October 1, 1991, by s. 809(lst), ch. 82·243, and<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.12 Revocation <strong>of</strong> license.-Whenever the<br />

department has reason to believe that any health<br />

care services plan is being operated for pr<strong>of</strong>it or<br />

fraudulently conducted, or is not complying with this<br />

code, it is authorized to suspend or revoke the certificate<br />

<strong>of</strong> authority; and it may at any time institute<br />

proceedings relating to the dissolution <strong>of</strong> the plan.<br />

Hi.tory.-s. 12, ch. 22826, 1945; ss. 13,35, ch. 69·106; s. 3, ch. 76·168; s. 1, ch.<br />

77·457; s. 21, ch. 78·95; ss. 2, 3, ch. 81·318; ss. 770, 777, 809(lst), ch. 82·243.<br />

'Note.-Expires October 1, 1991, pursuant to s. 809(lst), ch. 82·243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.13 Licenses and taxes.-No health care<br />

services plan, its representatives, or any <strong>of</strong> its properties<br />

or funds shall be exempt from any license fees or<br />

taxes, except as provided in chapter 624 for domestic<br />

insurance companies. With respect to the computation<br />

<strong>of</strong> such taxes, and for the purpose <strong>of</strong> this provision<br />

only, the rates paid by subscribers as provided<br />

herein shall be construed as "premiums," and the<br />

"contract" provided herein shall be construed as "policy."<br />

Hi8tory.-s. 13, ch. 22826, 1945; s. 2, ch. 69·92; ss. 13, 35, ch. 69·106; s. 3, ch.<br />

76·168; s. 1, ch. 77·457; ss. 2, 3, ch. 81·318; ss. 771, 777, 809(lst), ch. 82·243.<br />

'Note.-Expires October 1, 1991, pursuant to s. 809(lst), ch. 82·243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.14 Regulation <strong>of</strong> employees or representatives.-Every<br />

person who acts for any health<br />

care services plan to solicit applications for or to negotiate<br />

and effectuate a contract for coverage <strong>of</strong> hospital,<br />

medical, surgical, or other health care expenses<br />

shall be subject to all portions <strong>of</strong> the code applicable<br />

to health insurance agents.<br />

Hi8tory.-s. 14, ch. 22826, 1945; ss. 13, 35, ch. 69·106; s. 3, ch. 76·166; s. 1, ch.<br />

77·457; s. 21, ch. 78·95; ss. 2, 3, ch. 81·318; ss. 772, 777, 809(lst), ch. 82·243.<br />

'Note.-Expires October 1, 1991, pursuant to s. 809(lst), ch. 82·243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

cf.-s. 624.523 Insurance Commissioner's Regulatory Trust Fund.<br />

PART II<br />

HEALTH MAINTENANCE ORGANIZATIONS<br />

641.17<br />

641.18<br />

641.19<br />

641.21<br />

641.22<br />

641.225<br />

641.23<br />

641.24<br />

641.25<br />

641.255<br />

641.26<br />

641.27<br />

641.28<br />

Short title.<br />

Declaration <strong>of</strong> legislative intent, findings,<br />

and purposes.<br />

Definitions.<br />

Application for certificate.<br />

Issuance <strong>of</strong> certificate <strong>of</strong> authority.<br />

Surplus requirements.<br />

Revocation <strong>of</strong> certificate <strong>of</strong> authority.<br />

Denial and revocation proceedings; Department<br />

<strong>of</strong> Health and Rehabilitative<br />

Services participation.<br />

Administrative penalty in lieu <strong>of</strong> revocation.<br />

Transfer <strong>of</strong> ownership.<br />

Annual report.<br />

Examination by the department.<br />

Civil remedy.


Ch.641 HEALTH CARE SERVICE PROGRAMS F.S.<strong>1983</strong><br />

641.285<br />

641.29<br />

641.30<br />

641.31<br />

641.315<br />

641.32<br />

641.33<br />

641.35<br />

641.36<br />

641.37<br />

641.38<br />

Insolvency protection.<br />

Fees.<br />

Construction and relationship to other<br />

laws.<br />

Health maintenance contracts.<br />

Provider contracts.<br />

Acceptable payments.<br />

Certain words prohibited in name <strong>of</strong> organization.<br />

Investment <strong>of</strong> funds.<br />

Promulgation <strong>of</strong> rules.<br />

Penalty.<br />

Operational health maintenance organizations;<br />

issuance <strong>of</strong> certificate.<br />

1641.17 Short title.-This part shall be known<br />

and may be cited as the "Health Maintenance Organization<br />

Act."<br />

History.-8. 1, ch. 72-264; s. 3, ch. 76-168; s. 1, ch. 77-457; 88. 2, 3, ch. 81-318;<br />

88. 778, 804, 809(1st), ch. 82-243.<br />

'Note.-Expires October 1, 1991, pursuant to s. 809(lst), ch. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.18 Declaration <strong>of</strong> legislative intent,<br />

findings, and purposes.-<br />

(1) Faced with the continuation <strong>of</strong> mounting<br />

costs <strong>of</strong> health care, coupled with the state's interest<br />

in high quality care, the Legislature has determined<br />

that there is a need to explore alternative methods<br />

for the delivery <strong>of</strong> health care services, with a view<br />

toward achieving greater efficiency and economy in<br />

providing these services.<br />

(2) Health maintenance organizations, consisting<br />

<strong>of</strong> prepaid health care plans, hereinafter referred to<br />

as "plans," are developing rapidly in many communities.<br />

Through these organizations, structured in various<br />

forms, health care services are provided directly<br />

to a group <strong>of</strong> people who make regular premium payments.<br />

(3) These plans, when properly operated, emphasize<br />

effective cost and quality controls.<br />

(4) It shall be the policy <strong>of</strong> this state to:<br />

(a) Eliminate legal barriers to the organization,<br />

promotion, and expansion <strong>of</strong> comprehensive prepaid<br />

health care plans.<br />

(b) Recognize that prepaid comprehensive health<br />

care plans shall be exempt from operation <strong>of</strong> the insurance<br />

laws <strong>of</strong> this state except in the manner and to<br />

the extent set forth in this part.<br />

(5) Although it is the intent <strong>of</strong> this act to provide<br />

an opportunity for the development <strong>of</strong> health maintenance<br />

organizations, there is no intent to impair<br />

the present system for the delivery <strong>of</strong> health services.<br />

History.-s. 2, ch. 72-264; s. 3, ch. 76-168; s. I, ch. 77-457; 88. 2, 3, ch. 81-318;<br />

88. 779, 804, 809(lst), ch. 82-243.<br />

'Note.-Expires October I, 1991, pursuant to s. 809(lst), ch. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> thst date.<br />

1641.19 Definitions.-As used in this part, the<br />

term:<br />

(1) "Comprehensive health care services" means<br />

services, medical equipment, and supplies furnished<br />

by a provider which may include, but which are not<br />

limited to, medical, surgical, and dental care; psychological,<br />

optometric, optic, chiropractic, podiatric,<br />

nursing, physical therapy, and pharmaceutical services;<br />

health education, preventive medical, rehabili-<br />

766<br />

tative, and home health services; inpatient and outpatient<br />

hospital services; extended care; nursing<br />

home care; convalescent institutional care; laboratory<br />

and ambulance services; appliances, drugs, medicines,<br />

and supplies; and any other care, service, or<br />

treatment <strong>of</strong> disease, the correction <strong>of</strong> defects, or the<br />

maintenance <strong>of</strong> the physical and mental well-being <strong>of</strong><br />

human beings.<br />

(2) "Department" means the Department <strong>of</strong> Insurance.<br />

(3) "Entity" means any legal entity with continuing<br />

existence, including, but not limited to, a corporation,<br />

association, trust, or partnership.<br />

(4) "Guaranteeing organization" is an organization<br />

which is domiciled in the United <strong>State</strong>s; which<br />

has authorized service <strong>of</strong> process against it; and<br />

which has appointed the Insurance Commissioner as<br />

Treasurer as its agent for service <strong>of</strong> process issuing<br />

upon any cause <strong>of</strong> action arising in this state, based<br />

upon any guarantee entered into under this part.<br />

(5) "Health maintenance contract" means any<br />

contract entered into by a health maintenance organization<br />

with a subscriber or group <strong>of</strong> subscribers to<br />

provide comprehensive health care services in exchange<br />

for a prepaid per capita or prepaid aggregate<br />

fixed sum.<br />

(6) "Health maintenance organization" means<br />

any organization authorized under this part which:<br />

(a) Provides, either directly or through arrangements<br />

with other persons, health care services to persons<br />

enrolled with such organization, on a prepaid<br />

per capita or prepaid aggregate fixed-sum basis;<br />

(b) Provides, either directly or through arrangements<br />

with other persons, those health care services<br />

which subscribers might reasonably require to maintain<br />

good health;<br />

(c) Provides physician services directly through<br />

physicians who are either employees or partners <strong>of</strong><br />

such organization or under arrangements with a physician<br />

or any group <strong>of</strong> physicians.<br />

(7) "Insolvent" or "insolvency" means the inability<br />

<strong>of</strong> the health maintenance organization to discharge<br />

its liabilities as they become due in the normal<br />

course <strong>of</strong> business.<br />

(8) "Minimum services" includes, but is not limited<br />

to, emergency care, inpatient hospital and physician<br />

care, ambulatory diagnostic treatment, and preventive<br />

health care services.<br />

(9) "Provider" means any physician, hospital, or<br />

other institution, organization, or person that furnishes<br />

health care services and is licensed or otherwise<br />

authorized to practice in the state.<br />

(10) "Subscriber" means an individual who has<br />

contracted, or on whose behalf a contract has been<br />

entered into, with a health maintenance organization<br />

for health care services.<br />

(11) "Surplus" means total unencumbered assets<br />

in excess <strong>of</strong> total liabilities. Surplus includes capital<br />

stock, capital in excess <strong>of</strong> par, and retained earnings<br />

and may include surplus notes.<br />

(12) "Surplus notes" means debt which has been<br />

guaranteed by the United <strong>State</strong>s Government or its<br />

agencies, or debt which has been subordinated to all<br />

claims <strong>of</strong> subscribers and general creditors <strong>of</strong> the organization.


F.S.<strong>1983</strong> HEALTH CARE SERVICE PROGRAMS Ch.641<br />

(13) "Uncovered expenditures" means the cost <strong>of</strong><br />

health care services that are covered by a health<br />

maintenance organization, for which a subscriber<br />

would also be liable in the event <strong>of</strong> the insolvency <strong>of</strong><br />

the organization.<br />

History.-s. 3, ch. 72·264; s. 1, ch. 76·33; s. 3, ch. 76-168; s. 1, ch. 77-457; ss.<br />

2, 3, ch. 81-318; ss. 780, 804, 809(lst), ch. 82-243; s. 1, ch. 83-198; s. 137, ch.<br />

83-216. ·<br />

'Note.-Expires October 1, 1991, pursuant to s. 809(lst), ch. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.21 Application for certificate.-Before<br />

any entity may operate a health maintenance organization,<br />

it shall obtain a certificate <strong>of</strong> authority from<br />

the department. Each application for a certificate<br />

shall be on such form as the department shall prescribe<br />

and shall be accompanied by the following:<br />

(1) A copy <strong>of</strong> the basic organizational document<br />

<strong>of</strong> the applicant, if any, such as the articles <strong>of</strong> incorporation,<br />

articles <strong>of</strong> association, partnership agreement,<br />

trust agreement, or other applicable document,<br />

and all amendments thereto;<br />

(2) A copy <strong>of</strong> the bylaws, rules and regulations, or<br />

similar form <strong>of</strong> document, if any, regulating the conduct<br />

<strong>of</strong> the affairs <strong>of</strong> the applicant;<br />

(3) A list <strong>of</strong> the names, addresses, and <strong>of</strong>ficial capacities<br />

with the organization <strong>of</strong> the persons who are<br />

to be responsible for the conduct <strong>of</strong> the affairs <strong>of</strong> the<br />

health maintenance organization, including all members<br />

<strong>of</strong> the governing body, the <strong>of</strong>ficers and directors<br />

in the case <strong>of</strong> a corporation, and the partners or associates<br />

in the case <strong>of</strong> a partnership or association.<br />

Such persons shall fully disclose to the department<br />

and the governing body <strong>of</strong> the health maintenance<br />

organization the extent and nature <strong>of</strong> any contracts<br />

or arrangements between them and the health maintenance<br />

organization, including any possible conflicts<br />

<strong>of</strong> interest;<br />

(4) A statement generally describing the health<br />

maintenance organization, its operations, the manner<br />

in which comprehensive health services will be regularly<br />

available, the location <strong>of</strong> the facilities at which<br />

comprehensive health care services will be regularly<br />

available to subscribers, the type <strong>of</strong> health care personnel<br />

engaged to provide the comprehensive health<br />

care services, and the quantity <strong>of</strong> personnel <strong>of</strong> each<br />

type;<br />

(5) Forms <strong>of</strong> all health maintenance contracts the<br />

applicant proposes to <strong>of</strong>fer the subscribers, showing<br />

the benefits to which they are entitled, together with<br />

a table <strong>of</strong> the rates charged, or proposed to be<br />

charged, for each form <strong>of</strong> such contract;<br />

(6) A statement describing with reasonable certainty<br />

the geographic area or areas to be served by<br />

the health maintenance organization; and<br />

(7) A financial statement prepared on the basis <strong>of</strong><br />

generally accepted accounting principles, except that<br />

surplus notes acceptable to the department and<br />

meeting the requirements <strong>of</strong> this act may be included<br />

in the calculation <strong>of</strong> surplus.<br />

History.-s. 5, ch. 72-264; s. 3, ch. 76-168; s. 1, ch. 77-457; ... 2,3, ch. 81-318;<br />

... 782, 804, 809(lst), ch. 82-243; s. 2, ch. 83-198.<br />

'N ote.-Expires October 1, 1991, pursuant to s. 809(lst), ch. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

application to any entity filing a completed application<br />

in conformity with s. 641.21, upon payment <strong>of</strong><br />

the prescribed fees and upon the department's being<br />

satisfied that:<br />

(1) The entity proposes to establish and operate<br />

a bona fide health maintenance organization having<br />

the capability to provide comprehensive health care<br />

services in the geographic area proposed, as certified<br />

by the Department <strong>of</strong> Health and Rehabilitative Services<br />

as a condition precedent to the issuance <strong>of</strong> any<br />

certificate.<br />

(2) The proposed rates are actuarially sound for<br />

the benefits provided, including administrative costs.<br />

(3) Before December 31, 1985, the health maintenance<br />

organization has a minimum surplus <strong>of</strong><br />

$100,000 and, after December 31, 1985, the health<br />

maintenance organization has a minimum surplus as<br />

follows:<br />

(a) As <strong>of</strong> December 31, 1986, $150,000;<br />

(b) As <strong>of</strong> December 31, 1987, $200,000;<br />

(c) As <strong>of</strong> December 31, 1988, $250,000.<br />

In lieu <strong>of</strong> having a minimum surplus, the health<br />

maintenance organization may have a written guarantee<br />

insuring the payment <strong>of</strong> covered subscriber<br />

claims which guarantee is provided by an entity<br />

which has been in operation for at least 3 years and<br />

has a surplus, not including land, buildings, and<br />

equipment, equal to 2 times the statutory surplus deficiency<br />

or 2 times the statutory requirement, whichever<br />

is the greater amount. Such guaranteeing organization<br />

and the written guarantee must be acceptable<br />

to and approved by the Department <strong>of</strong> Insurance.<br />

(4) The health maintenance organization has<br />

made acceptable arrangements to provide all health<br />

care services <strong>of</strong>fered.<br />

(5) The terms <strong>of</strong> the contracts such entity proposes<br />

to <strong>of</strong>fer to subscribers will in fact assure that<br />

the comprehensive health care services required by<br />

such subscribers will be rendered under reasonable<br />

standards <strong>of</strong> quality <strong>of</strong> care, as certified by the Department<br />

<strong>of</strong> Health and Rehabilitative Services.<br />

(6) The procedures for <strong>of</strong>fering comprehensive<br />

health care services and <strong>of</strong>fering and terminating<br />

contracts to subscribers will not unfairly discriminate<br />

on the basis <strong>of</strong> age, sex, race, health, or economic status.<br />

However, this section shall not prohibit reasonable<br />

underwriting classifications for the purposes <strong>of</strong><br />

establishing contract rates, nor shall it prohibit experience<br />

rating.<br />

(7) The entity furnishes evidence <strong>of</strong> adequate insurance<br />

coverage or an adequate plan for<br />

self-insurance to respond to claims for injuries arising<br />

out <strong>of</strong> the furnishing <strong>of</strong> comprehensive health care.<br />

(8) The entity has provided, through contract or<br />

otherwise, for periodic review <strong>of</strong> its medical facilities<br />

and services.<br />

(9) The ownership, control, or management <strong>of</strong> the<br />

entity is competent and trustworthy and possesses<br />

managerial experience that would make the proposed<br />

health maintenance organization operation beneficial<br />

to the subscribers. The department shall not grant or<br />

1641.22 Issuance <strong>of</strong> certificate <strong>of</strong> authority. continue authority to transact the business <strong>of</strong> a<br />

-The department shall issue a certificate <strong>of</strong> authori- health maintenance organization in this state at any<br />

ty within 60 days <strong>of</strong> the filing <strong>of</strong> a properly completed time during which it has good reason to believe that<br />

767


Ch.641 HEALTH CARE SERVICE PROGRAMS F.S.<strong>1983</strong><br />

the ownership, control, or management <strong>of</strong> the organization<br />

is under the control <strong>of</strong> any person whose business<br />

operations are or have been marked by business<br />

practices or conduct that is to the detriment <strong>of</strong> the<br />

public, stockholders, investors, or creditors; by the<br />

improper manipulation <strong>of</strong> assets or <strong>of</strong> accounts; or by<br />

bad faith.<br />

(10) The entity has a blanket fidelity bond in the<br />

amount <strong>of</strong> $25,000, issued by a licensed insurance<br />

carrier in this state, that will reimburse the entity in<br />

the event that anyone handling the funds <strong>of</strong> the entity<br />

either misappropriates or absconds with such<br />

funds. All employees handling such funds shall be<br />

covered by the blanket fidelity bond. An agent licensed<br />

under the provisions <strong>of</strong> the <strong>Florida</strong> Insurance<br />

Code may either directly or indirectly represent the<br />

health maintenance organization in the solicitation,<br />

negotiation, effectuation, procurement, receipt, delivery,<br />

or forwarding <strong>of</strong> any health maintenance organization<br />

subscriber's contract or collect or forward any<br />

consideration paid by the subscriber to the health<br />

maintenance organization; and such agent shall not<br />

be required to post the bond required by this subsection.<br />

(11) The entity has filed with the department,<br />

and obtained approval from the department <strong>of</strong>, all<br />

reinsurance contracts as provided in s. 641.285.<br />

Hi.tory.-s. 6, ch. 72-264; s. 3, ch. 76-168; s. I, ch. 77-457; ss. 2, 3, ch. 81-318;<br />

ss. 783, 804, 809(1st), ch. 82-243; s. 3, ch. 83-198.<br />

'Note.-Expires Octoher I, 1991, pursuant to s. 809(lst), ch. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

cf.- s. 768.41 Internal risk management program; establishment required.<br />

641.225 Surplus requirements.-<br />

(1) Each health maintenance organization licensed<br />

before October 1, <strong>1983</strong>, must have by December<br />

31, 1985, a minimum surplus <strong>of</strong> $100,000. After<br />

December 31, 1985, each health maintenance organization<br />

must have a minimum surplus as follows:<br />

(a) As <strong>of</strong> December 31, 1986, $150,000.<br />

(b) As <strong>of</strong> December 31, 1987, $200,000.<br />

(c) As <strong>of</strong> December 31, 1988, $250,000.<br />

(2) In lieu <strong>of</strong> having a minimum surplus, there<br />

may exist for a health maintenance organization a<br />

written guarantee <strong>of</strong> the type and subject to the same<br />

provisions as outlined in s. 641.22.<br />

Hi.tory.-s. 4, ch. 83-198.<br />

'641.23 Revocation <strong>of</strong> certificate <strong>of</strong> authority.-The<br />

department may revoke any certificate issued<br />

to a health maintenance organization, or order<br />

compliance within 60 days, if it finds that any <strong>of</strong> the<br />

following conditions exists:<br />

(1) The organization is not operating in compliance<br />

with this part;<br />

(2) The organization is in substantial violation <strong>of</strong><br />

its health maintenance contracts, as certified by the<br />

Department <strong>of</strong> Health and Rehabilitative Services;<br />

(3) The organization is unable to fulfill its obligations<br />

under outstanding health maintenance contracts<br />

entered into with its subscribers, as certified<br />

by the Department <strong>of</strong> Health and Rehabilitative Services;<br />

(4) The plan is no longer actuarially sound or the<br />

organization does not have the minimum surplus as<br />

required by this part;<br />

768<br />

(5) The existing contract rates are excessive, inadequate,<br />

or unfairly discriminatory;<br />

(6) The organization has advertised, merchandised,<br />

or attempted to merchandise its services in<br />

such a manner as to misrepresent its services or capacity<br />

for service or has engaged in deceptive, misleading,<br />

or unfair practices with respect to advertising<br />

or merchandising; or<br />

(7) The organization is insolvent.<br />

Hi.tory.-s. 7, ch. 72-264; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318;<br />

ss. 764, 804, 809(lst), ch. 82-243; s. 5, ch. 83-198.<br />

'N ote.-Expires Octoher 1, 1991, pursuant to s. 809(lot), ch. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

'641.24 Denial and revocation proceedings;<br />

Department <strong>of</strong> Health and Rehabilitative Services<br />

participation.-The Department <strong>of</strong> Health<br />

and Rehabilitative Services shall participate in any<br />

proceedings for denial or revocation <strong>of</strong> a certificate.<br />

In connection with any decision regarding denial or<br />

revocation <strong>of</strong> a certificate, the recommendations and<br />

findings <strong>of</strong> the Department <strong>of</strong> Health and Rehabilitative<br />

Services with respect to matters relating to the<br />

quality and nature <strong>of</strong> health care services being provided<br />

shall be conclusive and binding upon the department.<br />

Bi.tory.-s. 8, ch. 72-264; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss.<br />

2, 3, ch. 81-318; ss. 785, 804, 809(1st), ch. 82-243.<br />

'Note.-Expires October 1, 1991, pursuant to s. 809(lst), ch. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.25 Administrative penalty in lieu <strong>of</strong><br />

revocation.-The department may, in lieu <strong>of</strong> revocation,<br />

levy an administrative penalty in an amount<br />

not less than $100 or more than $10,000.<br />

Hi.tory.-s. 9, ch. 72-264; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss.<br />

2, 3, ch. 81-318; ss. 786, 804, 809(1st), ch. 82-243; s. 6, ch. 83-198.<br />

'Note.-Expires October I, 1991, pursuant to s. 809{lst), ch. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.255 Transfer <strong>of</strong> ownership.-Each<br />

health maintenance organization which desires to<br />

transfer ownership <strong>of</strong> more than 10 percent <strong>of</strong> the<br />

stock or ownership interest in the health maintenance<br />

organization shall submit to the department an<br />

application for approval <strong>of</strong> the new stockholder or<br />

owner. The application shall contain the name and<br />

address <strong>of</strong> the applicant or applicants and such other<br />

information as required by the department. The application<br />

shall be filed with the department no later<br />

than 60 days prior to the effective date <strong>of</strong> the transfer<br />

<strong>of</strong> ownership.<br />

Bi.tory.- ss. 787, 809(1st), ch. 82-243.<br />

'Note.-Expires Octoher 1, 1991, pursuant to s. 809(1st), ch. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.26 Annual report.-<br />

