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

F.S.1983 AMBULANCE SERVICE CONTRACTS Ch.638 

638.021 

638.031 

638.041 

638.051 

638.061 

638.081 

638.091 

638.111 

638.121 

638.122 

638.125 

638.131 

638.141 

638.151 

638.161 

638.181 

638.191 

638.201 

638.211 

638.221 

638.231 

638.241 

638.251 

638.261 

638.271 

638.282 

Definitions. 

Powers of department; rules. 

Certificate of authority required. 

Certificate of authority; annual statement; 

renewal. 

Capital funds required. 

Required deposit or bond. 

Suspension or revocation of, or refusal to 

renew, certificate of authority. 

Notice of suspension or revocation of certificate 

of authority. 

Duration of suspension; obligations of association 

during suspension period; reinstatement. 

Administrative fine in lieu of suspension or 

revocation of certificate of authority. 

Unfair trade practices. 

Filing of contracts, forms, and rates. 

Tax on premiums and assessments. 

Examination of associations. 

Service of process. 

Registration of sales representatives. 

Grounds for compulsory refusal, suspension, 

or revocation of registration of sales 

representative. 

Grounds for discretionary refusal, suspension, 

or revocation of registration of sales 

representative. 

Refusal, suspension, or revocation of registration 

of sales representative. 

Administrative fine in lieu of suspension or 

revocation of registration. 

Disposition of taxes and fees. 

Insurance business not authorized. 

Fronting not permitted. . 

Certain ambulance service associations' relations 

with funeral directors prohibited. 

Penalty for violation. 

Investigatory records. 

'638.021 Definitions.-As used in this chapter, 

the term: 

(1) "Ambulance service association" or "association" 

means any person issuing ambulance service 

contracts as defined in this section, other than an authorized 

insurer. 

(2) "Ambulance service contract" or "preneed ambulance 

service contract" means any contract or 

agreement whereby, for an agreed premium or specified 

consideration paid in advance or by installments, 

any person undertakes to compensate or indemnify 

the contract or agreement holder for any type of ambulance 

service or undertakes to provide any type of 

ambulance service on a preneed basis. 

(3) "Department" means the Department of Insurance 

of this state. 

(4) "Insurance code" means the Florida Insurance 

Code, as defined in s. 624.01. 

(5) "Insurer" means any property or casualty insurer 

duly authorized to transact such business in 

this state. 

CHAPTER 638 

AMBULANCE SERVICE CONTRACTS 

751 

(6) "Sales representative" means any person employed 

or otherwise retained by an insurer or ambulance 

service association for the purpose of selling or 

issuing ambulance service contracts. 

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

81-318; 88. 2, 30, 31, ch. 83-314. 

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

for review pursuant to 8. 11.61 in advance of that date. 

'638.031 Powers of department; rules.-The 

department shall administer this chapter; and to that 

end it may adopt, promulgate, and enforce rules necessary 

and proper to effectuate any provisions of this 

chapter. 

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

ch.83-314. 

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


'638.041 Certificate of authority require d. 

(1) No person may receive, hold, control, or manage 

any funds tendered as payment on any ambulance 

service contract until such person has a subsisting 

certificate of authority issued by the department. 

The certificate of authority shall expire on June 1 

succeeding its issuance; and annually thereafter, or 

before June 1, a renewal thereof shall be issued under 

conditions herein set forth. 

(2) An insurer authorized to transact property or 

casualty insurance in this state may transact an ambulance 

service contract business without additional 

qualification or authority subject to the applicable 

provisions of this chapter. 

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

ch.83-314. 

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


'638.051 Certificate of authority; annual 

statement; renewal.- 

(1) An application to the department for a certificate 

of authority shall be accompanied by: 

(a) The deposit required by s. 638.081; 

(b) The ambulance service contracts proposed to 

be written; 

(c) The name and address of the place of business 

of the person offering to write the ambulance contracts; 

(d) Evidence of compliance with s. 638.061; . 

(e) Biographical information relating to the officers 

and directors 20f the association; and 

(f) Such other information as may be considered 

necessary by the department in order for it to meet 

its obligations under this chapter. 

(2) Annually on or before March 1, the ambulance 

service association shall file a statement of its 

financial condition, transactions, and affairs as of the 

preceding December 31 as certified by a certified 

public accountant. The statement shall contain a certification 

that the ambulance service association has 

sufficient funds available to perform obligations under 

its contracts. 

(3) An insurer required to file statements under 

chapter 624 may include therein any statement of

Ch.638 AMBULANCE SERVICE CONTRACTS F.S.1983 

business written under this chapter rather than complying 

with the provisions of subsections (1) and (2). 

(4) The annual fee payable to the department for 

the issuance of a certificate of authority shall be $100 

payable on initial application and thereafter no later 

than March 1 of each year for renewal. 

(5) When the required information has been submitted 

and the department determines that the ambulance 

service association is in compliance with this 

chapter, the department shall issue the certificate of 

authority or renewal thereof. 

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

cb.83-314. 

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

for review pur8uant to 8. 11.61 in advance of that date. 

'Note.- Tbe words "of lbe association" were inserted by the editors. 

1638.061 Capital funds required.- 

(1) Any person applying for a certificate of authority 

'under s. 638.051 shall possess unimpaired 

paid-in capital or paid-in capital stock, if a stock association; 

or unimpaired surplus, if a foreign mutual 

or foreign reciprocal association; or a net trust fund, 

if a business trust association, in an amount not less 

than $50,000. 

(2) After issuance of a certificate of authority, an 

ambulance service association shall maintain unimpaired 

paid-in capital stock, if a stock association; or 

unimpaired surplus, if a foreign mutual or foreign reciprocal 

association; or a net trust fund, if a business 

trust association, in an amount not less than $25,000. 

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

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

for review pursuant to s. 11.61 in advance of tbat date. 

'Note.-Tbe words "under s. 638.051" were inserted by tbe editors. 

1638.081 Required deposit or bond.- 

(1) To assure the faithful performance of its obligations 

to its members or subscribers, every ambulance 

service association shall, prior to issuance of its 

certificate of authority by the department, deposit 

with the department securities of the type eligible for 

deposit by insurers under s. 625.52, and having a 

market value of not less than $20,000. Such deposit 

requirement shall be in addition to the capital funds 

requirement in s. 638.061. Whenever the market value 

of the securities deposited with the department is 

less than 95 percent of the amount required under 

this subsection, the association shall deposit addi- 

service association insured thereunder shall, within 

30 days of the filing of notice of termination, provide 

the department with a replacement bond meeting the 

requirements of this part or deposit additional securities 

as required under subsection (1). The cancellation 

of a bond does not relieve the obligation of the 

issuer of the bond for claims arising out of contracts 

issued prior to cancellation of the bond unless a replacement 

bond or securities are filed. In no event 

shall the issuer's liability under the bond exceed the 

face amount of the bond. If within 30 days of filing 

the notice of termination no replacement bond or additional 

security is provided, the department shall 

suspend the license of the association until the deposit 

requirements are satisfied. 

(3) The state shall be responsible for the safekeeping 

of all securities deposited with the department 

under this chapter. The securities shall not, on 

account of being deposited in this state, be subject to 

taxation, but shall be held exclusively and solely to 

guarantee the faithful performance by the association 

of its obligations to its members or subscribers. 

(4) The depositing association shall, during its 

solvency, have the right to exchange or substitute 

other securities of like quality and value for securities 

so on deposit, to receive the interest and other income 

accruing on such securities, and to inspect the 

deposit at all reasonable times. 

(5) The deposit or bond shall be maintained unimpaired 

as long as the association continues in business 

in this state. Whenever the association ceases to 

do business in this state and furnishes to the department 

satisfactory proof that it has discharged or otherwise 

adequately provided for all its obligations to 

its members or subscribers in this state, the department 

shall release the deposited securities to the entitled 

parties, on presentation of the receipts of the 

department for such securities, or release any bond 

filed with it in lieu of such deposit. 

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

cb. 83-314. 

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

for review pursuant to •. 11.61 in advance of lbat date. 

INote.-This sentence appears to have been inadvertently retained in s. 

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

6O-day period of advance notice before cancellation of lbe bond of an ambulance 

service association. 

tional securities or otherwise increase the deposit to 1638.091 Suspension or revocation of, or rethe 

amount specified in this subsection. fusal to renew, certificate of authority.- 

(2) In lieu of any deposit of securities required (1) The department may, in its discretion, susunder 

subsection (1), the association may file with pend, revoke, or refuse to renew the certificate of authe 

department a surety bond in like amount. The thority of any ambulance service association if it 

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

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

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

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

or subject to cancellation unless at least 30 der its further transaction of business in this state 

days' advance notice thereof in writing is filed with hazardous or injurious to the public. 

the department. The bond shall guarantee that the (c) Is using methods of practice in the conduct of 

ambulance service association will faithfully and tru- its business so as to render its future transactions of 

ly perform all the conditions of any ambulance ser- business in this state hazardous or injurious to the 

vice contract. No such bond shall be canceled or shall public. 

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

vance notice thereof, in writing, is filed with the de- produce its accounts, records, and files for examinapartment. 

In the event that notice of termination of tion, or if any of its officers have refused to give inthe 

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

752

F.S.1983 AMBULANCE SERVICE CONTRACTS Ch.638 

other legal obligation as to such examination, when 

required by the department. 

(e) Has failed to pay any final judgment rendered 

against it in this state within 90 days after the judgment 

became final. 

(f) Has, without just cause, refused to provide 

service under its contracts or has, without just cause, 

compelled contract holders to employ attorneys to 

bring suit against the association to secure service. 

(g) Is affiliated with, and under the same general 

management or interlocking directorate or ownership 

as, another ambulance service association which 

transacts direct contracts in this state without having 

a license. 

(2) The department may, in its discretion, suspend 

the certificate of authority of any ambulance 

service association as to which proceedings for receivership, 

conservatorship, rehabilitation, or other delinquency 

proceedings have been commenced in any 

state. 

(3) A violation of this chapter by an insurer is 

grounds for suspension or revocation of the insurer's 

certificate of authority in this state. 

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

81 -318; ss. 9, 30, 31, ch. 83-314. 

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

for review pursuant to s. 11.61 in advance of that date. 

'638.111 Notice of suspension or revocation 

of certificate of authority.- 

(1) The department shall promptly give notice of 

the suspension or revocation of the certificate of authority 

of an association to its sales representatives in 

this state of record in the office of the department. 

(2) In its discretion, the department may cause 

notice of any such revocation to be published in one 

or more newspapers of general circulation published 

in this state. 

(3) Upon suspension or revocation of its certificate 

of authority, an association and its sales representatives 

in their representative capacities shall not 

solicit or write any new contracts in this state during 

the period of any such suspension or revocation, nor 

after such revocation renew any business previously 

written. 

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

81-318; ss. 10, 30, 31, ch. 83-314. 



'638.121 Duration of suspension; obligations 

of association during suspension period; reinstatement.- 

(1) The suspension of the certificate of authority 

of an association shall be for a period not to exceed 1 

year, as specified by the department in the order of 

suspension. The department may subsequently 

shorten or rescind a suspension or the order upon 

which the suspension is based. 

(2) During the period of suspension, the association 

shall file its annual statement and pay fees, licenses, 

and taxes as required under this chapter as if 

the certificate of authority were continued in full 

force. 

(3) Upon expiration of the suspension period, if 

within such period the certificate of authority has not 

otherwise terminated, the certificate of authority of 

the association shall automatically be reinstated un- 

753 

less the department finds that the causes of the suspension 

have not been removed, or that the association 

is otherwise not in compliance with the requirements 

of this chapter. 

(4) Upon reinstatement of the certificate of authority 

of an association or insurer following suspension, 

the authority of its sales representatives in this 

state to represent the association or insurer shall 

likewise be reinstated. The department shall promptly 

notify the association or insurer and its sales representatives 

in this state of record in the office of the 

department of the reinstatement. 

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

31, ch. 83-314. 

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

for review pursuant to B. 11.61 in advance of that date. 

'638.122 Administrative fine in lieu of suspension 

or revocation of certificate of authority. 

(1) If the department finds that one or more 

grounds exist for the revocation or suspension of a 

certificate of authority issued under this chapter, the 

department may, in lieu of such suspension or revocation, 

impose a fine upon the insurer or ambulance 

service association. 

(2) With respect to any nonwillful violation, such 

fine may not exceed $500 per violation. In no event 

may such fine exceed an aggregate amount of $2,500 

for all non willful violations arising out of the same 

action. When an ambulance service association discovers 

a non willful violation, the association shall 

correct the violation and, if restitution is due, make 

restitution to all affected persons. Such restitution 

shall include interest at 12 percent per year from either 

the date of the violation or the date of inception 

of the affected person's policy, at the option of the 

association. The restitution may be a credit against 

future premiums due, provided the interest accumulates 

until the premiums are due. If the amount of 

restitution due to any person is $50 or more, and the 

association wishes to credit it against future premiums, 

it shall notify such person that he may receive a 

check instead of a credit. If the credit is on a policy 

which is not renewed, the association shall pay the 

restitution to the person to whom it is due. 

(3) With respect to any knowing and willful violation 

of a lawful order or rule of the department or a 

provision of this chapter, the department may impose 

a fine upon the ambulance service association in 

an amount not to exceed $2,000 for each such violation. 

In no event may such fine exceed an aggregate 

amount of $10,000 for all knowing and willful violations 

arising out of the same action. In addition to 

such fines, the association shall make restitution 

when due in accordance with the provisions of subsection 

(2). 

(4) The failure of an ambulance service association 

to make restitution when due as required under 

this section constitutes a willful violation of this 

chapter. However, if a corporation in good faith is uncertain 

as to whether any restitution is due or as to 

the amount of such restitution, it shall promptly notify 

the department of the circumstances, and the 

failure to make restitution pending a determination 

thereof will not constitute a violation of this chapter. 

History.-ss. 12, 31, ch. 83-314. 

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

for review purBuant to s. 11.61 in advance of that date.


1638.125 Unfair trade practices.-Every ambulance 

service association and its representatives 

and employees shall be subject to the provisions of 

part VIII of chapter 626 (unfair insurance trade practices). 

History.- ss. 13, 31, ch. 83-314. 

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


1638.131 Filing of contracts, forms, and 

rates.- 

(1) No contract form nor related form may be issued 

or used in this state unless it has been filed with 

and approved by the department. 

(2) Every such filing shall be made not less than 

30 days in advance of issuance or use. At the expiration 

of 30 days from the date of filing, a form so filed 

shall be deemed approved unless prior thereto it has 

been affirmatively approved or disapproved by written 

order of the department. The department may 

extend by not more than an additional 15 days the 

period within which it may so affirmatively approve 

or disapprove any such form by giving notice of such 

extension before the expiration of the initial 30-day 

period. At the expiration of any such period as so extended 

and in the absence of prior affirmative approval 

or disapproval, any such form shall be deemed 

approved. 

(3) In addition, each ambulance service association 

or insurer shall file with the department for informational 

purposes the rate to be charged for each 

contract and the premium, including all modifications 

of rates and premiums, to be paid by the contract 

holder. Every filing shall state the proposed effective 

date of the rate to be charged. Such filing 

shall be made not fewer than 30 days prior to its effective 

date. No rate or modification of a rate or premium 

shall be used unless filed. 

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

31, ch. 83-314. 

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


1638.141 Tax on premiums and assessments. 

(1) In addition to the taxes provided for in this 

chapter for ambulance service associations, and license 

taxes as provided in the insurance code as to 

insurers, each such association and insurer shall, annually 

on or before March 1, file with the department 

its annual statement, in a form as prescribed and furnished 

by the department, showing all premiums or 

assessments received by it from contract holders in 

this state during the preceding calendar year, and 

shall pay to the Treasurer a tax in an amount equal 

to 2 percent of the gross amount of such premiums or 

assessments. The same exemptions and credits as set 

forth in ss. 624.512 and 624.514 allowed to insurers 

shall apply to insurers and ambulance service associations 

under this chapter. 

(2) Premiums and assessments received by insurers 

and taxed under this section are not subject to 

any premium tax provided for in the insurance code. 

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

81 -318; ss. 15, 30, 31, ch. 83-314. 



754 

1638.151 Examination of associations.-Ambulance 

service associations shall be subject to periodic 

examination by the department in the same 

manner and subject to the same terms and conditions 

as apply to insurers under part II of chapter 624. 

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

31, ch. 83-314. 



1638.161 Service of process.-Ambulance service 

associations shall be subject to service of process 

in the same manner and subject to the same terms, 

conditions, and fees as apply to insurers under chapter 

624. 

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

31, ch. 83-314. 



1638.181 Registration of sales representatives.-Every 

ambulance service association or insurer 

shall on forms prescribed by the department 

register, on or before October 1 of each year, the 

name and business office address of each sales representative 

employed by it, and shall within 30 days after 

termination of the employment notify the department 

of such termination. Any sales representative 

employed subsequent to the October 1 filing date 

shall be registered with the department within 10 

days after such employment. No employee or sales 

representative of an ambulance service association or 

insurer shall directly or indirectly solicit or negotiate 

insurance contracts, or hold himself out in any manner 

to be an insurance agent or solicitor, unless so 

qualified and licensed therefor under the insurance 

code. 

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

31, ch. 83-314. 

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


1638.191 Grounds for compulsory refusal, 

suspension, or revocation of registration of 

sales representative.-The department shall 

deny, suspend, revoke, or refuse to renew the registration 

of any sales representative if it finds that, as 

to the sales representative, anyone or more of the 

following grounds exist: 

(1) Material misstatement, misrepresentation, or 

fraud in registration. 

(2) Willful use of the registration to circumvent 

any of the requirements or prohibitions of this chapter. 

(3) Willful misrepresentation or willful deception 

with regard to any contract, done either in person or 

by any form of dissemination of information or advertising. 

(4) Material misrepresentation to a contract 

holder or other interested party of the terms and coverage 

of a contract with intent and for the purpose of 

effecting settlement of such claim on less favorable 

terms than those provided in and contemplated by 

the contract in the adjustment of claims arising out 

of any contract. 

(5) Demonstrated lack of fitness or trustworthiness 

to engage in the business of ambulance service 

contracts.


contracts; or otherwise to engage in the business of 

insurance unless the association is authorized as an 

insurer under a certificate of authority issued by the 

department under the insurance code of this state. 

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

31, cb. 83-314. 

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


1638.251 Fronting not permitted.-No insurer 

or ambulance service association shall act as a fronting 

company for any unauthorized insurer or ambulance 

service association. A "fronting company" is an 

insurer or ambulance service association which by reinsurance 

or otherwise generally transfers to one or 

more unauthorized insurers or ambulance service associations 

the risk of loss under ambulance service 

contracts written by it in this state. 

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

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


1638.261 Certain ambulance service associations' 

relations with funeral directors prohibited.- 

(1) No ambulance service association shall permit 

any funeral director or undertaker, or any member of 

his immediate family, to directly or indirectly by association 

or incorporation to act as the representative, 

adjuster, claim agent, special claim agent, sales 

representative, or agent for such association in soliciting, 

negotiating, or effecting ambulance service contracts 

on any plan or of any nature issued by such association 

or in collecting premiums from holders of 

any such contracts. 

(2) No ambulance service association shall affix, 

or permit to be affixed, advertising matter of any 

kind or character of any funeral director or undertaker 

to any ambulance service contracts or circulate, or 

permit to be circulated, any such advertising matter 

756 

with such contracts, or attempt in any manner or 

form to influence contract holders of the association 

to employ the services of any particular funeral director 

or undertaker. 

(3) No ambulance service association shall maintain 

an office or place of business, or permit its agent 

to maintain an office or place of business, in the office' 

establishment, or place of business of any funeral 

director or undertaker in this state. 

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

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


1638.271 Penalty for violation.-In addition 

to any applicable denial of, suspension of, revocation 

of, or refusal to renew any certificate of authority, 

any person who knowingly makes a false or otherwise 

fraudulent application for a certificate of authority or 

registration under this chapter, or who knowingly violates 

any provision of this chapter, is guilty of a misdemeanor 

of the second degree, punishable as provided 

in s. 775.082 or s. 775.083. Each instance of violation 

shall be considered a separate offense. 

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

cb. 83-314. 

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


1638.282 Investigatory records.-All active 

investigatory records of the department made or received 

pursuant to this chapter, and any active examination 

records necessary to complete an active investigation, 

shall be confidential and shall not be subject 

to public inspection under the provisions of chapter 

119 for so long as reasonably necessary to complete 

the investigation. 

History.-as. 29, 31, cb. 83-314. 


for review pursuant to s. 11.61 in advance of that date.

F.S.1983 PRENEED FUNERAL MERCHANDISE OR SERVICE CONTRACTS Ch.639 

639.07 

639.08 

639.09 

639.10 

639.105 

639.11 

639.13 

639.14 

639.15 

639.16 

639.162 

639.165 

639.17 

639.185 

639.20 

639.21 

639.22 

639.23 

639.24 

639.25 

639.26 

639.27 

639.28 

639.29 

639.30 

639.33 

CHAPTER 639 

PRE NEED FUNERAL MERCHANDISE OR SERVICE CONTRACTS 

Definitions. 

Forms and rules. 


Certificate of authority; annual statement; 

renewal. 

Approval of forms. 

Disposition of proceeds received on contracts. 

Cancellation of, or default on, preneed contracts. 

Payment of funds upon death of named 

beneficiary. 

Examinations and investigations. 

Denial, refusal to renew, revocation, or suspension 

of certificate of authority. 

Administrative fine in lieu of revocation or 

suspension of certificate of authority. 

Dissolution or liquidation. 

Penalty. 

Preneed sales; registration of sales agents 

and sales persons. 

Provisions not applicable to cemeteries 

holding certificate of authority under 

Florida Cemetery Act. 

Acceptability of funeral merchandise. 

Unfair methods of competition and unfair 

or deceptive acts or practices prohibited. 

Unfair methods of competition and unfair 

or deceptive acts or practices defined. 

Power of department. 

Prohibited practices; hearings, witnesses, 

appearances, production of books, and 

service of process. 

Cease and desist and penalty orders. 

Appeals from the department. 

Penalty for violation of cease and desist order. 

Injunctive proceedings. 

Civil liability. 

Investigatory records confidential. 

'639.07 Definitions.-As used in this chapter, 

the term: 



(2) "Direct disposer" means any person who is 

registered in this state to practice direct disposition 

pursuant to the provisions of chapter 470. 

(3) "Final disposition" means the final disposal of 

a dead human body whether by interment, entombment, 

burial at sea, cremation, or any other means. 

(4) "Funeral director" means any person licensed 

in this state to practice funeral directing pursuant to 

the provisions of chapter 470. 

(5) "Funeral merchandise" means any personal 

property offered or sold by any person for use in connection 

with the final disposition or memorialization 

of a dead human body. 

(6) "Preneed contract" means a contract to furnish 

funeral merchandise or service in. the future. 

757 

(7) "Service" means any service offered or provided 

by any person in connection with the final disposition 

of a dead human body. 

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

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

81-318; 88. 1, 31, 32, cb. 83-316. 



'639.08 Forms and rules.-The administration 

and enforcement of the provisions of this chapter are 

vested in the department, which shall prepare and 

furnish all forms necessary under this chapter, including 

forms for applications for certificates of authority, 

for renewals thereof, for annual statements, 

and for other required reports. The department may 

adopt reasonable rules necessary to effect any of its 

statutory duties pursuant to this chapter. 

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

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



'639.09 Certificate of authority require d. 

(1) No person may sell a preneed contract without 

first having a valid certificate of authority. 

(2)(a) No person may receive any funds for payment 

on a preneed contract who does not hold a valid 

certificate of authority. 

(b) The provisions of paragraph (a) do not apply 

to any trust company or to any national or state bank 

or savings and loan association having trust powers 

which company, bank, or association receives any 

money in trust pursuant to the sale of a preneed contract. 

(3) No person may obtain a certificate of authority 

under this chapter for the preneed sale of services 

unless such person holds a license as a funeral establishment 

or as a direct disposal establishment under 

chapter 470. 

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

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


for review pursuant 10 s. 11.61 in advance of that date. 

'639.10 Certificate of authority; annual 

statement; renewal.- 

(1) An application to the department for a certificate 

of authority shall be accompanied by the statement 

and other matters described in this section in 

the form prescribed by the department. Annually 

thereafter on or before March 1, the person authorized 

to engage in the sale of preneed contracts shall 

file with the department a full and true statement of 

his financial condition, transactions, and affairs as of 

the preceding December 31 or at such other time or 

times as the department may provide by rule, together 

with information and data which may be required 

by the department. 

(2) The statement shall include the following: 

(a) The types of preneed contracts proposed to be 

written. 

(b) The name and address of the place of business 

of the person offering to write preneed contracts.

Ch.639 PRENEED FUNERAL MERCHANDISE OR SERVICE CONTRACTS F.S.1983 

(c) Evidence that the person offering the statement: 

1. Has the ability to discharge his liabilities as 

they become due in the normal course of business 

and has sufficient funds available during the calendar 

year to perform his obligations under his contract; 

2. Has complied with the trust requirements for 

the funds received under contracts issued by himself 

as hereinafter described; 

3. Has disbursed interest, dividends, or accretions 

earned by trust funds, in accordance with this 

chapter and rules promulgated thereunder; and 

4. Has complied with this chapter and any rules 

of the department. 

(d) Any other information considered necessary 

by the department to meet its responsibilities under 

this chapter. 

(3) If the person is an individual, the statement 

shall be sworn by him; if a firm or association, by all 

members thereof; or, if a corporation, by the president 

and secretary thereof. 

(4) The fee payable to the department for issuance 

of the origmal certificate of authority and each 

annual renewal thereof shall be $50, which sum shall 

accompany each application for an original certificate 

and, thereafter, each annual statement. The fee shall 

be payable to the Insurance Commissioner's Regulatory 

Trust Fund. 

(5) Upon the department's being satisfied that 

the statement and matters which may accompany it 

meet the requirements of this chapter and of its 

rules, it shall issue or renew the certificate of authority 

if upon investigation by the department it appears 

that the principals, including directors, officers, 

stockholders, employees, and agents of such person, 

are of good moral character and have reputations for 

fair dealing in business matters. 

(6) The certificate of authority shall expire armually 

on June 1, unless renewed, or at such other time 

or times as the department may provide by rule. 

(7) An application for an initial certificate of authority 

or for the armual renewal of the certificate 

shall disclose the existence of all preneed contracts 

for service or merchandise funded by any method 

other than a method permitted by this chapter, 

which contracts are known to the applicant and name 

the applicant or his business as the beneficiary upon 

the death of the purchaser of the preneed contract. 

Such disclosure shall include the name and address 

of the contract purchaser, the name and address of 

the institution where such funds are deposited, and 

the number used by the institution to identify the account. 

With respect to contracts entered into before 

January 1, 1983, the department may not deny or refuse 

to renew a certificate of authority solely on the 

basis of such disclosure. The department may not require 

the purchaser of any such contract to liquidate 

the account if such account was established before 

July 1, 1965. The department may use the information 

disclosed to notify the contract purchaser and 

the institution in which such funds are deposited 

should the holder of a certificate of authority be unable 

to fulfill the requirements of the contract. 

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

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

83-316. 

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

for review pursuant to 8. 11.61 in advanoe of that date. 

Cf.-8. 624.523 Insuranoe Commissioner'8 Regulatory Trust Fund. 

758 

1639.105 Approval of forms.-Preneed contract 

forms and related forms shall be med with and 

approved by the department, as provided in s. 

627.410. The department may not approve any preneed 

contract form that does not provide for sequential 

numbering thereon. 

History.-88. 5, 32, ch. 83-316. 

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


639.11 Disposition of proceeds received on 

contracts.- 

1(1) All of the funds paid to or collected by any 

person under a preneed contract for services, and 70 

percent of all funds paid to or collected by any person 

under a preneed contract for funeral merchandise, 

shall, within 30 days after the end of the calendar 

month in which payment is received, be deposited in 

this state under the terms of a trust instrument entered 

into with a national or state bank or savings 

and loan association having trust powers or a trust 

company. The trust agreement shall be submitted to 

the department for approval and filing. No interest, 

dividend, or accretion on the funds deposited in trust 

which has been credited to an individual contract 

may be withdrawn unless an amount equal to all payments 

on the contract is on deposit and maintained 

in the trust. Funds deposited pursuant to this section 

may not be loaned to a certificateholder or to any 

person directly or indirectly engaged in the burial, funeral 

home, or cemetery business. 

1(2) The delivery of funeral merchandise before 

the death of the person for whom it is purchased does 

not constitute performance or fulfillment, either 

wholly or in part, of any preneed contract entered 

into after July 1, 1977. 

1(3) At reasonable times, the trustee may disburse 

income on, and appreciation of, trust funds to 

a certificateholder under this chapter. Such disbursement 

of income and appreciation shall be made in accordance 

with the terins of the trust instrument and 

the preneed contract subject to the provisions of this 

chapter. The trustee shall make regular valuations of 

assets it holds in trust and provide a report of such 

valuations to the certificateholder at least quarterly. 

Any person who withdraws appreciation in the value 

of trust, other than the pro rata portion of such appreciation 

which may be withdrawn upon the death 

of a contract beneficiary or upon cancellation of a 

preneed contract, shall be required to make additional 

deposits from his own funds to restore the aggregate 

value of assets to the value of funds deposited in 

trust, but excluding from the funds deposited those 

funds paid out upon preneed contracts which such 

person has fully performed or which have been otherwise 

withdrawn, as provided for in this chapter. 

(4) This section, as amended by s. 6 of chapter 

83-316, Laws of Florida, applies only to preneed contracts 

entered into on or after October 1, 1983. 

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

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

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

for review pursuant to 8. 11.61 in advanoe of that date. 

639.13 Cancellation of, or default on, preneed 

contracts.-


(g) Upon proper request, willful failure to cancel 

a contract or refund that part of the amount paid on 

the contract as required by s. 639.13. 

(h) Willful failure to secure the release, upon the 

death of a beneficiary, of the entire amount received 

on a contract as required by s. 639.14. 

(i) Refusal to produce records in connection with 

the business. 

(j) Revocation, suspension, or denial of licensure 

to sell preneed contracts by a licensing authority of 

another jurisdiction. 

(k) Being convicted or found guilty, regardless of 

adjudication, of a crime in any jurisdiction which directly 

relates to the sale of preneed contracts. 

(1) Solicitation by the certificateholder or his 

agents, employees, or representatives through the use 

of fraud, undue influence, intimidation, overreaching, 

or any other form of vexatious conduct. 

(2) The department may deny, refuse to renew, 

suspend, or revoke the certificate of authority of a 

person to issue preneed contracts upon a determination 

that the person has violated any provision of this 

chapter or rule or order of the department for which 

suspension is not mandatory. 

(3) A suspension or revocation of the certificate 

of authority shall be by order of the department. A 

person whose certificate of authority has been suspended 

or revoked may not solicit or write any new 

business in this state during the period of any such 

suspension or revocation. 


notice of any such suspension or revocation to be 

published in one or more newspapers of general circulation 

published in this state. 

(5) The suspension of a certificate of authority 

shall be for such period, not to exceed 1 year, as is 

fixed by the department in the order of suspension, 

unless the department shortens or rescinds such suspension 

or unless the order upon which the suspension 

3is based is modified, rescinded, or reversed. 

(6) During the period of suspension, the person 

whose certificate of authority has been suspended 

shall file the annual statement and pay license fees as 

required under this chapter as if the certificate had 

continued in full force. 

(7) Upon expiration of the suspension period, if 

within such period the certificate of authority has not 

otherwise terminated, the certificate of authority of 

the person whose certificate of authority has been 

suspended shall automatically be reinstated unless 

the department finds that the causes of the suspension 

have not been removed or that such person is 

otherwise not in compliance with the requirements of 

this chapter. If not so reinstated automatically, the 

certificate of authority shall be deemed to have expired 

as of the end of the suspension period or upon 

the failure of the person whose certificate of authority 

has been suspended to continue the certificate 

during the suspension period, whichever event first 

occurs. 

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

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



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

word "disbursed." 

'Note.-The words "is based" were inserted by the editors. 

760 

1639.162 Administrative ime in lieu of revocation 

or suspension of certificate of authority. 


grounds exist for the discretionary suspension or revocation 

of a certificate of authority issued under this 

chapter, it may, in lieu of such suspension or revocation, 

impose a fine upon the certificateholder in an 

amount not to exceed $1,000 for each nonwillful violation 

and in an amount not to exceed $10,000 for 

each willful violation. 

(2) The department may grant not more than 30 

days from the date of the order for the payment of 

any fine. 

(3) The fine shall be deposited into the Insurance 

Commissioner's Regulatory Trust Fund. 

Hi8tory.-ss. 13, 32, ch. 83-316. 



1639.165 Dissolution or liquidation.-Any 

dissolution or liquidation of a certificateholder shall 

be under the supervision of the department, which 

shall have all powers with respect thereto granted to 

it under the laws of the state with respect to the dissolution 

and liquidation of companies pursuant to 

chapter 631, as applicable. The venue of delinquency 

proceedings against a certificateholder shall be in the 

circuit court in the judicial circuit of the certificateholder's 

principal place of business. 

Hi8tory.-ss. 12, 32, ch. 83-316. 

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


1639.17 Penalty.-Any person who violates any 

of the provisions of this chapter or the rules promulgated 

under this chapter is guilty of a felony of the 

third degree, punishable as provided in s. 775.082, s. 

775.083, or s. 775.084. 

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

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



1639.185 Preneed sales; registration of sales 

agents and sales persons.- 

(1) Any person selling preneed contracts on or after 

April 1, 1984, shall be registered with the department. 

The application for registration shall be signed 

by the sales agent or other sales person and by the 

certificateholder to whom the sales agent or sales 

person will be responsible. The department shall register 

such person upon receipt of the application and 

a registration fee of $40. The registration shall be renewed 

biennially on April 1, and each 

even-numbered year thereafter, upon receipt of the 

renewal fee of $40. The certificateholder who has registered 

such sales agent or sales person shall notify 

the department within 10 days after such person's 

status as sales agent or sales person has terminated. 

(2) Each certificateholder is subject to discipline 

if his sales agent or sales person violates any provision 

of this chapter. The department may refuse to 

register, or may revoke the registration of, a sales 

agent or sales person who has violated the provisions 


(3) All fees collected pursuant to this section

F.S.1983 PRENEED FUNERAL MERCHANDISE OR SERVICE CONTRACTS Ch.639 

shall be payable to the Insurance Commissioner's 

Regulatory Trust Fund. 

History.-ss. 15, 32, ch. 83·316. 

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

uled for review pursuant to s. 11.61 in advance of that date. 

'639.20 Provisions not applicable to cemeteries 

holding certificate of authority under 

Florida Cemetery Act.-The provisions of this 

chapter do not apply to any person who holds a license 

under the provisions of chapter 497 or to any 

person who is under any contractual relationship 

with any person holding such a license as pertains to 

any transaction coming within the purview of the 

Florida Cemetery Act, except that preneed funeral 

services and direct disposal services shall be made 

and proceeds placed in trust pursuant to this chapter. 

History.-s. 17, ch. 65·393; s. 35, ch. 80·238; s. 2, ch. 81·318; 88.20,31,32, ch. 

83·316. 



cf.-ch. 497 Florida Cemetery Act. 

'639.21 Acceptability of funeral merchandise.-Each 

person who engages in preneed sales of 

funeral merchandise shall determine, and notify the 

purchaser in writing prior to the completion of the 

contract, that the merchandise being considered for 

purchase will be accepted in the cemetery of the purchaser's 

choice. The failure to comply with this chapter 

shall nullify the agreement, and all moneys paid 

in shall be returned, notwithstanding the existence of 

any liquidated damages provision pursuant to s. 

639.13(2). 

History.-s. 13, ch. 77·438; s. 2, ch. 81·318; ss. 21, 31, 32, ch. 83·316. 



1639.22 Unfair methods of competition and 

unfair or deceptive acts or practices prohibited. 

-No person shall engage in this state in any trade 

practice which is defined in this chapter as, or determined 

pursuant to s. 639.23 to be, an unfair method 

of competition or an unfair or deceptive act or practice. 

History.-ss. 22, 32, ch. 83·316. 



1639.23 Unfair methods of competition and 

unfair or deceptive acts or practices defined. 

-Unfair methods of competition and unfair or deceptive 

acts or practices are defined as the following: 

(1) MISREPRESENTATION AND FALSE AD 

VERTISING OF PRENEED CON 

TRACT.-Knowingly making, issuing, or circulating, 

or causing to be made, issued, or circulated, any estimate, 

illustration, circular, statement, sales presentation, 

omission, or comparison which: 

(a) Misrepresents the benefits, advantages, conditions, 

or terms of any preneed contract. 

(b) Is misleading, or is a misrepresentation as to 

the financial condition of any person. 

(c) Uses any name or title of any preneed contract 

misrepresenting the true nature thereof. 

(d) Is a misrepresentation for the purpose of inducing, 

or tending to induce, the lapse, forfeiture, ex- 

761 

change, conversion, or surrender of any preneed contract. 

(2) FALSE INFORMATION AND ADVERTIS 

ING GENERALLY.-Knowingly making, publishing, 

disseminating, circulating, or placing before the 

public, or causing, directly or indirectly, to be made, 

published, disseminated, circulated, or placed before 

the public: 

(a) In a newspaper, magazine, or other publication; 

(b) In the form of a notice, circular, pamphlet, 

letter, or poster; 

(c) Over any radio or television station; or 

(d) In any other way; 

an advertisement, announcement, or statement containing 

any assertion, representation, or statement 

which is untrue, deceptive, or misleading with respect 

to any preneed contract. 

(3) DEFAMATION.-Knowingly making, publishing, 

disseminating, or circulating, directly or indirectly, 

or aiding, abetting, or encouraging the making, 

publishing, disseminating, or circulating of, any oral 

or written statement, or any pamphlet, circular, article, 

or literature, which is false or maliciously critical 

of, or derogatory to, any person and which is calculated 

to injure such person. 

(4) FALSE STATEMENTS AND EN 

TRIES.-Knowingly: 

(a) Filing any false statement with any supervisory 

or other public official; 

(b) Making, publishing, disseminating, or circulating 

any false statement; 

(c) Delivering any false statement to any person; 

(d) Placing any false statement before the public; 

(e) Causing, directly or indirectly, any false statement 

to be made, published, disseminated, circulated, 

delivered to any person, or placed before the public; 

or 

(f) Making any false entry of a material fact in 

any book, report, or statement of any person. 

(5) UNFAIR CLAIM SETTLEMENT PRAC 

TICES.- 

(a) Attempting to settle a claim on the basis of a 

material document which was altered without notice 

to, or without the knowledge or consent of, the contract 

purchaser or his representative or legal guardian. 

(b) Making a material misrepresentation to a 

contract purchaser or his representative or legal 

guardian for the purpose and with the intent of effecting 

settlement of a claim or loss under a prepaid 

contract on less favorable terms than those provided 

in, and contemplated by, the prepaid contract; or 

(c) Committing or performing with such frequency 

as to indicate a general business practice any of 

the following acts: 

1. Failing to adopt and implement standards for 

the proper investigation of claims; 

2. Misrepresenting pertinent facts or prepaid 

contract provisions relating to issues on coverage of 

funeral merchandise or services; 

3. Failing to acknowledge and act promptly upon 

communications with respect to claims; 

4. Denying claims without conducting reasonable 

investigations based upon available information;


5. Failing to affirm or deny coverage of a claim 

upon written request of a contract purchaser or his 

representative or legal guardian within a reasonable 

time; or 

6. Failing to provide promptly a reasonable explanation 

to a contract purchaser or his representative 

or legal guardian of the basis, in the prepaid contract 

in relation to the facts or applicable law, for denial 

of a claim or for the offer of a compromise settlement. 

(6) FAILURE TO MAINTAIN PROCEDURES 

FOR HANDLING COMPLAINTS.-Failing to 

maintain a complete record of every complaint received 

since the date of the last examination. For 

purposes of this subsection, the term "complaint" 

means any written communication primarily expressing 

a grievance. 

(7) DISCRIMINATORY REFUSAL TO ISSUE 

A CONTRACT.-Refusing to issue a contract solely 

because of an individual's race, color, creed, marital 

status, sex, or national origin. 

Hi8tory.-88. 23, 32, ch. 83-316. 

'Note.-Expires Octoher 1, 1993, pursuant to s. 32, ch. 83-316, and is scheduled 


1639.24 Power of department.-The department 

has the power to examine and investigate the 

affairs of every certificateholder in this state to determine 

whether such person has engaged, or is engaging, 

in any unfair method of competition or in any 

unfair or deceptive act or practice prohibited by s. 

639.22. 

Hi8tory.-88. 24, 32, cb. 83-316. 

'Note.-Expires Octoher 1, 1993, pursuant to s. 32, cb. 83-316, and is scheduled 


1639.25 Prohibited practices; hearings, witnesses, 

appearances, production of books, and 

service of process.- 

(1) Whenever the department has reason to believe 

that any person has engaged, or is engaging, in 

this state in any unfair method of competition or any 

unfair or deceptive act or practice as defined in s. 

639.23, or is engaging in the sale of preneed contracts 

without being properly licensed as required by this 

chapter, and that a proceeding by the department in 

respect thereto would be in the interest of the public, 

the department shall conduct or cause to have conducted 

a hearing in accordance with chapter 120. 

(2) The department or a duly empowered hearing 

officer shall, during the conduct of such hearing, have 

those powers enumerated in s. 120.58; however, the 

penalties for failure to comply with a subpoena or 

with an order directing discovery shall be limited to 

a fine not to exceed $1,000 per violation. 

(3) A statement of charges, notice, or order 20r 

other process under this chapter may be served by 

anyone duly authorized by the department, either in 

the manner provided by law for service of process in 

civil actions or by certifying and mailing a copy 

thereof to the person affected by such statement, notice, 

or order or other process at his or its residence or 

principal office or place of business. The verified return 

by the person so serving such statement, notice, 

or order or other process, setting forth the manner of 

the service, shall be proof of the service; and the return 

postcard receipt for such statement, notice, or 

order or other process, certified and mailed as pro- 

762 

vided in this subsection, shall be proof of service of 

the statement, notice, or order or other process. 

HI.tory.-88. 25, 32, cb. 83-316. 

'Note.-Expires Octoher 1, 1993, pursuant to s. 32, cb. 83-316, and is scbeduled 


INote.-The words "or other process" were inserted by the editors. 

1639.26 Cease and desist and penalty orders. 

-After the hearing provided in s. 639.25, the department 

shall enter a final order in accordance with s. 