(1) Every health maintenance organization shall,<br />

annually on or before April 1, or within 3 months <strong>of</strong><br />

the end <strong>of</strong> the fiscal year for a health maintenance organization<br />

operating under a valid certificate <strong>of</strong> authority<br />

as <strong>of</strong> the effective date <strong>of</strong> this section, or within<br />

such extension <strong>of</strong> time therefor as the department,<br />

for good cause, may grant, on forms prescribed by the<br />

department, file a report with the department, verified<br />

by the oath <strong>of</strong> two executive <strong>of</strong>ficers <strong>of</strong> the organization,<br />

or, if not a corporation, <strong>of</strong> two persons who<br />

are principal managing directors <strong>of</strong> the affairs <strong>of</strong> the<br />

organization, showing its condition on the last day <strong>of</strong>


F.S.<strong>1983</strong> HEALTH CARE SERVICE PROGRAMS Ch.641<br />

the preceding calendar year. Such report shall include:<br />

(a) A financial statement <strong>of</strong> the organization, including<br />

its balance sheet and a statement <strong>of</strong> operations<br />

for the preceding year certified by an independent<br />

certified public accountant;<br />

(b) A list <strong>of</strong> the names and residence addresses <strong>of</strong><br />

all persons responsible for the conduct <strong>of</strong> its affairs,<br />

together with a disclosure <strong>of</strong> the extent and nature <strong>of</strong><br />

any contracts or arrangements between such persons<br />

and the health maintenance organization, including<br />

any possible conflicts <strong>of</strong> interest;<br />

(c) The number <strong>of</strong> health maintenance contracts<br />

issued and outstanding and the number <strong>of</strong> health<br />

maintenance contracts terminated and a compilation<br />

<strong>of</strong> the reasons for such terminations;<br />

(d) A description by location and specialty <strong>of</strong> the<br />

providers retained or otherwise engaged by the organization<br />

to satisfy its contractual obligations with its<br />

subscribers;<br />

(e) Such statistical information as is requested by<br />

the department reflecting the rates <strong>of</strong> the health<br />

maintenance organization for all comprehensive<br />

health care services provided under health maintenance<br />

contracts;<br />

(f) The number and amount <strong>of</strong> damage claims for<br />

medical injury initiated against the health maintenance<br />

organization and any <strong>of</strong> the providers engaged<br />

by it during the reporting year, broken down into<br />

claims with and without formal legal process, and the<br />

disposition, if any, <strong>of</strong> each such claim;<br />

(g) An actuarial certification that the rates <strong>of</strong> the<br />

health maintenance organization are actuarially<br />

sound for the benefits provided; and<br />

(h) Such other information relating to the performance<br />

<strong>of</strong> health maintenance organizations as is<br />

required by the department.<br />

(2) Any health maintenance organization which is<br />

unable to provide to the department an audited financial<br />

statement within the time required shall file<br />

annually, on or before March 1 next following each<br />

calendar year, the annual report required by subsection<br />

(1) with an unaudited financial statement <strong>of</strong> the<br />

organization; and certification <strong>of</strong> such financial statement<br />

by an independent certified public accountant<br />

shall be received by the department by the following<br />

May 1.<br />

(3) Any health maintenance organization which<br />

neglects to file the annual report in the form and<br />

within the time required by this section shall forfeit<br />

$100 for each day during which the neglect continues;<br />

and, upon notice by the department to that effect, its<br />

authority to do business in this state shall cease while<br />

such default continues. The department shall deposit<br />

all sums collected by it under this section to the credit<br />

<strong>of</strong> the Insurance Commissioner's Regulatory Trust<br />

Fund.<br />

Hi.tory.-s. 10, ch. 72-264; s. 3, ch. 76-168; s. I, ch_ 77-457; ss. 2, 3, ch.<br />

81-318; ss. 788, 804, 809(lst), ch. 82-243; s. 7, ch. 83-198.<br />

'Note.-Expires October I, 1991, pursuant to s. 809(lst), cb. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.27 Examination by the department.<br />

-The department shall examine the affairs, transactions,<br />

accounts, business records, and assets <strong>of</strong> any<br />

health maintenance organization as <strong>of</strong>ten as it deems<br />

it expedient for the protection <strong>of</strong> the people <strong>of</strong> this<br />

769<br />

state, but not less frequently than once every 3 years.<br />

The Department <strong>of</strong> Health and Rehabilitative Services<br />

may conduct periodic examinations regarding<br />

the quality <strong>of</strong> health care services being provided by<br />

the organization. Every health maintenance organization<br />

shall submit its books and records and take<br />

other appropriate action as may be necessary to facilitate<br />

an examination. However, medical records <strong>of</strong> individuals<br />

and records <strong>of</strong> physicians providing service<br />

under contract to the health maintenance organization<br />

shall not be subject to audit, although they may<br />

be subject to subpoena by court order upon a showing<br />

<strong>of</strong> good cause. For the purpose <strong>of</strong> examinations,<br />

the respective departments may administer oaths to<br />

and examine the <strong>of</strong>ficers and agents <strong>of</strong> a health maintenance<br />

organization concerning its business and affairs.<br />

The expenses <strong>of</strong> examination <strong>of</strong> each health<br />

maintenance organization by the department shall be<br />

subject to the same terms and conditions as apply to<br />

insurers under part II <strong>of</strong> chapter 624 <strong>of</strong> the <strong>Florida</strong><br />

Insurance Code. The expenses <strong>of</strong> examination <strong>of</strong> each<br />

health maintenance organization by the Department<br />

<strong>of</strong> Health and Rehabilitative Services shall be paid<br />

by the organization. In no event shall expenses <strong>of</strong> all<br />

examinations exceed a maximum <strong>of</strong> $15,000 per year.<br />

Any rehabilitation, liquidation, conservation, or dissolution<br />

<strong>of</strong> a health maintenance organization shall<br />

be conducted under the supervision <strong>of</strong> the department,<br />

which shall have all power with respect thereto<br />

granted to it under the laws governing the rehabilitation,<br />

liquidation, conservation, or dissolution <strong>of</strong> life<br />

insurance companies.<br />

Hi.tory.-s. 11, ch. 72-264; s. 3, ch. 76-188; s. 1, ch. 77-457; ss. 2, 3, cb.<br />

81-318; ss. 789, 804, 809(lst), ch. 82-243; s. 8, ch. 83-198.<br />

'Note.-Expires October I, 1991, pursuant to s. 809(lst), ch. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.28 Civil remedy.-In any civil action<br />

brought to enforce the terms and conditions <strong>of</strong> a<br />

health maintenance organization contract, the prevailing<br />

party is entitled to recover reasonable attorney's<br />

fees and court costs. This section shall not be<br />

construed to authorize a civil action against the department,<br />

its employees, or the Insurance Commissioner<br />

or against the Department <strong>of</strong> Health and Rehabilitative<br />

Services, its employees, or the secretary<br />

<strong>of</strong> that department.<br />

Hi.tory_-s. 12, ch. 72-264; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch.<br />

81-318; ss. 790, 804, 809(lst), ch. 82-243; s. 9, ch. 83-198.<br />

'Note.-Expires October I, 1991, pursuant to s. 809(lst), cb. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.285 Insolvency protection.-<br />

(1) Unless otherwise provided in this section,<br />

each health maintenance organization shall deposit<br />

with the department securities <strong>of</strong> the type eligible for<br />

deposit by insurers under s. 625.52, which securities<br />

shall have at all times a market value in the amount<br />

set forth in this subsection.<br />

(a) The amount for an organization that is beginning<br />

operation shall be the greatest <strong>of</strong>:<br />

1. Five percent <strong>of</strong> its estimated expenditures for<br />

health care services for its first year <strong>of</strong> operation;<br />

2_ Twice its estimated average monthly uncovered<br />

expenditures for its first year <strong>of</strong> operation; or<br />

3. $100,000.


Ch.641 HEALTH CARE SERVICE PROGRAMS F.S.<strong>1983</strong><br />

On or before January 1 <strong>of</strong> each succeeding year, unless<br />

inapplicable, the organization shall deposit with<br />

the department cash, securities, or any combination<br />

<strong>of</strong> these or other measures acceptable to the department<br />

in an amount equal to 4 percent <strong>of</strong> the preceding<br />

12 months' uncovered expenditures or 4 percent<br />

<strong>of</strong> its estimated annual uncovered expenditures for<br />

the succeeding year, whichever is greater.<br />

(b) Unless inapplicable, an organization that is in<br />

operation on the effective date <strong>of</strong> this section shall<br />

make a deposit equal to 1 percent <strong>of</strong> the preceding 12<br />

months' uncovered expenditures or $100,000, whichever<br />

is greater, on the first day <strong>of</strong> the first calendar<br />

year beginning 6 months or more after the effective<br />

date <strong>of</strong> this section. In the second calendar year, if<br />

applicable, the amount <strong>of</strong> the additional deposit shall<br />

be equal to 2 percent <strong>of</strong> its estimated annual uncovered<br />

expenditures. In the third calendar year, if applicable,<br />

the additional deposit shall be equal to 3<br />

percent <strong>of</strong> its estimated annual uncovered expenditures<br />

for that year, and in the fourth and subsequent<br />

years, if applicable, the additional deposit shall be<br />

equal to 4 percent <strong>of</strong> its estimated annual uncovered<br />

expenditures for each year. Each year's estimate, after<br />

the first year <strong>of</strong> operation, shall reasonably reflect<br />

the prior year's operating experience and delivery arrangements.<br />

(2) The department may waive any <strong>of</strong> the deposit<br />

requirements set forth in subsection (1) whenever the<br />

department is satisfied that:<br />

(a) The organization has sufficient surplus and<br />

an adequate history <strong>of</strong> generating net income to assure<br />

its financial viability for the next year;<br />

(b) The performance and obligations <strong>of</strong> the organization<br />

are guaranteed by an organization which has<br />

sufficient surplus and an adequate history <strong>of</strong> generating<br />

net income; or<br />

(c) The assets <strong>of</strong> the organization or its contracts<br />

with insurers (hospital or medical service corporations),<br />

governments, or other organizations are reasonably<br />

sufficient to assure the performance <strong>of</strong> the<br />

obligations <strong>of</strong> the organization.<br />

(3) When an organization has achieved a surplus,<br />

not including land, buildings, and equipment, <strong>of</strong> at<br />

least $1 million or has achieved a surplus, including<br />

organization-related land, buildings, and equipment,<br />

<strong>of</strong> at least $5 million, the annual deposit requirement<br />

does not apply. The annual deposit requirement does<br />

not apply to an organization if the total amount <strong>of</strong><br />

the accumulated deposit is equal to 25 percent <strong>of</strong> its<br />

estimated annual uncovered expenditures for the<br />

next calendar year, or $1,500,000, whichever is less. If<br />

the organization has a guaranteeing organization<br />

which has been in operation for 5 years or more and<br />

has a surplus, not including land, buildings, and<br />

equipment, <strong>of</strong> at least $1 million, or which has been<br />

in operation for 10 years or more and has a surplus,<br />

including organization-related land, buildings, and<br />

equipment, <strong>of</strong> at least $5 million, the annual deposit<br />

requirement does not apply; however, if the guaranteeing<br />

organization is sponsoring more than one organization,<br />

the surplus requirement shall be increased<br />

by a multiple equal to the number <strong>of</strong> such organizations.<br />

This requirement to maintain a deposit in excess<br />

<strong>of</strong> $1 million does not apply during any time that<br />

the guaranteeing organization maintains for each or-<br />

770<br />

ganization it sponsors a surplus at least equal to<br />

$1,500,000.<br />

(4) All income from deposits shall belong to the<br />

depositing organization and shall be paid to it as it<br />

becomes available. A health maintenance organization<br />

that has made a securities deposit may withdraw<br />

that deposit, or any part there<strong>of</strong>, after making a substitute<br />

deposit <strong>of</strong> cash, securities, or any combination<br />

<strong>of</strong> these or other measures <strong>of</strong> equal amount and value.<br />

Any securities shall be approved by the department.<br />

(5) In any year in which an annual deposit is not<br />

required <strong>of</strong> an organization, at the request <strong>of</strong> the organization<br />

the department shall reduce the required,<br />

previously accumulated deposit to $100,000 for each<br />

$250,000 <strong>of</strong> surplus in excess <strong>of</strong> the amount that allows<br />

the organization not to make the annual deposit.<br />

If the amount <strong>of</strong> surplus no longer supports a reduction<br />

<strong>of</strong> its required deposit, the organization shall immediately<br />

redeposit $100,000 for each $250,000 <strong>of</strong> reduction<br />

in surplus, provided that its total deposit<br />

does not exceed the maximum required under this<br />

section.<br />

(6) The requirements <strong>of</strong> this section do not apply<br />

to an applying or licensed health maintenance organization<br />

which has on file with the department contracts<br />

<strong>of</strong> insurance or reinsurance to protect subscribers<br />

in the event the organization is unable to meet its<br />

obligations. Each such agreement between the organization<br />

and an insurer shall be subject to the laws <strong>of</strong><br />

this state regarding reinsurance. Each such agreement<br />

and any modifications thereto must be filed<br />

with and approved by the department. Each such<br />

agreement shall remain in full force and effect until<br />

replaced or for at least 90 days following written notification<br />

to the department by registered mail <strong>of</strong> cancellation<br />

by either party.<br />

History.-S8. 791, 809(18t), ch. 82-243; 8. 10, ch. 83-198.<br />

'Note.-Expires October 1, 1991, pursuant to s. 809(18t), ch. 82-243, and is<br />

scbeduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.29 Fees.-Every health maintenance organization<br />

shall pay to the department the following<br />

fees:<br />

(1) For filing a copy <strong>of</strong> its application for a certificate<br />

<strong>of</strong> authority or amendment thereto, a nonrefundable<br />

fee in the amount <strong>of</strong> $150.<br />

(2) For filing each annual report, $150.<br />

Fees charged under this section shall be distributed<br />

as follows: one-third to the Department <strong>of</strong> Health<br />

and Rehabilitative Services and two-thirds to the Department<br />

<strong>of</strong> Insurance.<br />

History.-8. 13, ch. 72-264; 8. 3, cb. 76-168; s. 1, ch. 77-457; S8. 2, 3, cb.<br />

81-318; ... 792, 804, 809(18t), cb. 82-243.<br />

'Note.-Expires October 1, 1991, pursuant to s. 809(18t), cb. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.30 Construction and relationship to other<br />

laws.-<br />

(1) Every health maintenance organization and<br />

its agents and employees shall be subject to the provisions<br />

<strong>of</strong> part VIII <strong>of</strong> chapter 626.<br />

(2) Except as provided in this part, the <strong>Florida</strong><br />

Insurance Code does not apply to health maintenance<br />

organizations, and health maintenance organi-


F.S.<strong>1983</strong> HEALTH CARE SERVICE PROGRAMS Ch.641<br />

zations certificated under this part are not subject to<br />

part I <strong>of</strong> this chapter.<br />

(3) Solicitation <strong>of</strong> subscribers by a health maintenance<br />

organization or its representatives shall not be<br />

construed to be violative <strong>of</strong> any provisions <strong>of</strong> law relating<br />

to solicitation or advertising by health pr<strong>of</strong>essionals.<br />

History.-s. 14, ch. 72-264; s. 3, ch. 76-168; s. I, ch. 77-457; ss. 2, 3, ch.<br />

81-318; ss. 793, 804, 809(1st), ch. 82-243.<br />

'Note.-Expires October I, 1991, pursuant to s. 809(lst), ch. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> tbat date.<br />

1641.31 Health maintenance contracts.-<br />

(1) Any entity issued a certificate and otherwise<br />

in compliance with this part may enter into contracts<br />

in this state to provide an agreed-upon set <strong>of</strong> comprehensive<br />

health care services to subscribers in exchange<br />

for a prepaid per capita sum or a prepaid aggregate<br />

fixed sum.<br />

(2) The rates charged by any health maintenance<br />

organization to its subscribers shall not be excessive,<br />

inadequate, or unfairly discriminatory. The department<br />

may define by rule what constitutes excessive,<br />

inadequate, or unfairly discriminatory rates and may<br />

require whatever information it deems necessary to<br />

determine that a rate or proposed rate meets the requirements<br />

<strong>of</strong> this subsection.<br />

(3) If a health maintenance organization desires<br />

to amend any contract with its subscribers or desires<br />

to change any rate charged therefor, it may do so,<br />

upon filing with the department any proposed<br />

amendments or change in rates. Any proposed<br />

change shall be effective immediately, subject to disapproval<br />

by the department. However, it is not the<br />

intent <strong>of</strong> this subsection to restrict unduly the right<br />

to modify rates in the exercise <strong>of</strong> reasonable business<br />

judgment.<br />

(4) Every health maintenance contract must<br />

clearly state all <strong>of</strong> the services to which a subscriber<br />

is entitled under the contract and must include a<br />

clear and understandable statement <strong>of</strong> any limitations<br />

on the services or kinds <strong>of</strong> services to be provided,<br />

including any copayment feature required by the<br />

contract or by any insurer or entity which is underwriting<br />

any <strong>of</strong> the services <strong>of</strong>fered by the health<br />

maintenance organization. The contract shall also<br />

state where and in what manner the comprehensive<br />

health care services may be obtained.<br />

(5) Every subscriber shall receive a clear and understandable<br />

description <strong>of</strong> the method <strong>of</strong> the health<br />

maintenance organization for resolving subscriber<br />

grievances.<br />

(6) The rate <strong>of</strong> payment for a health maintenance<br />

contract shall be a part <strong>of</strong> the contract and shall be<br />

stated in individual contracts issued to subscribers.<br />

(7) For an appropriate additional premium, the<br />

health maintenance organization shall make available,<br />

according to the standards and procedures <strong>of</strong><br />

such organization, physician care provided by physicians<br />

licensed under chapter 459, chapter 460, or<br />

chapter 461.<br />

(8) A health maintenance organization is entitled<br />

to coordinate benefits on the same basis as an insurer<br />

under s. 627.4235.<br />

(9) A health maintenance organization providing<br />

medical benefits or payments to a subscriber who<br />

suffers injury, disease, or illness by virtue <strong>of</strong> the neg-<br />

771<br />

ligent act or omission <strong>of</strong> a third party is entitled to<br />

reimbursement from the subscriber, on a<br />

fee-for-service basis, for the reasonable value <strong>of</strong> the<br />

benefits or payments provided. However, the health<br />

maintenance organization is not entitled to reimbursement<br />

for medical expenses rendered in excess <strong>of</strong><br />

the subscriber's monetary recovery from the third<br />

party.<br />

History.-s. 15, ch. 72-264; s. 3, ch. 76-168; s. I, ch. 77-457; s. 21, ch. 78-95;<br />

ss. 2, 3, ch. 81-318; ss. 794, 804, 809(lst), ch. 82-243; s. 11, ch. 83-198.<br />

'Note.-Expires October I, 1991, pursuant to s. 809(1st), ch. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.315 Provider contracts.-Whenever a<br />

contract exists between a health maintenance organization<br />

and a provider and the organization fails to<br />

meet its obligations to pay fees for services already<br />

rendered to a subscriber, the health maintenance organization<br />

shall be liable for such fee or fees rather<br />

than the subscriber; and the contract shall so state.<br />

History.-ss. 795, 809(lst), ch. 82-243; s. 12, ch. 83-198.<br />

'Note.-Expires October I, 1991, pursuant to s. 809(lst), ch. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.32 Acceptable payments.-Each health<br />

maintenance organization may accept from governmental<br />

agencies, corporations, associations, groups,<br />

or individuals payments covering all or part <strong>of</strong> the<br />

cost <strong>of</strong> contracts entered into between the health<br />

maintenance organization and its subscribers.<br />

History.-s. 16, ch. 72-264; s. 3, ch. 76-168; s. I, ch. 77-457; ss. 2, 3, cb.<br />

81-318; ss. 796, 804, 809(1st), ch. 82-243.<br />

'Note.-Expires October I , 1991, pursuant to s. 809(lst), cb. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.33 Certain words prohibited in name <strong>of</strong><br />

organization.-<br />

(1) No entity certificated as a health maintenance<br />

organization, other than a licensed insurer ins<strong>of</strong>ar<br />

as its name is concerned, shall use in its name,<br />

contracts, or literature any <strong>of</strong> the words "insurance,"<br />

"casualty," "surety," "mutual," or any other words descriptive<br />

<strong>of</strong> the insurance, casualty, or surety business<br />

or deceptively similar to the name or description<br />

<strong>of</strong> any insurance or surety corporation doing business<br />

in the state.<br />

(2) No person, entity, or health care plan not certificated<br />

under the provisions <strong>of</strong> this part shall use in<br />

its name, logo, contracts, or literature the phrase<br />

"health maintenance organization" or the initials<br />

"HMO"; imply, directly or indirectly, that it is a<br />

health maintenance organization; or hold itself out to<br />

be a health maintenance organization.<br />

History.-s. 17, cb. 72-264; s. 3, ch. 76-168; s. I, ch. 77-457; ss. 2, 3, cb.<br />

81-318; ss. 797, 804, 809(lst), ch. 82-243.<br />

'Note.-Expires October I, 1991, pursuant to s. 809(lst), ch. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.35 Investment <strong>of</strong> funds.-The funds <strong>of</strong><br />

any health maintenance organization shall be invested<br />

only in securities permitted by the laws <strong>of</strong> this<br />

state for the investment <strong>of</strong> assets <strong>of</strong> life insurance<br />

companies.<br />

History.-s. 19, ch. 72-264; s. 3, ch. 76-168; s. I, ch. 77-457; ss. 2, 3, ch.<br />

81-318; ss. 799, 804, 809(lst), ch. 82-243.<br />

'Note.- Expires October I, 1991, pursuant to s. 809(lst), ch. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.36 Promulgation <strong>of</strong> rules.-The depart-


Ch.641 HEALTH CARE SERVICE PROGRAMS F.S.<strong>1983</strong><br />

ment, together with the Department <strong>of</strong> Health and<br />

Rehabilitative Services, on a joint basis, shall promulgate<br />

rules necessary to carry out the provisions <strong>of</strong><br />

this part. The approval <strong>of</strong> both departments is required<br />

as a condition to the implementation <strong>of</strong> any<br />

rule governing health maintenance organizations.<br />

The department shall collect and make available in a<br />

single volume all health maintenance organization<br />

rules promulgated by the departments.<br />

History.-B. 20, ch. 72-264; B. 3, ch. 76-168; B. 1, ch. 77-457; 88. 2, 3, ch.<br />

81-318; 88. BOO, 804, 809(lst), ch. 82-243.<br />

'Note.-Expires October 1, 1991, pursuant to B. 809(1Bt), ch. 82-243, and iB<br />

Bcheduled for review pursuant to B. 11.61 in advance <strong>of</strong> that date.<br />

cf.-B. 768.41 Internal risk management program; rules.<br />

1641.37 Penalty.-Any person who violates the<br />

provisions <strong>of</strong> this part is guilty <strong>of</strong> a misdemeanor <strong>of</strong><br />

the first degree and shall be punished by a fine not<br />

exceeding $1,000 or by imprisonment for a period not<br />

772<br />

exceeding 1 year, or by both such fine and imprisonment.<br />

History.-B. 21, ch. 72-264; B. 3, ch. 76-168; B. 1, ch. 77-457; BB. 2, 3, ch.<br />

81-318; 88. SOl, 804, 809(lst), ch. 82-243.<br />

'Note.-ExpireB October 1, 1991, pursuant to B. 809(lBt), ch. 82-243, and iB<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1641.38 Operational health maintenance organizations;<br />

issuance <strong>of</strong> certificate.-The provisions<br />

<strong>of</strong> this part do not apply to those organizations<br />

providing the services defined in ss. 641-17-641-38<br />

which have been continuously engaged in providing<br />

such services since January 1, 1947_ This exemption<br />

shall terminate upon a change in controlling ownership<br />

<strong>of</strong> the organization.<br />

History.-B. 23, ch. 72-264; B. 3, ch. 76-168; B. 1, ch. 77-457; BB. 2, 3, ch.<br />

81-318; 88. S02, S04, 809(lst), ch. 82-243.<br />

'Note.-ExpireB October 1, 1991, pursuant to B. 809(lst), ch. 82-243, and is<br />

scheduled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.