120.59. If it is determined that the person charged 

has engaged in an unfair or deceptive act or practice 

or the unlawful transaction of preneed contracts, the 

department shall also issue an order requiring the violator 

to cease and desist from engaging in such 

method of competition, act, or practice or in the unlawful 

sale of preneed contracts. Further, the department 

may, at its discretion, order anyone or more of 

the following: 

(1) Suspension or revocation of the charged person's 

license, or eligibility for any license, if he knew, 

or reasonably should have known, that he was in violation 


(2) An administrative penalty not to exceed 

$1,000 for each preneed contract offered or effectuated, 

if it is determined that the person charged has 

provided or offered to sell preneed contracts without 

proper licensure. 

HI8tory.-88. 26, 32, cb. 83-316. 



1639.27 Appeals from the department.-Any 

person subject to an order of the department under s. 

639.26 may obtain a review of such order by filing an 

appeal therefrom in accordance with the provisions 

and procedures from appeal from the orders of the 

department in general under s. 120.68. 

HI8tory.-88. 27, 32, ch. 83-316. 



1639.28 Penalty for violation of cease and 

desist order.-Any person who violates a cease and 

desist order of the department under s. 639.26 while 

such order is in effect, after notice and hearing as 

provided in s. 639.25, shall be subject, at the discretion 

of the department, to anyone or more of the following: 

(1) A monetary penalty of not more than $50,000 

as to all matters determined in such hearing. 

(2) Suspension or revocation of such person's certificate, 

or eligibility to hold a certificate. 

HI.tory.-88. 28, 32, ch. 83-316. 



1639.29 Injunctive proceedings.-In addition 

to the penalties and other enforcement provisions of 

this chapter, in the event any person violates any 

provision of this chapter or any rule adopted or promulgated 

pursuant to this chapter, the department is 

authorized to resort to proceedings for injunction in 

the circuit court of the county where such person resides 

or has his or its principal place of business, and 

therein apply for such temporary and permanent orders 

as the department may deem necessary to restrain 

such person from engaging in any such activi-

Ch.641 HEALTH CARE SERVICE PROGRAMS F.S.1983 

641.01 

641.02 

641.03 

641.04 

641.05 

641.06 

641.08 

641.12 

641.13 

641.14 

CHAPTER 641 

HEALTH CARE SERVICE PROGRAMS 

PART I HEALTH CARE SERVICES PLANS (ss. 641.01-641.14) 

PART II HEALTH MAINTENANCE ORGANIZATIONS (ss. 641.17-641.38) 

PART I 

HEALTH CARE 

SERVICES PLANS 

Definition and scope. 

Incorporation. 

Contracts. 

Certificate of authority. 

Amendments to charter, bylaws, contracts, 

rates; approval by department. 

Annual reports or statements. 

Acquisition costs. 

Revocation of license. 

Licenses and taxes. 

Regulation of employees or representatives. 

1641.01 Definition and scope.-Any five or 

more persons may form a corporation for the purpose 

of establishing, maintaining, and operating a nonprofit 

health care services plan in the state, whereby 

medical, surgical, hospital, or other health care services 

related to the treatment or prevention of sickness 

or injury may be provided by the corporation or 

by physicians, surgeons, hospitals, or other providers 

of such services to members of the public who become 

subscribers under a contract with the corporation. 

The plan shall be governed by the provisions of 

the laws of this state regarding health insurance and 

health insurers; and the department shall have all 

powers pertaining to such plan as it possesses as to 

health insurance and health insurers, except as otherwise 

provided by this chapter. Health maintenance 

organizations shall organize under and be subject to 

part II of this chapter. 

History.-s. I, ch. 22826, 1945; s. I, ch. 25394, 1949; s. I, ch. 69·92; 88. 13, 35, 

ch. 69·106; s. 24, ch. 72·264; s. 3, ch. 76·168; s. I, ch. 77-457; ss. 2, 3, ch. 81 -318; 

88. 759, 777, 809(lst), ch. 82-243. 

'Note.-Expires October I, 1991, pursuant to s. 809(lst), ch. 82-243, and is 

scheduled for review pursuant to s. 11.61 in advance of that date. 

1641.02 Incorporation.- 

(1) Any health care services plan shall be incorporated 

under chapter 617; and every charter or certificate 

of incorporation of the plan shall be subject 

to the approval of the department, and its approval 

shall be endorsed thereon. 

(2) The directors of every health care services 

plan shall include members of the general public, 

physicians contracting with the plan, and administrators 

or trustees of hospitals contracting with the plan. 

At least a majority of the directors of every such plan 

shall be representatives of the general public and not 

of the health or insurance industries. 

History.-s. 2, ch. 22826, 1945; 88. 13,35, ch. 69-106; s. 3, ch. 76-168; s. I, ch. 

77-457; 88. 2, 3, ch. 81-318; 88. 760, 777, 809(lst), ch. 82-243. 



764 

1641.03 Contracts.- 

(1) Any health care services plan may contract 

with licensed physicians, hospitals, and other health 

care providers to render service to, or accept payment 

on behalf of, its subscribers. Such contracts and 

amendments thereto shall be filed with the department. 

(2) The rates charged by a health care services 

plan to the subscribers for medical, surgical, hospital, 

or other health care services shall at all times be subject 

to the approval of the department. All rates of 

payments made by a health care services plan pursuant 

to the contracts provided for in subsection (1) 

shall be approved by the department. 

HI.tory.-s. 3, ch. 22826, 1945; 88. 13,35, ch. 69-106; s. 3, ch. 76-168; s. I, ch. 

77-457; 88. 2, 3, ch. 81-318; 88. 716, 777, 809(1st), ch. 82-243. 

'Note.-Expires October I, 1991, pursuant to s. 809(lst), ch. 82-243, and i8 

scheduled for review pursuant to 8. 11.61 in advance of that date. 

1641.04 Certificate of authority.- 

(1) No health care services plan shall issue contracts 

to subscribers until the department has, by 

formal certificate of authority, authorized it to do so. 

Application for a certificate shall be niade on forms 

supplied by the department, containing such information 

as it deems necessary. 

(2) Each application for such certificate, as a part 

thereof, sha1I be accompanied by copies of the following 

documents, duly certified to by at least two of the 

executive officers of the plan: 

(a) Charter or certificate of incorporation, with 

all amendments thereto. 

(b) Bylaws with all amendments thereto. 

(c) Proposed contracts between the plan and any 

party for the provision of, or the payment in whole or 

in part for, hQspital, medical, surgical, or other health 

care services provided the subscribers. 

(d) Proposed contracts to be issued to subscribers 

to the plan showing the benefits to which they are entitled, 

together with a table of the rates to be charged 

to subscribers for each form of contract. 

(e) Financial statement of the plan which shall 

include the amounts of each contribution paid or 

agreed to be paid to the plan for working capital, the 

name or names of each contributor, and the terms of 

each contribution. 

(3) The department shall issue a certificate to 

each applicant upon the payment of the fees provided 

for in s. 624.501 and upon being satisfied as to the 

following: 

(a) That the applicant has been organized bona 

fide for the purpose of establishing, maintaining, and 

operating a nonprofit health care services plan. 

(b) That each contract executed or proposed to 

be executed by the applicant and the physician, hospital, 

or other health care service provider obligates, 

or will when executed obligate, each physician, hospi-

F.S.1983 HEALTH CARE SERVICE PROGRAMS Ch.641 

tal, or other health care service provider to render the 

service, or accept payment for the service, to which 

each subscriber may be entitled under the terms of 

the contract issued to the subscriber. 

(c) That each contract issued or proposed to be 

issued to subscribers complies with statutory provisions 

relating to health insurance policies. 

(d) That no contributions to the funds of the plan 

for working capital are repayable by the plan except 

out of earned income over and above operating expenses 

and medical, surgical, hospital, or other health 

care service expenses and such reserve as the department 

may deem adequate. 

(e) That the amount of money actually received 

by the applicant, upon the terms specified in paragraph 

(d), for working capital is sufficient to carryall 

acquisition costs and operating expenses for a period 

of at least 6 months from the date of the issuance of 

the initial certificate of authority. 

(4) Such certificate shall be effective until revoked 

by the department; and any plan to which such 

certificate has been issued, until revocation thereof, 

shall be authorized to issue contracts. 

(5) The department shall not renew a certificate 

of authority unless it is satisfied that the amount of 

money held by the plan for working capital is sufficient 

to carryall acquisition costs and operating expenses 

for a period of at least 3 months from the date 

of renewal. 

Hi.tory.-s. 4, ch. 22826, 1945; s. 22, ch. 65·269; ss. 13, 35, ch. 69·106; s. 3, ch. 

76·168; s. 1, ch. 77.457; ss. 2, 3, ch. 81·318; ss. 717, 777, 809(lst), ch. 82·243. 

'Note.-Expires October 1, 1991, pursuant to s. 809(lst), ch. 82·243, and is 


1641.05 Amendments to charter, bylaws, 

contracts, rates; approval by department.-No 

health care services plan shall amend its charter or 

certificate of incorporation, its bylaws, the terms and 

provisions of contracts executed or to be executed 

with hospitals or physicians, and the terms and provisions 

of contracts issued or proposed to be issued to 

subscribers until such proposed amendments have 

been first submitted to and approved by the department; 

nor shall any change be made in the table of 

rates charged or proposed to be charged to subscribers 

for any form of contract issued or to be issued until 

such proposed charge has been submitted to and 

approved by the department upon the adoption of 

any amendment or change, and following its approval 

by the department such corporation shall file a copy 

thereof with the department duly certified by at least 

two of the executive officers of such corporation. 

Hi.tory.-s. 5, ch. 22826, 1945; ss. 13,35, ch. 69·106; s. 3, ch. 76·168; s. 1, ch. 

77·457; ss. 2, 3, ch. 81·318; ss. 763, 777, 809(lst), ch. 82·243; s. 76, ch. 82·386. 



1641.06 Annual reports or statements.-Every 

health care services plan shall annually, on or before 

March 1, file in the office of the department a 

statement verified by at least two of the principal officers 

of such corporation showing its condition on 

December 31 then next preceding, which statement 

shall be in such form and shall contain such matters 

as the department shall prescribe. 


77·457; ss. 2, 3, ch. 81·318; ss. 764, 777, 809(lst), ch. 82·243. 


scheduled for review pursuant to 8. 11.61 in advance of that date. 

765 

1641.08 Acquisition costs.-All acquisition 

costs in connection with the solicitation of subscribers 

to such service plan or plans shall at all times be 

subject to the approval of the Department of Insurance. 

Hi.tory.-s. 8, ch. 22826, 1945; ss. 13, 35, ch. 69·106; s. 3, ch. 76·168; s. 1, ch. 

77·457; ss. 2, 3, ch. 81·318; ss. 766, 809(lst), ch. 82·243; ss. 77, 78, ch. 82·386. 

'Note.-Repealed effective October 1, 1991, by s. 809(lst), ch. 82·243, and 


1641.12 Revocation of license.-Whenever the 

department has reason to believe that any health 

care services plan is being operated for profit or 

fraudulently conducted, or is not complying with this 

code, it is authorized to suspend or revoke the certificate 

of authority; and it may at any time institute 

proceedings relating to the dissolution of the plan. 


77·457; s. 21, ch. 78·95; ss. 2, 3, ch. 81·318; ss. 770, 777, 809(lst), ch. 82·243. 



1641.13 Licenses and taxes.-No health care 

services plan, its representatives, or any of its properties 

or funds shall be exempt from any license fees or 

taxes, except as provided in chapter 624 for domestic 

insurance companies. With respect to the computation 

of such taxes, and for the purpose of this provision 

only, the rates paid by subscribers as provided 

herein shall be construed as "premiums," and the 

"contract" provided herein shall be construed as "policy." 

Hi8tory.-s. 13, ch. 22826, 1945; s. 2, ch. 69·92; ss. 13, 35, ch. 69·106; s. 3, ch. 




1641.14 Regulation of employees or representatives.-Every 

person who acts for any health 

care services plan to solicit applications for or to negotiate 

and effectuate a contract for coverage of hospital, 

medical, surgical, or other health care expenses 

shall be subject to all portions of the code applicable 

to health insurance agents. 

Hi8tory.-s. 14, ch. 22826, 1945; ss. 13, 35, ch. 69·106; s. 3, ch. 76·166; s. 1, ch. 




cf.-s. 624.523 Insurance Commissioner's Regulatory Trust Fund. 

PART II 

HEALTH MAINTENANCE ORGANIZATIONS 

641.17 

641.18 

641.19 

641.21 

641.22 

641.225 

641.23 

641.24 

641.25 

641.255 

641.26 

641.27 

641.28 

Short title. 

Declaration of legislative intent, findings, 

and purposes. 

Definitions. 

Application for certificate. 

Issuance of certificate of authority. 

Surplus requirements. 

Revocation of certificate of authority. 

Denial and revocation proceedings; Department 

of Health and Rehabilitative 

Services participation. 

Administrative penalty in lieu of revocation. 

Transfer of ownership. 

Annual report. 

Examination by the department. 

Civil remedy.


641.285 

641.29 

641.30 

641.31 

641.315 

641.32 

641.33 

641.35 

641.36 

641.37 

641.38 

Insolvency protection. 

Fees. 

Construction and relationship to other 

laws. 

Health maintenance contracts. 

Provider contracts. 

Acceptable payments. 

Certain words prohibited in name of organization. 

Investment of funds. 

Promulgation of rules. 

Penalty. 

Operational health maintenance organizations; 

issuance of certificate. 

1641.17 Short title.-This part shall be known 

and may be cited as the "Health Maintenance Organization 

Act." 

History.-8. 1, ch. 72-264; s. 3, ch. 76-168; s. 1, ch. 77-457; 88. 2, 3, ch. 81-318; 

88. 778, 804, 809(1st), ch. 82-243. 

'Note.-Expires October 1, 1991, pursuant to s. 809(lst), ch. 82-243, and is 


1641.18 Declaration of legislative intent, 

findings, and purposes.- 

(1) Faced with the continuation of mounting 

costs of health care, coupled with the state's interest 

in high quality care, the Legislature has determined 

that there is a need to explore alternative methods 

for the delivery of health care services, with a view 

toward achieving greater efficiency and economy in 

providing these services. 

(2) Health maintenance organizations, consisting 

of prepaid health care plans, hereinafter referred to 

as "plans," are developing rapidly in many communities. 

Through these organizations, structured in various 

forms, health care services are provided directly 

to a group of people who make regular premium payments. 

(3) These plans, when properly operated, emphasize 

effective cost and quality controls. 

(4) It shall be the policy of this state to: 

(a) Eliminate legal barriers to the organization, 

promotion, and expansion of comprehensive prepaid 

health care plans. 

(b) Recognize that prepaid comprehensive health 

care plans shall be exempt from operation of the insurance 

laws of this state except in the manner and to 

the extent set forth in this part. 

(5) Although it is the intent of this act to provide 

an opportunity for the development of health maintenance 

organizations, there is no intent to impair 

the present system for the delivery of health services. 

History.-s. 2, ch. 72-264; s. 3, ch. 76-168; s. I, ch. 77-457; 88. 2, 3, ch. 81-318; 

88. 779, 804, 809(lst), ch. 82-243. 


scheduled for review pursuant to s. 11.61 in advance of thst date. 

1641.19 Definitions.-As used in this part, the 

term: 

(1) "Comprehensive health care services" means 

services, medical equipment, and supplies furnished 

by a provider which may include, but which are not 

limited to, medical, surgical, and dental care; psychological, 

optometric, optic, chiropractic, podiatric, 

nursing, physical therapy, and pharmaceutical services; 

health education, preventive medical, rehabili- 

766 

tative, and home health services; inpatient and outpatient 

hospital services; extended care; nursing 

home care; convalescent institutional care; laboratory 

and ambulance services; appliances, drugs, medicines, 

and supplies; and any other care, service, or 

treatment of disease, the correction of defects, or the 

maintenance of the physical and mental well-being of 

human beings. 

(2) "Department" means the Department of Insurance. 

(3) "Entity" means any legal entity with continuing 

existence, including, but not limited to, a corporation, 

association, trust, or partnership. 

(4) "Guaranteeing organization" is an organization 

which is domiciled in the United States; which 

has authorized service of process against it; and 

which has appointed the Insurance Commissioner as 

Treasurer as its agent for service of process issuing 

upon any cause of action arising in this state, based 

upon any guarantee entered into under this part. 

(5) "Health maintenance contract" means any 

contract entered into by a health maintenance organization 

with a subscriber or group of subscribers to 

provide comprehensive health care services in exchange 

for a prepaid per capita or prepaid aggregate 

fixed sum. 

(6) "Health maintenance organization" means 

any organization authorized under this part which: 

(a) Provides, either directly or through arrangements 

with other persons, health care services to persons 

enrolled with such organization, on a prepaid 

per capita or prepaid aggregate fixed-sum basis; 

(b) Provides, either directly or through arrangements 

with other persons, those health care services 

which subscribers might reasonably require to maintain 

good health; 

(c) Provides physician services directly through 

physicians who are either employees or partners of 

such organization or under arrangements with a physician 

or any group of physicians. 

(7) "Insolvent" or "insolvency" means the inability 

of the health maintenance organization to discharge 

its liabilities as they become due in the normal 

course of business. 

(8) "Minimum services" includes, but is not limited 

to, emergency care, inpatient hospital and physician 

care, ambulatory diagnostic treatment, and preventive 

health care services. 

(9) "Provider" means any physician, hospital, or 

other institution, organization, or person that furnishes 

health care services and is licensed or otherwise 

authorized to practice in the state. 

(10) "Subscriber" means an individual who has 

contracted, or on whose behalf a contract has been 

entered into, with a health maintenance organization 

for health care services. 

(11) "Surplus" means total unencumbered assets 

in excess of total liabilities. Surplus includes capital 

stock, capital in excess of par, and retained earnings 

and may include surplus notes. 

(12) "Surplus notes" means debt which has been 

guaranteed by the United States Government or its 

agencies, or debt which has been subordinated to all 

claims of subscribers and general creditors of the organization.


(13) "Uncovered expenditures" means the cost of 

health care services that are covered by a health 

maintenance organization, for which a subscriber 

would also be liable in the event of the insolvency of 

the organization. 

History.-s. 3, ch. 72·264; s. 1, ch. 76·33; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 

2, 3, ch. 81-318; ss. 780, 804, 809(lst), ch. 82-243; s. 1, ch. 83-198; s. 137, ch. 

83-216. · 



1641.21 Application for certificate.-Before 

any entity may operate a health maintenance organization, 

it shall obtain a certificate of authority from 

the department. Each application for a certificate 

shall be on such form as the department shall prescribe 

and shall be accompanied by the following: 

(1) A copy of the basic organizational document 

of the applicant, if any, such as the articles of incorporation, 

articles of association, partnership agreement, 

trust agreement, or other applicable document, 

and all amendments thereto; 

(2) A copy of the bylaws, rules and regulations, or 

similar form of document, if any, regulating the conduct 

of the affairs of the applicant; 

(3) A list of the names, addresses, and official capacities 

with the organization of the persons who are 

to be responsible for the conduct of the affairs of the 

health maintenance organization, including all members 

of the governing body, the officers and directors 

in the case of a corporation, and the partners or associates 

in the case of a partnership or association. 

Such persons shall fully disclose to the department 

and the governing body of the health maintenance 

organization the extent and nature of any contracts 

or arrangements between them and the health maintenance 

organization, including any possible conflicts 

of interest; 

(4) A statement generally describing the health 

maintenance organization, its operations, the manner 

in which comprehensive health services will be regularly 

available, the location of the facilities at which 

comprehensive health care services will be regularly 

available to subscribers, the type of health care personnel 

engaged to provide the comprehensive health 

care services, and the quantity of personnel of each 

type; 

(5) Forms of all health maintenance contracts the 

applicant proposes to offer the subscribers, showing 

the benefits to which they are entitled, together with 

a table of the rates charged, or proposed to be 

charged, for each form of such contract; 

(6) A statement describing with reasonable certainty 

the geographic area or areas to be served by 

the health maintenance organization; and 

(7) A financial statement prepared on the basis of 

generally accepted accounting principles, except that 

surplus notes acceptable to the department and 

meeting the requirements of this act may be included 

in the calculation of surplus. 

History.-s. 5, ch. 72-264; s. 3, ch. 76-168; s. 1, ch. 77-457; ... 2,3, ch. 81-318; 

... 782, 804, 809(lst), ch. 82-243; s. 2, ch. 83-198. 

'N ote.-Expires October 1, 1991, pursuant to s. 809(lst), ch. 82-243, and is 


application to any entity filing a completed application 

in conformity with s. 641.21, upon payment of 

the prescribed fees and upon the department's being 

satisfied that: 

(1) The entity proposes to establish and operate 

a bona fide health maintenance organization having 

the capability to provide comprehensive health care 

services in the geographic area proposed, as certified 

by the Department of Health and Rehabilitative Services 

as a condition precedent to the issuance of any 

certificate. 

(2) The proposed rates are actuarially sound for 

the benefits provided, including administrative costs. 

(3) Before December 31, 1985, the health maintenance 

organization has a minimum surplus of 

$100,000 and, after December 31, 1985, the health 

maintenance organization has a minimum surplus as 

follows: 

(a) As of December 31, 1986, $150,000; 

(b) As of December 31, 1987, $200,000; 

(c) As of December 31, 1988, $250,000. 