F.S.<strong>1983</strong> LEGAL EXPENSE INSURANCE Ch.642<br />

642.011<br />

642.013<br />

642.015<br />

642.017<br />

642.019<br />

642.021<br />

642.023<br />

642.025<br />

642.027<br />

642.029<br />

642.032<br />

642.0331<br />

642.0334<br />

642.0336<br />

642.0338<br />

642.034<br />

642.036<br />

642.038<br />

642.041<br />

642.043<br />

642.045<br />

642.047<br />

642.0475<br />

642.049<br />

Short title.<br />

Purpose.<br />

Definitions.<br />

Exemptions. .<br />

Organization <strong>of</strong> legal expense insurance<br />

corporations.<br />

Certificate <strong>of</strong> authority.<br />

Required deposit or bond.<br />

Policy and certificate forms.<br />

Premium rates.<br />

Contracts by insurers.<br />

Provisions <strong>of</strong> general insurance law applicable<br />

to legal expense insurance corporations.<br />

Grounds for suspension or revocation <strong>of</strong><br />

certificate.<br />

Order; notice <strong>of</strong> suspension or revocation<br />

<strong>of</strong> certificate; effect; publication.<br />

Duration <strong>of</strong> suspension; obligations during<br />

suspension; reinstatement.<br />

Administrative fine in lieu <strong>of</strong> suspension<br />

or revocation.<br />

Registration required.<br />

Sales representatives to be registered.<br />

Reporting and accounting for funds.<br />

Grounds for compulsory refusal, suspension,<br />

or revocation <strong>of</strong> registration <strong>of</strong><br />

contracting sales representatives.<br />

Grounds for discretionary refusal, suspension,<br />

or revocation <strong>of</strong> registration <strong>of</strong><br />

sales representatives.<br />

Procedure for refusal, suspension, or revocation<br />

<strong>of</strong> registration <strong>of</strong> sales representative;<br />

departmental action upon violation<br />

by licensed insurance agent or solicitor.<br />

Administrative fine in lieu <strong>of</strong> suspension<br />

or revocation <strong>of</strong> registration.<br />

Civil remedy.<br />

Construction.<br />

'642.011 Short title.-Sections 642.011-642.049<br />

may be cited as the "Legal Expense Insurance Act."<br />

Hi8tory.-s. I, ch. 79-103; s. 2, ch. 81-318; ss. 20, 21, ch. 83-278.<br />

'Note.- Repealed effective October I, 1993, by s. 21, ch. 83-278, and scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

'642.013 Purpose.-The purpose <strong>of</strong> ss.<br />

642.011-642.049 is to authorize certification and regulation<br />

<strong>of</strong> certain organizations which provide programs<br />

for the payment <strong>of</strong> the costs <strong>of</strong> legal services or<br />

provide legal services.<br />

Hi8tory.-s. I, ch. 79-103; s. 2, ch. 81-318; 88. 20, 21, ch. 83-278.<br />

'Not e.- Repealed effective October I, 1993, by s. 21, ch. 83-278, and scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

'642.015 Definitions.-As used in ss.<br />

642.011-642.049, the term:<br />

(1) "Department" means the Department <strong>of</strong> Insurance.<br />

(2) "Insurance code" means the <strong>Florida</strong> Insurance<br />

Code as provided in s. 624.01.<br />

CHAPTER 642<br />

LEGAL EXPENSE INSURANCE<br />

773<br />

(3) "Insurer" means any person authorized to<br />

conduct a life or casualty insurance business in this<br />

state or a legal expense insurance corporation authorized<br />

under ss. 642.011-642.049.<br />

(4) "Legal expense insurance" means a contractual<br />

obligation to provide specific legal services, or to<br />

reimburse for specific legal expenses, ih consideration<br />

<strong>of</strong> a specified payment for an interval <strong>of</strong>.time, regardless<br />

<strong>of</strong> whether the payment is made by the beneficiaries<br />

individually or by a third person for them, but<br />

does not include the provision <strong>of</strong>, or reimbursement<br />

for, legal services incidental to other insurance coverages.<br />

Hi8tory.-s. I, ch. 79-103; s. 2, ch. 81-318; ss. I, 20, 21 , ch. 83-278.<br />

'Note.-Expires October I, 1993, pursuant to s. 21, ch. 83-278, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

'642.017 Exemptions.-The provisions <strong>of</strong> the<br />

<strong>Florida</strong> Insurance Code and ss. 642.011-642.049 do<br />

not apply to:<br />

(1) Retainer contracts made by attorneys-at-law<br />

with individual clients with fees based on estimates<br />

<strong>of</strong> the nature and amount <strong>of</strong> services to be provided<br />

to the specific client and similar contracts made with<br />

a group <strong>of</strong> clients involved in the same or closely related<br />

legal matters.<br />

(2) Any lawyer referral service authorized by The<br />

<strong>Florida</strong> Bar.<br />

(3) The furnishing <strong>of</strong> legal assistance by labor<br />

unions or other employee organizations to their members<br />

in matters relating to employment or occupation.<br />

(4) The furnishing <strong>of</strong> legal assistance to members,<br />

or their dependents, by a church, cooperative, educational<br />

institution, credit union, or organization <strong>of</strong> employees,<br />

in which the organization contracts directly<br />

with a lawyer or law firm for the provision <strong>of</strong> legal<br />

services and the administration and marketing <strong>of</strong><br />

such legal services are conducted wholly by the organization.<br />

(5) Employee welfare benefit plans to the extent<br />

that state laws are superseded by the Employee Retirement<br />

Income Security Act <strong>of</strong> 1974, 29 U.S.C. s.<br />

1144, provided evidence <strong>of</strong> exemption from state laws<br />

is shown to the department.<br />

Hi8tory.-s. I, ch. 79-103; s. 2, ch. 81-318; sa. 2, 20, 21, ch. 83-278.<br />

'Note.-Expires October I, 1993, pursuant to s. 21, ch. 83-278, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

'642.019 Organization <strong>of</strong> legal expense insurance<br />

corporations.-<br />

(1) Any number <strong>of</strong> corporations or adult natural<br />

persons may organize a legal expense insurance corporation<br />

under the law <strong>of</strong> this state relating to corporations<br />

generally.<br />

(2) The articles <strong>of</strong> incorporation shall conform to<br />

the requirements applicable to corporations, and, in<br />

addition:<br />

(a) The name bf the corporation shall indicate<br />

that legal services or indemnity for legal expenses is<br />

to be provided; and<br />

(b) The purposes <strong>of</strong> the corporation shall be lim-


Ch.642 LEGAL EXPENSE INSURANCE F.S.<strong>1983</strong><br />

ited to providing legal services or indemnity for legal<br />

expenses and business reasonably related thereto.<br />

History.- s. 1, ch. 79-103; s. 2, ch. 81-318; 88. 3, 20, 21, ch. 83-278.<br />

'Note.-Expires October 1, 1993, pursuant to s. 21, ch. 83-278, and is scheduled<br />

for review pursuant to •. 11.61 in advance <strong>of</strong> that date.<br />

'642.021 Certificate <strong>of</strong> authority.-<br />

(1) It is unlawful for any person to engage in a legal<br />

expense insurance business in this state without a<br />

valid certificate <strong>of</strong> authority issued by the department,<br />

pursuant to ss. 642.011-642.049, except that a<br />

domestic, foreign, or alien insurer authorized to<br />

transact life or casualty insurance in this state may<br />

transact legal expense insurance provided it complies<br />

with the applicable provisions <strong>of</strong> ss. 642.011-642.049.<br />

A certificate <strong>of</strong> authority under ss. 642.011-642.049<br />

may be issued only to a legal expense insurance corporation.<br />

(2) The corporation shall file with the department<br />

an application for a certificate <strong>of</strong> authority<br />

upon a form to be furnished by the department,<br />

which shall include or have attached the following:<br />

(a) The names, addresses, and occupations <strong>of</strong> all<br />

incorporators and proposed directors and <strong>of</strong>ficers.<br />

(b) A certified copy <strong>of</strong> the corporate articles and<br />

bylaws and, for the 3 most recent years, the annual<br />

statements and reports <strong>of</strong> the corporation.<br />

(c) Each agreement relating to the corporation to<br />

which any incorporator or proposed director or <strong>of</strong>ficer<br />

is a party.<br />

(d) A statement <strong>of</strong> the amount and sources <strong>of</strong> the<br />

funds available for organization expenses and the<br />

proposed arrangements for reimbursement and compensation<br />

<strong>of</strong> incorporators or other persons.<br />

(e) A statement <strong>of</strong> compensation to be provided<br />

directors and <strong>of</strong>ficers.<br />

(f) The forms to be used for any proposed contracts<br />

between the corporation and participating attorneys<br />

or between the corporation and corporations<br />

which perform administration, marketing, or management<br />

services and the forms relating to the provision<br />

<strong>of</strong> services to insureds.<br />

(g) The plan for conducting the insurance business,<br />

which plan shall include all <strong>of</strong> the following:<br />

1. The geographical area in which business is intended<br />

to be conducted in the first 5 years.<br />

2. The types <strong>of</strong> insurance intended to be written<br />

in the first 5 years, including specification whether<br />

and to what extent indemnity rather than service<br />

benefits are to be provided.<br />

3. The proposed marketing methods.<br />

(h) A current statement <strong>of</strong> the assets and liabilities<br />

<strong>of</strong> the corporate applicant.<br />

(i) Forms <strong>of</strong> all legal service contracts the applicant<br />

proposes to <strong>of</strong>fer showing the rates to be<br />

charged for each form <strong>of</strong> contract.<br />

(j) Such other documents and information as the<br />

department may reasonably require.<br />

(3) Copies <strong>of</strong> the documents filed pursuant to<br />

paragraphs (f) and (i) <strong>of</strong> subsection (2) shall be filed<br />

with The <strong>Florida</strong> Bar within 5 days after filing with<br />

the department.<br />

(4) The department shall issue a certificate <strong>of</strong> authority<br />

only to a legal expense insurance corporation,<br />

provided it is satisfied that:<br />

774<br />

(a) All requirements <strong>of</strong> law have been met;<br />

(b) All natural persons who are incorporators, the<br />

directors and principal <strong>of</strong>ficers <strong>of</strong> corporate incorporators,<br />

and the proposed directors and <strong>of</strong>ficers <strong>of</strong> the<br />

corporation being formed are trustworthy and collectively<br />

have the competence and experience to engage<br />

in the particular insurance business proposed; and<br />

(c) The business plan is consistent with the interests<br />

<strong>of</strong> potential insureds and <strong>of</strong> the public.<br />

History.-s. 1, ch. 79-103; s. 2, ch. 81-318; 88. 4, 20, 21, ch. 83-278.<br />

'Note.-Expires October 1, 1993, pursuant to s. 21, ch. 83-278, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

'642.023 Required deposit or bond.-<br />

(1) To assure the faithful performance <strong>of</strong> its obligations<br />

in the event <strong>of</strong> insolvency, each legal expense<br />

insurance corporation, prior to the issuance <strong>of</strong> its certificate<br />

<strong>of</strong> authority, shall deposit and maintain with<br />

the department securities <strong>of</strong> the type eligible for deposit<br />

by insurers under s. 625.52, which securities<br />

shall be held in trust and shall have at all times a<br />

market value in the amount specified. Whenever the<br />

market value <strong>of</strong> the securities deposited with the department<br />

is less than 95 percent <strong>of</strong> the amount <strong>of</strong> the<br />

deposit required, the insurer shall deposit additional<br />

securities or otherwise increase the deposit to the<br />

amount required. The initial deposit for a corporation<br />

shall be in the amount <strong>of</strong> $50,000 for at least the<br />

first full year <strong>of</strong> operation. The amount <strong>of</strong> the initial<br />

deposit shall be adjusted annually thereafter on October<br />

1 as follows:<br />

(a) Each corporation having in force $300,000 or<br />

less <strong>of</strong> gross written premiums shall deposit with the<br />

department an amount equal to $30,000.<br />

(b) Each corporation having in force more than<br />

$300,000 <strong>of</strong> gross written premiums, but less than<br />

$750,000, shall deposit with the department an<br />

amount equal to $75,000.<br />

(c) Each corporation having in force more than<br />

$750,000 <strong>of</strong> gross written premiums shall deposit<br />

with the department an amount equal to $100,000.<br />

(2) In lieu <strong>of</strong> any deposit <strong>of</strong> securities required<br />

under subsection (1) and subject to the approval <strong>of</strong><br />

the department, a legal service insurance corporation<br />

may file with the department a surety bond issued by<br />

an authorized surety insurer. The bond shall be for<br />

the same purpose as the deposit in lieu <strong>of</strong> which it is<br />

filed. The department may not approve any bond under<br />

the terms <strong>of</strong> which the protection afforded<br />

against insolvency is not equivalent to the protection<br />

afforded by those securities provided for in subsection<br />

(1).<br />

(3) Securities or bonds deposited pursuant to this<br />

section shall be for the benefit <strong>of</strong>, and subject to, action<br />

thereon by any person sustaining an actionable<br />

injury due to the failure <strong>of</strong> the corporation to faithfully<br />

perform its obligations to its insureds in the<br />

event <strong>of</strong> insolvency or impairment <strong>of</strong> any legal expense<br />

insurance corporation.<br />

(4) The state shall be responsible for the safekeeping<br />

<strong>of</strong> all securities deposited with the department<br />

under ss. 642.011-642.049. Such securities are<br />

not, on account <strong>of</strong> being in this state, subject to taxation,<br />

but shall be held exclusively and solely to guarantee<br />

the performance by the legal expense insurance<br />

corporation <strong>of</strong> its obligations to its insureds.


F.S.<strong>1983</strong> LEGAL EXPENSE INSURANCE Ch.642<br />

(5) Such deposit or bond shall be maintained unimpaired<br />

as long as the legal expense insurance corporation<br />

continues to do business in this state.<br />

Whenever the corporation ceases to do business in<br />

this state and furnishes pro<strong>of</strong> satisfactory to the department<br />

that it has discharged or otherwise adequately<br />

provided for all its obligations to its insureds<br />

in this state, the department shall release the deposited<br />

securities to the parties entitled thereto, on presentation<br />

<strong>of</strong> the receipts <strong>of</strong> the department for such<br />

securities, or shall release the bond filed with it in<br />

lieu <strong>of</strong> such deposit.<br />

(6) The department, upon written request <strong>of</strong> the<br />

legal expense insurance corporation, may reduce the<br />

amount <strong>of</strong> deposit or bond required under subsection<br />

(1) if it finds that the policyholders and certificateholders<br />

<strong>of</strong> the corporation are adequately protected<br />

by:<br />

(a) The terms and number <strong>of</strong> existing contracts<br />

with subscribers;<br />

(b) Financial guarantees <strong>of</strong> financially sound<br />

public or private organizations or agencies;<br />

(c) Other reliable financial guarantees; or<br />

(d) Plan attorney agreements that provide for<br />

full plan benefits to subscribers without additional<br />

payments by the subscribers if the plan terminates.<br />

(7) The department may at any time enter an order<br />

modifying the amount <strong>of</strong> the deposit or bond<br />

specified under subsection (1) or subsection (2) if it<br />

finds that there has been a substantial change in the<br />

facts on which the determination was based.<br />

History.-s. 1, ch. 79-103; s. 2, ch_ 81-318; 88. 5, 20, 21, ch_ 83-278_<br />

'Note.-Expires October 1, 1993, pursuant to s. 21, ch. 83-278, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1642.025 Policy and certificate forms.-<br />

(1) Legal expense insurance may be written as individual,<br />

group, blanket, or franchise insurance. Each<br />

contractual obligation for legal expense insurance<br />

shall be evidenced by a policy. Each person insured<br />

under a group policy shall be issued a certificate <strong>of</strong><br />

coverage.<br />

(2) No policy or certificate <strong>of</strong> legal expense insurance<br />

may be issued in this state unless a copy <strong>of</strong> the<br />

form has been filed with and approved by the department<br />

pursuant to s. 627.410.<br />

(3) The department shall not approve any policy<br />

or certificate form which does not meet the following<br />

requirements:<br />

(a) Policies shall contain a list and description <strong>of</strong><br />

the legal services to be supplied or the legal matters<br />

for which expenses are to be reimbursed and any limits<br />

on the amounts to be reimbursed.<br />

(b) Policies and certificates shall indicate the<br />

name <strong>of</strong> the insurer and the full address <strong>of</strong> its principal<br />

place <strong>of</strong> business.<br />

(c) Certificates issued under group policies shall<br />

contain a full statement <strong>of</strong> the benefits provided and<br />

exceptions thereto but may summarize the other<br />

terms <strong>of</strong> the master policy.<br />

(d) Policies providing for legal services to be supplied<br />

by a limited number <strong>of</strong> attorneys who have executed<br />

provider contracts with the insurer, whether<br />

the attorney in an individual case is to be selected by<br />

the insured or by the insurer, shall provide for alternative<br />

benefits if the insured is unable to find a par-<br />

775<br />

ticipating attorney willing to perform the services or<br />

the attorney selected by the insurer is disqualified or<br />

otherwise unable to perform the services. The alternative<br />

benefit may consist <strong>of</strong> furnishing the services<br />

<strong>of</strong> an attorney selected and paid by the insurer or<br />

paying the fee <strong>of</strong> an attorney selected by the insured.<br />

The policy shall also provide a procedure that includes<br />

impartial review for settling disagreements<br />

concerning the grounds for demanding an alternative<br />

benefit.<br />

(e) No policy, except one issued by a mutual or<br />

reciprocal insurance company, may provide for assessments<br />

on policyholders or for reduction <strong>of</strong> benefits<br />

for the purpose <strong>of</strong> maintaining the insurer's solvency.<br />

(f) Policies shall contain a statement that the<br />

subscriber has a right to file a complaint with The<br />

<strong>Florida</strong> Bar concerning attorney conduct pursuant to<br />

the plan.<br />

(g) Policies shall contain a statement that the individual<br />

beneficiary has the right to retain, at his own<br />

expense, except when the policy provides otherwise,<br />

any attorney authorized to practice law in this state.<br />

(4) The department may disapprove a policy or<br />

certificate form if it finds that the form:<br />

(a) Is unfair, unfairly discriminatory, misleading,<br />

or ambiguous or encourages misrepresentation or<br />

misunderstanding <strong>of</strong> the contract;<br />

(b) Provides coverage or benefits or contains other<br />

provisions that would endanger the solvency <strong>of</strong> the<br />

insurer; or<br />

(c) Is contrary to law.<br />

History.-s. 1, ch. 79-103; s. 2, ch. 81-318; 88. 6, 20, 21, ch. 83-278.<br />

'N ote.-Expires October 1, 1993, pursuant to s. 21, ch. 83-278, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1642.027 Premium rates.-No policy <strong>of</strong> legal<br />

expense insurance may be issued in this state unless<br />

the premium rates for the insurance have been filed<br />

with and approved by the department. Premium<br />

rates shall be established and justified in accordance<br />

with generally accepted insurance principles, including,<br />

but not limited to, the experience or judgment <strong>of</strong><br />

the insurer making the rate filing or actuarial computations.<br />

The department may disapprove rates that<br />

are excessive, inadequate, or unfairly discriminatory.<br />

Rates are not unfairly discriminatory because they<br />

are averaged broadly among persons insured under<br />

group, blanket, or franchise policies. The department<br />

may require the submission <strong>of</strong> any other information<br />

reasonably necessary in determining whether to approve<br />

or disapprove a filing made under this section<br />

or s. 642.025.<br />

History.-s. 1, ch. 79-103; s. 2, ch. 81-318; 88. 20, 21, ch. 83-278.<br />

'Note.-Repealed effective October 1, 1993, by s. 21, ch. 83-278, and scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1642.029 Contracts by insurers.-<br />

(1) Contracts made between the insurer and participating<br />

attorneys, management contracts, or contracts<br />

with providers <strong>of</strong> other services covered by the<br />

legal expense insurance policy shall be filed with and<br />

approved by the department.<br />

(2) An insurer shall annually report to the department<br />

the number and geographical distribution<br />

<strong>of</strong> attorneys and providers <strong>of</strong> other services covered<br />

by the legal expense insurance policy with whom it<br />

maintains contractual relations and the nature <strong>of</strong> the


Ch.642 LEGAL EXPENSE INSURANCE F.S.<strong>1983</strong><br />

relations. The department may require more frequent<br />

reports from an insurer or group <strong>of</strong> insurers.<br />

History.-s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 7, 20, 21, ch. 83-278.<br />

'Note.-Expires October 1, 1993, pursuant to s. 21, ch. 83-278, and is scheduled<br />

for review pursuant to 8. 11.61 in advance <strong>of</strong> that date.<br />

1642.032 Provisions <strong>of</strong> general insurance<br />

law applicable to legal expense insurance corporations.-The<br />

following provisions <strong>of</strong> the insurance<br />

laws <strong>of</strong> this state shall apply to legal service insurance<br />

corporations, to the extent that they are not<br />

inconsistent with the provisions <strong>of</strong> ss.<br />

642.011-642.049:<br />

(1) Chapter 624, administration and general provisions.<br />

(2) Chapter 625, accounting, investments, and<br />

deposits.<br />

(3) Chapter 626, part VIII, unfair insurance trade<br />

practices.<br />

(4) Chapter 627, part I, rates and rating organizations,<br />

and part II, the insurance contract.<br />

(5) Chapter 631, insurer insolvency; guaranty <strong>of</strong><br />

payment.<br />

History.-s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 8, 20, 21, ch. 83-278.<br />

'Note.-Expires October 1, 1993, pursuant to s. 21, ch. 83-278, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1642.0331 Grounds for suspension or revocation<br />

<strong>of</strong> certificate.-<br />

(1) The certificate <strong>of</strong> authority <strong>of</strong> an insurer,<br />

whether issued pursuant to this chapter or the insurance<br />

code, may be revoked or suspended, or the department<br />

may refuse to renew a certificate <strong>of</strong> authority,<br />

if the department determines that the insurer:<br />

(a) Has violated any lawful rule or order <strong>of</strong> the<br />

department or any provision <strong>of</strong> this chapter.<br />

(b) Is in an unsound financial condition which<br />

would render its further transaction <strong>of</strong> business in<br />

this state hazardous or injurious to its policyholders,<br />

its certificate holders, or the public.<br />

(c) Is using such methods or practices in the conduct<br />

<strong>of</strong> its business so as to render its further transaction<br />

<strong>of</strong> business in this state hazardous or injurious<br />

to its policyholders, its certificateholders, or the public.<br />

(d) Has refused to be examined or to produce its<br />

accounts, records, or files for examination, or if any<br />

<strong>of</strong> its <strong>of</strong>ficers have refused to give information with<br />

respect to its affairs or have refused to perform any<br />

other legal obligation as to such examination, when<br />

required by the department.<br />

(e) Has failed to pay any final judgment rendered<br />

against it in this state within 60 days after the judgment<br />

became final.<br />

(f) Without just cause has refused to pay proper<br />

claims or perform services arising under its policies<br />

or contracts; without just cause has compelled policyholders<br />

or certificateholders to accept less than the<br />

amount due them; or has employed attorneys, or has<br />

brought suit against the association, to secure full<br />

payment or settlement <strong>of</strong> such claims.<br />

(g) Is affiliated with, and under the same general<br />

management or interlocking directorate or ownership<br />

as, another insurer which transacts business in this<br />

state without having a certificate <strong>of</strong> authority.<br />

(2) The department may, pursuant to s. 120.60, in<br />

776<br />

its discretion and without advance notice or hearing<br />

thereon, immediately suspend the certificate <strong>of</strong> any<br />

insurer, whether such certificate was issued pursuant<br />

to this chapter or the insurance code, if it finds that<br />

one or more <strong>of</strong> the following circumstances exist:<br />

(a) The insurer is insolvent or impaired.<br />

(b) The deposit required by s. 642.023 is not being<br />

maintained.<br />

(c) Proceedings for receivership, conservatorship,<br />

or rehabilitation or other delinquency proceedings regarding<br />

the insurer have been commenced in any<br />

state.<br />

(d) The financial condition or business practices<br />

<strong>of</strong> the insurer otherwise pose an imminent threat to<br />

the public health, safety, or welfare <strong>of</strong> the residents<br />

<strong>of</strong> this state.<br />

History.-ss. 9, 21, ch. 83-278.<br />

'Note.-Expires October 1, 1993, pursuant to s. 21, ch. 83-278, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1642.0334 Order; notice <strong>of</strong> suspension or<br />

revocation <strong>of</strong> certificate; effect; publication.-<br />

(1) Suspension or revocation <strong>of</strong> a certificate <strong>of</strong><br />

authority <strong>of</strong> an insurer shall be by order <strong>of</strong> the department<br />

mailed to the corporation by registered or<br />

certified mail. The department also shall promptly<br />

give notice <strong>of</strong> such suspension or revocation to the<br />

sales representatives in this state <strong>of</strong> the corporation<br />

who are <strong>of</strong> record in the <strong>of</strong>fice <strong>of</strong> the department.<br />

The insurer shall not solicit or write any new contracts<br />

in this state during the period <strong>of</strong> any such suspension<br />

or revocation.<br />

(2) In its discretion, the department may cause<br />

notice <strong>of</strong> the revocation or suspension to be published<br />

in one or more newspapers <strong>of</strong> general circulation<br />

published in this state.<br />

History.-ss. 10, 21, ch. 83-278.<br />

'N ote.-Expires October 1, 1993, pursuant to s. 21, ch. 83-278, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1642.0336 Duration <strong>of</strong> suspension; obligations<br />

during suspension; reinstatement.-<br />

(1) Suspension <strong>of</strong> an insurer's' certificate <strong>of</strong> authority<br />

shall be for such period, not to exceed 1 year,<br />

as is fixed in the order <strong>of</strong> suspension, unless such suspension<br />

or the order upon which the suspension is<br />

based is modified, rescinded, or reversed.<br />

(2) During the period <strong>of</strong> suspension, the insurer<br />

shall file its annual statement and pay fees as required<br />

under this chapter as if the certificate <strong>of</strong> authority<br />

had continued in full force.<br />

(3) Upon expiration <strong>of</strong> the period <strong>of</strong> suspension,<br />

if within such period the certificate <strong>of</strong> authority has<br />

not otherwise terminated, the certificate <strong>of</strong> authority<br />

shall automatically be reinstated, unless the causes <strong>of</strong><br />

the suspension have not been removed or the insurer<br />

is otherwise not in compliance with the requirements<br />

<strong>of</strong> this chapter.<br />

(4) Upon reinstatement <strong>of</strong> an insurer's certificate<br />

<strong>of</strong> authority following suspension, the authority <strong>of</strong><br />

the sales representatives in this state to represent the<br />

insurer shall be reinstated.<br />

History.- ss. 11, 21, ch. 83-278.<br />

'Note.-Expires October 1, 1993, pursuant to s. 21, ch. 83-278, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1642.0338 Administrative fine in lieu <strong>of</strong> suspension<br />

or revocation.-<br />

(1) If the department finds that one or more


Ch.642 LEGAL EXPENSE INSURANCE F.S.<strong>1983</strong><br />

(5) Demonstrated lack <strong>of</strong> fitness or trustworthiness<br />

to engage in the business <strong>of</strong> legal expense insurance.<br />

(6) Demonstrated lack <strong>of</strong> adequate knowledge<br />

and technical competence to engage in the transactions<br />

authorized by the registration.<br />

(7) Fraudulent or dishonest practices in the conduct<br />

<strong>of</strong> business under the registration.<br />

(8) Misappropriation, conversion, or unlawful<br />

withholding <strong>of</strong> moneys belonging to an insurer or<br />

other person and received in the conduct <strong>of</strong> business<br />

under the registration.<br />

(9) Rebating, or attempting to rebate, or unlawfully<br />

dividing, or <strong>of</strong>fering to divide, his commission<br />

with another.<br />

(10) Willful failure to comply with, or willful violation<br />

<strong>of</strong>, any proper order or rule <strong>of</strong> the department<br />

or willful violation <strong>of</strong> any provision <strong>of</strong> ss.<br />

642.011-642.049.<br />

(11) Being found guilty <strong>of</strong>, or pleading guilty or<br />

nolo contendere to, a felony which involves moral<br />

turpitude, without regard to whether a judgment <strong>of</strong><br />

conviction has been entered.<br />

History.-B. 1. ch. 79-103; B. 2, ch. 81-318; 88. 16, 20, 21, ch. 83-278.<br />

'Note.-Expires October 1, 1993, pursuant to B. 21, ch. 83-278, and is scheduled<br />

for review pursuant to B. 11.61 in advance <strong>of</strong> tbat date.<br />

1642.043 Grounds for discretionary refusal,<br />

suspension, or revocation <strong>of</strong> registration <strong>of</strong><br />

sales representatives.-The department may, in<br />

its discretion, deny, suspend, revoke, or refuse to renew<br />

or continue the registration <strong>of</strong> any sales representative<br />

if it finds that, as to the representative, any<br />

one or more <strong>of</strong> the following applicable grounds exist<br />

under circumstances for which such denial, suspension,<br />

revocation, or refusal is not mandatory under s.<br />

642.041:<br />

(1) Any cause for which granting <strong>of</strong> the registration<br />

could have been refused had it been known to<br />

the department at the time <strong>of</strong> application.<br />

(2) Violation <strong>of</strong> any provision <strong>of</strong> ss.<br />

642.011-642.049, or <strong>of</strong> any other law applicable to the<br />

business <strong>of</strong> legal expense insurance in the course <strong>of</strong><br />

dealings under the registration.<br />

(3) Violation <strong>of</strong> any lawful order or rule <strong>of</strong> the department.<br />

(4) Failure or refusal to pay over, upon demand,<br />

to any insurer he represents, or has represented, any<br />

money which belongs to the insurer.<br />

(5) In the conduct <strong>of</strong> business under the registration,<br />

having engaged in unfair methods <strong>of</strong> competition<br />

or in unfair or deceptive acts or practices, as<br />

such methods, acts, or practices are defined under<br />

part VIII <strong>of</strong> chapter 626, or having otherwise shown<br />

himself to be a source <strong>of</strong> injury or loss to the public or<br />

detrimental to the public interest.<br />

(6) Having been found guilty <strong>of</strong>, or having pled<br />

guilty or nolo contendere to, a felony, whether or not<br />

a judgment <strong>of</strong> conviction has been entered.<br />

History.-B. 1, ch. 79-103; B. 2, ch. 81-318; BB. 17,20,21, ch. 83-278.<br />

'Note.-Expires October 1, 1993, pursuant to s. 21, ch. 83-278, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1642.045 Procedure for refusal, suspension,<br />

or revocation <strong>of</strong> registration <strong>of</strong> sales representative;<br />

departmental action upon violation by licensed<br />

insurance agent or solicitor.-<br />

778<br />

(1) If any sales representative is convicted by a<br />

court <strong>of</strong> a violation <strong>of</strong> any provision <strong>of</strong> ss.<br />

642.011-642.049, the registration <strong>of</strong> such individual<br />

shall thereby be deemed to be immediately revoked<br />

without any further procedure relative thereto by the<br />

department.<br />

(2) Whenever it appears that any licensed insurance<br />

agent or solicitor has violated the provisions <strong>of</strong><br />

ss. 642.011-642.049, or if any grounds listed in s.<br />

642.041 or s. 642.043 exist as to such agent or solicitor,<br />

the department may take such action as is authorized<br />

by the insurance code for a violation <strong>of</strong> the insurance<br />

code by such agent or solicitor, or such action<br />

as is authorized by this chapter for a violation <strong>of</strong> this<br />

chapter by a sales representative.<br />

History.-s. 1, ch. 79-103; s. 2, ch. 81-318; 88. 18, 20, 21, ch. 83-278.<br />

'Note.-Expires October 1, 1993, pursuant to 8. 21, ch. 83-278, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1642.047 Administrative fine in lieu <strong>of</strong> suspension<br />

or revocation <strong>of</strong> registration.-<br />

(1) If, pursuant to procedures provided for in ss.<br />

642.011-642.049, it is found that one or more grounds<br />

exist for the suspension or revocation <strong>of</strong>, or refusal to<br />

renew or continue, any registration issued under ss.<br />

642.011-642.049, and except when such suspension,<br />

revocation, or refusal is mandatory, an order may be<br />

entered imposing upon the registrant, in lieu <strong>of</strong> such<br />

suspension, revocation, or refusal, an administrative<br />

penalty for each violation in the amount <strong>of</strong> $100 or,<br />

in the event <strong>of</strong> willful misconduct or willful violation<br />

on the part <strong>of</strong> the registrant, an administrative fine<br />

<strong>of</strong> $500. The administrative penalty may be augmented<br />

in amount by an amount equal to any commissions<br />

received by or accruing to the credit <strong>of</strong> the<br />

registrant in connection with any transaction to<br />

which the grounds for suspension, revocation, or refusal<br />

related.<br />

(2) The order may allow the registrant a reasonable<br />

period not to exceed 30 days, within which to<br />

pay to the department the amount <strong>of</strong> the penalty so<br />

imposed. If the registrant fails to pay the penalty in<br />

its entirety to the department at its <strong>of</strong>fice in Tallahassee<br />

within the period so allowed, the registration<br />

<strong>of</strong> the registrant shall stand suspended or revoked, or<br />

renewal or continuation may be refused, as the case<br />

may be, upon expiration <strong>of</strong> such period and without<br />

any further proceedings.<br />

History.-B. 1, ch. 79-103; s. 2, ch. 81-318; BB. 20, 21, ch. 83-278.<br />

'Note.-Repealed effective October 1, 1993, by B. 21, ch. 83-278, and scheduled<br />

for review purBuant to B. 11.61 in advance <strong>of</strong> that date.<br />

1642.0475 Civil remedy.-<br />

(1) Any person damaged by a violation <strong>of</strong> the provisions<br />

<strong>of</strong> this chapter may bring a civil action against<br />

a person violating such provisions in the circuit court<br />

<strong>of</strong> the county in which the alleged violator resides, or<br />

has his principal place <strong>of</strong> business, or in the county<br />

wherein the alleged violation occurred. Upon adverse<br />

adjudication, the defendant shall be liable for actual<br />

damages or $500, whichever is greater, together with<br />

court costs and reasonable attorney's fees incurred by<br />

the plaintiff.<br />

(2) No punitive damages may be awarded under<br />

this section unless the acts giving rise to the violation<br />

occur with such frequency as to indicate a general<br />

business practice and these acts are:


F.S.<strong>1983</strong> LEGAL EXPENSE INSURANCE Ch.642<br />

(a) Willful, wanton, and malicious.<br />

(b) In reckless disregard for the rights <strong>of</strong> any insured.<br />

Any person who pursues a claim under this subsection<br />

shall post in advance the costs <strong>of</strong> discovery. Such<br />

costs shall be awarded to the insurer if no punitive<br />

damages are awarded to the plaintiff.<br />

(3) As a condition precedent to bringing an action<br />

under this section, the department and the person<br />

against whom the action is to be brought shall be given<br />

notice <strong>of</strong> the violation. The notice shall state with<br />

specificity the facts which allegedly constitute the violation<br />

and the law which the plaintiff is relying<br />

upon. No action shall lie if, within 30 days thereafter,<br />

779<br />

the damages are paid or the circumstances giving rise<br />

to the violation are corrected.<br />

(4) This section shall not be construed to authorize<br />

a class action suit against a legal expense insurance<br />

corporation or a civil action against the department,<br />

its employees, or the Insurance Commissioner.<br />

Hi.tory.-ss. 19, 21, ch. 83-278.<br />

'Note.-Expires October 1, 1993, pursuant to 8. 21, ch. 83-278, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1642.049 Construction.-Nothing contained in<br />

ss. 642.011-642.049 shall be construed to regulate the<br />

practice <strong>of</strong> law or limit the powers or authority <strong>of</strong> the<br />

Supreme Court <strong>of</strong> <strong>Florida</strong> in the regulation <strong>of</strong> the<br />

conduct <strong>of</strong> attorneys.<br />

Hi.tory.-s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 20, 21, ch. 83-278.<br />

'Note.-Repealed effective October 1, 1993, by 8. 21, ch. 83-278, and scheduled<br />

for review pursuant to 8. 11.61 in advance <strong>of</strong> that date.


Ch.648 BAIL BONDSMEN AND RUNNERS F.S.<strong>1983</strong><br />

648.25<br />

648.26<br />

648.27<br />

648.29<br />

648.30<br />

648.31<br />

648.32<br />

648.33<br />

648.34<br />

648.35<br />

648.36<br />

648.365<br />

648.37<br />

648.38<br />

648.388<br />

648.39<br />

648.40<br />

648.41<br />

648.42<br />

648.421<br />

648.43<br />

648.44<br />

648.441<br />

648.442<br />

648.45<br />

648.46<br />

648.48<br />

648.49<br />

648.50<br />

648.51<br />

648.52<br />

648.53<br />

648.55<br />

648.56<br />

648.57<br />

648.571<br />

Definitions for ss. 648.25-648.57.<br />

Department <strong>of</strong> Insurance; administration.<br />

Licenses, permits; general.<br />

Deposits or build-up funds posted by<br />

bondsman.<br />

License required.<br />

License tax and fee.<br />

Effective date and initial period <strong>of</strong> license.<br />

Bail bond rates.<br />

Bail bondsmen; qualifications.<br />

Pr<strong>of</strong>essional bondsmen; qualifications.<br />

Bail bondsman's records.<br />

Statistical reporting requirements.<br />

Runners; qualifications.<br />

Examination; time; place; fee; scope.<br />

Insurer must appoint general agent.<br />

Notice <strong>of</strong> appointment <strong>of</strong> agents; termination.<br />

Notice <strong>of</strong> appointment <strong>of</strong> pr<strong>of</strong>essional<br />

bondsmen; termination.<br />

Notice <strong>of</strong> appointment <strong>of</strong> runners; termination.<br />

Registration <strong>of</strong> bail bondsmen.<br />

Notice <strong>of</strong> change <strong>of</strong> address.<br />

Power <strong>of</strong> attorney; to be approved by department;<br />

filing <strong>of</strong> copies.<br />

Prohibitions.<br />

Furnishing supplies to unlicensed bail<br />

bondsmen prohibited; civil liability and<br />

penalty.<br />

Collateral security.<br />

Actions against a license or eligibility to<br />

hold a license.<br />

Procedure for suspension or revocation <strong>of</strong><br />

eligibility or for denial, revocation, suspension,<br />

or refusal to renew license.<br />

Witnesses and evidence.<br />

Duration <strong>of</strong> suspension or revocation.<br />

Effect <strong>of</strong> suspension, revocation upon associated<br />

licenses and licensees.<br />

Surrender <strong>of</strong> license or permit.<br />

Administrative fine.<br />

Probation.<br />

All bondsmen <strong>of</strong> same agency; licensed by<br />

same companies.<br />

Exemption.<br />

Penalty.<br />

Failure to return collateral; penalty.<br />

1648.25 Definitions for ss. 648.25-648.57.<br />

-The following words when used in ss. 648.25-648.57<br />

shall have the meanings respectively ascribed to<br />

them in this section:<br />

(1) "Department" means the Department <strong>of</strong> Insurance.<br />

(2) "Insurer" means any domestic, foreign, or<br />

alien surety company which has qualified to transact<br />

surety business in this state.<br />

(3) "Bail bondsman" means a limited surety agent<br />

or a general lines agent engaged in the bail bond<br />

CHAPTER 648<br />

BAIL BONDSMEN AND RUNNERS<br />

780<br />

business or a pr<strong>of</strong>essional bondsman as hereafter defined.<br />

(4) "Limited surety agent" means any individual<br />

appointed by an insurer by power <strong>of</strong> attorney to execute<br />

or countersign bail bonds in connection with judicial<br />

proceedings who receives or is promised money<br />

or other things <strong>of</strong> value therefor.<br />

(5) "Pr<strong>of</strong>essional bondsman" means any person<br />

who pledges United <strong>State</strong>s currency, United <strong>State</strong>s<br />

postal money orders, or cashier's checks or other<br />

property as security for a bail bond in connection<br />

with a judicial proceeding and receives or is promised<br />

therefor money or other things <strong>of</strong> value.<br />

(6) "General lines agent" means a duly licensed<br />

general lines agent as defined in s. 626.041.<br />

(7) "Runner" means a person employed by a bail<br />

bondsman, insurer, or general agent for the purpose<br />

<strong>of</strong> assisting the bail bondsman in presenting the defendant<br />

in court when required or employed by the<br />

bail bondsman to assist in the apprehension and surrender<br />

<strong>of</strong> the defendant to the court or keeping the<br />

defendant under necessary surveillance. This does<br />

not affect the right <strong>of</strong> a bail bondsman or insurer to<br />

hire counselor to obtain the assistance <strong>of</strong> law enforcement<br />

<strong>of</strong>ficers.<br />

(8) "General agent" means any individual, partnership,<br />

association, or corporation appointed or employed<br />

by an insurer to supervise or manage the bail<br />

bond business written by limited surety agents or<br />

general lines agents <strong>of</strong> such insurer.<br />

Hi.tory.-8. I, ch. 29621, 1955; 8. 2, ch. 57·63; 8. 6, ch. 65-492; 88. 13,35, ch.<br />

69-106; 8. 177, ch. 70-339; 8. 272, ch. 71-377; 8.3, ch. 76-168; 8. I, ch. 77-457; ...<br />

2, 3, ch. 81-318; 88. 1, 71,72, ch. 82-175; 8. 138, ch. 83-216.<br />

'Note.-Expires October I, 1984, pursuant to 8. 72, ch. 82-175, and is 8chedu1ed<br />

for review pursuant to 8. 11.61 in advance <strong>of</strong> that date.<br />

Note.-Former 8. 903.37.<br />

1648.26 Department <strong>of</strong> Insurance; administration.-<br />

(1) The department shall have full power and authority<br />

to administer the provisions <strong>of</strong> ss.<br />

648.25-648.57, which regulate bail bondsmen and<br />

runners, and, to that end, to adopt and promulgate<br />

rules pursuant to s. 624.308 <strong>of</strong> the insurance code and<br />

enforce such rules necessary and proper to effectuate<br />

and enforce the purposes and provisions <strong>of</strong> such sections.<br />

The department may employ and discharge<br />

such employees, examiners, counsel, and other assistants<br />

as shall be deemed necessary, and it shall prescribe<br />

their duties; their compensation shall be the<br />

same as other state employees receive for similar services.<br />

(2) The department shall adopt a seal by which<br />

its proceedings are authenticated. Any written instrument<br />

purporting to be a copy <strong>of</strong> any action, proceeding,<br />

or finding <strong>of</strong> fact by the department, or any<br />

record <strong>of</strong> the department authenticated by the seal,<br />

shall be accepted by all the courts <strong>of</strong> this state as prima<br />

facie evidence <strong>of</strong> the contents there<strong>of</strong>.<br />

(3) The papers, documents, reports, or evidence<br />

<strong>of</strong> the department shall not be subject to subpoena<br />

without its consent until after the same has been<br />

published at a hearing held under such sections, unless<br />

after notice to the department and hearing, the


Ch.648 BAIL BONDSMEN AND RUNNERS F.S.<strong>1983</strong><br />

(a) Original license:<br />

Appointment fee ....................................... $22<br />

<strong>State</strong> license tax ....................................... $12<br />

County license tax ...................................... $6<br />

Total ....................................................................... $40<br />

(b) Biennial renewal or continuation <strong>of</strong> license:<br />

Appointment fee ....................................... $22<br />

<strong>State</strong> license tax ....................................... $12<br />

County license tax ...................................... $6<br />

Total ....................................................................... $40<br />

(2) The department shall deposit all license taxes<br />

and fees in such funds and for such uses as is provided<br />

by laws applicable to like license taxes and like<br />

fees in the case <strong>of</strong> general lines agents.<br />

History.-s. 5, ch. 29621, 1955; s. 2, ch. 59-326; os. 13, 35, ch. 69-106; s. 177,<br />

ch. 70-339; s. 3, ch. 76-168; s. I, ch. 77-457; S8. 2, 3, ch. 81·318; ss. 7, 71, 72, ch.<br />

82·175.<br />

'Note.-Expires October I, 1984, pursuant to 8. 72, ch. 82·175, and is sched·<br />

uled for review pursuant to s. 11.61 in advance <strong>of</strong> tbat date.<br />

N ote.-Former s. 903.41.<br />

1648.32 Effective date and initial period <strong>of</strong><br />

license.-<br />

(1) All licenses as to which all requisite applications,<br />

payment <strong>of</strong> fees and taxes, passing <strong>of</strong> examinations,<br />

and waiting periods have been completed and<br />

evidence there<strong>of</strong> in the customary form has been received<br />

by the department at its <strong>of</strong>fice in Tallahassee<br />

within 1 calendar month prior to the expiration <strong>of</strong><br />

the applicable license period then current or within 1<br />

calendar month after the commencement <strong>of</strong> the next<br />

following new license period shall be dated and be effective<br />

as <strong>of</strong> the first day <strong>of</strong> such new license period<br />

and shall be for the entire such license period (subject<br />

to suspension, revocation, renewal, continuation,<br />

or termination as otherwise provided for in this chapter);<br />

but such a license, if issued pursuant to qualification<br />

therefor during the last calendar month <strong>of</strong> the<br />

preceding license period as hereinabove provided,<br />

shall be deemed to relate back in effectiveness to the<br />

date within such calendar month on which the last <strong>of</strong><br />

such qualifying requirements was received by the department<br />

at its <strong>of</strong>fices in Tallahassee.<br />

(2) All other licenses shall be dated and become<br />

effective as <strong>of</strong> the date <strong>of</strong> issue.<br />

History.-s. 3, ch. 59·326; os. 13, 35, ch. 69·106; 8. 177, ch. 70·339; 8. 3, ch.<br />

76·168; s. I, ch. 77·457; ... 2, 3, ch. 81·318; ss. 8, 71, 72, ch. 82·175.<br />

'Note.-Expires October I, 1984, pursuant to s. 72, ch. 82-175, and is scbed·<br />

uled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

Note.-Former s. 903.411.<br />

1648.33 Bail bond rates.-Bail bond rates shall<br />

be subject to the provisions <strong>of</strong> part I <strong>of</strong> chapter 627 <strong>of</strong><br />

the insurance code. It shall be unlawful for a bail<br />

bondsman to execute a bail bond without charging a<br />

premium therefor and the premium rate shall not exceed<br />

nor be less than the premium rate as filed with<br />

and approved by the department.<br />

History.-s. 6, cb. 29621, 1955; s. 4, ch. 59·326; ... 13, 35, ch. 69-106; s. 177,<br />

ch. 70·339; s. 3, ch. 76-168; s. I, ch. 77·457; ... 2, 3, ch. 81·318; ... 71, 72, ch.<br />

82·175.<br />

'Note.-The repeal <strong>of</strong> this section by s. 2, ch. 81·318, was nullified by 8. 71,<br />

ch. 82·175. Repealed effective October I, 1984, by 8. 72, ch. 82·175, and sched·<br />

uled for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

Note.-Former s. 903.42.<br />

1648.34 Bail bondsmen; qualifieations.-<br />

(1) Applications for filing for examination for bail<br />

bondsmen shall be submitted on forms furnished by<br />

the department.<br />

782<br />

(2) To qualify as a bail bondsman, it must affirmatively<br />

appear at the time <strong>of</strong> application and<br />

throughout the period <strong>of</strong> licensure that:<br />

(a) The applicant is a natural person who has<br />

reached the age <strong>of</strong> 18 years.<br />

(b) The applicant has been a bona fide resident<br />

<strong>of</strong> the state for 1 year last past; however, the department,<br />

in its discretion, may waive this residency requirement<br />

if the applicant is an employee under the<br />

supervision <strong>of</strong> a currently licensed bondsman.<br />

(c) The place <strong>of</strong> business <strong>of</strong> the applicant will be<br />

located in this state and the applicant will be actively<br />

engaged in the bail bond business and maintain a<br />

place <strong>of</strong> business accessible to the public which is<br />

open for reasonable business hours.<br />

(d) The applicant has successfully completed a<br />

basic certification course in the criminal justice system,<br />

consisting <strong>of</strong> not less than 80 hours, approved by<br />

the department and has successfully completed within<br />

2 years <strong>of</strong> the date <strong>of</strong> his application a correspondence<br />

course for bail bondsmen approved by the department.<br />

(e) The applicant is vouched for and recommended<br />

upon sworn statements filed with the department<br />

by at least three reputable citizens who are residents<br />

<strong>of</strong> the same counties in which the applicant proposes<br />

to engage in the bail bond business.<br />

(f) The applicant is a person <strong>of</strong> high character<br />

and approved integrity and has not been convicted <strong>of</strong><br />

or pleaded guilty or no contest to a crime involving<br />

moral turpitude or to a felony.<br />

(3) A fee <strong>of</strong> $10 shall be submitted to the department<br />

with each application. In addition to the $10<br />

fee, the department shall collect a fee necessary to<br />

cover the cost <strong>of</strong> a credit report. Such fees will be deposited<br />

to the credit <strong>of</strong> the Insurance Commissioner's<br />

Regulatory Trust Fund.<br />

(4) The applicant shall furnish, with his application,<br />

a complete set <strong>of</strong> his fingerprints and a recent<br />

credential-sized, fullface photograph <strong>of</strong> himself. The<br />

applicant's fingerprints shall be certified by an authorized<br />

law enforcement <strong>of</strong>ficer.<br />

(5) The department shall conduct a comprehensive<br />

investigation <strong>of</strong> each applicant, including his<br />

background.<br />

(6) The provisions <strong>of</strong> s. 112.011 do not apply to<br />

bail bondsmen or runners or to applicants for licensure<br />

as bail bondsmen or runners.<br />

(7) Any bail bondsman who holds a license on October<br />

1, 1982, issued under the provisions <strong>of</strong> this<br />

chapter is exempt from the certification and correspondence<br />

course provisions <strong>of</strong> this section.<br />

History.-s. 7, ch. 29621, 1955; s. 5, ch. 59·326; s. 9, ch. 61·406; s. 2, ch.<br />