In lieu of having a minimum surplus, the health 

maintenance organization may have a written guarantee 

insuring the payment of covered subscriber 

claims which guarantee is provided by an entity 

which has been in operation for at least 3 years and 

has a surplus, not including land, buildings, and 

equipment, equal to 2 times the statutory surplus deficiency 

or 2 times the statutory requirement, whichever 

is the greater amount. Such guaranteeing organization 

and the written guarantee must be acceptable 

to and approved by the Department of Insurance. 

(4) The health maintenance organization has 

made acceptable arrangements to provide all health 

care services offered. 

(5) The terms of the contracts such entity proposes 

to offer to subscribers will in fact assure that 

the comprehensive health care services required by 

such subscribers will be rendered under reasonable 

standards of quality of care, as certified by the Department 

of Health and Rehabilitative Services. 

(6) The procedures for offering comprehensive 

health care services and offering and terminating 

contracts to subscribers will not unfairly discriminate 

on the basis of age, sex, race, health, or economic status. 

However, this section shall not prohibit reasonable 

underwriting classifications for the purposes of 

establishing contract rates, nor shall it prohibit experience 

rating. 

(7) The entity furnishes evidence of adequate insurance 

coverage or an adequate plan for 

self-insurance to respond to claims for injuries arising 

out of the furnishing of comprehensive health care. 

(8) The entity has provided, through contract or 

otherwise, for periodic review of its medical facilities 

and services. 

(9) The ownership, control, or management of the 

entity is competent and trustworthy and possesses 

managerial experience that would make the proposed 

health maintenance organization operation beneficial 

to the subscribers. The department shall not grant or 

1641.22 Issuance of certificate of authority. continue authority to transact the business of a 

-The department shall issue a certificate of authori- health maintenance organization in this state at any 

ty within 60 days of the filing of a properly completed time during which it has good reason to believe that 

767


the ownership, control, or management of the organization 

is under the control of any person whose business 

operations are or have been marked by business 

practices or conduct that is to the detriment of the 

public, stockholders, investors, or creditors; by the 

improper manipulation of assets or of accounts; or by 

bad faith. 

(10) The entity has a blanket fidelity bond in the 

amount of $25,000, issued by a licensed insurance 

carrier in this state, that will reimburse the entity in 

the event that anyone handling the funds of the entity 

either misappropriates or absconds with such 

funds. All employees handling such funds shall be 

covered by the blanket fidelity bond. An agent licensed 

under the provisions of the Florida Insurance 

Code may either directly or indirectly represent the 

health maintenance organization in the solicitation, 

negotiation, effectuation, procurement, receipt, delivery, 

or forwarding of any health maintenance organization 

subscriber's contract or collect or forward any 

consideration paid by the subscriber to the health 

maintenance organization; and such agent shall not 

be required to post the bond required by this subsection. 

(11) The entity has filed with the department, 

and obtained approval from the department of, all 

reinsurance contracts as provided in s. 641.285. 

Hi.tory.-s. 6, ch. 72-264; s. 3, ch. 76-168; s. I, ch. 77-457; ss. 2, 3, ch. 81-318; 

ss. 783, 804, 809(1st), ch. 82-243; s. 3, ch. 83-198. 

'Note.-Expires Octoher I, 1991, pursuant to s. 809(lst), ch. 82-243, and is 


cf.- s. 768.41 Internal risk management program; establishment required. 

641.225 Surplus requirements.- 

(1) Each health maintenance organization licensed 

before October 1, 1983, must have by December 

31, 1985, a minimum surplus of $100,000. After 

December 31, 1985, each health maintenance organization 

must have a minimum surplus as follows: 

(a) As of December 31, 1986, $150,000. 

(b) As of December 31, 1987, $200,000. 

(c) As of December 31, 1988, $250,000. 

(2) In lieu of having a minimum surplus, there 

may exist for a health maintenance organization a 

written guarantee of the type and subject to the same 

provisions as outlined in s. 641.22. 

Hi.tory.-s. 4, ch. 83-198. 

'641.23 Revocation of certificate of authority.-The 

department may revoke any certificate issued 

to a health maintenance organization, or order 

compliance within 60 days, if it finds that any of the 

following conditions exists: 

(1) The organization is not operating in compliance 

with this part; 

(2) The organization is in substantial violation of 

its health maintenance contracts, as certified by the 

Department of Health and Rehabilitative Services; 

(3) The organization is unable to fulfill its obligations 

under outstanding health maintenance contracts 

entered into with its subscribers, as certified 

by the Department of Health and Rehabilitative Services; 

(4) The plan is no longer actuarially sound or the 

organization does not have the minimum surplus as 

required by this part; 

768 

(5) The existing contract rates are excessive, inadequate, 

or unfairly discriminatory; 

(6) The organization has advertised, merchandised, 

or attempted to merchandise its services in 

such a manner as to misrepresent its services or capacity 

for service or has engaged in deceptive, misleading, 

or unfair practices with respect to advertising 

or merchandising; or 

(7) The organization is insolvent. 

Hi.tory.-s. 7, ch. 72-264; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; 

ss. 764, 804, 809(lst), ch. 82-243; s. 5, ch. 83-198. 

'N ote.-Expires Octoher 1, 1991, pursuant to s. 809(lot), ch. 82-243, and is 


'641.24 Denial and revocation proceedings; 

Department of Health and Rehabilitative Services 

participation.-The Department of Health 

and Rehabilitative Services shall participate in any 

proceedings for denial or revocation of a certificate. 

In connection with any decision regarding denial or 

revocation of a certificate, the recommendations and 

findings of the Department of Health and Rehabilitative 

Services with respect to matters relating to the 

quality and nature of health care services being provided 

shall be conclusive and binding upon the department. 

Bi.tory.-s. 8, ch. 72-264; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 

2, 3, ch. 81-318; ss. 785, 804, 809(1st), ch. 82-243. 



1641.25 Administrative penalty in lieu of 

revocation.-The department may, in lieu of revocation, 

levy an administrative penalty in an amount 

not less than $100 or more than $10,000. 

Hi.tory.-s. 9, ch. 72-264; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 

2, 3, ch. 81-318; ss. 786, 804, 809(1st), ch. 82-243; s. 6, ch. 83-198. 

'Note.-Expires October I, 1991, pursuant to s. 809{lst), ch. 82-243, and is 


1641.255 Transfer of ownership.-Each 

health maintenance organization which desires to 

transfer ownership of more than 10 percent of the 

stock or ownership interest in the health maintenance 

organization shall submit to the department an 

application for approval of the new stockholder or 

owner. The application shall contain the name and 

address of the applicant or applicants and such other 

information as required by the department. The application 

shall be filed with the department no later 

than 60 days prior to the effective date of the transfer 

of ownership. 

Bi.tory.- ss. 787, 809(1st), ch. 82-243. 

'Note.-Expires Octoher 1, 1991, pursuant to s. 809(1st), ch. 82-243, and is 


1641.26 Annual report.- 

(1) Every health maintenance organization shall, 

annually on or before April 1, or within 3 months of 

the end of the fiscal year for a health maintenance organization 

operating under a valid certificate of authority 

as of the effective date of this section, or within 

such extension of time therefor as the department, 

for good cause, may grant, on forms prescribed by the 

department, file a report with the department, verified 

by the oath of two executive officers of the organization, 

or, if not a corporation, of two persons who 

are principal managing directors of the affairs of the 

organization, showing its condition on the last day of


the preceding calendar year. Such report shall include: 

(a) A financial statement of the organization, including 

its balance sheet and a statement of operations 

for the preceding year certified by an independent 

certified public accountant; 

(b) A list of the names and residence addresses of 

all persons responsible for the conduct of its affairs, 

together with a disclosure of the extent and nature of 

any contracts or arrangements between such persons 

and the health maintenance organization, including 

any possible conflicts of interest; 

(c) The number of health maintenance contracts 

issued and outstanding and the number of health 

maintenance contracts terminated and a compilation 

of the reasons for such terminations; 

(d) A description by location and specialty of the 

providers retained or otherwise engaged by the organization 

to satisfy its contractual obligations with its 

subscribers; 

(e) Such statistical information as is requested by 

the department reflecting the rates of the health 

maintenance organization for all comprehensive 

health care services provided under health maintenance 

contracts; 

(f) The number and amount of damage claims for 

medical injury initiated against the health maintenance 

organization and any of the providers engaged 

by it during the reporting year, broken down into 

claims with and without formal legal process, and the 

disposition, if any, of each such claim; 

(g) An actuarial certification that the rates of the 

health maintenance organization are actuarially 

sound for the benefits provided; and 

(h) Such other information relating to the performance 

of health maintenance organizations as is 


(2) Any health maintenance organization which is 

unable to provide to the department an audited financial 

statement within the time required shall file 

annually, on or before March 1 next following each 

calendar year, the annual report required by subsection 

(1) with an unaudited financial statement of the 

organization; and certification of such financial statement 

by an independent certified public accountant 

shall be received by the department by the following 

May 1. 

(3) Any health maintenance organization which 

neglects to file the annual report in the form and 

within the time required by this section shall forfeit 

$100 for each day during which the neglect continues; 

and, upon notice by the department to that effect, its 

authority to do business in this state shall cease while 

such default continues. The department shall deposit 

all sums collected by it under this section to the credit 

of the Insurance Commissioner's Regulatory Trust 

Fund. 

Hi.tory.-s. 10, ch. 72-264; s. 3, ch. 76-168; s. I, ch_ 77-457; ss. 2, 3, ch. 

81-318; ss. 788, 804, 809(lst), ch. 82-243; s. 7, ch. 83-198. 

'Note.-Expires October I, 1991, pursuant to s. 809(lst), cb. 82-243, and is 


1641.27 Examination by the department. 

-The department shall examine the affairs, transactions, 

accounts, business records, and assets of any 

health maintenance organization as often as it deems 

it expedient for the protection of the people of this 

769 

state, but not less frequently than once every 3 years. 

The Department of Health and Rehabilitative Services 

may conduct periodic examinations regarding 

the quality of health care services being provided by 

the organization. Every health maintenance organization 

shall submit its books and records and take 

other appropriate action as may be necessary to facilitate 

an examination. However, medical records of individuals 

and records of physicians providing service 

under contract to the health maintenance organization 

shall not be subject to audit, although they may 

be subject to subpoena by court order upon a showing 

of good cause. For the purpose of examinations, 

the respective departments may administer oaths to 

and examine the officers and agents of a health maintenance 

organization concerning its business and affairs. 

The expenses of examination of each health 

maintenance organization by the department shall be 

subject to the same terms and conditions as apply to 

insurers under part II of chapter 624 of the Florida 

Insurance Code. The expenses of examination of each 

health maintenance organization by the Department 

of Health and Rehabilitative Services shall be paid 

by the organization. In no event shall expenses of all 

examinations exceed a maximum of $15,000 per year. 

Any rehabilitation, liquidation, conservation, or dissolution 

of a health maintenance organization shall 

be conducted under the supervision of the department, 

which shall have all power with respect thereto 

granted to it under the laws governing the rehabilitation, 

liquidation, conservation, or dissolution of life 

insurance companies. 

Hi.tory.-s. 11, ch. 72-264; s. 3, ch. 76-188; s. 1, ch. 77-457; ss. 2, 3, cb. 

81-318; ss. 789, 804, 809(lst), ch. 82-243; s. 8, ch. 83-198. 



1641.28 Civil remedy.-In any civil action 

brought to enforce the terms and conditions of a 

health maintenance organization contract, the prevailing 

party is entitled to recover reasonable attorney's 

fees and court costs. This section shall not be 

construed to authorize a civil action against the department, 

its employees, or the Insurance Commissioner 

or against the Department of Health and Rehabilitative 

Services, its employees, or the secretary 

of that department. 

Hi.tory_-s. 12, ch. 72-264; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 

81-318; ss. 790, 804, 809(lst), ch. 82-243; s. 9, ch. 83-198. 

'Note.-Expires October I, 1991, pursuant to s. 809(lst), cb. 82-243, and is 


1641.285 Insolvency protection.- 

(1) Unless otherwise provided in this section, 

each health maintenance organization shall deposit 

with the department securities of the type eligible for 

deposit by insurers under s. 625.52, which securities 

shall have at all times a market value in the amount 

set forth in this subsection. 

(a) The amount for an organization that is beginning 

operation shall be the greatest of: 

1. Five percent of its estimated expenditures for 

health care services for its first year of operation; 

2_ Twice its estimated average monthly uncovered 

expenditures for its first year of operation; or 

3. $100,000.


On or before January 1 of each succeeding year, unless 

inapplicable, the organization shall deposit with 

the department cash, securities, or any combination 

of these or other measures acceptable to the department 

in an amount equal to 4 percent of the preceding 

12 months' uncovered expenditures or 4 percent 

of its estimated annual uncovered expenditures for 

the succeeding year, whichever is greater. 

(b) Unless inapplicable, an organization that is in 

operation on the effective date of this section shall 

make a deposit equal to 1 percent of the preceding 12 

months' uncovered expenditures or $100,000, whichever 

is greater, on the first day of the first calendar 

year beginning 6 months or more after the effective 

date of this section. In the second calendar year, if 

applicable, the amount of the additional deposit shall 

be equal to 2 percent of its estimated annual uncovered 

expenditures. In the third calendar year, if applicable, 

the additional deposit shall be equal to 3 

percent of its estimated annual uncovered expenditures 

for that year, and in the fourth and subsequent 

years, if applicable, the additional deposit shall be 

equal to 4 percent of its estimated annual uncovered 

expenditures for each year. Each year's estimate, after 

the first year of operation, shall reasonably reflect 

the prior year's operating experience and delivery arrangements. 

(2) The department may waive any of the deposit 

requirements set forth in subsection (1) whenever the 

department is satisfied that: 

(a) The organization has sufficient surplus and 

an adequate history of generating net income to assure 

its financial viability for the next year; 

(b) The performance and obligations of the organization 

are guaranteed by an organization which has 

sufficient surplus and an adequate history of generating 

net income; or 

(c) The assets of the organization or its contracts 

with insurers (hospital or medical service corporations), 

governments, or other organizations are reasonably 

sufficient to assure the performance of the 

obligations of the organization. 

(3) When an organization has achieved a surplus, 

not including land, buildings, and equipment, of at 

least $1 million or has achieved a surplus, including 

organization-related land, buildings, and equipment, 

of at least $5 million, the annual deposit requirement 

does not apply. The annual deposit requirement does 

not apply to an organization if the total amount of 

the accumulated deposit is equal to 25 percent of its 

estimated annual uncovered expenditures for the 

next calendar year, or $1,500,000, whichever is less. If 

the organization has a guaranteeing organization 

which has been in operation for 5 years or more and 

has a surplus, not including land, buildings, and 

equipment, of at least $1 million, or which has been 

in operation for 10 years or more and has a surplus, 

including organization-related land, buildings, and 

equipment, of at least $5 million, the annual deposit 

requirement does not apply; however, if the guaranteeing 

organization is sponsoring more than one organization, 

the surplus requirement shall be increased 

by a multiple equal to the number of such organizations. 

This requirement to maintain a deposit in excess 

of $1 million does not apply during any time that 

the guaranteeing organization maintains for each or- 

770 

ganization it sponsors a surplus at least equal to 

$1,500,000. 

(4) All income from deposits shall belong to the 

depositing organization and shall be paid to it as it 

becomes available. A health maintenance organization 

that has made a securities deposit may withdraw 

that deposit, or any part thereof, after making a substitute 

deposit of cash, securities, or any combination 

of these or other measures of equal amount and value. 

Any securities shall be approved by the department. 

(5) In any year in which an annual deposit is not 

required of an organization, at the request of the organization 

the department shall reduce the required, 

previously accumulated deposit to $100,000 for each 

$250,000 of surplus in excess of the amount that allows 

the organization not to make the annual deposit. 

If the amount of surplus no longer supports a reduction 

of its required deposit, the organization shall immediately 

redeposit $100,000 for each $250,000 of reduction 

in surplus, provided that its total deposit 

does not exceed the maximum required under this 

section. 

(6) The requirements of this section do not apply 

to an applying or licensed health maintenance organization 

which has on file with the department contracts 

of insurance or reinsurance to protect subscribers 

in the event the organization is unable to meet its 

obligations. Each such agreement between the organization 

and an insurer shall be subject to the laws of 

this state regarding reinsurance. Each such agreement 

and any modifications thereto must be filed 

with and approved by the department. Each such 

agreement shall remain in full force and effect until 

replaced or for at least 90 days following written notification 

to the department by registered mail of cancellation 

by either party. 

History.-S8. 791, 809(18t), ch. 82-243; 8. 10, ch. 83-198. 

'Note.-Expires October 1, 1991, pursuant to s. 809(18t), ch. 82-243, and is 

scbeduled for review pursuant to s. 11.61 in advance of that date. 

1641.29 Fees.-Every health maintenance organization 

shall pay to the department the following 

fees: 

(1) For filing a copy of its application for a certificate 

of authority or amendment thereto, a nonrefundable 

fee in the amount of $150. 

(2) For filing each annual report, $150. 

Fees charged under this section shall be distributed 

as follows: one-third to the Department of Health 

and Rehabilitative Services and two-thirds to the Department 

of Insurance. 

History.-8. 13, ch. 72-264; 8. 3, cb. 76-168; s. 1, ch. 77-457; S8. 2, 3, cb. 

81-318; ... 792, 804, 809(18t), cb. 82-243. 

'Note.-Expires October 1, 1991, pursuant to s. 809(18t), cb. 82-243, and is 


1641.30 Construction and relationship to other 

laws.- 

(1) Every health maintenance organization and 

its agents and employees shall be subject to the provisions 

of part VIII of chapter 626. 

(2) Except as provided in this part, the Florida 

Insurance Code does not apply to health maintenance 

organizations, and health maintenance organi-


zations certificated under this part are not subject to 

part I of this chapter. 

(3) Solicitation of subscribers by a health maintenance 

organization or its representatives shall not be 

construed to be violative of any provisions of law relating 

to solicitation or advertising by health professionals. 

History.-s. 14, ch. 72-264; s. 3, ch. 76-168; s. I, ch. 77-457; ss. 2, 3, ch. 

81-318; ss. 793, 804, 809(1st), ch. 82-243. 


scheduled for review pursuant to s. 11.61 in advance of tbat date. 

1641.31 Health maintenance contracts.- 

(1) Any entity issued a certificate and otherwise 

in compliance with this part may enter into contracts 

in this state to provide an agreed-upon set of comprehensive 

health care services to subscribers in exchange 

for a prepaid per capita sum or a prepaid aggregate 

fixed sum. 

(2) The rates charged by any health maintenance 

organization to its subscribers shall not be excessive, 

inadequate, or unfairly discriminatory. The department 

may define by rule what constitutes excessive, 

inadequate, or unfairly discriminatory rates and may 

require whatever information it deems necessary to 

determine that a rate or proposed rate meets the requirements 

of this subsection. 

(3) If a health maintenance organization desires 

to amend any contract with its subscribers or desires 

to change any rate charged therefor, it may do so, 

upon filing with the department any proposed 

amendments or change in rates. Any proposed 

change shall be effective immediately, subject to disapproval 

by the department. However, it is not the 

intent of this subsection to restrict unduly the right 

to modify rates in the exercise of reasonable business 

judgment. 

(4) Every health maintenance contract must 

clearly state all of the services to which a subscriber 

is entitled under the contract and must include a 

clear and understandable statement of any limitations 

on the services or kinds of services to be provided, 

including any copayment feature required by the 

contract or by any insurer or entity which is underwriting 

any of the services offered by the health 

maintenance organization. The contract shall also 

state where and in what manner the comprehensive 

health care services may be obtained. 

(5) Every subscriber shall receive a clear and understandable 

description of the method of the health 

maintenance organization for resolving subscriber 

grievances. 

(6) The rate of payment for a health maintenance 

contract shall be a part of the contract and shall be 

stated in individual contracts issued to subscribers. 

(7) For an appropriate additional premium, the 

health maintenance organization shall make available, 

according to the standards and procedures of 

such organization, physician care provided by physicians 

licensed under chapter 459, chapter 460, or 

chapter 461. 

(8) A health maintenance organization is entitled 

to coordinate benefits on the same basis as an insurer 

under s. 627.4235. 

(9) A health maintenance organization providing 

medical benefits or payments to a subscriber who 

suffers injury, disease, or illness by virtue of the neg- 

771 

ligent act or omission of a third party is entitled to 

reimbursement from the subscriber, on a 

fee-for-service basis, for the reasonable value of the 

benefits or payments provided. However, the health 

maintenance organization is not entitled to reimbursement 

for medical expenses rendered in excess of 

the subscriber's monetary recovery from the third 

party. 

History.-s. 15, ch. 72-264; s. 3, ch. 76-168; s. I, ch. 77-457; s. 21, ch. 78-95; 

ss. 2, 3, ch. 81-318; ss. 794, 804, 809(lst), ch. 82-243; s. 11, ch. 83-198. 

'Note.-Expires October I, 1991, pursuant to s. 809(1st), ch. 82-243, and is 


1641.315 Provider contracts.-Whenever a 

contract exists between a health maintenance organization 

and a provider and the organization fails to 

meet its obligations to pay fees for services already 

rendered to a subscriber, the health maintenance organization 

shall be liable for such fee or fees rather 

than the subscriber; and the contract shall so state. 

History.-ss. 795, 809(lst), ch. 82-243; s. 12, ch. 83-198. 



1641.32 Acceptable payments.-Each health 

maintenance organization may accept from governmental 

agencies, corporations, associations, groups, 

or individuals payments covering all or part of the 

cost of contracts entered into between the health 

maintenance organization and its subscribers. 