61·119; s. 24, ch. 65·269; ... 13,35, ch. 69·106; s. 177, ch. 70·339; s. 3, ch. 76·168;<br />

s. I, cb. 77·96; s. I, ch. 77·116; 8. 61, ch. 77·121, 8. I, ch. 77·457; ... 2, 3, ch.<br />

81·318; ... 10, 71, 72, ch. 82-175.<br />

'Note.-Expires October I, 1984, pursuant to s. 72, cb. 82·175, and is sched·<br />

uled for review pursuant to s. 11.61 in advance <strong>of</strong> tbat date.<br />

Note.-Former s. 903.43.<br />

1648.35 Pr<strong>of</strong>essional bondsmen; qualifieations.-In<br />

addition to the qualifications prescribed<br />

in s. 648.34, to qualify as a pr<strong>of</strong>essional bondsman an<br />

applicant shall:<br />

(1) File with his application for filing for examination<br />

and with each application for renewal or continuation<br />

<strong>of</strong> his license a detailed financial statement<br />

under oath; and


F.S.<strong>1983</strong> BAIL BONDSMEN AND RUNNERS Ch.648<br />

(2) File with his application for filing for examination<br />

the rating plan he proposes to use in writing<br />

bail bonds; such rating plan must be approved prior<br />

to issuance <strong>of</strong> the license.<br />

History.-s. 8, ch. 29621, 1955; s. 10, ch. 61-406; s. 177, ch. 70-339; s. 3, ch.<br />

76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; 88. 71,72, ch. 82-175.<br />

'Note.-Repealed effective October 1, 1984, by s. 72, ch. 82-175, and scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

Note.-Former s. 903.44.<br />

'648.36 Bail bondsman's records.-<br />

(1) Every bail bondsman must maintain in his <strong>of</strong>fice<br />

such records <strong>of</strong> bail bonds executed or countersigned<br />

by him to enable the public to obtain all necessary<br />

information concerning such bail bonds for at<br />

least 3 years after the liability <strong>of</strong> the surety has been<br />

terminated. Such records shall be open to examination<br />

by the department or its agents at all times, and<br />

the department may at any time require the licensee<br />

to furnish to it, in such manner or form as it requires,<br />

any information concerning the bail bond business <strong>of</strong><br />

such licensee.<br />

(2) On or before August 15 <strong>of</strong> each year, a sworn<br />

statement on a form furnished by the department<br />

shall be filed with the department by:<br />

(a) Every bail bondsman listing his assets and liabilities,<br />

and<br />

(b) Every bail bondsman or every firm or agency<br />

if the bail bondsman is employed by, associated with<br />

or is a member <strong>of</strong> such firm or agency, listing every<br />

outstanding or unpaid forfeiture, estreature, and<br />

judgment, together with the name <strong>of</strong> the court in<br />

which such forfeiture, estreature, and judgment is recorded,<br />

and submitting all other pertinent information<br />

requested by the department.<br />

History.-s. 11, ch. 61-406; 88. 13, 35, ch. 69-106; s. 177, ch. 70-339; s. 3, ch.<br />

76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 12,71,72, ch. 82-175.<br />

'Note.-Expires October 1, 1984, pursuant to s. 72, ch. 82-175, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

Note.-Former s. 903.441.<br />

'648.365 Statistical reporting requirements.<br />

(1) Each insurer and each bail bondsman engaged<br />

in the bail bond business in this state shall transmit<br />

the following information, based on their <strong>Florida</strong> bail<br />

bond business, to the department semiannually,<br />

within 30 days after the end <strong>of</strong> the period, except<br />

that bail bondsmen shall not report the information<br />

specified in paragraphs (a), (m), and (n):<br />

(a) Commissions paid.<br />

(b) The number <strong>of</strong>, and the total dollar amount<br />

<strong>of</strong>, bonds executed.<br />

(c) The number <strong>of</strong> defendants for whom bonds<br />

were executed.<br />

(d) The number <strong>of</strong>, and the total dollar amount<br />

<strong>of</strong>, bonds declared forfeited.<br />

(e) The number <strong>of</strong> defendants for whom a bond<br />

was declared forfeited.<br />

(f) The number <strong>of</strong>, and the total dollar amount<br />

<strong>of</strong>, forfeitures discharged, remitted, or otherwise recovered<br />

prior to payment for any reason.<br />

(g) The number <strong>of</strong>, and the total dollar amount<br />

<strong>of</strong>, forfeitures discharged, remitted, or otherwise recovered<br />

prior to payment due to the apprehension <strong>of</strong><br />

the defendant by the bail bondsman.<br />

(h) The number <strong>of</strong>, and the total dollar amount<br />

<strong>of</strong>, judgments entered.<br />

783<br />

(i) The number <strong>of</strong>, and the total dollar amount<br />

<strong>of</strong>, forfeitures paid and subsequently recovered from<br />

the court by discharge or remission or otherwise.<br />

(j) The number <strong>of</strong>, and the total dollar amount<br />

<strong>of</strong>, bonds for which collateral was accepted.<br />

(k) The actual realized value <strong>of</strong> collateral converted,<br />

excluding the cost <strong>of</strong> converting the collateral.<br />

(I) The cost <strong>of</strong> converting collateral.<br />

(m) The underwriting gain or loss.<br />

(n) The net investment gain or loss allocated to<br />

the flow <strong>of</strong> funds associated with <strong>Florida</strong> business.<br />

(0) Such additional information as the Insurance<br />

Commissioner may require in order to:<br />

1. Evaluate the reasonableness <strong>of</strong> rates or assure<br />

that such rates are not excessive or unfairly discriminatory.<br />

2. Evaluate the financial condition or trade practices<br />

<strong>of</strong> bail bondsmen and sureties executing bail<br />

bonds.<br />

3. Evaluate the performance <strong>of</strong> the commercial<br />

bail bond industry in accordance with appropriate<br />

criminal justice system goals and standards.<br />

Each bail bondsman shall submit a copy <strong>of</strong> such information<br />

to each insurer he represents.<br />

(2) The department shall provide a summary <strong>of</strong><br />

the information provided by each insurer pursuant to<br />

subsection (1) in its annual report.<br />

History.-ss. 13, 72, ch. 82-175.<br />

'Note.-Expires October 1, 1984, pursuant to s. 72, ch. 82-175, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

'648.37 Runners; qualifications.-<br />

(1) Applications for filing for runners shall be<br />

submitted on forms furnished by the department.<br />

(2) In order for an applicant to qualify as a runner,<br />

it must affirmatively appear at the time <strong>of</strong> application<br />

and throughout the period <strong>of</strong> licensure that:<br />

(a) The applicant is a natural person who has<br />

reached the age <strong>of</strong> 18 years.<br />

(b) The applicant has been a bona fide resident<br />

<strong>of</strong> this state for more than 6 months last past; however,<br />

the department, in its discretion, may waive this<br />

residency requirement if the applicant is an employee<br />

under the supervision <strong>of</strong> a currently licensed<br />

bondsman, insurer, or general agent.<br />

(c) The applicant will be employed by only one<br />

bail bondsman, insurer, or general agent who will supervise<br />

the work <strong>of</strong> the applicant and be responsible<br />

for the runner's conduct in the bail bond business.<br />

(d) The application is endorsed by the appointing<br />

bail bondsman, insurer, or general agent who has obligated<br />

himself to supervise the runner's activities in<br />

his behalf.<br />

(e) The applicant is a person <strong>of</strong> high character<br />

and approved integrity and has never been convicted<br />

<strong>of</strong> or pleaded guilty or no contest to a felony or a<br />

crime involving moral turpitude.<br />

(f) The applicant has successfully completed a<br />

basic certification course in the criminal justice system,<br />

consisting <strong>of</strong> not less than 20 hours, approved by<br />

the department.<br />

(3) A fee in an amount necessary to cover the cost<br />

<strong>of</strong> a credit report shall be submitted to the department<br />

with each application, which fee shall be depos-


Ch.648 BAIL BONDSMEN AND RUNNERS F.S.<strong>1983</strong><br />

ited to the credit <strong>of</strong> the Insurance Commissioner's<br />

Regulatory Trust Fund.<br />

(4) The applicant shall furnish, with his application,<br />

a complete set <strong>of</strong> his fingerprints and a recent<br />

credential-sized, fullface photograph <strong>of</strong> himself. The<br />

applicant's fingerprints shall be certified by an authorized<br />

law enforcement <strong>of</strong>ficer.<br />

(5) The applicant shall file with the department<br />

statements by at least three reputable citizens who<br />

are residents <strong>of</strong> the same counties in which the applicant<br />

proposes to be engaged as a runner.<br />

(6) The department shall conduct a comprehensive<br />

investigation <strong>of</strong> each applicant, including his<br />

background.<br />

History.-s. 9, ch. 29621, 1955; s. 6, ch. 59-326; s. 2, ch. 61-119; s. 12, ch.<br />

61-406; s. 25, ch. 65-269; ss. 13,35, ch. 69-106; s. 177, ch. 70-339; s. 3, ch. 76-168;<br />

s. I, ch. 77-116; s. 62, ch. 77-121; s. I, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 14,71,<br />

72, ch. 82-175; s. 139, ch. 83-216.<br />

'Note.-Expires October I, 1984, pursuant to s. 72, ch. 82-175, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

Note.-Former s. 903.45.<br />

1648.38 Examination; time; place; fee; scope.<br />

(l)(a) If upon the basis <strong>of</strong> the completed application<br />

for examination and such further inquiry or investigation<br />

as the department may make concerning<br />

the fitness and qualifications <strong>of</strong> the applicant, the<br />

department is satisfied that, subject to any examination<br />

required to be taken and passed by the applicant<br />

for a license, the applicant is qualified to take the examination<br />

applied for and that all pertinent taxes<br />

and fees have been paid, it shall approve the application.<br />

(b) If upon the basis <strong>of</strong> the completed application<br />

for examination and such further inquiry or investigation<br />

as to the fitness and qualifications <strong>of</strong> the applicant,<br />

the department deems the applicant to be<br />

unfit or lacking in anyone or more <strong>of</strong> the required<br />

qualifications as specified in s. 648.34 as to limited<br />

surety agent, and ss. 648.34 and 648.35 as to pr<strong>of</strong>essional<br />

bondsmen, the department shall disapprove<br />

the application.<br />

(2) Upon approval by the department the applicant<br />

shall be required to appear in person at a place<br />

hereinafter designated to take a written examination<br />

prepared by the department, testing his ability and<br />

qualifications to be a bail bondsman.<br />

(3) Each applicant shall become eligible for examination<br />

60 days after the date the application is<br />

received by the department in Tallahassee provided<br />

the department is satisfied as to the applicant's fitness<br />

to take the examination. Examinations shall be<br />

held in the department's <strong>of</strong>fices where an adequate<br />

and designated examination room is available. Each<br />

applicant shall be entitled to take the examination at<br />

such <strong>of</strong> the said <strong>of</strong>fices which is located closest to his<br />

place <strong>of</strong> residence, and he shall be entitled to notice<br />

<strong>of</strong> the time and place not less than 15 days prior to<br />

taking the examination.<br />

(4) A fee <strong>of</strong> $10 shall be submitted to the department<br />

with each application, such fee to be deposited<br />

to the credit <strong>of</strong> the Insurance Commissioner's Regulatory<br />

Trust Fund. The fee for filing application for<br />

examination shall not be subject to refund.<br />

(5) The failure <strong>of</strong> the applicant to secure approval<br />

<strong>of</strong> the department shall not preclude him from applying<br />

as many times as he desires, but no applica-<br />

784<br />

tion will be considered by the department within 60<br />

days subsequent to the date upon which the department<br />

denied the last application.<br />

(6) The failure <strong>of</strong> an applicant to pass an examination,<br />

after having been approved by the department<br />

to take the examination, shall not preclude him<br />

from taking subsequent examinations. A separate<br />

and additional application and fee for filing application<br />

for examination shall be filed with the department<br />

for each subsequent examination; provided,<br />

however, that at least 60 days must intervene between<br />

examinations.<br />

(7) The $10 fee for filing application for examination<br />

shall apply to each examination, but once an applicant<br />

has been approved by the department he will<br />

not have to file another application as set forth in ss.<br />

648.34 and 648.35 unless specifically so ordered by<br />

the department. Any bail bondsman who successfully<br />

passes an examination must be licensed within 24<br />

months from date <strong>of</strong> examination or be subject to another<br />

examination unless failure to be so licensed was<br />

due to military service, in which event the period<br />

within which another examination is not required<br />

may, in the department's discretion, be extended to<br />

12 months following the date <strong>of</strong> discharge from military<br />

service, if the military service does not exceed 3<br />

years, but in no event to extend under this clause for<br />

a period <strong>of</strong> more than 4 years.<br />

(8) The scope <strong>of</strong> the examination shall be as<br />

broad as the bail bond business.<br />

History.-s. 10, ch. 29621, 1955; s. 7, ch. 59-326; s. 13, ch. 61·406; 8. 2, ch.<br />

61-119; s. 26, ch. 65-269; ss. 13,35, ch. 69-106; s. 177, ch. 70-339, s. 3, ch. 76-168;<br />

s. I, ch. 77-457; s. 21, ch. 78-95; ss. 2,3, ch. 81-318; ss. 71, 72, ch. 82-175.<br />

'Note.-Repealed effective October I, 1984, by s. 72, ch. 82-175, and scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

Note.-Former s. 903.46.<br />

1648.388 Insurer must appoint general<br />

agent.-Any insurer regularly engaged in the execution<br />

<strong>of</strong> bail bonds in this state shall have a general<br />

agent in this state to supervise its agents.<br />

History.-ss. 3, 72, ch. 82-175.<br />

'Note.-Expires October I, 1984, pursuant to s. 72, ch. 82-175, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1648.39 Notice <strong>of</strong> appointment <strong>of</strong> agents; termination.-<br />

(1) Each insurer shall biennially, prior to September<br />

1, file with the department an alphabetical<br />

list <strong>of</strong> all agents appointed pursuant to this chapter,<br />

giving the type and class <strong>of</strong> license, name, and address<br />

<strong>of</strong> each licensee whose appointment and license<br />

in this state is being renewed or is to be continued in<br />

effect, accompanied by payment <strong>of</strong> the applicable renewal<br />

or continuation fees and taxes. Each such insurer<br />

which shall, subsequent to the filing <strong>of</strong> this list,<br />

expect to appoint an agent pursuant to this chapter<br />

in this state shall give notice there<strong>of</strong> to the department<br />

along with a written application for license for<br />

such agent. All such appointments shall be subject to<br />

the issuance <strong>of</strong> licenses pursuant to this chapter to<br />

such agents.<br />

(2) An insurer terminating the appointment <strong>of</strong> an<br />

agent shall, within 30 days after such termination,<br />

file written notice there<strong>of</strong> with the department, together<br />

with a statement that it has given or mailed<br />

notice to the agent. Such notice filed with the department<br />

shall state the reasons, if any, for such termina-


F.S.<strong>1983</strong> BAIL BONDSMEN AND RUNNERS Ch.648<br />

tion. Information so furnished the department shall<br />

be privileged and shall not be used as evidence in, or<br />

basis for, any action against the insurer or any <strong>of</strong> its<br />

representatives.<br />

(3) Each insurer shall, within 5 days after terminating<br />

the appointment <strong>of</strong> any agent, give written<br />

notice there<strong>of</strong> to each clerk <strong>of</strong> the circuit court and<br />

sheriff with whom the agent is registered.<br />

History.-s. 11, ch. 29621, 1955; s. 8, ch. 59-326; 89.13,35, ch. 69-106; s. 177,<br />

ch. 70-339; s. 3, ch. 76-168; s. I, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 16, 71,72, ch.<br />

82-175.<br />

'Note.-Expires October I, 1984, pursuant to s. 72, ch. 82-175, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

Note.- Former s. 903.47.<br />

1648.40 Notice <strong>of</strong> appointment <strong>of</strong> pr<strong>of</strong>essional<br />

bondsmen; termination.-<br />

(1) Any person applying to qualify as a pr<strong>of</strong>essional<br />

bondsman shall at the time <strong>of</strong> filing his application<br />

for examination also file with the department<br />

an application for license and upon the applicant's<br />

passing the examination for bail bondsmen the department<br />

shall promptly issue proper license.<br />

(2) Any pr<strong>of</strong>essional bail bondsman who discontinues<br />

writing bail bonds during the period for which<br />

he is licensed shall notify the clerks <strong>of</strong> the circuit<br />

court and the sheriffs with whom he is registered and<br />

return his license to the department for cancellation<br />

within 30 days from such discontinuance.<br />

Hi8tory.-s. 12, ch. 29621, 1955; s. 9, ch. 59-326; ss. 13, 35, ch. 69-106; s. 177,<br />

ch. 70-339; s. 3, ch. 76-168; s. I, ch. 77-457; 89. 2, 3, ch. 81-318; ss. 71 , 72, ch.<br />

82-175.<br />

'Note.-Repealed effective October I, 1984, by s. 72, ch. 82-175, and scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

N ote.- Former s. 903.48.<br />

'648.41 Notice <strong>of</strong> appointment <strong>of</strong> runners;<br />

termination.-<br />

(1) Every person duly licensed as a bail bondsman<br />

may appoint as a runner any person who holds<br />

or has qualified for a runner's license. Each bail<br />

bondsman shall biennially, prior to September 1, file<br />

with the department an alphabetical list <strong>of</strong> all runners<br />

appointed, giving the type and class <strong>of</strong> license,<br />

name, and address <strong>of</strong> each licensee whose appointment<br />

and license in this state is being renewed or is<br />

to be continued in effect, accompanied by payment <strong>of</strong><br />

the applicable renewal or continuation fees and taxes.<br />

Each such bail bondsman who, subsequent to the<br />

filing <strong>of</strong> this list, expects to appoint additional persons<br />

as runners shall file written notice with the department<br />

and request licenses for the runners.<br />

(2) A bail bondsman, insurer, or general agent<br />

terminating the appointment <strong>of</strong> a runner shall, within<br />

30 days, file written notice there<strong>of</strong> with the department,<br />

together with a statement that he has given or<br />

mailed notice to the runner. Such notice filed with<br />

the department shall state the reasons, if any, for<br />

such termination. Information so furnished the department<br />

shall be privileged and shall not be used as<br />

evidence in any action against the bail bondsman.<br />

Hi8tory.-s. 13, ch. 29621, 1955; s. 10, ch. 59-326; ss. 13, 35, ch. 69-106; s. 177,<br />

ch. 70-339; s. 3, ch. 76-168; 8. I, ch. 77-457; ... 2, 3, ch. 81-318; 89.18, 71 , 72, ch.<br />

82-175.<br />

'Note.- Expires October I, 1984, pursuant to s. 72, ch. 82-175, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

Note.- Former s. 903.49.<br />

1648.42 Registration <strong>of</strong> bail bondsmen.-No<br />

785<br />

bail bondsman shall become a surety on an undertaking<br />

unless he has registered in the <strong>of</strong>fice <strong>of</strong> the sheriff<br />

and with the clerk <strong>of</strong> the circuit court in the county<br />

in which the bondsman resides. He may register in a<br />

like manner in any other county, and any agent shall<br />

file a certified copy <strong>of</strong> his appointment by power <strong>of</strong><br />

attorney from each insurer which he represents as<br />

agent with each <strong>of</strong> such <strong>of</strong>ficers. Registration and filing<br />

<strong>of</strong> a certified copy <strong>of</strong> renewed power <strong>of</strong> attorney<br />

shall be performed annually on October 1. The clerk<br />

<strong>of</strong> the circuit court and the sheriff shall not permit<br />

the registration <strong>of</strong> a bail bondsman unless such<br />

bondsman is currently licensed by the department.<br />

Hi8tory.-s. 14, ch. 29621, 1955; ss. 13,35, ch. 69-106; s. 177, ch. 70-339, s. 3,<br />

ch. 76-168; s. I, ch. 77-457; ss. 2, 3, ch. 81-318; ... 19,71,72, ch. 82-175.<br />

'Note.-Expires October 1, 1984, pursuant to s. 72, ch. 82-175, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

Note.-Former s. 903.50.<br />

1648.421 Notice <strong>of</strong> change <strong>of</strong> address.-Each<br />

licensee under this chapter shall promptly notify in<br />

writing the department, insurer, and general agent<br />

and the clerk <strong>of</strong> each court in which he is registered<br />

<strong>of</strong> a change <strong>of</strong> his principal business address.<br />

Hi8tory.-ss. 20, 72, ch. 82-175.<br />

'Note.-Expires October 1, 1984, pursuant to s. 72, ch. 82-175, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1648.43 Power <strong>of</strong> attorney; to be approved<br />

by department; filing <strong>of</strong> copies.-<br />

(1) Every insurer engaged in the writing <strong>of</strong> bail<br />

bonds through agents in this state shall submit and<br />

have approved by the department a sample power <strong>of</strong><br />

attorney, which will be the only form <strong>of</strong> power <strong>of</strong> attorney<br />

the insurer will issue to agents in this state.<br />

(2) Every pr<strong>of</strong>essional bondsman who authorizes<br />

a licensed pr<strong>of</strong>essional bondsman directly employed<br />

by him to sign his name to bonds must file copy <strong>of</strong><br />

the power <strong>of</strong> attorney given to such licensed bondsman<br />

with the sheriff and the clerk <strong>of</strong> the circuit court<br />

in the county in which he resides and with the department.<br />

Such power <strong>of</strong> attorney shall remain in full<br />

force and effect until written notice revoking the<br />

power <strong>of</strong> attorney has been received by the<br />

above-named <strong>of</strong>ficials.<br />

History.-s. 15, ch. 29621,1955; s.14, ch. 61-406; ss. 13,35, ch. 69-106; s.177,<br />

ch. 70-339; s. 3, ch. 76-168; s. I, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 21, 71, 72, ch.<br />

82-175.<br />

'Note.-Expires October 1, 1984, pursuant to s. 72, ch. 82-175, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

Note.-Former s. 903.5l.<br />

1648.44 Prohibitions.-<br />

(1) No bail bondsman or runner shall:<br />

(a) Suggest or advise the employment <strong>of</strong>, or name<br />

for employment, any particular attorney to represent<br />

his principal.<br />

(b) Solicit business in or about any place where<br />

prisoners are confined or in or about any court.<br />

(c) Pay a fee or rebate or give or promise anything<br />

<strong>of</strong> value to a jailer, policeman, peace <strong>of</strong>ficer, or<br />

committing magistrate or any other person who has<br />

power to arrest or to hold in custody or to any public<br />

<strong>of</strong>ficial or public employee in order to secure a settlement,<br />

compromise, remission, or reduction <strong>of</strong> the<br />

amount <strong>of</strong> any bail bond or estreatment there<strong>of</strong>.<br />

(d) Pay a fee or rebate or give anything <strong>of</strong> value<br />

to an attorney in a bail bond matter, except in defense<br />

<strong>of</strong> any action on a bond.


Ch.648 BAIL BONDSMEN AND RUNNERS F.S.<strong>1983</strong><br />

(e) Pay a fee or rebate or give or promise anything<br />

<strong>of</strong> value to the principal or anyone in his behalf.<br />

(f) Participate in the capacity <strong>of</strong> an attorney at a<br />

trial or hearing <strong>of</strong> one on whose bond he is surety.<br />

(g) Accept anything <strong>of</strong> value from a principal for<br />

providing a bail bond except the premium and transfer<br />

fee authorized by the department, except that the<br />

bondsman shall be permitted to accept collateral security<br />

or other indemnity from the principal or another<br />

person in accordance with the provisions <strong>of</strong> s.<br />

648.442.<br />

(2) The following persons or classes shall not be<br />

bail bondsmen, runners, or employees <strong>of</strong> a bail<br />

bondsman or a bail bond business and shall not directly<br />

or indirectly receive any benefits from the execution<br />

<strong>of</strong> any bail bond:<br />

(a) Jailers or persons employed in any jail.<br />

(b) Police <strong>of</strong>ficers or employees <strong>of</strong> any police department<br />

or law enforcement agency.<br />

(c) Committing magistrates, employees <strong>of</strong> a<br />

court, or employees <strong>of</strong> the clerk <strong>of</strong> any court.<br />

(d) Sheriffs and deputy sheriffs or employees <strong>of</strong><br />

any sheriff's department.<br />

(e) Persons having the power to arrest or having<br />

anything to do with the control <strong>of</strong> federal, state,<br />

county, or municipal prisoners.<br />

(3) No person who has been convicted <strong>of</strong> or has<br />

pleaded guilty or no contest to any felony, regardless<br />

<strong>of</strong> whether adjudication <strong>of</strong> guilt was withheld, may<br />

participate as a director, <strong>of</strong>ficer, manager, or employee<br />

<strong>of</strong> any bail bond agency or <strong>of</strong>fice there<strong>of</strong> or own<br />

shares in any closely held corporation which has any<br />

interest in any bail bond business.<br />

(4) A bail bondsman shall not sign nor countersign<br />

in blank any bond, nor shall he give a power <strong>of</strong><br />

attorney to, or otherwise authorize, anyone to countersign<br />

his name to bonds unless the person so authorized<br />

is a licensed bondsman directly employed by<br />

the bondsman giving such power <strong>of</strong> attorney.<br />

(5) No bail bond agency shall advertise as or hold<br />

itself out to be a bail bond or surety company.<br />

(6) Except as between licensed bail bondsmen, no<br />

bail bondsman shall divide with others, or share in,<br />

any commissions payable on account <strong>of</strong> any bail<br />

bond.<br />

(7) No place <strong>of</strong> business, including a branch <strong>of</strong>fice,<br />

shall be established, opened, or maintained unless<br />

it is in the active full-time charge <strong>of</strong> a licensed<br />

bail bondsman.<br />

Hi.tory.-s. 16. ch. 29621. 1955; s. 177. ch. 70-339; s. 26. ch. 73-334; s. 3. ch.<br />

76-168; s. 1. ch. 77-119; s. 1. ch. 77-457; 88. 2. 3. ch_ 81-318; 88. 22. 71, 72, ch.<br />

82-175.<br />

'Note_-Expires October 1, 1984, pursuant to s. 72, cb. 82-175, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

Note.-Former s. 903.52.<br />

1648.441 Furnishing supplies to unlicensed<br />

bail bondsmen prohibited; civil liability and<br />

penalty.-<br />

(1) No insurer, bail bondsman, runner, or permittee<br />

under this chapter shall furnish to any person any<br />

blank forms, applications, stationery, or other supplies<br />

to be used in soliciting, negotiating, or effecting<br />

bail bonds until such person has received from the<br />

department a license to act as a bail bondsman and<br />

has duly qualified as such.<br />

786<br />

(2) Any insurer, licensee, or permittee who furnishes<br />

to any bail bondsman or other person not<br />

named or appointed by the insurer represented any<br />

<strong>of</strong> the supplies mentioned in subsection (1) and accepts<br />

any bail bond business from or writes any bail<br />

bond business for such bail bondsman, person, or<br />

agency shall be subject to civil liability to any insured<br />

<strong>of</strong> such insurer to the same extent and in the same<br />

manner as if such bail bondsman or other person had<br />

been appointed, licensed, or authorized by the insurer,<br />

general agent, or bail bondsman to act in its or his<br />

behalf by the department.<br />

Hi.tory.-ss. 23, 72, ch. 82-175; s. 140, cb. 83-216.<br />

'Note.-Expires October 1, 1984, pursuant to s. 72, cb. 82-175, and is scbeduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> tbat date.<br />

1648.442 Collateral security.-<br />

(1) Collateral security or other indemnity accepted<br />

by a bail bondsman, except a promissory note or<br />

an indemnity agreement, shall be returned upon final<br />

termination <strong>of</strong> liability on the bond. Such collateral<br />

security or other indemnity required by the bail<br />

bondsman must be reasonable in relation to the<br />

amount <strong>of</strong> the bond. No bail bondsman shall accept<br />

collateral security or other indemnity in excess <strong>of</strong><br />

$25,000 per bond unless such security or indemnity<br />

consists <strong>of</strong> the following:<br />

(a) A promissory note;<br />

(b) An indemnity agreement;<br />

(c) A real property mortgage; or<br />

(d) Any other type <strong>of</strong> security approved by the<br />

department. The department shall approve other security<br />

only if, after considering the liquidity and other<br />

characteristics <strong>of</strong> the security, it determines that<br />

the security is <strong>of</strong> a type which increases the probability<br />

that the defendant will in fact appear in court or<br />

increases the probability that the defendant will be<br />

subsequently apprehended by the bail bondsman.<br />

(2) When a bail bondsman accepts collateral, he<br />

shall give a written, numbered receipt for it, and this<br />

receipt shall give in detail a full account <strong>of</strong> the collateral<br />

received.<br />

(3) Such collateral security shall be received in<br />

the insurer's name by the bail bondsman in his fiduciary<br />

capacity and, prior to any forfeiture <strong>of</strong> bail,<br />

shall be kept separate and apart from any other<br />

funds or assets <strong>of</strong> such bail bondsman. Such collateral<br />

security may be placed in an interest-bearing account<br />

to accrue to the benefit <strong>of</strong> the person giving the<br />

collateral security, and the bail bondsman shall not<br />

make any pecuniary gain on the collateral security<br />

deposited. The insurer shall be liable for all collateral<br />

received.<br />

(4) When the obligation <strong>of</strong>the surety on the bond<br />

or bonds has been released in writing by the court,<br />

the collateral shall be returned to the rightful owner<br />

as agreed in the indemnity agreement unless another<br />

disposition is provided for by legal assignment <strong>of</strong> the<br />

right to receive the collateral to another person.<br />

(5) If a forfeiture occurs, the agent or insurer<br />

shall give 10 days' written notice <strong>of</strong> intent to convert<br />

the collateral deposit into cash to satisfy the forfeiture<br />

to the indemnitor and principal. Notice shall be<br />

sent by certified mail to the last known address <strong>of</strong> the<br />

indemnitor and principal.


F.S.<strong>1983</strong> BAIL BONDSMEN AND RUNNERS Ch.648<br />

(6) The bail bondsman or insurer must convert<br />

the collateral to cash within a reasonable period <strong>of</strong><br />

time and return that which is in excess <strong>of</strong> the face<br />

value <strong>of</strong> the bond plus the actual and reasonable expenses<br />

<strong>of</strong> converting the collateral to cash. In no<br />

event shall these expenses exceed 10 percent <strong>of</strong> the<br />

face value <strong>of</strong> the bond. However, upon motion and<br />

pro<strong>of</strong> that the actual, reasonable expenses exceed 10<br />

percent, the court may allow recovery <strong>of</strong> the full<br />

amount <strong>of</strong> such actual, reasonable expenses.<br />

(7) No bail bondsman or insurer shall solicit or<br />

accept a waiver <strong>of</strong> any <strong>of</strong> the provisions <strong>of</strong> this section<br />

or enter into any agreement as to the value <strong>of</strong> the<br />

collateral.<br />

History.-ss. 24, 72, ch. 82-175; s. 141, ch. 83-216.<br />

'Note.-Expires October 1, 1984, pursuant to s. 72, ch. 82-175, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1648.45 Actions against a license or eligibility<br />

to hold a license.-<br />

(1) The department shall immediately temporarily<br />

suspend any license issued under this chapter<br />

when the licensee has been found guilty <strong>of</strong>, or has<br />

pleaded guilty or no contest to, a crime involving moral<br />

turpitude or a felony, whether or not a judgment<br />

or conviction has been entered, during a pending appeal.<br />

(2) The department shall deny, suspend, revoke,<br />

or refuse to renew any license issued under this chapter<br />

or the insurance code, and it shall suspend or revoke<br />

the eligibility <strong>of</strong> any person to hold a license under<br />

this chapter or the insurance code, for any violation<br />

<strong>of</strong> the laws <strong>of</strong> this state relating to bailor any violation<br />

<strong>of</strong> the insurance code or for any <strong>of</strong> the following<br />

causes:<br />

(a) Lack <strong>of</strong> one or more <strong>of</strong> the qualifications specified<br />

in this chapter for a license or permit.<br />

(b) Material misstatement, misrepresentation, or<br />

fraud in obtaining a license or permit, or in attempting<br />

to obtain a license or permit.<br />

(c) Failure to pass to the satisfaction <strong>of</strong> the department<br />

any examination required under this chapter.<br />

(d) Willful use, or intended use, <strong>of</strong> the license or<br />

permit to circumvent any <strong>of</strong> the requirements or prohibitions<br />

<strong>of</strong> this chapter or the insurance code.<br />

(e) Demonstrated lack <strong>of</strong> fitness or trustworthiness<br />

to engage in the bail bond business.<br />

(f) Demonstrated lack <strong>of</strong> reasonably adequate<br />

knowledge and technical competence to engage in the<br />

transactions authorized by the license or permit.<br />

(g) Fraudulent or dishonest practices in the conduct<br />

<strong>of</strong> business under the license or permit.<br />

(h) Misappropriation, conversion, or unlawful<br />

withholding <strong>of</strong> moneys belonging to a surety, a principal,<br />

or others and received in the conduct <strong>of</strong> business<br />

under a license.<br />

(i) Rebating or <strong>of</strong>fering to rebate, or unlawfully<br />

dividing or <strong>of</strong>fering to divide, any commission, in the<br />

case <strong>of</strong> a limited surety agent, or premiums, in the<br />

case <strong>of</strong> a pr<strong>of</strong>essional bondsman.<br />

(j) Willful failure to comply with or willful violation<br />

<strong>of</strong> any proper order or rule <strong>of</strong> the department or<br />

willful violation <strong>of</strong> any provision <strong>of</strong> this chapter or<br />

the insurance code.<br />

787<br />

(k) Having been found guilty <strong>of</strong>, or having pleaded<br />

guilty or no contest to, a crime involving moral<br />

turpitude or a felony, whether or not a judgment or<br />

conviction has been entered.<br />

(I) Demonstrated lack <strong>of</strong> good faith in carrying<br />

out contractual obligations and agreements, as provided<br />

to the satisfaction <strong>of</strong> the Insurance Commissioner.<br />

(3) The department may deny, suspend, revoke,<br />

or refuse to renew any license issued under this chapter<br />

or the insurance code, or it may suspend or revoke<br />

the eligibility <strong>of</strong> any person to hold a license under<br />

this chapter or the insurance code, for any violation<br />

<strong>of</strong> the laws <strong>of</strong> this state relating to bail or any violation<br />

<strong>of</strong> the insurance code or for any <strong>of</strong> the following<br />

causes:<br />

(a) Any cause for which issuance <strong>of</strong> the license<br />

could have been refused had it then existed and been<br />

known to the department.<br />

(b) Violation <strong>of</strong> any law relating to the business<br />

<strong>of</strong> bail bond insurance or violation <strong>of</strong> any provision <strong>of</strong><br />

the insurance code.<br />

(c) Failure or refusal, upon demand, to pay over<br />

to any insurer he represents or has represented any<br />

money coming into his hands which money belongs to<br />

the insurer.<br />

(d) Showing himself to be a source <strong>of</strong> injury or<br />

loss to the public or detrimental to the public interest<br />

or being found by the department to be no longer<br />

carrying on the bail bond business in good faith.<br />

(e) Interfering or attempting to interfere with the<br />

administration <strong>of</strong> justice.<br />

(4) Grounds for revocation <strong>of</strong> the license exist<br />

when any licensee is adjudged bankrupt or insolvent.<br />

History.-s.17, ch. 29621, 1955; s. 3, ch. 57-63; s.15, ch. 61-406; ss. 13,35, ch.<br />

69-106; s. 177, ch. 70-339; s. 25, ch. 71-86; s. 167, ch. 73-333; s. 3, ch. 76-168; s. 1,<br />

ch. 77-457; ss. 2, 3, ch. 81-318; ss. 25, 71, 72, ch. 82-175; s. 142, cb. 83-216.<br />

'Note.-Expires October 1, 1984, pursuant to s. 72, ch. 82-175, and is scbeduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

Note.-Former s. 903.53.<br />

cf.-s. 112.011 Felons; removal <strong>of</strong> disqualifications for employment, exceptions.<br />

1648.46 Procedure for suspension or revocation<br />

<strong>of</strong> eligibility or for denial, revocation, suspension,<br />

or refusal to renew license.-<br />

(1) If any bail bondsman or runner is convicted<br />

by a court <strong>of</strong> a violation <strong>of</strong> any <strong>of</strong> the provisions <strong>of</strong><br />

this chapter or is convicted <strong>of</strong> or has pleaded guilty or<br />

no contest to any felony, regardless <strong>of</strong> whether adjudication<br />

<strong>of</strong> guilt was withheld, the license or eligibility<br />

to hold a license <strong>of</strong> such individual shall thereby<br />

be deemed to be immediately revoked.<br />

(2) If after an investigation or upon other evidence<br />

the department has reason to believe that<br />

there may exist anyone or more causes for suspension<br />

<strong>of</strong>, revocation <strong>of</strong>, or refusal to renew or continue<br />

the license <strong>of</strong> any bail bondsman or runner as such<br />

causes are specified in s. 648.45 or that a bail bondsman<br />

or runner has been guilty <strong>of</strong> violating any <strong>of</strong> the<br />

laws <strong>of</strong> this state relating to bail bonds, or that any licensee<br />

is no longer eligible to hold a license, the department<br />

may suspend, revoke, or refuse to renew or<br />

continue such license.<br />

History.-s. 18, ch. 29621, 1955; s. 16, ch. 61-406; 88.13, 35, ch. 69-106; s. 177,<br />

ch. 70-339; s. 26, cb. 71-86; s. 3, ch. 76-168; s. 1, cb. 77-457; s. 21, cb. 78-95; ss. 2,<br />

3, ch. 81-318; ss. 26, 71, 72, ch. 82-175.<br />

'Note,-Expires October 1, 1984, pursuant to s. 72, ch. 82-175, and is scbeduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

Note.-Former s. 903.54.


F.S.<strong>1983</strong> BAIL BONDSMEN AND RUNNERS Ch.648<br />

the ground for the suspension or revocation may likewise<br />

be suspended or revoked.<br />

(3) No person whose license as a bail bondsman<br />

or runner has been revoked or suspended shall be<br />

employed by any bail bondsman, have any ownership<br />

interest in any business involving bail bonds, or have<br />

any financial interest <strong>of</strong> any type in any bail bond<br />

business during the period <strong>of</strong> revocation or suspension.<br />

History.-s. 20, ch. 61-406; ss. 13,35, ch. 69-106; s. 177, ch. 70-339; s. 28, ch.<br />

71-86; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 29,<br />

71, 72, ch. 82-175.<br />

'Note.-Expires October 1, 1984, pursuant to s. 72, ch. 82-175, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

Note.-Former s. 903.544.<br />

1648.51 Surrender <strong>of</strong> license or permit.-<br />

(1) Though issued to a licensee all certificates <strong>of</strong><br />

licenses issued under this chapter are at all times the<br />

property <strong>of</strong> the state, and upon notice <strong>of</strong> any suspension,<br />

revocation, refusal to renew, expiration or other<br />

termination <strong>of</strong> the license, the licensee or other person<br />

having either the original or copy <strong>of</strong> the license<br />

shall promptly deliver the certificate <strong>of</strong> license or<br />

COllY there<strong>of</strong> to the department for cancellation.<br />

(2) As to any certificate <strong>of</strong> license lost, stolen or<br />

destroyed while in the possession <strong>of</strong> any such licensee<br />

or person, the department may accept in lieu <strong>of</strong> return<br />

<strong>of</strong> the certificate the affidavit <strong>of</strong> the licensee or<br />

other person responsible for or involved in the safekeeping<br />

<strong>of</strong> such certificate, concerning the facts <strong>of</strong><br />

such loss, theft, or destruction. Willful falsification <strong>of</strong><br />

any such affidavit shall, upon conviction, be subject<br />

to .Qunishment as for perjury.<br />

(3) This section shall not be deemed to require<br />

the delivery to the department <strong>of</strong> any certificate <strong>of</strong> license<br />

which, as shown by specific date <strong>of</strong> expiration<br />

on the face <strong>of</strong> the license, has already expired, unless<br />

such delivery has been requested by the department.<br />

History.-s. 21, ch. 61-406; ss. 13, 35, ch. 69-106; s. 177, ch. 70-339; s. 3, ch.<br />

76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 71, 72, ch. 82-175.<br />

'Note.-Repealed effective October 1, 1984, by s. 72, ch. 82-175, and scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

N ote.-Former s. 903.545.<br />

1648.52 Administrative fin e.-<br />

(1) If the department finds that one or more<br />

causes exist for the suspension <strong>of</strong>, revocation <strong>of</strong>, or<br />

refusal to renew or contmue any license issued under<br />

this chapter, the department may, in its discretion, in<br />

lieu ·<strong>of</strong> or in addition to such suspension, revocation,<br />

or refusal, and except on a second <strong>of</strong>fense, impose<br />

upon the licensee an administrative penalty in an<br />

amount up to $1,000. The administrative penalty<br />

may, in the discretion <strong>of</strong> the department, be increased<br />

by an amount equal to any commissions or<br />

other pecuniary benefits received by or accruing to<br />

the credit <strong>of</strong> the licensee in connection with any<br />

transaction related to the grounds for suspension,<br />

revocation, or refusal.<br />

(2) The department may allow the licensee a reasonable<br />

period/ not to exceed 30 days, within which<br />

to pay to the aepartment the amount <strong>of</strong> the penalty<br />

so Imposed. If the licensee fails to pay the penalty in<br />

its entirety to the department at Its <strong>of</strong>fice at Tallahassee<br />

within the period so allowed, the licenses <strong>of</strong><br />

the licensee shall stand suspended, revoked, or renewal<br />

or continuation refused, as the case may be,<br />

upon expiration <strong>of</strong> such period.<br />

History.-B. 22, ch. 61-406; s. 2, ch. 61-119; s. 30, ch. 65-269; ss. 13, 35, ch.<br />

69-106; s. 177, ch. 70-339; s. 3, ch. 76-168; B. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2,<br />

3, ch. 81-318; ss. 31, 71, 72, ch. 82-175.<br />

'Note.-Expires October 1, 1984, pursuant to s. 72, ch. 82-175, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

Note.-Former B. 903.546.<br />

789<br />

1648.53 Probation.-<br />

(1) If the department finds that one or more<br />

causes exist for a fine, or for the suspension <strong>of</strong>, revocation<br />

<strong>of</strong>, or refusal to renew or continue any license<br />

issued under this chapter, the department may in addition<br />

to any other penalties required herein, in its<br />

discretion, in lieu <strong>of</strong> such suspension, revocation, or<br />

refusal or in connection with any administrative<br />

monetary penalty imposed under s. 648.52, place the<br />

<strong>of</strong>fending licensee on probation for a period, not to<br />

exceed 2 years, as specified by the department in its<br />

order.<br />

(2) As a condition to such probation or in connection<br />

therewith, the department may specify in its order<br />

reasonable terms and conditions to be fulfilled by<br />

the probationer during the probation period. If during<br />

the probation period the department has good<br />

cause to believe that the probationer has violated<br />

such terms and conditions or any <strong>of</strong> them, it shall<br />

forthwith suspend, revoke, or refuse to renew or continue<br />

the license <strong>of</strong> the probationer, as upon the original<br />

causes referred to in subsection (1).<br />

History.-s. 23, ch. 61-406; ss. 13, 35, ch. 69-106; s. 177, ch. 70-339; s. 3, ch.<br />

76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, cb. 81-318; ss. 32, 71, 72, ch.<br />

82-175.<br />

'Note.-Expires October 1, 1984, pursuant to s. 72, ch. 82-175, and is scheduled<br />

for review pursuant to B. 11.61 in advance <strong>of</strong> tbat date.<br />

Note.-Former s. 903.547.<br />

1648.55 All bondsmen <strong>of</strong> same agency; licensed<br />

by same companies.-All bail bondsmen<br />

who are members <strong>of</strong> the same agency, partnership,<br />

corporation or association shall be licensed for the<br />

same companies. If any member <strong>of</strong> such agency, partnership,<br />

corporation or association is licensed as a<br />

pr<strong>of</strong>essional bondsman, all members there<strong>of</strong> shall be<br />

so licensed. It shall be the responsibility <strong>of</strong> each company<br />

to see that each agent in an agency is licensed to<br />

represent that particular company.<br />

History.-s. 20, ch. 29621, 1955; s. 4, ch. 57-63; s. 177, ch. 70-339; s. 3, ch.<br />

76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 71, 72, ch. 82-175.<br />

'Note.-Repealed effective October 1, 1984, by s. 72, ch. 82-175, and scbeduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

Note.-Former s. 903.56.<br />

1648.56 Exemption.-Nothing in ss.<br />

648.25-648.57 shall be construed as to prevent any<br />

duly licensed general lines agent as defined in s.<br />

626.041 <strong>of</strong> the Insurance Code, from writing bail<br />

bonds for any company authorized to write fidelity<br />

and surety bonds which he represents as agent, provided<br />

such agent shall be subject to and governed by<br />

all laws, rules, and regulations relating to bail bondsmen<br />

when engaged in the activities there<strong>of</strong>.<br />

History.-s. 21, ch. 29621,1955; s. 12, ch. 59-326; s. 177, ch. 70-339; s. 3, cb.<br />

76-168; s. 1, ch. 77-457; BS. 2, 3, ch. 81-318; SB. 71, 72, ch. 82-175.<br />

'Note.-Repealed effective October 1, 1984, by B. 72, ch. 82-175, and scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

Note.-Former s. 903.57.<br />

1648.57 Penalty.-Any person or corporation,<br />

who is found guilty <strong>of</strong> violating any <strong>of</strong> the provisions<br />

<strong>of</strong> this chapter shall be guilty <strong>of</strong> a misdemeanor <strong>of</strong><br />

the second degree, punishable as provided in s.<br />

775.082 or s. 775.083.<br />

History.-s. 22, ch. 29621, 1955; B. 177, ch. 70-339; s. 867, ch. 71-136; s. 3, ch.<br />

76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81·318; ss. 71, 72, ch. 82-175.<br />

'Note.-Repealed effective October 1, 1984, by s. 72, ch. 82-175, and scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

Note.-Former s. 903.58.


Ch.648 BAIL BONDSMEN AND RUNNERS F.S.<strong>1983</strong><br />

1648.571 Failure to return collateral; penal·<br />

ty.-A bondsman who has taken collateral as security<br />

for a bail bond shall, upon demand, return the collateral<br />

to the person from whom it was received within<br />

21 days after the bail bond has been discharged in<br />

writing by the court. Failure to return collateral under<br />

these terms shall be punishable:<br />

(1) In the event the collateral is <strong>of</strong> a value <strong>of</strong> less<br />

790<br />

than $100, as provided in s. 775.082(4)(a).<br />

(2) In the event the collateral is <strong>of</strong> a value <strong>of</strong> $100<br />

or more as provided in s. 775.082(3)(d).<br />

(3) In the event the collateral is <strong>of</strong> a value <strong>of</strong><br />

$1,500 or more, as provided in s. 775.082(3)(c).<br />

(4) In the event the collateral is <strong>of</strong> a value <strong>of</strong><br />

$10,000 or more, as provided in s. 775.082(3)(b).<br />

Hi.tory.-88. 36, 72, ch. 82-175.<br />

'Note.-Expires October 1, 1984, pursuant to s. 72, ch. 82-175, and is scheduled<br />

for review pursuant to s. 11.61 m advance <strong>of</strong> that date.