History.-s. 16, ch. 72-264; s. 3, ch. 76-168; s. I, ch. 77-457; ss. 2, 3, cb. 

81-318; ss. 796, 804, 809(1st), ch. 82-243. 

'Note.-Expires October I , 1991, pursuant to s. 809(lst), cb. 82-243, and is 


1641.33 Certain words prohibited in name of 

organization.- 

(1) No entity certificated as a health maintenance 

organization, other than a licensed insurer insofar 

as its name is concerned, shall use in its name, 

contracts, or literature any of the words "insurance," 

"casualty," "surety," "mutual," or any other words descriptive 

of the insurance, casualty, or surety business 

or deceptively similar to the name or description 

of any insurance or surety corporation doing business 

in the state. 

(2) No person, entity, or health care plan not certificated 

under the provisions of this part shall use in 

its name, logo, contracts, or literature the phrase 

"health maintenance organization" or the initials 

"HMO"; imply, directly or indirectly, that it is a 

health maintenance organization; or hold itself out to 

be a health maintenance organization. 

History.-s. 17, cb. 72-264; s. 3, ch. 76-168; s. I, ch. 77-457; ss. 2, 3, cb. 

81-318; ss. 797, 804, 809(lst), ch. 82-243. 



1641.35 Investment of funds.-The funds of 

any health maintenance organization shall be invested 

only in securities permitted by the laws of this 

state for the investment of assets of life insurance 

companies. 

History.-s. 19, ch. 72-264; s. 3, ch. 76-168; s. I, ch. 77-457; ss. 2, 3, ch. 

81-318; ss. 799, 804, 809(lst), ch. 82-243. 

'Note.- Expires October I, 1991, pursuant to s. 809(lst), ch. 82-243, and is 


1641.36 Promulgation of rules.-The depart-


ment, together with the Department of Health and 

Rehabilitative Services, on a joint basis, shall promulgate 

rules necessary to carry out the provisions of 

this part. The approval of both departments is required 

as a condition to the implementation of any 

rule governing health maintenance organizations. 

The department shall collect and make available in a 

single volume all health maintenance organization 

rules promulgated by the departments. 

History.-B. 20, ch. 72-264; B. 3, ch. 76-168; B. 1, ch. 77-457; 88. 2, 3, ch. 

81-318; 88. BOO, 804, 809(lst), ch. 82-243. 

'Note.-Expires October 1, 1991, pursuant to B. 809(1Bt), ch. 82-243, and iB 

Bcheduled for review pursuant to B. 11.61 in advance of that date. 

cf.-B. 768.41 Internal risk management program; rules. 

1641.37 Penalty.-Any person who violates the 

provisions of this part is guilty of a misdemeanor of 

the first degree and shall be punished by a fine not 

exceeding $1,000 or by imprisonment for a period not 

772 

exceeding 1 year, or by both such fine and imprisonment. 

History.-B. 21, ch. 72-264; B. 3, ch. 76-168; B. 1, ch. 77-457; BB. 2, 3, ch. 

81-318; 88. SOl, 804, 809(lst), ch. 82-243. 

'Note.-ExpireB October 1, 1991, pursuant to B. 809(lBt), ch. 82-243, and iB 


1641.38 Operational health maintenance organizations; 

issuance of certificate.-The provisions 

of this part do not apply to those organizations 

providing the services defined in ss. 641-17-641-38 

which have been continuously engaged in providing 

such services since January 1, 1947_ This exemption 

shall terminate upon a change in controlling ownership 

of the organization. 

History.-B. 23, ch. 72-264; B. 3, ch. 76-168; B. 1, ch. 77-457; BB. 2, 3, ch. 

81-318; 88. S02, S04, 809(lst), ch. 82-243. 

'Note.-ExpireB October 1, 1991, pursuant to B. 809(lst), ch. 82-243, and is 

scheduled for review pursuant to s. 11.61 in advance of that date.

F.S.1983 LEGAL EXPENSE INSURANCE Ch.642 

642.011 

642.013 

642.015 

642.017 

642.019 

642.021 

642.023 

642.025 

642.027 

642.029 

642.032 

642.0331 

642.0334 

642.0336 

642.0338 

642.034 

642.036 

642.038 

642.041 

642.043 

642.045 

642.047 

642.0475 

642.049 

Short title. 

Purpose. 

Definitions. 

Exemptions. . 

Organization of legal expense insurance 

corporations. 

Certificate of authority. 

Required deposit or bond. 

Policy and certificate forms. 

Premium rates. 

Contracts by insurers. 

Provisions of general insurance law applicable 

to legal expense insurance corporations. 

Grounds for suspension or revocation of 

certificate. 

Order; notice of suspension or revocation 

of certificate; effect; publication. 

Duration of suspension; obligations during 

suspension; reinstatement. 

Administrative fine in lieu of suspension 

or revocation. 

Registration required. 

Sales representatives to be registered. 

Reporting and accounting for funds. 

Grounds for compulsory refusal, suspension, 

or revocation of registration of 

contracting sales representatives. 


or revocation of registration of 

sales representatives. 

Procedure for refusal, suspension, or revocation 

of registration of sales representative; 

departmental action upon violation 

by licensed insurance agent or solicitor. 

Administrative fine in lieu of suspension 

or revocation of registration. 

Civil remedy. 

Construction. 

'642.011 Short title.-Sections 642.011-642.049 

may be cited as the "Legal Expense Insurance Act." 

Hi8tory.-s. I, ch. 79-103; s. 2, ch. 81-318; ss. 20, 21, ch. 83-278. 

'Note.- Repealed effective October I, 1993, by s. 21, ch. 83-278, and scheduled 


'642.013 Purpose.-The purpose of ss. 

642.011-642.049 is to authorize certification and regulation 

of certain organizations which provide programs 

for the payment of the costs of legal services or 

provide legal services. 

Hi8tory.-s. I, ch. 79-103; s. 2, ch. 81-318; 88. 20, 21, ch. 83-278. 

'Not e.- Repealed effective October I, 1993, by s. 21, ch. 83-278, and scheduled 


'642.015 Definitions.-As used in ss. 

642.011-642.049, the term: 


(2) "Insurance code" means the Florida Insurance 

Code as provided in s. 624.01. 

CHAPTER 642 

LEGAL EXPENSE INSURANCE 

773 

(3) "Insurer" means any person authorized to 

conduct a life or casualty insurance business in this 

state or a legal expense insurance corporation authorized 

under ss. 642.011-642.049. 

(4) "Legal expense insurance" means a contractual 

obligation to provide specific legal services, or to 

reimburse for specific legal expenses, ih consideration 

of a specified payment for an interval of.time, regardless 

of whether the payment is made by the beneficiaries 

individually or by a third person for them, but 

does not include the provision of, or reimbursement 

for, legal services incidental to other insurance coverages. 

Hi8tory.-s. I, ch. 79-103; s. 2, ch. 81-318; ss. I, 20, 21 , ch. 83-278. 



'642.017 Exemptions.-The provisions of the 

Florida Insurance Code and ss. 642.011-642.049 do 

not apply to: 

(1) Retainer contracts made by attorneys-at-law 

with individual clients with fees based on estimates 

of the nature and amount of services to be provided 

to the specific client and similar contracts made with 

a group of clients involved in the same or closely related 

legal matters. 

(2) Any lawyer referral service authorized by The 

Florida Bar. 

(3) The furnishing of legal assistance by labor 

unions or other employee organizations to their members 

in matters relating to employment or occupation. 

(4) The furnishing of legal assistance to members, 

or their dependents, by a church, cooperative, educational 

institution, credit union, or organization of employees, 

in which the organization contracts directly 

with a lawyer or law firm for the provision of legal 

services and the administration and marketing of 

such legal services are conducted wholly by the organization. 

(5) Employee welfare benefit plans to the extent 

that state laws are superseded by the Employee Retirement 

Income Security Act of 1974, 29 U.S.C. s. 

1144, provided evidence of exemption from state laws 

is shown to the department. 

Hi8tory.-s. I, ch. 79-103; s. 2, ch. 81-318; sa. 2, 20, 21, ch. 83-278. 



'642.019 Organization of legal expense insurance 

corporations.- 

(1) Any number of corporations or adult natural 

persons may organize a legal expense insurance corporation 

under the law of this state relating to corporations 

generally. 

(2) The articles of incorporation shall conform to 

the requirements applicable to corporations, and, in 

addition: 

(a) The name bf the corporation shall indicate 

that legal services or indemnity for legal expenses is 

to be provided; and 

(b) The purposes of the corporation shall be lim-

Ch.642 LEGAL EXPENSE INSURANCE F.S.1983 

ited to providing legal services or indemnity for legal 

expenses and business reasonably related thereto. 

History.- s. 1, ch. 79-103; s. 2, ch. 81-318; 88. 3, 20, 21, ch. 83-278. 


for review pursuant to •. 11.61 in advance of that date. 

'642.021 Certificate of authority.- 

(1) It is unlawful for any person to engage in a legal 

expense insurance business in this state without a 

valid certificate of authority issued by the department, 

pursuant to ss. 642.011-642.049, except that a 

domestic, foreign, or alien insurer authorized to 

transact life or casualty insurance in this state may 

transact legal expense insurance provided it complies 

with the applicable provisions of ss. 642.011-642.049. 

A certificate of authority under ss. 642.011-642.049 

may be issued only to a legal expense insurance corporation. 

(2) The corporation shall file with the department 

an application for a certificate of authority 

upon a form to be furnished by the department, 

which shall include or have attached the following: 

(a) The names, addresses, and occupations of all 

incorporators and proposed directors and officers. 

(b) A certified copy of the corporate articles and 

bylaws and, for the 3 most recent years, the annual 

statements and reports of the corporation. 

(c) Each agreement relating to the corporation to 

which any incorporator or proposed director or officer 

is a party. 

(d) A statement of the amount and sources of the 

funds available for organization expenses and the 

proposed arrangements for reimbursement and compensation 

of incorporators or other persons. 

(e) A statement of compensation to be provided 

directors and officers. 

(f) The forms to be used for any proposed contracts 

between the corporation and participating attorneys 

or between the corporation and corporations 

which perform administration, marketing, or management 

services and the forms relating to the provision 

of services to insureds. 

(g) The plan for conducting the insurance business, 

which plan shall include all of the following: 

1. The geographical area in which business is intended 

to be conducted in the first 5 years. 

2. The types of insurance intended to be written 

in the first 5 years, including specification whether 

and to what extent indemnity rather than service 

benefits are to be provided. 

3. The proposed marketing methods. 

(h) A current statement of the assets and liabilities 

of the corporate applicant. 

(i) Forms of all legal service contracts the applicant 

proposes to offer showing the rates to be 

charged for each form of contract. 

(j) Such other documents and information as the 

department may reasonably require. 

(3) Copies of the documents filed pursuant to 

paragraphs (f) and (i) of subsection (2) shall be filed 

with The Florida Bar within 5 days after filing with 

the department. 

(4) The department shall issue a certificate of authority 

only to a legal expense insurance corporation, 

provided it is satisfied that: 

774 

(a) All requirements of law have been met; 

(b) All natural persons who are incorporators, the 

directors and principal officers of corporate incorporators, 

and the proposed directors and officers of the 

corporation being formed are trustworthy and collectively 

have the competence and experience to engage 

in the particular insurance business proposed; and 

(c) The business plan is consistent with the interests 

of potential insureds and of the public. 

History.-s. 1, ch. 79-103; s. 2, ch. 81-318; 88. 4, 20, 21, ch. 83-278. 



'642.023 Required deposit or bond.- 

(1) To assure the faithful performance of its obligations 

in the event of insolvency, each legal expense 

insurance corporation, prior to the issuance of its certificate 

of authority, shall deposit and maintain with 

the department securities of the type eligible for deposit 

by insurers under s. 625.52, which securities 

shall be held in trust and shall have at all times a 

market value in the amount specified. Whenever the 

market value of the securities deposited with the department 

is less than 95 percent of the amount of the 

deposit required, the insurer shall deposit additional 

securities or otherwise increase the deposit to the 

amount required. The initial deposit for a corporation 

shall be in the amount of $50,000 for at least the 

first full year of operation. The amount of the initial 

deposit shall be adjusted annually thereafter on October 

1 as follows: 

(a) Each corporation having in force $300,000 or 

less of gross written premiums shall deposit with the 

department an amount equal to $30,000. 

(b) Each corporation having in force more than 

$300,000 of gross written premiums, but less than 

$750,000, shall deposit with the department an 

amount equal to $75,000. 

(c) Each corporation having in force more than 

$750,000 of gross written premiums shall deposit 

with the department an amount equal to $100,000. 

(2) In lieu of any deposit of securities required 

under subsection (1) and subject to the approval of 

the department, a legal service insurance corporation 

may file with the department a surety bond issued by 

an authorized surety insurer. The bond shall be for 

the same purpose as the deposit in lieu of which it is 

filed. The department may not approve any bond under 

the terms of which the protection afforded 

against insolvency is not equivalent to the protection 

afforded by those securities provided for in subsection 

(1). 

(3) Securities or bonds deposited pursuant to this 

section shall be for the benefit of, and subject to, action 

thereon by any person sustaining an actionable 

injury due to the failure of the corporation to faithfully 

perform its obligations to its insureds in the 

event of insolvency or impairment of any legal expense 

insurance corporation. 

(4) The state shall be responsible for the safekeeping 

of all securities deposited with the department 

under ss. 642.011-642.049. Such securities are 

not, on account of being in this state, subject to taxation, 

but shall be held exclusively and solely to guarantee 

the performance by the legal expense insurance 

corporation of its obligations to its insureds.


(5) Such deposit or bond shall be maintained unimpaired 

as long as the legal expense insurance corporation 

continues to do business in this state. 

Whenever the corporation ceases to do business in 

this state and furnishes proof satisfactory to the department 

that it has discharged or otherwise adequately 

provided for all its obligations to its insureds 

in this state, the department shall release the deposited 

securities to the parties entitled thereto, on presentation 

of the receipts of the department for such 

securities, or shall release the bond filed with it in 

lieu of such deposit. 

(6) The department, upon written request of the 

legal expense insurance corporation, may reduce the 

amount of deposit or bond required under subsection 

(1) if it finds that the policyholders and certificateholders 

of the corporation are adequately protected 

by: 

(a) The terms and number of existing contracts 

with subscribers; 

(b) Financial guarantees of financially sound 

public or private organizations or agencies; 

(c) Other reliable financial guarantees; or 

(d) Plan attorney agreements that provide for 

full plan benefits to subscribers without additional 

payments by the subscribers if the plan terminates. 

(7) The department may at any time enter an order 

modifying the amount of the deposit or bond 

specified under subsection (1) or subsection (2) if it 

finds that there has been a substantial change in the 

facts on which the determination was based. 

History.-s. 1, ch. 79-103; s. 2, ch_ 81-318; 88. 5, 20, 21, ch_ 83-278_ 



1642.025 Policy and certificate forms.- 

(1) Legal expense insurance may be written as individual, 

group, blanket, or franchise insurance. Each 

contractual obligation for legal expense insurance 

shall be evidenced by a policy. Each person insured 

under a group policy shall be issued a certificate of 

coverage. 

(2) No policy or certificate of legal expense insurance 

may be issued in this state unless a copy of the 

form has been filed with and approved by the department 

pursuant to s. 627.410. 

(3) The department shall not approve any policy 

or certificate form which does not meet the following 

requirements: 

(a) Policies shall contain a list and description of 

the legal services to be supplied or the legal matters 

for which expenses are to be reimbursed and any limits 

on the amounts to be reimbursed. 

(b) Policies and certificates shall indicate the 

name of the insurer and the full address of its principal 

place of business. 

(c) Certificates issued under group policies shall 

contain a full statement of the benefits provided and 

exceptions thereto but may summarize the other 

terms of the master policy. 

(d) Policies providing for legal services to be supplied 

by a limited number of attorneys who have executed 

provider contracts with the insurer, whether 

the attorney in an individual case is to be selected by 

the insured or by the insurer, shall provide for alternative 

benefits if the insured is unable to find a par- 

775 

ticipating attorney willing to perform the services or 

the attorney selected by the insurer is disqualified or 

otherwise unable to perform the services. The alternative 

benefit may consist of furnishing the services 

of an attorney selected and paid by the insurer or 

paying the fee of an attorney selected by the insured. 

The policy shall also provide a procedure that includes 

impartial review for settling disagreements 

concerning the grounds for demanding an alternative 

benefit. 

(e) No policy, except one issued by a mutual or 

reciprocal insurance company, may provide for assessments 

on policyholders or for reduction of benefits 

for the purpose of maintaining the insurer's solvency. 

(f) Policies shall contain a statement that the 

subscriber has a right to file a complaint with The 

Florida Bar concerning attorney conduct pursuant to 

the plan. 

(g) Policies shall contain a statement that the individual 

beneficiary has the right to retain, at his own 

expense, except when the policy provides otherwise, 

any attorney authorized to practice law in this state. 

(4) The department may disapprove a policy or 

certificate form if it finds that the form: 

(a) Is unfair, unfairly discriminatory, misleading, 

or ambiguous or encourages misrepresentation or 

misunderstanding of the contract; 

(b) Provides coverage or benefits or contains other 

provisions that would endanger the solvency of the 

insurer; or 

(c) Is contrary to law. 


'N ote.-Expires October 1, 1993, pursuant to s. 21, ch. 83-278, and is scheduled 


1642.027 Premium rates.-No policy of legal 

expense insurance may be issued in this state unless 

the premium rates for the insurance have been filed 

with and approved by the department. Premium 

rates shall be established and justified in accordance 

with generally accepted insurance principles, including, 

but not limited to, the experience or judgment of 

the insurer making the rate filing or actuarial computations. 

The department may disapprove rates that 

are excessive, inadequate, or unfairly discriminatory. 

Rates are not unfairly discriminatory because they 

are averaged broadly among persons insured under 

group, blanket, or franchise policies. The department 

may require the submission of any other information 

reasonably necessary in determining whether to approve 

or disapprove a filing made under this section 

or s. 642.025. 

History.-s. 1, ch. 79-103; s. 2, ch. 81-318; 88. 20, 21, ch. 83-278. 

'Note.-Repealed effective October 1, 1993, by s. 21, ch. 83-278, and scheduled 


1642.029 Contracts by insurers.- 

(1) Contracts made between the insurer and participating 

attorneys, management contracts, or contracts 

with providers of other services covered by the 

legal expense insurance policy shall be filed with and 

approved by the department. 

(2) An insurer shall annually report to the department 

the number and geographical distribution 

of attorneys and providers of other services covered 

by the legal expense insurance policy with whom it 

maintains contractual relations and the nature of the


relations. The department may require more frequent 

reports from an insurer or group of insurers. 

History.-s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 7, 20, 21, ch. 83-278. 



1642.032 Provisions of general insurance 

law applicable to legal expense insurance corporations.-The 

following provisions of the insurance 

laws of this state shall apply to legal service insurance 

corporations, to the extent that they are not 

inconsistent with the provisions of ss. 

642.011-642.049: 

(1) Chapter 624, administration and general provisions. 

(2) Chapter 625, accounting, investments, and 

deposits. 

(3) Chapter 626, part VIII, unfair insurance trade 

practices. 

(4) Chapter 627, part I, rates and rating organizations, 

and part II, the insurance contract. 

(5) Chapter 631, insurer insolvency; guaranty of 

payment. 

History.-s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 8, 20, 21, ch. 83-278. 



1642.0331 Grounds for suspension or revocation 

of certificate.- 

(1) The certificate of authority of an insurer, 

whether issued pursuant to this chapter or the insurance 

code, may be revoked or suspended, or the department 

may refuse to renew a certificate of authority, 

if the department determines that the insurer: 

(a) Has violated any lawful rule or order of the 

department or any provision of this chapter. 

(b) Is in an unsound financial condition which 

would render its further transaction of business in 

this state hazardous or injurious to its policyholders, 

its certificate holders, or the public. 

(c) Is using such methods or practices in the conduct 

of its business so as to render its further transaction 

of business in this state hazardous or injurious 

to its policyholders, its certificateholders, or the public. 

(d) Has refused to be examined or to produce its 

accounts, records, or files for examination, or if any 

of its officers have refused to give information with 

respect to its affairs or have refused to perform any 

other legal obligation as to such examination, when 


(e) Has failed to pay any final judgment rendered 

against it in this state within 60 days after the judgment 

became final. 

(f) Without just cause has refused to pay proper 

claims or perform services arising under its policies 

or contracts; without just cause has compelled policyholders 

or certificateholders to accept less than the 

amount due them; or has employed attorneys, or has 

brought suit against the association, to secure full 

payment or settlement of such claims. 

(g) Is affiliated with, and under the same general 

management or interlocking directorate or ownership 

as, another insurer which transacts business in this 

state without having a certificate of authority. 

(2) The department may, pursuant to s. 120.60, in 

776 

its discretion and without advance notice or hearing 

thereon, immediately suspend the certificate of any 

insurer, whether such certificate was issued pursuant 

to this chapter or the insurance code, if it finds that 

one or more of the following circumstances exist: 

(a) The insurer is insolvent or impaired. 

(b) The deposit required by s. 642.023 is not being 

maintained. 

(c) Proceedings for receivership, conservatorship, 

or rehabilitation or other delinquency proceedings regarding 

the insurer have been commenced in any 

state. 

(d) The financial condition or business practices 

of the insurer otherwise pose an imminent threat to 

the public health, safety, or welfare of the residents 


History.-ss. 9, 21, ch. 83-278. 



1642.0334 Order; notice of suspension or 

revocation of certificate; effect; publication.- 

(1) Suspension or revocation of a certificate of 

authority of an insurer shall be by order of the department 

mailed to the corporation by registered or 

certified mail. The department also shall promptly 

give notice of such suspension or revocation to the 

sales representatives in this state of the corporation 

who are of record in the office of the department. 

The insurer shall not solicit or write any new contracts 

in this state during the period of any such suspension 

or revocation. 


notice of the revocation or suspension to be published 

in one or more newspapers of general circulation 

published in this state. 

History.-ss. 10, 21, ch. 83-278. 

'N ote.-Expires October 1, 1993, pursuant to s. 21, ch. 83-278, and is scheduled 


1642.0336 Duration of suspension; obligations 

during suspension; reinstatement.- 

(1) Suspension of an insurer's' certificate of authority 

shall be for such period, not to exceed 1 year, 

as is fixed in the order of suspension, unless such suspension 

or the order upon which the suspension is 

based is modified, rescinded, or reversed. 

(2) During the period of suspension, the insurer 

shall file its annual statement and pay fees as required 

under this chapter as if the certificate of authority 

had continued in full force. 

(3) Upon expiration of the period of suspension, 

if within such period the certificate of authority has 

not otherwise terminated, the certificate of authority 

shall automatically be reinstated, unless the causes of 

the suspension have not been removed or the insurer 

is otherwise not in compliance with the requirements 


(4) Upon reinstatement of an insurer's certificate 

of authority following suspension, the authority of 

the sales representatives in this state to represent the 

insurer shall be reinstated. 

History.- ss. 11, 21, ch. 83-278. 



1642.0338 Administrative fine in lieu of suspension 

or revocation.- 

(1) If the department finds that one or more


(5) Demonstrated lack of fitness or trustworthiness 

to engage in the business of legal expense insurance. 

(6) Demonstrated lack of adequate knowledge 

and technical competence to engage in the transactions 

authorized by the registration. 

(7) Fraudulent or dishonest practices in the conduct 

of business under the registration. 

(8) Misappropriation, conversion, or unlawful 

withholding of moneys belonging to an insurer or 

other person and received in the conduct of business 

under the registration. 

(9) Rebating, or attempting to rebate, or unlawfully 

dividing, or offering to divide, his commission 

with another. 

(10) Willful failure to comply with, or willful violation 

of, any proper order or rule of the department 

or willful violation of any provision of ss. 

642.011-642.049. 

(11) Being found guilty of, or pleading guilty or 

nolo contendere to, a felony which involves moral 

turpitude, without regard to whether a judgment of 

conviction has been entered. 

History.-B. 1. ch. 79-103; B. 2, ch. 81-318; 88. 16, 20, 21, ch. 83-278. 

'Note.-Expires October 1, 1993, pursuant to B. 21, ch. 83-278, and is scheduled 

for review pursuant to B. 11.61 in advance of tbat date. 

1642.043 Grounds for discretionary refusal, 

suspension, or revocation of registration of 

sales representatives.-The department may, in 

its discretion, deny, suspend, revoke, or refuse to renew 

or continue the registration of any sales representative 

if it finds that, as to the representative, any 

one or more of the following applicable grounds exist 

under circumstances for which such denial, suspension, 

revocation, or refusal is not mandatory under s. 

642.041: 

(1) Any cause for which granting of the registration 

could have been refused had it been known to 

the department at the time of application. 

(2) Violation of any provision of ss. 

642.011-642.049, or of any other law applicable to the 

business of legal expense insurance in the course of 

dealings under the registration. 

(3) Violation of any lawful order or rule of the department. 

(4) Failure or refusal to pay over, upon demand, 

to any insurer he represents, or has represented, any 

money which belongs to the insurer. 

(5) In the conduct of business under the registration, 

having engaged in unfair methods of competition 

or in unfair or deceptive acts or practices, as 

such methods, acts, or practices are defined under 

part VIII of chapter 626, or having otherwise shown 

himself to be a source of injury or loss to the public or 

detrimental to the public interest. 

(6) Having been found guilty of, or having pled 

guilty or nolo contendere to, a felony, whether or not 

a judgment of conviction has been entered. 

History.-B. 1, ch. 79-103; B. 2, ch. 81-318; BB. 17,20,21, ch. 83-278. 



1642.045 Procedure for refusal, suspension, 

or revocation of registration of sales representative; 

departmental action upon violation by licensed 

insurance agent or solicitor.- 

778 

(1) If any sales representative is convicted by a 

court of a violation of any provision of ss. 

642.011-642.049, the registration of such individual 

shall thereby be deemed to be immediately revoked 

without any further procedure relative thereto by the 

department. 

(2) Whenever it appears that any licensed insurance 

agent or solicitor has violated the provisions of 

ss. 642.011-642.049, or if any grounds listed in s. 

642.041 or s. 642.043 exist as to such agent or solicitor, 

the department may take such action as is authorized 

by the insurance code for a violation of the insurance 

code by such agent or solicitor, or such action 

as is authorized by this chapter for a violation of this 

chapter by a sales representative. 


'Note.-Expires October 1, 1993, pursuant to 8. 21, ch. 83-278, and is scheduled 


1642.047 Administrative fine in lieu of suspension 

or revocation of registration.- 

(1) If, pursuant to procedures provided for in ss. 

642.011-642.049, it is found that one or more grounds 

exist for the suspension or revocation of, or refusal to 

renew or continue, any registration issued under ss. 

642.011-642.049, and except when such suspension, 

revocation, or refusal is mandatory, an order may be 

entered imposing upon the registrant, in lieu of such 

suspension, revocation, or refusal, an administrative 

penalty for each violation in the amount of $100 or, 

in the event of willful misconduct or willful violation 

on the part of the registrant, an administrative fine 

of $500. The administrative penalty may be augmented 

in amount by an amount equal to any commissions 

received by or accruing to the credit of the 

registrant in connection with any transaction to 

which the grounds for suspension, revocation, or refusal 

related. 

(2) The order may allow the registrant a reasonable 

period not to exceed 30 days, within which to 

pay to the department the amount of the penalty so 

imposed. If the registrant fails to pay the penalty in 

its entirety to the department at its office in Tallahassee 

within the period so allowed, the registration 

of the registrant shall stand suspended or revoked, or 

renewal or continuation may be refused, as the case 

may be, upon expiration of such period and without 

any further proceedings. 

History.-B. 1, ch. 79-103; s. 2, ch. 81-318; BB. 20, 21, ch. 83-278. 

'Note.-Repealed effective October 1, 1993, by B. 21, ch. 83-278, and scheduled 

for review purBuant to B. 11.61 in advance of that date. 

1642.0475 Civil remedy.- 

(1) Any person damaged by a violation of the provisions 

of this chapter may bring a civil action against 

a person violating such provisions in the circuit court 

of the county in which the alleged violator resides, or 

has his principal place of business, or in the county 

wherein the alleged violation occurred. Upon adverse 

adjudication, the defendant shall be liable for actual 

damages or $500, whichever is greater, together with 

court costs and reasonable attorney's fees incurred by 

the plaintiff. 

(2) No punitive damages may be awarded under 

this section unless the acts giving rise to the violation 

occur with such frequency as to indicate a general 

business practice and these acts are:


(a) Willful, wanton, and malicious. 

(b) In reckless disregard for the rights of any insured. 

Any person who pursues a claim under this subsection 

shall post in advance the costs of discovery. Such 

costs shall be awarded to the insurer if no punitive 

damages are awarded to the plaintiff. 

(3) As a condition precedent to bringing an action 

under this section, the department and the person 

against whom the action is to be brought shall be given 

notice of the violation. The notice shall state with 

specificity the facts which allegedly constitute the violation 

and the law which the plaintiff is relying 

upon. No action shall lie if, within 30 days thereafter, 

779 

the damages are paid or the circumstances giving rise 

to the violation are corrected. 

(4) This section shall not be construed to authorize 

a class action suit against a legal expense insurance 

corporation or a civil action against the department, 

its employees, or the Insurance Commissioner. 

Hi.tory.-ss. 19, 21, ch. 83-278. 

'Note.-Expires October 1, 1993, pursuant to 8. 21, ch. 83-278, and is scheduled 


1642.049 Construction.-Nothing contained in 

ss. 642.011-642.049 shall be construed to regulate the 

practice of law or limit the powers or authority of the 

Supreme Court of Florida in the regulation of the 

conduct of attorneys. 

Hi.tory.-s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 20, 21, ch. 83-278. 

'Note.-Repealed effective October 1, 1993, by 8. 21, ch. 83-278, and scheduled 

for review pursuant to 8. 11.61 in advance of that date.

Ch.648 BAIL BONDSMEN AND RUNNERS F.S.1983 

648.25 

648.26 

648.27 

648.29 

648.30 

648.31 

648.32 

648.33 

648.34 

648.35 

648.36 

648.365 

648.37 

648.38 

648.388 

648.39 

648.40 

648.41 

648.42 

648.421 

648.43 

648.44 

648.441 

648.442 

648.45 

648.46 

648.48 

648.49 

648.50 

648.51 

648.52 

648.53 

648.55 

648.56 

648.57 

648.571 

Definitions for ss. 648.25-648.57. 

Department of Insurance; administration. 

Licenses, permits; general. 

Deposits or build-up funds posted by 

bondsman. 

License required. 

License tax and fee. 

Effective date and initial period of license. 

Bail bond rates. 

Bail bondsmen; qualifications. 

Professional bondsmen; qualifications. 

Bail bondsman's records. 

Statistical reporting requirements. 

Runners; qualifications. 

Examination; time; place; fee; scope. 

Insurer must appoint general agent. 

Notice of appointment of agents; termination. 

Notice of appointment of professional 

bondsmen; termination. 

Notice of appointment of runners; termination. 

Registration of bail bondsmen. 

Notice of change of address. 

Power of attorney; to be approved by department; 

filing of copies. 

Prohibitions. 

Furnishing supplies to unlicensed bail 

bondsmen prohibited; civil liability and 

penalty. 

Collateral security. 

Actions against a license or eligibility to 

hold a license. 

Procedure for suspension or revocation of 

eligibility or for denial, revocation, suspension, 

or refusal to renew license. 

Witnesses and evidence. 

Duration of suspension or revocation. 

Effect of suspension, revocation upon associated 

licenses and licensees. 

Surrender of license or permit. 

Administrative fine. 

Probation. 

All bondsmen of same agency; licensed by 

same companies. 

Exemption. 

Penalty. 

Failure to return collateral; penalty. 

1648.25 Definitions for ss. 648.25-648.57. 

-The following words when used in ss. 648.25-648.57 

shall have the meanings respectively ascribed to 

them in this section: 


(2) "Insurer" means any domestic, foreign, or 

alien surety company which has qualified to transact 

surety business in this state. 

(3) "Bail bondsman" means a limited surety agent 

or a general lines agent engaged in the bail bond 

CHAPTER 648 

BAIL BONDSMEN AND RUNNERS 

780 

business or a professional bondsman as hereafter defined. 

(4) "Limited surety agent" means any individual 

appointed by an insurer by power of attorney to execute 

or countersign bail bonds in connection with judicial 

proceedings who receives or is promised money 

or other things of value therefor. 

(5) "Professional bondsman" means any person 

who pledges United States currency, United States 

postal money orders, or cashier's checks or other 

property as security for a bail bond in connection 

with a judicial proceeding and receives or is promised 

therefor money or other things of value. 

(6) "General lines agent" means a duly licensed 

general lines agent as defined in s. 626.041. 

(7) "Runner" means a person employed by a bail 

bondsman, insurer, or general agent for the purpose 

of assisting the bail bondsman in presenting the defendant 

in court when required or employed by the 

bail bondsman to assist in the apprehension and surrender 

of the defendant to the court or keeping the 

defendant under necessary surveillance. This does 

not affect the right of a bail bondsman or insurer to 

hire counselor to obtain the assistance of law enforcement 

officers. 

(8) "General agent" means any individual, partnership, 

association, or corporation appointed or employed 

by an insurer to supervise or manage the bail 

bond business written by limited surety agents or 

general lines agents of such insurer. 

Hi.tory.-8. I, ch. 29621, 1955; 8. 2, ch. 57·63; 8. 6, ch. 65-492; 88. 13,35, ch. 

69-106; 8. 177, ch. 70-339; 8. 272, ch. 71-377; 8.3, ch. 76-168; 8. I, ch. 77-457; ... 

2, 3, ch. 81-318; 88. 1, 71,72, ch. 82-175; 8. 138, ch. 83-216. 

'Note.-Expires October I, 1984, pursuant to 8. 72, ch. 82-175, and is 8chedu1ed 


Note.-Former 8. 903.37. 

1648.26 Department of Insurance; administration.- 

(1) The department shall have full power and authority 

to administer the provisions of ss. 

648.25-648.57, which regulate bail bondsmen and 

runners, and, to that end, to adopt and promulgate 

rules pursuant to s. 624.308 of the insurance code and 

enforce such rules necessary and proper to effectuate 

and enforce the purposes and provisions of such sections. 

The department may employ and discharge 

such employees, examiners, counsel, and other assistants 

as shall be deemed necessary, and it shall prescribe 

their duties; their compensation shall be the 

same as other state employees receive for similar services. 

(2) The department shall adopt a seal by which 

its proceedings are authenticated. Any written instrument 

purporting to be a copy of any action, proceeding, 

or finding of fact by the department, or any 

record of the department authenticated by the seal, 

shall be accepted by all the courts of this state as prima 

facie evidence of the contents thereof. 

(3) The papers, documents, reports, or evidence 

of the department shall not be subject to subpoena 

without its consent until after the same has been 

published at a hearing held under such sections, unless 

after notice to the department and hearing, the


(a) Original license: 

Appointment fee ....................................... $22 

State license tax ....................................... $12 

County license tax ...................................... $6 

Total ....................................................................... $40 

(b) Biennial renewal or continuation of license: 

Appointment fee ....................................... $22 

State license tax ....................................... $12 

County license tax ...................................... $6 

Total ....................................................................... $40 

(2) The department shall deposit all license taxes 

and fees in such funds and for such uses as is provided 

by laws applicable to like license taxes and like 

fees in the case of general lines agents. 

History.-s. 5, ch. 29621, 1955; s. 2, ch. 59-326; os. 13, 35, ch. 69-106; s. 177, 

ch. 70-339; s. 3, ch. 76-168; s. I, ch. 77-457; S8. 2, 3, ch. 81·318; ss. 7, 71, 72, ch. 

82·175. 

'Note.-Expires October I, 1984, pursuant to 8. 72, ch. 82·175, and is sched· 

uled for review pursuant to s. 11.61 in advance of tbat date. 

N ote.-Former s. 903.41. 

1648.32 Effective date and initial period of 

license.- 

(1) All licenses as to which all requisite applications, 

payment of fees and taxes, passing of examinations, 

and waiting periods have been completed and 

evidence thereof in the customary form has been received 

by the department at its office in Tallahassee 

within 1 calendar month prior to the expiration of 

the applicable license period then current or within 1 

calendar month after the commencement of the next 

following new license period shall be dated and be effective 

as of the first day of such new license period 

and shall be for the entire such license period (subject 

to suspension, revocation, renewal, continuation, 

or termination as otherwise provided for in this chapter); 

but such a license, if issued pursuant to qualification 

therefor during the last calendar month of the 

preceding license period as hereinabove provided, 

shall be deemed to relate back in effectiveness to the 

date within such calendar month on which the last of 

such qualifying requirements was received by the department 

at its offices in Tallahassee. 

(2) All other licenses shall be dated and become 

effective as of the date of issue. 

History.-s. 3, ch. 59·326; os. 13, 35, ch. 69·106; 8. 177, ch. 70·339; 8. 3, ch. 

76·168; s. I, ch. 77·457; ... 2, 3, ch. 81·318; ss. 8, 71, 72, ch. 82·175. 

'Note.-Expires October I, 1984, pursuant to s. 72, ch. 82-175, and is scbed· 


Note.-Former s. 903.411. 

1648.33 Bail bond rates.-Bail bond rates shall 

be subject to the provisions of part I of chapter 627 of 

the insurance code. It shall be unlawful for a bail 

bondsman to execute a bail bond without charging a 

premium therefor and the premium rate shall not exceed 

nor be less than the premium rate as filed with 

and approved by the department. 

History.-s. 6, cb. 29621, 1955; s. 4, ch. 59·326; ... 13, 35, ch. 69-106; s. 177, 

ch. 70·339; s. 3, ch. 76-168; s. I, ch. 77·457; ... 2, 3, ch. 81·318; ... 71, 72, ch. 

82·175. 

'Note.-The repeal of this section by s. 2, ch. 81·318, was nullified by 8. 71, 

ch. 82·175. Repealed effective October I, 1984, by 8. 72, ch. 82·175, and sched· 



1648.34 Bail bondsmen; qualifieations.- 

(1) Applications for filing for examination for bail 

bondsmen shall be submitted on forms furnished by 


782 

(2) To qualify as a bail bondsman, it must affirmatively 

appear at the time of application and 

throughout the period of licensure that: 

(a) The applicant is a natural person who has 

reached the age of 18 years. 

(b) The applicant has been a bona fide resident 

of the state for 1 year last past; however, the department, 

in its discretion, may waive this residency requirement 

if the applicant is an employee under the 

supervision of a currently licensed bondsman. 

(c) The place of business of the applicant will be 

located in this state and the applicant will be actively 

engaged in the bail bond business and maintain a 

place of business accessible to the public which is 

open for reasonable business hours. 

(d) The applicant has successfully completed a 

basic certification course in the criminal justice system, 

consisting of not less than 80 hours, approved by 

the department and has successfully completed within 

2 years of the date of his application a correspondence 

course for bail bondsmen approved by the department. 

(e) The applicant is vouched for and recommended 

upon sworn statements filed with the department 

by at least three reputable citizens who are residents 

of the same counties in which the applicant proposes 

to engage in the bail bond business. 

(f) The applicant is a person of high character 

and approved integrity and has not been convicted of 

or pleaded guilty or no contest to a crime involving 

moral turpitude or to a felony. 

(3) A fee of $10 shall be submitted to the department 

with each application. In addition to the $10 

fee, the department shall collect a fee necessary to 

cover the cost of a credit report. Such fees will be deposited 

to the credit of the Insurance Commissioner's 


(4) The applicant shall furnish, with his application, 

a complete set of his fingerprints and a recent 

credential-sized, fullface photograph of himself. The 

applicant's fingerprints shall be certified by an authorized 

law enforcement officer. 

(5) The department shall conduct a comprehensive 

investigation of each applicant, including his 

background. 

(6) The provisions of s. 112.011 do not apply to 

bail bondsmen or runners or to applicants for licensure 

as bail bondsmen or runners. 

(7) Any bail bondsman who holds a license on October 

1, 1982, issued under the provisions of this 

chapter is exempt from the certification and correspondence 

course provisions of this section. 

History.-s. 7, ch. 29621, 1955; s. 5, ch. 59·326; s. 9, ch. 61·406; s. 2, ch. 

61·119; s. 24, ch. 65·269; ... 13,35, ch. 69·106; s. 177, ch. 70·339; s. 3, ch. 76·168; 

s. I, cb. 77·96; s. I, ch. 77·116; 8. 61, ch. 77·121, 8. I, ch. 77·457; ... 2, 3, ch. 

81·318; ... 10, 71, 72, ch. 82-175. 

'Note.-Expires October I, 1984, pursuant to s. 72, cb. 82·175, and is sched· 

uled for review pursuant to s. 11.61 in advance of tbat date. 


1648.35 Professional bondsmen; qualifieations.-In 

addition to the qualifications prescribed 

in s. 648.34, to qualify as a professional bondsman an 

applicant shall: 

(1) File with his application for filing for examination 

and with each application for renewal or continuation 

of his license a detailed financial statement 

under oath; and

F.S.1983 BAIL BONDSMEN AND RUNNERS Ch.648 

(2) File with his application for filing for examination 

the rating plan he proposes to use in writing 

bail bonds; such rating plan must be approved prior 

to issuance of the license. 

History.-s. 8, ch. 29621, 1955; s. 10, ch. 61-406; s. 177, ch. 70-339; s. 3, ch. 

76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; 88. 71,72, ch. 82-175. 




'648.36 Bail bondsman's records.- 

(1) Every bail bondsman must maintain in his office 

such records of bail bonds executed or countersigned 

by him to enable the public to obtain all necessary 

information concerning such bail bonds for at 

least 3 years after the liability of the surety has been 

terminated. Such records shall be open to examination 

by the department or its agents at all times, and 

the department may at any time require the licensee 

to furnish to it, in such manner or form as it requires, 

any information concerning the bail bond business of 

such licensee. 

(2) On or before August 15 of each year, a sworn 

statement on a form furnished by the department 

shall be filed with the department by: 

(a) Every bail bondsman listing his assets and liabilities, 

and 

(b) Every bail bondsman or every firm or agency 

if the bail bondsman is employed by, associated with 

or is a member of such firm or agency, listing every 

outstanding or unpaid forfeiture, estreature, and 

judgment, together with the name of the court in 

which such forfeiture, estreature, and judgment is recorded, 

and submitting all other pertinent information 

requested by the department. 

History.-s. 11, ch. 61-406; 88. 13, 35, ch. 69-106; s. 177, ch. 70-339; s. 3, ch. 