Ch.650 SOCIAL SECURITY FOR PUBLIC EMPLOYEES F.S.<strong>1983</strong><br />

650.03 Federal-state agreement; interstate<br />

instrumentalities.-<br />

(1) The state agency with the approval <strong>of</strong> the<br />

Governor, is hereby authorized to enter on behalf <strong>of</strong><br />

the state into an agreement with the Federal Security<br />

Administrator, consistent with the terms and provisions<br />

<strong>of</strong> this chapter, for the purpose <strong>of</strong> extending the<br />

benefits <strong>of</strong> the Federal Old-age and Survivors Insurance<br />

System to employees <strong>of</strong> the state or any political<br />

subdivision there<strong>of</strong> with respect to services specified<br />

in such agreement which constitutes "employment"<br />

as defined in s. 650.02. Such agreement may contain<br />

such provisions relating to coverage, benefits, contributions,<br />

effective date, modification and termination<br />

<strong>of</strong> the agreement, administration, and other appropriate<br />

provisions as the state agency and the Secretary<br />

<strong>of</strong> Health, Education and Welfare shall agree<br />

upon, but, except as may be otherwise required by or<br />

under the Social Security Act as to the services to be<br />

covered, such agreement shall provide in effect that:<br />

(a) Benefits will be provided for employees whose<br />

services are covered by the agreement (and their dependents<br />

and survivors) on the same basis as though<br />

such services constituted employment within the<br />

meaning <strong>of</strong> Title II <strong>of</strong> the Social Security Act;<br />

(b) The state will pay to the Secretary <strong>of</strong> the<br />

Treasury, at such time or times as may be prescribed<br />

under the Social Security Act, contributions with respect<br />

to wages (as defined in s. 650.02), equal to the<br />

sum <strong>of</strong> the taxes which would be imposed by the Federal<br />

Insurance Contributions Act if the services covered<br />

by the agreement constituted employment within<br />

the meaning <strong>of</strong> that act.<br />

(c) Such agreement shall be effective with respect<br />

to services in employment covered by the agreement<br />

performed after January 1, 1951;<br />

(d) All services which constitute employment as<br />

defined in s. 650.02 and are performed in the employ<br />

<strong>of</strong> the state by employees <strong>of</strong> the state, shall be covered<br />

by the agreement.<br />

(e) All services which:<br />

1. Constitute employment as defined in s. 650.02;<br />

2. Are performed in the employ <strong>of</strong> a political subdivision<br />

<strong>of</strong> the state; and<br />

3. Are covered by a plan which is in conformity<br />

with the terms <strong>of</strong> the agreement and has been approved<br />

by the state agency under s. 650.05, shall be<br />

covered by the agreement.<br />

(f) As modified, the agreement shall include all<br />

services described in either paragraph (d) or paragraph<br />

(e) <strong>of</strong> this subsection and performed by individuals<br />

to whom s. 218(c)(3)(C) <strong>of</strong> the Social Security<br />

Act is applicable, and shall provide for election by<br />

the employer as to whether the service <strong>of</strong> any such individual<br />

shall continue to be covered by the agreement<br />

in case he thereafter becomes eligible to be a<br />

member <strong>of</strong> a retirement system.<br />

(g) As modified, the agreement shall include all<br />

services described in either paragraph (d) or paragraph<br />

(e) <strong>of</strong> this subsection and performed by individuals<br />

in positions covered by a retirement system<br />

with respect to which the Governor has issued a certificate<br />

to the Secretary <strong>of</strong> Health, Education, and<br />

Welfare pursuant to s. 218(d)(3) <strong>of</strong> the Social Security<br />

Act, as amended.<br />

792<br />

(2) Any instrumentality jointly created by this<br />

state and any other state or states is hereby authorized,<br />

upon the granting <strong>of</strong> like authority by such other<br />

state or states:<br />

(a) To enter into an agreement with the Secretary<br />

<strong>of</strong> Health, Education, and Welfare whereby the benefits<br />

<strong>of</strong> the Federal Old-age and Survivors Insurance<br />

System shall be extended to employees <strong>of</strong> such instrumentality;<br />

(b) To require its employees to pay (and for that<br />

purpose to deduct from their wages) contributions<br />

equal to the amounts which they would be required<br />

to pay under s. 650.04(1) if they were covered by an<br />

agreement made pursuant to subsection (1); and<br />

(c) To make payments to the Secretary <strong>of</strong> the<br />

Treasury in accordance with such agreement, including<br />

payments from its own funds, and otherwise to<br />

comply with such agreements. Such agreement shall,<br />

to the extent practicable, be consistent with the<br />

terms and provisions <strong>of</strong> subsection (1) and other provisions<br />

<strong>of</strong> this chapter.<br />

(3) Where a retirement system established by the<br />

state or any political subdivision there<strong>of</strong> covers positions<br />

<strong>of</strong> policemen or firemen, or both, and whether<br />

or not other positions are covered by such system,<br />

there shall, for the purposes <strong>of</strong> this chapter, be<br />

deemed to be a separate retirement system with respect<br />

to the positions <strong>of</strong> policemen and a separate retirement<br />

system with respect to the positions <strong>of</strong> firemen.<br />

(4) For the purposes <strong>of</strong> this chapter any retirement<br />

system established by the state or any political<br />

subdivision there<strong>of</strong>, which, on, before, or after the<br />

date <strong>of</strong> enactment <strong>of</strong> this subsection is divided into<br />

two divisions or parts, one <strong>of</strong> which is composed <strong>of</strong><br />

positions <strong>of</strong> members <strong>of</strong> such system who desire coverage<br />

under an agreement under this chapter and the<br />

other <strong>of</strong> which is composed <strong>of</strong> positions <strong>of</strong> members<br />

<strong>of</strong> such system who do not desire such coverage, shall,<br />

upon the Governor's authorization <strong>of</strong> a referendum<br />

for either division or part, be deemed to be a separate<br />

retirement system with respect to each such division<br />

or part. The positions <strong>of</strong> individuals who become<br />

members <strong>of</strong> such system after such coverage is extended<br />

shall be included in such division or part composed<br />

<strong>of</strong> members desiring such coverage. The position<br />

<strong>of</strong> any individual which is covered by any retirement<br />

system to which the preceding two sentences<br />

are applicable shall, if such individual is ineligible to<br />

become a member <strong>of</strong> such system on the date <strong>of</strong> enactment<br />

<strong>of</strong> this subsection or, if later, the day he first<br />

occupies such position, be deemed to be covered by<br />

the separate retirement system consisting <strong>of</strong> the positions<br />

<strong>of</strong> members <strong>of</strong> the division or part who do not<br />

desire coverage under this chapter.<br />

(5) For purposes <strong>of</strong> this chapter employees <strong>of</strong> the<br />

institutions <strong>of</strong> higher learning under the Board <strong>of</strong> Regents<br />

who are covered by the Teachers' Retirement<br />

System shall be deemed to be covered by a separate<br />

retirement system for each institution.<br />

(6) If a retirement system covers positions <strong>of</strong> employees<br />

<strong>of</strong> a hospital which is an integral part <strong>of</strong> a<br />

municipal political subdivision, then, for the purposes<br />

<strong>of</strong> this chapter, there shall be deemed to be a<br />

separate retirement system for the employees <strong>of</strong> such<br />

hospital.<br />

Hi.tory.-8. 3, ch. 26841 , 1951; s. 4, ch. 28246, 1953; 88. 6, 7, 8, 9, ch. 29824,<br />

1955; 8. 1, ch. 57-226; 8. 1, ch. 57-780; s. 1, ch. 61-138; 8. 2, ch. 63-204.


F.S.<strong>1983</strong> SOCIAL SECURITY FOR PUBLIC EMPLOYEES Ch.650<br />

650.04 Contributions by state employees.<br />

(1) Every employee <strong>of</strong> the state whose services<br />

are covered by an agreement entered into under s.<br />

650.03 shall be required to pay for the period <strong>of</strong> such<br />

coverage, into the Social Security Contribution Trust<br />

Fund established by s. 650.06, contributions, with respect<br />

to wages as defined in s. 650.02, equal to the<br />

amount <strong>of</strong> the employee tax which would be imposed<br />

by the Federal Insurance Contributions Act if such<br />

services constituted employment within the meaning<br />

<strong>of</strong> that act. Such liability shall arise in consideration<br />

<strong>of</strong> the employee's retention in the service <strong>of</strong> the state,<br />

or his entry upon such service, after the enactment <strong>of</strong><br />

this chapter.<br />

(2) The contribution imposed by this section<br />

shall be collected by deducting the amount <strong>of</strong> the<br />

contribution from wages as and when paid, but failure<br />

to make such deduction shall not relieve the em­<br />

ployee from liability for such contribution.<br />

(3) If more or less than the correct amount <strong>of</strong> the<br />

contribution imposed by this section is paid or deducted<br />

with respect to any remuneration, proper adjustments,<br />

or refund if adjustment is impracticable,<br />

shall be made, without interest, in such manner and<br />

at such times as the state agency shall prescribe.<br />

Hi8tory.-s. 4, ch. 26841, 1951; s. 10, ch. 29824, 1955; s. 2, ch. 61-119.<br />

assure the correctness and verification <strong>of</strong> such reports;<br />

and<br />

(f) It authorizes the state agency to terminate the<br />

plan in its entirety, in the discretion <strong>of</strong> the state<br />

agency, if it finds that there has been a failure to<br />

comply substantially with any provisions contained<br />

in such plan, such termination to take effect at the<br />

expiration <strong>of</strong> such notice and on such conditions as<br />

may be provided by regulations <strong>of</strong> the state agency<br />

and may be consistent with the provisions <strong>of</strong> the Social<br />

Security Act.<br />

(2) The state agency shall not finally refuse to approve<br />

a plan submitted by a political subdivision under<br />

subsection (1), and shall not terminate an approved<br />

plan, without reasonable notice and opportunity<br />

for hearing to the political subdivision affected<br />

thereby. Any final decision <strong>of</strong> the state agency shall<br />

be subject to proper judicial review.<br />

(3)(a) Each political subdivision as to which a<br />

plan has been approved under this section shall pay<br />

into the Social Security Contribution Trust Fund,<br />

with respect to wages (as defined in s. 650.02), at such<br />

time or times as the state agency may by regulation<br />

prescribe, contributions in the amounts and at the<br />

rates specified in the applicable agreement entered<br />

into by the state agency under s. 650.03.<br />

(b) Each political subdivision required to make<br />

payments under paragraph (a) is authorized, in consideration<br />

<strong>of</strong> the employee's retention in, or entry<br />

650.05 Plans for coverage <strong>of</strong> employees <strong>of</strong><br />

political subdivisions.-<br />

(1) Each political subdivision <strong>of</strong> the state is hereby<br />

authorized to submit for approval by the state<br />

agency a plan for extending the benefits <strong>of</strong> Title II <strong>of</strong><br />

the Social Security Act, in conformity with the applicable<br />

provisions <strong>of</strong> such act, to employees <strong>of</strong> such political<br />

subdivisions. Each such plan and any amendment<br />

there<strong>of</strong> shall be approved by the state agency if<br />

it is found that such plan, or such plan as amended,<br />

is in conformity with such requirements as are provided<br />

in regulations <strong>of</strong> the state agency, except that<br />

upon, employment after enactment <strong>of</strong> this chapter, to<br />

impose upon each <strong>of</strong> its employees, as to services<br />

which are covered by an approved plan, a contribu­<br />

tion with respect to his wages as defined in s. 650.02<br />

not exceeding the amount <strong>of</strong> the employee tax which<br />

would be imposed by the Federal Insurance Contri­<br />

butions Act if such services constituted employment<br />

within the meaning <strong>of</strong> that act, and to deduct the<br />

amount <strong>of</strong> such contribution from his wages as and<br />

when paid. Contributions so collected shall be paid<br />

into the Social Security Contribution Trust Fund in<br />

partial discharge <strong>of</strong> the liability <strong>of</strong> such political subno<br />

such plan shall be approved unless:<br />

(a) It is in conformity with the requirements <strong>of</strong><br />

the Social Security Act and with the agreement endivision<br />

or instrumentality under paragraph (a). Failure<br />

to deduct such contribution shall not relieve the<br />

employee or employer <strong>of</strong> liability therefor.<br />

tered into under s. 650.03;<br />

(b) It provides that all services which constitute<br />

employment as defined in s. 650.02 are performed in<br />

the employ <strong>of</strong> the political subdivisions by employees<br />

there<strong>of</strong>, shall be covered by the plan, except such <strong>of</strong><br />

those services set forth in s. 650.02(2)(c) as the political<br />

subdivision specifically elects to exclude;<br />

(c) It specifies the source or sources from which<br />

the funds necessary to make the payments required<br />

by paragraph (3)(a) and by subsection (4) are expected<br />

to be derived and contains reasonable assurance<br />

that such sources will be adequate for such purpose;<br />

(d) It provides for such methods <strong>of</strong> administration<br />

<strong>of</strong> the plan by the political subdivision as are<br />

found by the state agency to be necessary for the<br />

proper and efficient administration <strong>of</strong> the plan;<br />

(e) It provides that the political subdivision will<br />

make such reports, in such form and containing such<br />

information, as the state agency may from time to<br />

time require, and comply with such provisions as the<br />

state agency or the Secretary <strong>of</strong> Health, Education,<br />

and Welfare may from time to time find necessary to<br />

(4) Delinquent payments due under paragraph<br />

(3)(a) may, with interest <strong>of</strong> 1 percent for each calen­<br />

dar month or part there<strong>of</strong> past the due date, be re­<br />

covered by action in a court <strong>of</strong> competent jurisdiction<br />

against the political subdivision liable therefor or<br />

shall, at the request <strong>of</strong> the state agency, be deducted<br />

from any other moneys payable to such subdivision<br />

by any department or agency <strong>of</strong> the state.<br />

(5) Each political subdivision as to which a plan<br />

has been approved shall be liable to the state agency<br />

for a proportionate part <strong>of</strong> the cost <strong>of</strong> administering<br />

this chapter. Such proportionate cost shall be computed<br />

and paid in accordance with such regulations<br />

relating thereto as may be adopted by the state agen­<br />

cy and shall be deposited in the Social Security Ad­<br />

ministration Trust Fund; and, if any such payment is<br />

not made when due, the amount there<strong>of</strong>, with inter­<br />

est <strong>of</strong> 0.5 percent for each calendar month or part<br />

there<strong>of</strong> past the due date, shall, upon request <strong>of</strong> the<br />

state agency, be deducted from any other moneys<br />

payable to such political subdivision by any <strong>of</strong>ficer,<br />

department, or agency <strong>of</strong> the state, and forthwith<br />

793


F.S.<strong>1983</strong> SOCIAL SECURITY FOR PUBLIC EMPLOYEES Ch.650<br />

650.10 Referenda and certification.-<br />

(1) The Governor, or an <strong>of</strong>ficial <strong>of</strong> the state designated<br />

by him for the purpose, is empowered to authorize<br />

and supervise the conduct <strong>of</strong> employee referenda<br />

prescribed by s. 213(d)(3) <strong>of</strong> the Social Security<br />

Act, on the question <strong>of</strong> whether service in positions<br />

covered by a retirement system established by the<br />

state or by a political subdivision there<strong>of</strong> should be<br />

excluded from or included under an agreement under<br />

this chapter. The notice <strong>of</strong> referendum required by s.<br />

218(d)(3)(C) <strong>of</strong> the Social Security Act to be given to<br />

employees shall contain or shall be accompanied by a<br />

statement, in such form and such detail as the agency<br />

795<br />

or individual designated to supervise the referendum<br />

shall deem necessary and sufficient, to inform the<br />

employees <strong>of</strong> the rights which will accrue to them and<br />

their dependents and survivors, and the liabilities to<br />

which they will be subject, if their services are included<br />

under an agreement under this chapter.<br />

(2) Upon receiving evidence satisfactory to him<br />

that with respect to any such referendum the conditions<br />

specified in s. 218(d)(3) <strong>of</strong> the Social Security<br />

Act have been met, the Governor, or an <strong>of</strong>ficial <strong>of</strong> the<br />

state designated by him for the purpose, shall so certify<br />

to the Secretary <strong>of</strong> Health, Education and Welfare.<br />

Hlstory.-8. 12, ch. 29824, 1955; 8. 2, ch. 61-138.


Ch.651 CONTINUING CARE CONTRACTS F.S.<strong>1983</strong><br />

651.011<br />

651.015<br />

651.021<br />

651.022<br />

651.023<br />

651.026<br />

651.033<br />

651.035<br />

651.041<br />

651.051<br />

651.055<br />

651.061<br />

651.065<br />

651.071<br />

651.081<br />

651.085<br />

651.091<br />

651.095<br />

651.105<br />

651.106<br />

651.107<br />

651.108<br />

651.111<br />

651.114<br />

651.121<br />

651.125<br />

651.13<br />

651.131<br />

651.132<br />

651.133<br />

651.134<br />

Definitions.<br />

Administration; forms; fees; rules; fines.<br />

Certificate <strong>of</strong> authority required.<br />

Provisional certificate <strong>of</strong> authority; application.<br />

Certificate <strong>of</strong> authority; application; renewal.<br />

Annual statements.<br />

Escrow accounts.<br />

Minimum liquid reserve requirements.<br />

Use <strong>of</strong> reserves; investment purposes.<br />

Maintenance <strong>of</strong> assets and records in state.<br />

Agreements; right to rescind.<br />

Dismissal or discharge <strong>of</strong> resident; refund.<br />

Waiver <strong>of</strong> statutory protection.<br />

Agreements as preferred claims on liquidation.<br />

Continuing care facilities residents' organizations.<br />

Quarterly meetings between residents and<br />

the governing body <strong>of</strong> the facility.<br />

Availability, distribution, and posting <strong>of</strong><br />

reports and records; requirement <strong>of</strong> full<br />

disclosure.<br />

Advertisements; requirements; penalties.<br />

Examination and inspections; fines.<br />

Grounds for discretionary refusal, suspension,<br />

or revocation <strong>of</strong> certificate <strong>of</strong> authority.<br />

Duration <strong>of</strong> suspension; obligations during<br />

suspension period; reinstatement.<br />

Administrative fines.<br />

Requests for inspections.<br />

Delinquency proceedings.<br />

Advisory council.<br />

Criminal penalties; injunctive relief.<br />

Civil action.<br />

Actions under prior law.<br />

Amendment or renewal <strong>of</strong> existing contracts.<br />

Provisional certificates issued under prior<br />

law.<br />

Investigatory records.<br />

'651.011 Definitions.-For the purposes <strong>of</strong> this<br />

chapter, the term:<br />

(1) "Advisory council" means the Continuing<br />

Care Advisory Council established by s. 651.121.<br />

(2) "Continuing care" or "care" means furnishing<br />

pursuant to an agreement shelter, food, and either<br />

nursing care or personal services as defined in s.<br />

400.402(8), whether such nursing care or personal<br />

services are provided in the facility or in another setting<br />

designated by the agreement for continuing care,<br />

to an individual not related by consanguinity or affinity<br />

to the provider furnishing such care, upon payment<br />

<strong>of</strong> an entrance fee. Other personal services provided<br />

shall be designated in the continuing care<br />

agreement. Agreements to provide continuing care<br />

include agreements to provide care for any duration,<br />

CHAPTER 651<br />

CONTINUING CARE CONTRACTS<br />

796<br />

including agreements that are terminable by either<br />

party.<br />

(3) "Department" means the Department <strong>of</strong> Insurance<br />

<strong>of</strong> this state.<br />

(4) "Entrance fee" means an initial or deferred<br />

payment <strong>of</strong> a sum <strong>of</strong> money or property made as full<br />

or partial payment to assure the resident a place in a<br />

facility. An accommodation fee, admission fee, or<br />

other fee <strong>of</strong> similar form and application shall be considered<br />

to be an entrance fee.<br />

(5) "Facility" means a place in which it is undertaken<br />

to provide continuing care.<br />

(6) "Licensed" means that the provider has obtained<br />

a certificate <strong>of</strong> authority from the department.<br />

(7) "Provider" means the owner or operator,<br />

whether a natural person, partnership or other unincorporated<br />

association, however organized, trust, or<br />

corporation, <strong>of</strong> an institution, building, residence, or<br />

other place, whether operated for pr<strong>of</strong>it or not, which<br />

owner or operator undertakes to provide continuing<br />

care for a fixed or variable fee, or for any other remuneration<br />

<strong>of</strong> any type, whether fixed or variable, for<br />

the period <strong>of</strong> care, payable in a lump sum or lump<br />

sum and monthly maintenance charges or in installments.<br />

(8) "Records" means the permanent financial, directory,<br />

and personnel information and data maintained<br />

by a provider pursuant to this chapter.<br />

(9) "Resident" means a purchaser <strong>of</strong> or a nominee<br />

<strong>of</strong>, or a subscriber to, a continuing care agreement.<br />

Such an agreement may not be construed to give the<br />

resident a part ownership <strong>of</strong> the facility in which the<br />

resident is to reside, unless expressly provided for in<br />

the agreement.<br />

History.-s. 1, eli. 77-323; s. 170, cb. 79-164; ss. 1, 25, cb. 81-292; s. 2, ch.<br />

81-318; s. 3, ch. 83-265; ss. 1, 31, 33, 35, ch. 83-328.<br />

'Note.-Expires October 1, 1993, pursuant to s. 33, ch. 83-328, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

'651.015 Administration; forms; fees; rules;<br />

fines.-The administration <strong>of</strong> this chapter is vested<br />

in the department, which shall:<br />

(1) Prepare and furnish all forms necessary under<br />

the provisions <strong>of</strong> this chapter in relation to applications<br />

for certificates <strong>of</strong> authority or renewals there<strong>of</strong>,<br />

statements, examinations, and other required reports.<br />

(2) Collect in advance, and the applicant shall<br />

pay in advance, the following fees:<br />

(a) At the time <strong>of</strong> filing an application for a certificate<br />

<strong>of</strong> authority, an application fee in the amount<br />

<strong>of</strong> $75 for each facility.<br />

(b) At the time <strong>of</strong> renewal <strong>of</strong> a certificate <strong>of</strong> authority,<br />

a renewal fee in the amount <strong>of</strong> $75 for each<br />

year or part there<strong>of</strong> for each facility where continuing<br />

care is provided.<br />

(c) A late fee in an amount equal to 50 percent <strong>of</strong><br />

the renewal fee in effect on the last preceding regular<br />

renewal date. In addition to any other penalty that<br />

may be provided for under this chapter, the department<br />

may levy a fine not to exceed $50 a day for each<br />

day <strong>of</strong> noncompliance.