76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 12,71,72, ch. 82-175. 




'648.365 Statistical reporting requirements. 

(1) Each insurer and each bail bondsman engaged 

in the bail bond business in this state shall transmit 

the following information, based on their Florida bail 

bond business, to the department semiannually, 

within 30 days after the end of the period, except 

that bail bondsmen shall not report the information 

specified in paragraphs (a), (m), and (n): 

(a) Commissions paid. 

(b) The number of, and the total dollar amount 

of, bonds executed. 

(c) The number of defendants for whom bonds 

were executed. 

(d) The number of, and the total dollar amount 

of, bonds declared forfeited. 

(e) The number of defendants for whom a bond 

was declared forfeited. 

(f) The number of, and the total dollar amount 

of, forfeitures discharged, remitted, or otherwise recovered 

prior to payment for any reason. 

(g) The number of, and the total dollar amount 

of, forfeitures discharged, remitted, or otherwise recovered 

prior to payment due to the apprehension of 

the defendant by the bail bondsman. 

(h) The number of, and the total dollar amount 

of, judgments entered. 

783 

(i) The number of, and the total dollar amount 

of, forfeitures paid and subsequently recovered from 

the court by discharge or remission or otherwise. 

(j) The number of, and the total dollar amount 

of, bonds for which collateral was accepted. 

(k) The actual realized value of collateral converted, 

excluding the cost of converting the collateral. 

(I) The cost of converting collateral. 

(m) The underwriting gain or loss. 

(n) The net investment gain or loss allocated to 

the flow of funds associated with Florida business. 

(0) Such additional information as the Insurance 

Commissioner may require in order to: 

1. Evaluate the reasonableness of rates or assure 

that such rates are not excessive or unfairly discriminatory. 

2. Evaluate the financial condition or trade practices 

of bail bondsmen and sureties executing bail 

bonds. 

3. Evaluate the performance of the commercial 

bail bond industry in accordance with appropriate 

criminal justice system goals and standards. 

Each bail bondsman shall submit a copy of such information 

to each insurer he represents. 

(2) The department shall provide a summary of 

the information provided by each insurer pursuant to 

subsection (1) in its annual report. 

History.-ss. 13, 72, ch. 82-175. 



'648.37 Runners; qualifications.- 

(1) Applications for filing for runners shall be 

submitted on forms furnished by the department. 

(2) In order for an applicant to qualify as a runner, 

it must affirmatively appear at the time of application 

and throughout the period of licensure that: 

(a) The applicant is a natural person who has 

reached the age of 18 years. 

(b) The applicant has been a bona fide resident 

of this state for more than 6 months last past; however, 

the department, in its discretion, may waive this 

residency requirement if the applicant is an employee 

under the supervision of a currently licensed 

bondsman, insurer, or general agent. 

(c) The applicant will be employed by only one 

bail bondsman, insurer, or general agent who will supervise 

the work of the applicant and be responsible 

for the runner's conduct in the bail bond business. 

(d) The application is endorsed by the appointing 

bail bondsman, insurer, or general agent who has obligated 

himself to supervise the runner's activities in 

his behalf. 

(e) The applicant is a person of high character 

and approved integrity and has never been convicted 

of or pleaded guilty or no contest to a felony or a 

crime involving moral turpitude. 

(f) The applicant has successfully completed a 

basic certification course in the criminal justice system, 

consisting of not less than 20 hours, approved by 


(3) A fee in an amount necessary to cover the cost 

of a credit report shall be submitted to the department 

with each application, which fee shall be depos-


ited to the credit of the Insurance Commissioner's 


(4) The applicant shall furnish, with his application, 

a complete set of his fingerprints and a recent 

credential-sized, fullface photograph of himself. The 

applicant's fingerprints shall be certified by an authorized 

law enforcement officer. 

(5) The applicant shall file with the department 

statements by at least three reputable citizens who 

are residents of the same counties in which the applicant 

proposes to be engaged as a runner. 

(6) The department shall conduct a comprehensive 

investigation of each applicant, including his 

background. 


61-406; s. 25, ch. 65-269; ss. 13,35, ch. 69-106; s. 177, ch. 70-339; s. 3, ch. 76-168; 

s. I, ch. 77-116; s. 62, ch. 77-121; s. I, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 14,71, 

72, ch. 82-175; s. 139, ch. 83-216. 




1648.38 Examination; time; place; fee; scope. 

(l)(a) If upon the basis of the completed application 

for examination and such further inquiry or investigation 

as the department may make concerning 

the fitness and qualifications of the applicant, the 

department is satisfied that, subject to any examination 

required to be taken and passed by the applicant 

for a license, the applicant is qualified to take the examination 

applied for and that all pertinent taxes 

and fees have been paid, it shall approve the application. 

(b) If upon the basis of the completed application 

for examination and such further inquiry or investigation 

as to the fitness and qualifications of the applicant, 

the department deems the applicant to be 

unfit or lacking in anyone or more of the required 

qualifications as specified in s. 648.34 as to limited 

surety agent, and ss. 648.34 and 648.35 as to professional 

bondsmen, the department shall disapprove 

the application. 

(2) Upon approval by the department the applicant 

shall be required to appear in person at a place 

hereinafter designated to take a written examination 

prepared by the department, testing his ability and 

qualifications to be a bail bondsman. 

(3) Each applicant shall become eligible for examination 

60 days after the date the application is 

received by the department in Tallahassee provided 

the department is satisfied as to the applicant's fitness 

to take the examination. Examinations shall be 

held in the department's offices where an adequate 

and designated examination room is available. Each 

applicant shall be entitled to take the examination at 

such of the said offices which is located closest to his 

place of residence, and he shall be entitled to notice 

of the time and place not less than 15 days prior to 

taking the examination. 

(4) A fee of $10 shall be submitted to the department 

with each application, such fee to be deposited 

to the credit of the Insurance Commissioner's Regulatory 

Trust Fund. The fee for filing application for 

examination shall not be subject to refund. 

(5) The failure of the applicant to secure approval 

of the department shall not preclude him from applying 

as many times as he desires, but no applica- 

784 

tion will be considered by the department within 60 

days subsequent to the date upon which the department 

denied the last application. 

(6) The failure of an applicant to pass an examination, 

after having been approved by the department 

to take the examination, shall not preclude him 

from taking subsequent examinations. A separate 

and additional application and fee for filing application 

for examination shall be filed with the department 

for each subsequent examination; provided, 

however, that at least 60 days must intervene between 

examinations. 

(7) The $10 fee for filing application for examination 

shall apply to each examination, but once an applicant 

has been approved by the department he will 

not have to file another application as set forth in ss. 

648.34 and 648.35 unless specifically so ordered by 

the department. Any bail bondsman who successfully 

passes an examination must be licensed within 24 

months from date of examination or be subject to another 

examination unless failure to be so licensed was 

due to military service, in which event the period 

within which another examination is not required 

may, in the department's discretion, be extended to 

12 months following the date of discharge from military 

service, if the military service does not exceed 3 

years, but in no event to extend under this clause for 

a period of more than 4 years. 

(8) The scope of the examination shall be as 

broad as the bail bond business. 

History.-s. 10, ch. 29621, 1955; s. 7, ch. 59-326; s. 13, ch. 61·406; 8. 2, ch. 

61-119; s. 26, ch. 65-269; ss. 13,35, ch. 69-106; s. 177, ch. 70-339, s. 3, ch. 76-168; 

s. I, ch. 77-457; s. 21, ch. 78-95; ss. 2,3, ch. 81-318; ss. 71, 72, ch. 82-175. 

'Note.-Repealed effective October I, 1984, by s. 72, ch. 82-175, and scheduled 



1648.388 Insurer must appoint general 

agent.-Any insurer regularly engaged in the execution 

of bail bonds in this state shall have a general 

agent in this state to supervise its agents. 

History.-ss. 3, 72, ch. 82-175. 



1648.39 Notice of appointment of agents; termination.- 

(1) Each insurer shall biennially, prior to September 

1, file with the department an alphabetical 

list of all agents appointed pursuant to this chapter, 

giving the type and class of license, name, and address 

of each licensee whose appointment and license 

in this state is being renewed or is to be continued in 

effect, accompanied by payment of the applicable renewal 

or continuation fees and taxes. Each such insurer 

which shall, subsequent to the filing of this list, 

expect to appoint an agent pursuant to this chapter 

in this state shall give notice thereof to the department 

along with a written application for license for 

such agent. All such appointments shall be subject to 

the issuance of licenses pursuant to this chapter to 

such agents. 

(2) An insurer terminating the appointment of an 

agent shall, within 30 days after such termination, 

file written notice thereof with the department, together 

with a statement that it has given or mailed 

notice to the agent. Such notice filed with the department 

shall state the reasons, if any, for such termina-


tion. Information so furnished the department shall 

be privileged and shall not be used as evidence in, or 

basis for, any action against the insurer or any of its 

representatives. 

(3) Each insurer shall, within 5 days after terminating 

the appointment of any agent, give written 

notice thereof to each clerk of the circuit court and 

sheriff with whom the agent is registered. 

History.-s. 11, ch. 29621, 1955; s. 8, ch. 59-326; 89.13,35, ch. 69-106; s. 177, 

ch. 70-339; s. 3, ch. 76-168; s. I, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 16, 71,72, ch. 

82-175. 



Note.- Former s. 903.47. 

1648.40 Notice of appointment of professional 

bondsmen; termination.- 

(1) Any person applying to qualify as a professional 

bondsman shall at the time of filing his application 

for examination also file with the department 

an application for license and upon the applicant's 

passing the examination for bail bondsmen the department 

shall promptly issue proper license. 

(2) Any professional bail bondsman who discontinues 

writing bail bonds during the period for which 

he is licensed shall notify the clerks of the circuit 

court and the sheriffs with whom he is registered and 

return his license to the department for cancellation 

within 30 days from such discontinuance. 

Hi8tory.-s. 12, ch. 29621, 1955; s. 9, ch. 59-326; ss. 13, 35, ch. 69-106; s. 177, 

ch. 70-339; s. 3, ch. 76-168; s. I, ch. 77-457; 89. 2, 3, ch. 81-318; ss. 71 , 72, ch. 

82-175. 

'Note.-Repealed effective October I, 1984, by s. 72, ch. 82-175, and scheduled 


N ote.- Former s. 903.48. 

'648.41 Notice of appointment of runners; 

termination.- 

(1) Every person duly licensed as a bail bondsman 

may appoint as a runner any person who holds 

or has qualified for a runner's license. Each bail 

bondsman shall biennially, prior to September 1, file 

with the department an alphabetical list of all runners 

appointed, giving the type and class of license, 

name, and address of each licensee whose appointment 

and license in this state is being renewed or is 

to be continued in effect, accompanied by payment of 

the applicable renewal or continuation fees and taxes. 

Each such bail bondsman who, subsequent to the 

filing of this list, expects to appoint additional persons 

as runners shall file written notice with the department 

and request licenses for the runners. 

(2) A bail bondsman, insurer, or general agent 

terminating the appointment of a runner shall, within 

30 days, file written notice thereof with the department, 

together with a statement that he has given or 

mailed notice to the runner. Such notice filed with 

the department shall state the reasons, if any, for 

such termination. Information so furnished the department 

shall be privileged and shall not be used as 

evidence in any action against the bail bondsman. 

Hi8tory.-s. 13, ch. 29621, 1955; s. 10, ch. 59-326; ss. 13, 35, ch. 69-106; s. 177, 

ch. 70-339; s. 3, ch. 76-168; 8. I, ch. 77-457; ... 2, 3, ch. 81-318; 89.18, 71 , 72, ch. 

82-175. 

'Note.- Expires October I, 1984, pursuant to s. 72, ch. 82-175, and is scheduled 


Note.- Former s. 903.49. 

1648.42 Registration of bail bondsmen.-No 

785 

bail bondsman shall become a surety on an undertaking 

unless he has registered in the office of the sheriff 

and with the clerk of the circuit court in the county 

in which the bondsman resides. He may register in a 

like manner in any other county, and any agent shall 

file a certified copy of his appointment by power of 

attorney from each insurer which he represents as 

agent with each of such officers. Registration and filing 

of a certified copy of renewed power of attorney 

shall be performed annually on October 1. The clerk 

of the circuit court and the sheriff shall not permit 

the registration of a bail bondsman unless such 

bondsman is currently licensed by the department. 

Hi8tory.-s. 14, ch. 29621, 1955; ss. 13,35, ch. 69-106; s. 177, ch. 70-339, s. 3, 

ch. 76-168; s. I, ch. 77-457; ss. 2, 3, ch. 81-318; ... 19,71,72, ch. 82-175. 




1648.421 Notice of change of address.-Each 

licensee under this chapter shall promptly notify in 

writing the department, insurer, and general agent 

and the clerk of each court in which he is registered 

of a change of his principal business address. 

Hi8tory.-ss. 20, 72, ch. 82-175. 



1648.43 Power of attorney; to be approved 

by department; filing of copies.- 

(1) Every insurer engaged in the writing of bail 

bonds through agents in this state shall submit and 

have approved by the department a sample power of 

attorney, which will be the only form of power of attorney 

the insurer will issue to agents in this state. 

(2) Every professional bondsman who authorizes 

a licensed professional bondsman directly employed 

by him to sign his name to bonds must file copy of 

the power of attorney given to such licensed bondsman 

with the sheriff and the clerk of the circuit court 

in the county in which he resides and with the department. 

Such power of attorney shall remain in full 

force and effect until written notice revoking the 

power of attorney has been received by the 

above-named officials. 

History.-s. 15, ch. 29621,1955; s.14, ch. 61-406; ss. 13,35, ch. 69-106; s.177, 

ch. 70-339; s. 3, ch. 76-168; s. I, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 21, 71, 72, ch. 

82-175. 



Note.-Former s. 903.5l. 

1648.44 Prohibitions.- 

(1) No bail bondsman or runner shall: 

(a) Suggest or advise the employment of, or name 

for employment, any particular attorney to represent 

his principal. 

(b) Solicit business in or about any place where 

prisoners are confined or in or about any court. 

(c) Pay a fee or rebate or give or promise anything 

of value to a jailer, policeman, peace officer, or 

committing magistrate or any other person who has 

power to arrest or to hold in custody or to any public 

official or public employee in order to secure a settlement, 

compromise, remission, or reduction of the 

amount of any bail bond or estreatment thereof. 

(d) Pay a fee or rebate or give anything of value 

to an attorney in a bail bond matter, except in defense 

of any action on a bond.


(e) Pay a fee or rebate or give or promise anything 

of value to the principal or anyone in his behalf. 

(f) Participate in the capacity of an attorney at a 

trial or hearing of one on whose bond he is surety. 

(g) Accept anything of value from a principal for 

providing a bail bond except the premium and transfer 

fee authorized by the department, except that the 

bondsman shall be permitted to accept collateral security 

or other indemnity from the principal or another 

person in accordance with the provisions of s. 

648.442. 

(2) The following persons or classes shall not be 

bail bondsmen, runners, or employees of a bail 

bondsman or a bail bond business and shall not directly 

or indirectly receive any benefits from the execution 

of any bail bond: 

(a) Jailers or persons employed in any jail. 

(b) Police officers or employees of any police department 

or law enforcement agency. 

(c) Committing magistrates, employees of a 

court, or employees of the clerk of any court. 

(d) Sheriffs and deputy sheriffs or employees of 

any sheriff's department. 

(e) Persons having the power to arrest or having 

anything to do with the control of federal, state, 

county, or municipal prisoners. 

(3) No person who has been convicted of or has 

pleaded guilty or no contest to any felony, regardless 

of whether adjudication of guilt was withheld, may 

participate as a director, officer, manager, or employee 

of any bail bond agency or office thereof or own 

shares in any closely held corporation which has any 

interest in any bail bond business. 

(4) A bail bondsman shall not sign nor countersign 

in blank any bond, nor shall he give a power of 

attorney to, or otherwise authorize, anyone to countersign 

his name to bonds unless the person so authorized 

is a licensed bondsman directly employed by 

the bondsman giving such power of attorney. 

(5) No bail bond agency shall advertise as or hold 

itself out to be a bail bond or surety company. 

(6) Except as between licensed bail bondsmen, no 

bail bondsman shall divide with others, or share in, 

any commissions payable on account of any bail 

bond. 

(7) No place of business, including a branch office, 

shall be established, opened, or maintained unless 

it is in the active full-time charge of a licensed 

bail bondsman. 

Hi.tory.-s. 16. ch. 29621. 1955; s. 177. ch. 70-339; s. 26. ch. 73-334; s. 3. ch. 

76-168; s. 1. ch. 77-119; s. 1. ch. 77-457; 88. 2. 3. ch_ 81-318; 88. 22. 71, 72, ch. 

82-175. 

'Note_-Expires October 1, 1984, pursuant to s. 72, cb. 82-175, and is scheduled 



1648.441 Furnishing supplies to unlicensed 

bail bondsmen prohibited; civil liability and 

penalty.- 

(1) No insurer, bail bondsman, runner, or permittee 

under this chapter shall furnish to any person any 

blank forms, applications, stationery, or other supplies 

to be used in soliciting, negotiating, or effecting 

bail bonds until such person has received from the 

department a license to act as a bail bondsman and 

has duly qualified as such. 

786 

(2) Any insurer, licensee, or permittee who furnishes 

to any bail bondsman or other person not 

named or appointed by the insurer represented any 

of the supplies mentioned in subsection (1) and accepts 

any bail bond business from or writes any bail 

bond business for such bail bondsman, person, or 

agency shall be subject to civil liability to any insured 

of such insurer to the same extent and in the same 

manner as if such bail bondsman or other person had 

been appointed, licensed, or authorized by the insurer, 

general agent, or bail bondsman to act in its or his 

behalf by the department. 

Hi.tory.-ss. 23, 72, ch. 82-175; s. 140, cb. 83-216. 



1648.442 Collateral security.- 

(1) Collateral security or other indemnity accepted 

by a bail bondsman, except a promissory note or 

an indemnity agreement, shall be returned upon final 

termination of liability on the bond. Such collateral 

security or other indemnity required by the bail 

bondsman must be reasonable in relation to the 

amount of the bond. No bail bondsman shall accept 

collateral security or other indemnity in excess of 

$25,000 per bond unless such security or indemnity 

consists of the following: 

(a) A promissory note; 

(b) An indemnity agreement; 

(c) A real property mortgage; or 

(d) Any other type of security approved by the 

department. The department shall approve other security 

only if, after considering the liquidity and other 

characteristics of the security, it determines that 

the security is of a type which increases the probability 

that the defendant will in fact appear in court or 

increases the probability that the defendant will be 

subsequently apprehended by the bail bondsman. 

(2) When a bail bondsman accepts collateral, he 

shall give a written, numbered receipt for it, and this 

receipt shall give in detail a full account of the collateral 

received. 

(3) Such collateral security shall be received in 

the insurer's name by the bail bondsman in his fiduciary 

capacity and, prior to any forfeiture of bail, 

shall be kept separate and apart from any other 

funds or assets of such bail bondsman. Such collateral 

security may be placed in an interest-bearing account 

to accrue to the benefit of the person giving the 

collateral security, and the bail bondsman shall not 

make any pecuniary gain on the collateral security 

deposited. The insurer shall be liable for all collateral 

received. 

(4) When the obligation ofthe surety on the bond 

or bonds has been released in writing by the court, 

the collateral shall be returned to the rightful owner 

as agreed in the indemnity agreement unless another 

disposition is provided for by legal assignment of the 

right to receive the collateral to another person. 

(5) If a forfeiture occurs, the agent or insurer 

shall give 10 days' written notice of intent to convert 

the collateral deposit into cash to satisfy the forfeiture 

to the indemnitor and principal. Notice shall be 

sent by certified mail to the last known address of the 

indemnitor and principal.


(6) The bail bondsman or insurer must convert 

the collateral to cash within a reasonable period of 

time and return that which is in excess of the face 

value of the bond plus the actual and reasonable expenses 

of converting the collateral to cash. In no 

event shall these expenses exceed 10 percent of the 

face value of the bond. However, upon motion and 

proof that the actual, reasonable expenses exceed 10 

percent, the court may allow recovery of the full 

amount of such actual, reasonable expenses. 

(7) No bail bondsman or insurer shall solicit or 

accept a waiver of any of the provisions of this section 

or enter into any agreement as to the value of the 

collateral. 

History.-ss. 24, 72, ch. 82-175; s. 141, ch. 83-216. 



1648.45 Actions against a license or eligibility 

to hold a license.- 

(1) The department shall immediately temporarily 

suspend any license issued under this chapter 

when the licensee has been found guilty of, or has 

pleaded guilty or no contest to, a crime involving moral 

turpitude or a felony, whether or not a judgment 

or conviction has been entered, during a pending appeal. 

(2) The department shall deny, suspend, revoke, 

or refuse to renew any license issued under this chapter 

or the insurance code, and it shall suspend or revoke 

the eligibility of any person to hold a license under 

this chapter or the insurance code, for any violation 

of the laws of this state relating to bailor any violation 

of the insurance code or for any of the following 

causes: 

(a) Lack of one or more of the qualifications specified 

in this chapter for a license or permit. 

(b) Material misstatement, misrepresentation, or 

fraud in obtaining a license or permit, or in attempting 

to obtain a license or permit. 

(c) Failure to pass to the satisfaction of the department 

any examination required under this chapter. 

(d) Willful use, or intended use, of the license or 

permit to circumvent any of the requirements or prohibitions 

of this chapter or the insurance code. 