F.S.<strong>1983</strong> CONTINUING CARE CONTRACTS Ch.651<br />

(d) An investigation fee, to be paid upon original<br />

application, in the amount <strong>of</strong> $100 for each facility<br />

where continuing care is provided. Upon application<br />

subsequent to the denial <strong>of</strong> an earlier application or<br />

subsequent to the revocation, suspension, or surrender<br />

<strong>of</strong> a certificate <strong>of</strong> authority, the department shall<br />

collect in advance, and the applicant shall pay in advance,<br />

a second investigation fee in the amount <strong>of</strong><br />

$100.<br />

(e) For the issuance <strong>of</strong> the provisional certificate<br />

<strong>of</strong> authority, a fee in the amount <strong>of</strong> $50.<br />

(3) Adopt rules, within the standards <strong>of</strong> this<br />

chapter, necessary to effect the purposes <strong>of</strong> this chapter.<br />

Specific provisions in this chapter relating to any<br />

subject shall not preclude the department from<br />

adopting rules concerning such subject if such rules<br />

are within the standards and purposes <strong>of</strong> this chapter.<br />

(4) Impose administrative fines and penalties<br />

pursuant to this chapter.<br />

(5) Deposit all fees and fines collected under the<br />

provisions <strong>of</strong> this chapter into the Insurance Commissioner's<br />

Regulatory Trust Fund.<br />

History.-s. 1, ch. 77-323; s. 249, ch. 79-400; ss. 2, 25, ch. 81-292; s. 2, ch.<br />

81-318; s. 3, ch. 83-265; ss. 2, 31, 33, 35, ch. 83-328.<br />

'Note.-Expires October 1, 1993, pursuant to s. 33, ch. 83-328, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1651.021 Certificate <strong>of</strong> authority required.­<br />

(1) No person may engage in the business <strong>of</strong> providing<br />

continuing care or issuing continuing care<br />

agreements or construct a facility for the purpose <strong>of</strong><br />

providing continuing care in this state without a certificate<br />

<strong>of</strong> authority therefor obtained from the department<br />

as provided in this chapter. This subsection<br />

shall not be construed to prohibit preparation <strong>of</strong> the<br />

construction site or construction <strong>of</strong> a model residence<br />

unit for marketing purposes, or both.<br />

(2)(a) Before commencement <strong>of</strong> construction for<br />

any expansion <strong>of</strong> a certificated facility equivalent to<br />

the addition <strong>of</strong> at least 20 percent <strong>of</strong> existing units,<br />

written approval must be obtained from the department.<br />

This provision does not apply to construction<br />

for which a certificate <strong>of</strong> need, as provided in chapter<br />

381, is required.<br />

(b) The application for such approval shall be on<br />

forms provided by the department. The application<br />

shall include the feasibility study required by ss.<br />

651.022(3) and 651.023(1)(b) and such other information<br />

as required by s. 651.023.<br />

(c) In determining whether an expansion should<br />

be approved, the department shall utilize the criteria<br />

provided in ss. 651.022(5) and 651.023(5).<br />

History.-s. 1, ch. 77-323; ss. 3, 25, ch. 81-292; s. 2, ch. 81-318; s. 3, ch.<br />

83-265; ss. 3, 31, 33, 35, ch. 83-328.<br />

'Note.-Expires October 1, 1993, pursuant to s. 33, ch. 83-328, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

1651.022 Provisional certificate <strong>of</strong> authority;<br />

application.-<br />

(1) Each applicant for a certificate <strong>of</strong> authority<br />

shall first apply for and obtain a provisional certificate<br />

<strong>of</strong> authority pursuant to this section.<br />

(2) The application for a provisional certificate <strong>of</strong><br />

authority shall be on a form prescribed by the department<br />

and shall contain, or be accompanied by, at<br />

least the following information 2and items:<br />

797<br />

(a) If the applicant or provider is a corporation, a<br />

copy <strong>of</strong> the charter; if the applicant or provider is a<br />

partnership or other unincorporated association, a<br />

copy <strong>of</strong> the partnership agreement, articles <strong>of</strong> association,<br />

or other membership agreement; and, if the applicant<br />

or provider is a trust, a copy <strong>of</strong> the trust<br />

agreement or instrument.<br />

(b) The full names, residences, and business addresses<br />

<strong>of</strong>:<br />

1. The proprietor, if the applicant or provider is<br />

an individual.<br />

2. Every partner or member, if the applicant or<br />

provider is a partnership or other unincorporated association,<br />

however organized, having fewer than 50<br />

partners or members, together with the business<br />

name and address <strong>of</strong> the partnership or other organization.<br />

3. The principal partners or members, if the applicant<br />

or provider is a partnership or other unincorporated<br />

association, however organized, having 50 or<br />

more partners or members, together with the business<br />

name and business address <strong>of</strong> the partnership or<br />

other organization. If such unincorporated organization<br />

has <strong>of</strong>ficers and a board <strong>of</strong> directors, the full<br />

name and business address <strong>of</strong> each <strong>of</strong>ficer and director<br />

may be set forth in lieu <strong>of</strong> the full name and business<br />

address <strong>of</strong> its principal members.<br />

4. The corporation and each <strong>of</strong>ficer and director<br />

there<strong>of</strong>, if the applicant or provider is a corporation.<br />

5. Every trustee and <strong>of</strong>ficer, if the applicant or<br />

provider is a trust.<br />

6. The manager, whether an individual, corporation,<br />

partnership, or association.<br />

7. Any stockholder holding at least a lO-percent<br />

interest in the operations <strong>of</strong> the facility in which the<br />

care is to be <strong>of</strong>fered.<br />

8. Any person whose name is required to be provided<br />

in the application under the provisions <strong>of</strong> this<br />

paragraph and who owns any interest in or receives<br />

any remuneration from, either directly or indirectly,<br />

any pr<strong>of</strong>essional service firm, association, trust, partnership,<br />

or corporation providing goods, leases, or<br />

services to the facility for which the application is<br />

made, with a real or anticipated value <strong>of</strong> $500 or<br />

more, and the name and address <strong>of</strong> the pr<strong>of</strong>essional<br />

service firm, association, trust, partnership, or corporation<br />

in which such interest is held. The applicant<br />

shall describe such goods, leases, or services and the<br />

probable cost to the facility or provider and shall describe<br />

why such goods, leases, or services should not<br />

be purchased from an independent entity.<br />

9. Any person, corporation, partnership, association,<br />

or trust owning land or property leased to the<br />

facility, along with a copy <strong>of</strong> the lease agreement.<br />

10. Any affiliated parent or subsidiary corporation<br />

or partnership.<br />

(c)1. Evidence that the applicant is reputable and<br />

<strong>of</strong> responsible character. If the applicant is a firm, association,<br />

organization, partnership, business trust,<br />

corporation, or company, the form shall require evidence<br />

that the members or shareholders are reputable<br />

and <strong>of</strong> responsible character, and the person in<br />

charge <strong>of</strong> providing care under a certificate <strong>of</strong> authority<br />

shall likewise be required to produce evidence <strong>of</strong><br />

being reputable and <strong>of</strong> responsible character.


Ch.651 CONTINUING CARE CONTRACTS F.S.<strong>1983</strong><br />

2. Evidence satisfactory to the department <strong>of</strong> the<br />

ability <strong>of</strong> the applicant to comply with the provisions<br />

<strong>of</strong> this chapter and with rules adopted by the department<br />

pursuant to this chapter.<br />

3. A statement <strong>of</strong> whether a person identified in<br />

the application for a provisional certificate <strong>of</strong> authority<br />

or the administrator or manager <strong>of</strong> the facility, if<br />

such person has been designated, or any such person<br />

living in the same location:<br />

a. Has been convicted <strong>of</strong> a felony or has pleaded<br />

nolo contendere to a felony charge, or has been held<br />

liable or has been enjoined in a civil action by final<br />

judgment, if the felony or civil action involved fraud,<br />

embezzlement, fraudulent conversion, or misappropriation<br />

<strong>of</strong> property.<br />

b. Is subject to a currently effective injunctive or<br />

restrictive order or federal or state administrative order<br />

relating to business activity or health care as a result<br />

<strong>of</strong> an action brought by a public agency or department,<br />

including, without limitation, an action affecting<br />

a license under chapter 400.<br />

The statement shall set forth the court or agency, the<br />

date <strong>of</strong> conviction or judgment, and the penalty imposed<br />

or damages assessed, or the date, nature, and<br />

issuer <strong>of</strong> the order. Before determining whether a<br />

provisional certificate <strong>of</strong> authority is to be issued, the<br />

department may make an inquiry to determine the<br />

accuracy <strong>of</strong> the information submitted pursuant to<br />

subparagraphs 1. and 2.<br />

(d) The agreements for continuing care to be entered<br />

into between the provider and residents which<br />

meet the minimum requirements <strong>of</strong> s. 651.055.<br />

(e) Any advertisement or other written material<br />

proposed to be used in the solicitation <strong>of</strong> residents.<br />

(f) Such other reasonable data, financial statements,<br />

and pertinent information as the department<br />

may require with respect to the provider or the facility,<br />

or its directors, trustees, members, branches, subsidiaries,<br />

or affiliates, to determine the financial status<br />

<strong>of</strong> the facility and the management capabilities <strong>of</strong><br />

its managers and owners, including the most recent<br />

audited financial statements <strong>of</strong> comparable facilities<br />

owned, managed, or developed by the applicant or its<br />

principal.<br />

(3) In addition to the information required in<br />

subsection (2), an applicant for a provisional certificate<br />

<strong>of</strong> authority shall submit a preliminary feasibility<br />

study to the department. The preliminary feasibility<br />

study shall include at least the following information:<br />

(a) A description <strong>of</strong> the proposed facility, including<br />

the location, size, anticipated completion date,<br />

and the proposed construction program.<br />

(b) An identification and evaluation <strong>of</strong> the potential<br />

market, including a demographic and economic<br />

pr<strong>of</strong>ile <strong>of</strong> the population in the market area <strong>of</strong> the facility.<br />

(c) An evaluation <strong>of</strong> the potential market within<br />

a 50-mile radius <strong>of</strong> the facility.<br />

(d) Identification <strong>of</strong> existing and proposed competitive<br />

or similar facilities within a lOO-mile radius<br />

<strong>of</strong> the facility and, to the extent such information is<br />

available, the occupancy rate for such existing facilities<br />

for the last 3 years.<br />

(e) Projected revenues, including anticipated entrance<br />

fees; monthly service fees; nursing care rates,<br />

if applicable; and all other sources <strong>of</strong> revenue, including<br />

the total amount <strong>of</strong> debt financing required.<br />

(f) Projected expenses, including staffing requirements<br />

and salaries; cost <strong>of</strong> property, plant, and<br />

equipment, including depreciation expense; interest<br />

expense; and other operating expenses.<br />

(g) Current assets and liabilities <strong>of</strong> the applicant.<br />

(h) Expectations <strong>of</strong> the financial condition <strong>of</strong> the<br />

project, including the projected cash flow and a projected<br />

balance sheet and an estimate <strong>of</strong> the funds anticipated<br />

to be necessary to cover start-up losses.<br />

(i) The name <strong>of</strong> the person who prepared the feasibility<br />

study and the experience <strong>of</strong> such person in<br />

preparing similar studies or otherwise consulting in<br />

the field <strong>of</strong> continuing care.<br />

(4) If an applicant has or proposes to have more<br />

than one facility <strong>of</strong>fering continuing care, separate<br />

applications for a provisional certificate <strong>of</strong> authority<br />

and for a certificate <strong>of</strong> authority shall be made for<br />

each facility.<br />

(5) Within 14 days <strong>of</strong> receipt <strong>of</strong> an application for<br />

a certificate <strong>of</strong> authority, the department shall issue<br />

a written acknowledgment to the applicant. The department<br />

shall grant a provisional certificate <strong>of</strong> authority<br />

to an applicant who meets the qualifications<br />

<strong>of</strong> this section upon a determination by the department<br />

that the feasibility study was based on sufficient<br />

data and reasonable assumptions and that the<br />

applicant will be able to provide continuing care as<br />

proposed and meet all financial obligations related to<br />

its operations, including the financial requirements<br />

<strong>of</strong> this chapter.<br />

(6) The issuance <strong>of</strong> a provisional certificate <strong>of</strong> authority<br />

entitles the applicant to collect entrance fees<br />

and reservation deposits from prospective residents.<br />

All entrance fees and deposits collected shall be<br />

placed in an escrow account or on deposit with the<br />

department, pursuant to s. 651.033, until a certificate<br />

<strong>of</strong> authority is issued by the department. After the<br />

certificate <strong>of</strong> authority is issued, the initial entrance<br />

fees shall be escrowed as provided in s. 651.023.<br />

History.-ss. 4, 33, ch. 83-328.<br />

'Note.-Expires October 1, 1993, pursuant to •. 33, ch. 83-328, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

INote.-The words "and items" were inserted by the editors.<br />

1651.023 Certificate <strong>of</strong> authority; application;<br />

renewal.-<br />

(1) After issuance <strong>of</strong> a provisional certificate <strong>of</strong><br />

authority, the holder <strong>of</strong> such certificate may apply<br />

for a certificate <strong>of</strong> authority on a form prescribed by<br />

the department, which application shall contain at<br />

least the following information:<br />

(a) Any change in status with respect to the information<br />

required to be filed under s. 651.022(2) in the<br />

application for a provisional certificate <strong>of</strong> authority.<br />

(b) A final feasibility study containing any<br />

changes in the feasibility study required to be filed<br />

under s. 651.022(3) in the application for a provisional<br />

certificate <strong>of</strong> authority. The final feasibility study<br />

shall also contain an independent evaluation, by the<br />

consultant who prepared the study, <strong>of</strong> the underlying<br />

assumptions used as a basis for the forecasts in the<br />

study.<br />

798


F.S.<strong>1983</strong> CONTINUING CARE CONTRACTS Ch.651<br />

(c) Pro<strong>of</strong> that the project has a minimum <strong>of</strong> 50<br />

percent <strong>of</strong> the units reserved for which the provider<br />

is charging an entrance fee. In order for a unit to be<br />

considered reserved under this paragraph, the provider<br />

must collect a minimum deposit <strong>of</strong> 10 percent<br />

<strong>of</strong> the then current entrance fee for that unit, and<br />

must assess a forfeiture penalty <strong>of</strong> 2 percent <strong>of</strong> the<br />

entrance fee due to termination <strong>of</strong> the reservation after<br />

30 days for any reason other than the death or serious<br />

illness <strong>of</strong> the prospective resident, the failure <strong>of</strong><br />

the provider to meet its obligations under the reservation<br />

agreement, or other circumstances beyond the<br />

control <strong>of</strong> the prospective resident that equitably entitles<br />

the prospective resident to a refund <strong>of</strong> his deposit.<br />

The reservation agreement shall state the cancellation<br />

policy and the terms <strong>of</strong> the continuing care<br />

agreement to be entered into. The department may<br />

require the holder <strong>of</strong> such certificate to disclose to<br />

the prospective resident on forms prescribed by the<br />

department such additional financial information as<br />

the department may deem necessary. The provisions<br />

<strong>of</strong> this paragraph shall not be construed to alter the<br />

provisions <strong>of</strong> s. 651.055.<br />

(d) Pro<strong>of</strong> that commitments have been secured<br />

by the applicant for both construction financing and<br />

long-term financing.<br />

(e) Pro<strong>of</strong> that all conditions have been satisfied<br />

to activate the commitment to disburse funds other<br />

than the obtaining <strong>of</strong> the certificate <strong>of</strong> authority, the<br />

completion <strong>of</strong> construction, or the closing <strong>of</strong> the purchase<br />

<strong>of</strong> realty or buildings for the facility.<br />

(f) Pro<strong>of</strong> that the aggregate 'amount <strong>of</strong> entrance<br />

fees received by or pledged to the applicant, plus anticipated<br />

proceeds from any long-term financing<br />

commitment, plus funds from all other sources in the<br />

actual possession <strong>of</strong> the applicant, equal not less than<br />

100 percent <strong>of</strong> the aggregate cost <strong>of</strong> constructing or<br />

purchasing, equipping, and furnishing the facility<br />

plus 100 percent <strong>of</strong> the anticipated start-up losses <strong>of</strong><br />

the facility.<br />

(g) A financial statement, audited by an independent<br />

certified public accountant, in accordance with<br />

generally accepted accounting principles, which<br />

statement shall contain at least the following information<br />

about the applicant:<br />

1. A balance sheet <strong>of</strong> all <strong>of</strong> the assets and liabilities<br />

<strong>of</strong> the applicant.<br />

2. A statement <strong>of</strong> income and expenses for the<br />

I-year period ending December 31 immediately preceding<br />

the date <strong>of</strong> application and for the one or<br />

more quarters after December 31 preceding the date<br />

<strong>of</strong> application. The department may request an income<br />

statement for prior periods if it determines that<br />

such information is necessary to evaluate the financial<br />

status <strong>of</strong> the applicant.<br />

3. A statement <strong>of</strong> changes in financial position for<br />

the year ending December 31 immediately preceding<br />

the date <strong>of</strong> application.<br />

(h) Pro<strong>of</strong> that the applicant will be able to comply<br />

with the escrow requirements <strong>of</strong> subsection (2)<br />

and s. 651.035.<br />

(i) Such other reasonable data, financial statements,<br />

and pertinent information as the department<br />

may require with respect to the applicant or the facility,<br />

or its directors, trustees, members, branches, subsidiaries,<br />

or affiliates, to determine the financial sta-<br />

799<br />

tus <strong>of</strong> the facility and the management capabilities <strong>of</strong><br />

its managers and owners.<br />

(2) No more than 25 percent <strong>of</strong> the moneys paid<br />

for all or any part <strong>of</strong> an initial entrance fee may be included<br />

or pledged for the construction or purchase <strong>of</strong><br />

the facility, or included or pledged as security for<br />

long-term financing. The term "initial entrance fee"<br />

means the total entrance fee charged by the facility<br />

to the first occupant <strong>of</strong> a unit. A minimum <strong>of</strong> 75 percent<br />

<strong>of</strong> the moneys paid for all or any part <strong>of</strong> an initial<br />

entrance fee collected shall be placed in an escrow<br />

account or on deposit with the department as<br />

prescribed in s. 651.033 until:<br />

(a) Payment in full has been received for no less<br />

than 70 percent <strong>of</strong> the total units; and<br />

(b) A certificate <strong>of</strong> occupancy has been issued.<br />

(3) In lieu <strong>of</strong> fulfilling the requirements in subsection<br />

(2), the provider may have sufficient funds in<br />

the escrow account to meet all outstanding debts on<br />

the facility and equipment. The department may authorize<br />

the release <strong>of</strong> such funds to retire all outstanding<br />

debts on the facility and equipment upon<br />

application <strong>of</strong> the provider and upon the provider's<br />

showing that the provider will grant to the residents<br />

a first mortgage on the land, buildings, and equipment<br />

that constitute the facility. Such mortgage shall<br />

secure the refund <strong>of</strong> the entrance fee in the amount<br />

required by this chapter. The granting <strong>of</strong> such mortgage<br />

shall be subject to the following:<br />

(a) The first mortgage may be granted to a trust<br />

which is beneficially held by the residents. The mortgage<br />

may secure payment on bonds issued to the residents<br />

or trustee. Such bonds shall be redeemable after<br />

termination <strong>of</strong> the residency agreement in the<br />

amount and manner required by this chapter for the<br />

refund <strong>of</strong> an entrance fee.<br />

(b) Before granting a first mortgage to the residents,<br />

all construction must be substantially completed<br />

and substantially all equipment purchased.<br />

No part <strong>of</strong> the entrance fees may be pledged as security<br />

for a construction loan or otherwise used for construction<br />

expenses before the completion <strong>of</strong> construction.<br />

(c) If the provider is leasing the land or buildings<br />

used by the facility, the leasehold interest must be<br />

for a term <strong>of</strong> at least 30 years.<br />

(4) Upon a showing, to the satisfaction <strong>of</strong> the department,<br />

that the provider has sufficient funds to<br />

meet the escrow requirements <strong>of</strong> s. 651.035 and that<br />

the provider is otherwise in a financially sound position,<br />

and upon fulfillment <strong>of</strong> the requirements <strong>of</strong><br />

subsection (2), the department shall authorize the release<br />

<strong>of</strong> the remaining 75 percent <strong>of</strong> the initial entrance<br />

fees collected; except that at least 10 percent<br />

<strong>of</strong> all initial entrance fees collected shall remain in<br />

the escrow account for a period <strong>of</strong> 6 months from the<br />

issuance <strong>of</strong> the certificate <strong>of</strong> occupancy, during which<br />

time these funds shall be released only for the refund<br />

<strong>of</strong> such entrance fees due because <strong>of</strong> the cancellation<br />

<strong>of</strong> a contract.<br />

(5) The application for a certificate <strong>of</strong> authority<br />

shall be accompanied by the forms <strong>of</strong> the agreements<br />

proposed to be used by the provider in the furnishing<br />

<strong>of</strong> care. If the department finds that the agreements<br />

comply with s. 651.055, it shall approve them. Thereafter,<br />

no other form <strong>of</strong> agreement may be used by the


Ch.651 CONTINUING CARE CONTRACTS F.S.<strong>1983</strong><br />

provider until it has been submitted to the department<br />

and approved by the department as complying<br />

with s. 651.055.<br />

(6) The department shall issue a certificate <strong>of</strong> authority<br />

upon its determination that the applicant has<br />

submitted all <strong>of</strong> the information required by this section,<br />

that all escrow requirements have been satisfied,<br />

and that the fees prescribed in s. 651.015(2)<br />

have been paid.<br />

(7) The department may not issue a certificate <strong>of</strong><br />

authority under this chapter to any facility which<br />

does not have a component which is to be licensed<br />

pursuant to chapter 395 or part I or part II <strong>of</strong> chapter<br />

400.<br />

(8) The certificate <strong>of</strong> authority shall be renewable<br />

annually on or before September 30 upon payment <strong>of</strong><br />

the renewal fee prescribed in s. 651.015(2) and upon<br />

a determination by the department that the provider<br />

continues to meet the requirements <strong>of</strong> this chapter. If<br />

the provider fails to meet the requirements <strong>of</strong> this<br />

chapter, the department may issue a renewal certificate<br />

if it notifies the provider <strong>of</strong> any deficiencies and<br />

requires the provider to correct such deficiencies<br />

within a period to be determined by the department.<br />

If such deficiencies are not corrected within 20 days<br />

after the notice to the provider, or 3within less time at<br />

the discretion <strong>of</strong> the department, the department<br />

shall notify the advisory council, which may assist<br />

the facility in formulating a remedial plan to be submitted<br />

to the department no later than 60 days from<br />

the date <strong>of</strong> notification. The time period granted to<br />

correct deficiencies may be extended upon submission<br />

<strong>of</strong> a plan for corrective action approved by the<br />

department. If such deficiencies have not been<br />

cleared by the expiration <strong>of</strong> such time period, as extended,<br />

the department shall petition for a delinquency<br />

proceeding or pursue such other relief as is<br />

provided for under s. 651.114, as the circumstances<br />

may require.<br />

History.-ss. 5, 33, ch. 83-328.<br />

'Note.-Expires October 1, 1993, pursuant to s. 33, ch. 83-328, and is scheduled<br />

for review pursuant to s. 11.61 in advance <strong>of</strong> that date.<br />

IN ote.- The words "amount or' were inserted by the editors.<br />

' N ote.- The words 'within less' were substituted by the editors for the<br />

words "prior to such."<br />

'651.026 Annual statements.-<br />

(1) Annually, on or before July 1, the provider<br />

shall file an annual statement and such other information<br />

and data, showing its condition as <strong>of</strong> the last<br />

day <strong>of</strong> the preceding calendar year, except as provided<br />

in subsection (5). If the department does not receive<br />

the required information on or before July 1, a<br />

late fee may be charged pursuant to s. 651.015(2)(c).<br />

(2) The annual statement shall be in such form as<br />

the department prescribes and shall contain at least<br />

the following:<br />

(a) Any change in status with respect to the information<br />

required to be filed under s. 651.022(2).<br />

(b) Financial statements audited by an independent<br />

certified public accountant, which shall contain,<br />

for two or more periods if the facility has been in existence<br />

that long, the following:<br />

1. An accountant's opinion and, in accordance<br />

with generally accepted accounting principles:<br />

a. A balance sheet;<br />

b. A statement <strong>of</strong> income and expenses;<br />

c. A statement <strong>of</strong> equity or fund balances; and<br />

d. A statement <strong>of</strong> changes in financial position;<br />

and<br />

2. Notes to the financial statements considered<br />

customary or necessary to full disclosure or adequate<br />

understanding <strong>of</strong> the financial statements, financial<br />

condition, and operation.<br />

(c) The following financial information:<br />

1. A detailed listing <strong>of</strong> the assets maintained in<br />

the liquid reserve as required in s. 651.035 and in accordance<br />

with part II <strong>of</strong> chapter 625;<br />

2. A schedule giving additional information relating<br />

to property, plant, and equipment having an original<br />

cost <strong>of</strong> at least $25,000, so as to show in reasonable<br />

detail with respect to each separate facility original<br />

costs, accumulated depreciation, net book value,<br />

appraised value or insurable value and date there<strong>of</strong>,<br />

insurance coverage, encumbrances, and net equity <strong>of</strong><br />

appraised or insured value over encumbrances. Any<br />

property not used in continuing care shall be shown<br />

separately from property used in continuing care;<br />

3. The level <strong>of</strong> participation in Medicare or Medicaid<br />

programs, or both;<br />

4. A statement <strong>of</strong> all fees required <strong>of</strong> residents,<br />

including, but not limited to, a statement <strong>of</strong> the entrance<br />

fee charged, the monthly service charges, the<br />

proposed application <strong>of</strong> the proceeds <strong>of</strong> the entrance<br />

fee by the provider, and the plan by which the<br />

amount <strong>of</strong> the entrance fee is determined if the entrance<br />

fee is not the same in all cases; and<br />

5. Any change or increase in fees when the provider<br />

changes either the scope <strong>of</strong>, or the rates for,<br />

care or services, regardless <strong>of</strong> whether the change involves<br />

the basic rate or only those services available<br />

at additional costs to the resident.<br />

(d) Such other reasonable data, financial statements,<br />

and pertinent information as the department<br />

may require with respect to the provider or the facility,<br />

or its directors, trustees, members, branches, subsidiaries,<br />

or affiliates, to determine the financial status<br />

<strong>of</strong> the facility and the management capabilities <strong>of</strong><br />

its managers and owners.<br />

(e) Except as provided in subsection (5), 60 days<br />

before the commencement <strong>of</strong> each calendar year or<br />

<strong>of</strong>ficial opening date, whichever is applicable, each<br />

facility shall file a computation <strong>of</strong> the annual<br />

long-term debt service and a projected annual revenue<br />

and expense summary, excluding depreciation<br />

and any expenses included in s. 651.035(1), on a form<br />

prescribed by the department. This projection shall<br />

serve as the basis for determining the amount <strong>of</strong> the<br />

minimum liquid reserve required by s. 651.035.<br />

(3) A facility, within no more than 5 years <strong>of</strong> the<br />

opening date, shall show a ratio <strong>of</strong> no less than 1 to 1<br />

<strong>of</strong> current assets to current liabilities.<br />

(4) If the provider is an individual, the annual<br />

statement shall be sworn to by him; if a limited partnership,<br />

by the general partner; if a partnership other<br />

than a limited partnership, by all the partners; if any<br />

other unincorporated association, by all its members<br />

or <strong>of</strong>ficers and directors; if a trust, by all its trustees<br />

and <strong>of</strong>ficers; and, if a corporation, by the president<br />

and secretary there<strong>of</strong>.<br />

(5) A provider which has a component insured or<br />

800

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