(e) Demonstrated lack of fitness or trustworthiness 

to engage in the bail bond business. 

(f) Demonstrated lack of reasonably adequate 

knowledge and technical competence to engage in the 

transactions authorized by the license or permit. 

(g) Fraudulent or dishonest practices in the conduct 

of business under the license or permit. 

(h) Misappropriation, conversion, or unlawful 

withholding of moneys belonging to a surety, a principal, 

or others and received in the conduct of business 

under a license. 

(i) Rebating or offering to rebate, or unlawfully 

dividing or offering to divide, any commission, in the 

case of a limited surety agent, or premiums, in the 

case of a professional bondsman. 

(j) Willful failure to comply with or willful violation 

of any proper order or rule of the department or 

willful violation of any provision of this chapter or 

the insurance code. 

787 

(k) Having been found guilty of, or having pleaded 

guilty or no contest to, a crime involving moral 

turpitude or a felony, whether or not a judgment or 

conviction has been entered. 

(I) Demonstrated lack of good faith in carrying 

out contractual obligations and agreements, as provided 

to the satisfaction of the Insurance Commissioner. 

(3) The department may deny, suspend, revoke, 

or refuse to renew any license issued under this chapter 

or the insurance code, or it may suspend or revoke 

the eligibility of any person to hold a license under 

this chapter or the insurance code, for any violation 

of the laws of this state relating to bail or any violation 

of the insurance code or for any of the following 

causes: 

(a) Any cause for which issuance of the license 

could have been refused had it then existed and been 

known to the department. 

(b) Violation of any law relating to the business 

of bail bond insurance or violation of any provision of 

the insurance code. 

(c) Failure or refusal, upon demand, to pay over 

to any insurer he represents or has represented any 

money coming into his hands which money belongs to 

the insurer. 

(d) Showing himself to be a source of injury or 

loss to the public or detrimental to the public interest 

or being found by the department to be no longer 

carrying on the bail bond business in good faith. 

(e) Interfering or attempting to interfere with the 

administration of justice. 

(4) Grounds for revocation of the license exist 

when any licensee is adjudged bankrupt or insolvent. 

History.-s.17, ch. 29621, 1955; s. 3, ch. 57-63; s.15, ch. 61-406; ss. 13,35, ch. 

69-106; s. 177, ch. 70-339; s. 25, ch. 71-86; s. 167, ch. 73-333; s. 3, ch. 76-168; s. 1, 

ch. 77-457; ss. 2, 3, ch. 81-318; ss. 25, 71, 72, ch. 82-175; s. 142, cb. 83-216. 

'Note.-Expires October 1, 1984, pursuant to s. 72, ch. 82-175, and is scbeduled 



cf.-s. 112.011 Felons; removal of disqualifications for employment, exceptions. 

1648.46 Procedure for suspension or revocation 

of eligibility or for denial, revocation, suspension, 

or refusal to renew license.- 

(1) If any bail bondsman or runner is convicted 

by a court of a violation of any of the provisions of 

this chapter or is convicted of or has pleaded guilty or 

no contest to any felony, regardless of whether adjudication 

of guilt was withheld, the license or eligibility 

to hold a license of such individual shall thereby 

be deemed to be immediately revoked. 

(2) If after an investigation or upon other evidence 

the department has reason to believe that 

there may exist anyone or more causes for suspension 

of, revocation of, or refusal to renew or continue 

the license of any bail bondsman or runner as such 

causes are specified in s. 648.45 or that a bail bondsman 

or runner has been guilty of violating any of the 

laws of this state relating to bail bonds, or that any licensee 

is no longer eligible to hold a license, the department 

may suspend, revoke, or refuse to renew or 

continue such license. 

History.-s. 18, ch. 29621, 1955; s. 16, ch. 61-406; 88.13, 35, ch. 69-106; s. 177, 

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, 

3, ch. 81-318; ss. 26, 71, 72, ch. 82-175. 

'Note,-Expires October 1, 1984, pursuant to s. 72, ch. 82-175, and is scbeduled 


Note.-Former s. 903.54.


the ground for the suspension or revocation may likewise 

be suspended or revoked. 

(3) No person whose license as a bail bondsman 

or runner has been revoked or suspended shall be 

employed by any bail bondsman, have any ownership 

interest in any business involving bail bonds, or have 

any financial interest of any type in any bail bond 

business during the period of revocation or suspension. 

History.-s. 20, ch. 61-406; ss. 13,35, ch. 69-106; s. 177, ch. 70-339; s. 28, ch. 

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, 

71, 72, ch. 82-175. 




1648.51 Surrender of license or permit.- 

(1) Though issued to a licensee all certificates of 

licenses issued under this chapter are at all times the 

property of the state, and upon notice of any suspension, 

revocation, refusal to renew, expiration or other 

termination of the license, the licensee or other person 

having either the original or copy of the license 

shall promptly deliver the certificate of license or 

COllY thereof to the department for cancellation. 

(2) As to any certificate of license lost, stolen or 

destroyed while in the possession of any such licensee 

or person, the department may accept in lieu of return 

of the certificate the affidavit of the licensee or 

other person responsible for or involved in the safekeeping 

of such certificate, concerning the facts of 

such loss, theft, or destruction. Willful falsification of 

any such affidavit shall, upon conviction, be subject 

to .Qunishment as for perjury. 

(3) This section shall not be deemed to require 

the delivery to the department of any certificate of license 

which, as shown by specific date of expiration 

on the face of the license, has already expired, unless 

such delivery has been requested by the department. 


76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 71, 72, ch. 82-175. 



N ote.-Former s. 903.545. 

1648.52 Administrative fin e.- 


causes exist for the suspension of, revocation of, or 

refusal to renew or contmue any license issued under 

this chapter, the department may, in its discretion, in 

lieu ·of or in addition to such suspension, revocation, 

or refusal, and except on a second offense, impose 

upon the licensee an administrative penalty in an 

amount up to $1,000. The administrative penalty 

may, in the discretion of the department, be increased 

by an amount equal to any commissions or 

other pecuniary benefits received by or accruing to 

the credit of the licensee in connection with any 

transaction related to the grounds for suspension, 

revocation, or refusal. 

(2) The department may allow the licensee a reasonable 

period/ not to exceed 30 days, within which 

to pay to the aepartment the amount of the penalty 

so Imposed. If the licensee fails to pay the penalty in 

its entirety to the department at Its office at Tallahassee 

within the period so allowed, the licenses of 

the licensee shall stand suspended, revoked, or renewal 

or continuation refused, as the case may be, 

upon expiration of such period. 

History.-B. 22, ch. 61-406; s. 2, ch. 61-119; s. 30, ch. 65-269; ss. 13, 35, ch. 

69-106; s. 177, ch. 70-339; s. 3, ch. 76-168; B. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 

3, ch. 81-318; ss. 31, 71, 72, ch. 82-175. 



Note.-Former B. 903.546. 

789 

1648.53 Probation.- 


causes exist for a fine, or for the suspension of, revocation 

of, or refusal to renew or continue any license 

issued under this chapter, the department may in addition 

to any other penalties required herein, in its 

discretion, in lieu of such suspension, revocation, or 

refusal or in connection with any administrative 

monetary penalty imposed under s. 648.52, place the 

offending licensee on probation for a period, not to 

exceed 2 years, as specified by the department in its 

order. 

(2) As a condition to such probation or in connection 

therewith, the department may specify in its order 

reasonable terms and conditions to be fulfilled by 

the probationer during the probation period. If during 

the probation period the department has good 

cause to believe that the probationer has violated 

such terms and conditions or any of them, it shall 

forthwith suspend, revoke, or refuse to renew or continue 

the license of the probationer, as upon the original 

causes referred to in subsection (1). 


76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, cb. 81-318; ss. 32, 71, 72, ch. 

82-175. 


for review pursuant to B. 11.61 in advance of tbat date. 


1648.55 All bondsmen of same agency; licensed 

by same companies.-All bail bondsmen 

who are members of the same agency, partnership, 

corporation or association shall be licensed for the 

same companies. If any member of such agency, partnership, 

corporation or association is licensed as a 

professional bondsman, all members thereof shall be 

so licensed. It shall be the responsibility of each company 

to see that each agent in an agency is licensed to 

represent that particular company. 


76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 71, 72, ch. 82-175. 

'Note.-Repealed effective October 1, 1984, by s. 72, ch. 82-175, and scbeduled 



1648.56 Exemption.-Nothing in ss. 

648.25-648.57 shall be construed as to prevent any 

duly licensed general lines agent as defined in s. 

626.041 of the Insurance Code, from writing bail 

bonds for any company authorized to write fidelity 

and surety bonds which he represents as agent, provided 

such agent shall be subject to and governed by 

all laws, rules, and regulations relating to bail bondsmen 

when engaged in the activities thereof. 

History.-s. 21, ch. 29621,1955; s. 12, ch. 59-326; s. 177, ch. 70-339; s. 3, cb. 

76-168; s. 1, ch. 77-457; BS. 2, 3, ch. 81-318; SB. 71, 72, ch. 82-175. 

'Note.-Repealed effective October 1, 1984, by B. 72, ch. 82-175, and scheduled 



1648.57 Penalty.-Any person or corporation, 

who is found guilty of violating any of the provisions 

of this chapter shall be guilty of a misdemeanor of 

the second degree, punishable as provided in s. 

775.082 or s. 775.083. 

History.-s. 22, ch. 29621, 1955; B. 177, ch. 70-339; s. 867, ch. 71-136; s. 3, ch. 

76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81·318; ss. 71, 72, ch. 82-175. 



Note.-Former s. 903.58.


1648.571 Failure to return collateral; penal· 

ty.-A bondsman who has taken collateral as security 

for a bail bond shall, upon demand, return the collateral 

to the person from whom it was received within 

21 days after the bail bond has been discharged in 

writing by the court. Failure to return collateral under 

these terms shall be punishable: 

(1) In the event the collateral is of a value of less 

790 

than $100, as provided in s. 775.082(4)(a). 

(2) In the event the collateral is of a value of $100 

or more as provided in s. 775.082(3)(d). 

(3) In the event the collateral is of a value of 

$1,500 or more, as provided in s. 775.082(3)(c). 

(4) In the event the collateral is of a value of 

$10,000 or more, as provided in s. 775.082(3)(b). 

Hi.tory.-88. 36, 72, ch. 82-175. 


for review pursuant to s. 11.61 m advance of that date.

Ch.650 SOCIAL SECURITY FOR PUBLIC EMPLOYEES F.S.1983 

650.03 Federal-state agreement; interstate 

instrumentalities.- 

(1) The state agency with the approval of the 

Governor, is hereby authorized to enter on behalf of 

the state into an agreement with the Federal Security 

Administrator, consistent with the terms and provisions 

of this chapter, for the purpose of extending the 

benefits of the Federal Old-age and Survivors Insurance 

System to employees of the state or any political 

subdivision thereof with respect to services specified 

in such agreement which constitutes "employment" 

as defined in s. 650.02. Such agreement may contain 

such provisions relating to coverage, benefits, contributions, 

effective date, modification and termination 

of the agreement, administration, and other appropriate 

provisions as the state agency and the Secretary 

of Health, Education and Welfare shall agree 

upon, but, except as may be otherwise required by or 

under the Social Security Act as to the services to be 

covered, such agreement shall provide in effect that: 

(a) Benefits will be provided for employees whose 

services are covered by the agreement (and their dependents 

and survivors) on the same basis as though 

such services constituted employment within the 

meaning of Title II of the Social Security Act; 

(b) The state will pay to the Secretary of the 

Treasury, at such time or times as may be prescribed 

under the Social Security Act, contributions with respect 

to wages (as defined in s. 650.02), equal to the 

sum of the taxes which would be imposed by the Federal 

Insurance Contributions Act if the services covered 

by the agreement constituted employment within 

the meaning of that act. 

(c) Such agreement shall be effective with respect 

to services in employment covered by the agreement 

performed after January 1, 1951; 

(d) All services which constitute employment as 

defined in s. 650.02 and are performed in the employ 

of the state by employees of the state, shall be covered 

by the agreement. 

(e) All services which: 

1. Constitute employment as defined in s. 650.02; 

2. Are performed in the employ of a political subdivision 

of the state; and 

3. Are covered by a plan which is in conformity 

with the terms of the agreement and has been approved 

by the state agency under s. 650.05, shall be 

covered by the agreement. 

(f) As modified, the agreement shall include all 

services described in either paragraph (d) or paragraph 

(e) of this subsection and performed by individuals 

to whom s. 218(c)(3)(C) of the Social Security 

Act is applicable, and shall provide for election by 

the employer as to whether the service of any such individual 

shall continue to be covered by the agreement 

in case he thereafter becomes eligible to be a 

member of a retirement system. 

(g) As modified, the agreement shall include all 

services described in either paragraph (d) or paragraph 

(e) of this subsection and performed by individuals 

in positions covered by a retirement system 

with respect to which the Governor has issued a certificate 

to the Secretary of Health, Education, and 

Welfare pursuant to s. 218(d)(3) of the Social Security 

Act, as amended. 

792 

(2) Any instrumentality jointly created by this 

state and any other state or states is hereby authorized, 

upon the granting of like authority by such other 

state or states: 

(a) To enter into an agreement with the Secretary 

of Health, Education, and Welfare whereby the benefits 

of the Federal Old-age and Survivors Insurance 

System shall be extended to employees of such instrumentality; 

(b) To require its employees to pay (and for that 

purpose to deduct from their wages) contributions 

equal to the amounts which they would be required 

to pay under s. 650.04(1) if they were covered by an 

agreement made pursuant to subsection (1); and 

(c) To make payments to the Secretary of the 

Treasury in accordance with such agreement, including 

payments from its own funds, and otherwise to 

comply with such agreements. Such agreement shall, 

to the extent practicable, be consistent with the 

terms and provisions of subsection (1) and other provisions 


(3) Where a retirement system established by the 

state or any political subdivision thereof covers positions 

of policemen or firemen, or both, and whether 

or not other positions are covered by such system, 

there shall, for the purposes of this chapter, be 

deemed to be a separate retirement system with respect 

to the positions of policemen and a separate retirement 

system with respect to the positions of firemen. 

(4) For the purposes of this chapter any retirement 

system established by the state or any political 

subdivision thereof, which, on, before, or after the 

date of enactment of this subsection is divided into 

two divisions or parts, one of which is composed of 

positions of members of such system who desire coverage 

under an agreement under this chapter and the 

other of which is composed of positions of members 

of such system who do not desire such coverage, shall, 

upon the Governor's authorization of a referendum 

for either division or part, be deemed to be a separate 

retirement system with respect to each such division 

or part. The positions of individuals who become 

members of such system after such coverage is extended 

shall be included in such division or part composed 

of members desiring such coverage. The position 

of any individual which is covered by any retirement 

system to which the preceding two sentences 

are applicable shall, if such individual is ineligible to 

become a member of such system on the date of enactment 

of this subsection or, if later, the day he first 

occupies such position, be deemed to be covered by 

the separate retirement system consisting of the positions 

of members of the division or part who do not 

desire coverage under this chapter. 

(5) For purposes of this chapter employees of the 

institutions of higher learning under the Board of Regents 

who are covered by the Teachers' Retirement 

System shall be deemed to be covered by a separate 

retirement system for each institution. 

(6) If a retirement system covers positions of employees 

of a hospital which is an integral part of a 

municipal political subdivision, then, for the purposes 

of this chapter, there shall be deemed to be a 

separate retirement system for the employees of such 

hospital. 

Hi.tory.-8. 3, ch. 26841 , 1951; s. 4, ch. 28246, 1953; 88. 6, 7, 8, 9, ch. 29824, 

1955; 8. 1, ch. 57-226; 8. 1, ch. 57-780; s. 1, ch. 61-138; 8. 2, ch. 63-204.

F.S.1983 SOCIAL SECURITY FOR PUBLIC EMPLOYEES Ch.650 

650.04 Contributions by state employees. 

(1) Every employee of the state whose services 

are covered by an agreement entered into under s. 

650.03 shall be required to pay for the period of such 

coverage, into the Social Security Contribution Trust 

Fund established by s. 650.06, contributions, with respect 

to wages as defined in s. 650.02, equal to the 

amount of the employee tax which would be imposed 

by the Federal Insurance Contributions Act if such 

services constituted employment within the meaning 

of that act. Such liability shall arise in consideration 

of the employee's retention in the service of the state, 

or his entry upon such service, after the enactment of 

this chapter. 

(2) The contribution imposed by this section 

shall be collected by deducting the amount of the 

contribution from wages as and when paid, but failure 

to make such deduction shall not relieve the em 

ployee from liability for such contribution. 

(3) If more or less than the correct amount of the 

contribution imposed by this section is paid or deducted 

with respect to any remuneration, proper adjustments, 

or refund if adjustment is impracticable, 

shall be made, without interest, in such manner and 

at such times as the state agency shall prescribe. 

Hi8tory.-s. 4, ch. 26841, 1951; s. 10, ch. 29824, 1955; s. 2, ch. 61-119. 

assure the correctness and verification of such reports; 

and 

(f) It authorizes the state agency to terminate the 

plan in its entirety, in the discretion of the state 

agency, if it finds that there has been a failure to 

comply substantially with any provisions contained 

in such plan, such termination to take effect at the 

expiration of such notice and on such conditions as 

may be provided by regulations of the state agency 

and may be consistent with the provisions of the Social 

Security Act. 

(2) The state agency shall not finally refuse to approve 

a plan submitted by a political subdivision under 

subsection (1), and shall not terminate an approved 

plan, without reasonable notice and opportunity 

for hearing to the political subdivision affected 

thereby. Any final decision of the state agency shall 

be subject to proper judicial review. 

(3)(a) Each political subdivision as to which a 

plan has been approved under this section shall pay 

into the Social Security Contribution Trust Fund, 

with respect to wages (as defined in s. 650.02), at such 

time or times as the state agency may by regulation 

prescribe, contributions in the amounts and at the 

rates specified in the applicable agreement entered 

into by the state agency under s. 650.03. 

(b) Each political subdivision required to make 

payments under paragraph (a) is authorized, in consideration 

of the employee's retention in, or entry 

650.05 Plans for coverage of employees of 

political subdivisions.- 

(1) Each political subdivision of the state is hereby 

authorized to submit for approval by the state 

agency a plan for extending the benefits of Title II of 

the Social Security Act, in conformity with the applicable 

provisions of such act, to employees of such political 

subdivisions. Each such plan and any amendment 

thereof shall be approved by the state agency if 

it is found that such plan, or such plan as amended, 

is in conformity with such requirements as are provided 

in regulations of the state agency, except that 

upon, employment after enactment of this chapter, to 

impose upon each of its employees, as to services 

which are covered by an approved plan, a contribu 

tion with respect to his wages as defined in s. 650.02 

not exceeding the amount of the employee tax which 

would be imposed by the Federal Insurance Contri 

butions Act if such services constituted employment 

within the meaning of that act, and to deduct the 

amount of such contribution from his wages as and 

when paid. Contributions so collected shall be paid 

into the Social Security Contribution Trust Fund in 

partial discharge of the liability of such political subno 

such plan shall be approved unless: 

(a) It is in conformity with the requirements of 

the Social Security Act and with the agreement endivision 

or instrumentality under paragraph (a). Failure 

to deduct such contribution shall not relieve the 

employee or employer of liability therefor. 

tered into under s. 650.03; 

(b) It provides that all services which constitute 

employment as defined in s. 650.02 are performed in 

the employ of the political subdivisions by employees 

thereof, shall be covered by the plan, except such of 

those services set forth in s. 650.02(2)(c) as the political 

subdivision specifically elects to exclude; 

(c) It specifies the source or sources from which 

the funds necessary to make the payments required 

by paragraph (3)(a) and by subsection (4) are expected 

to be derived and contains reasonable assurance 

that such sources will be adequate for such purpose; 

(d) It provides for such methods of administration 

of the plan by the political subdivision as are 

found by the state agency to be necessary for the 

proper and efficient administration of the plan; 

(e) It provides that the political subdivision will 

make such reports, in such form and containing such 

information, as the state agency may from time to 

time require, and comply with such provisions as the 

state agency or the Secretary of Health, Education, 

and Welfare may from time to time find necessary to 

(4) Delinquent payments due under paragraph 

(3)(a) may, with interest of 1 percent for each calen 

dar month or part thereof past the due date, be re 

covered by action in a court of competent jurisdiction 

against the political subdivision liable therefor or 

shall, at the request of the state agency, be deducted 

from any other moneys payable to such subdivision 

by any department or agency of the state. 

(5) Each political subdivision as to which a plan 

has been approved shall be liable to the state agency 

for a proportionate part of the cost of administering 

this chapter. Such proportionate cost shall be computed 

and paid in accordance with such regulations 

relating thereto as may be adopted by the state agen 

cy and shall be deposited in the Social Security Ad 

ministration Trust Fund; and, if any such payment is 

not made when due, the amount thereof, with inter 

est of 0.5 percent for each calendar month or part 

thereof past the due date, shall, upon request of the 

state agency, be deducted from any other moneys 

payable to such political subdivision by any officer, 

department, or agency of the state, and forthwith 

793

F.S.1983 SOCIAL SECURITY FOR PUBLIC EMPLOYEES Ch.650 

650.10 Referenda and certification.- 

(1) The Governor, or an official of the state designated 

by him for the purpose, is empowered to authorize 

and supervise the conduct of employee referenda 

prescribed by s. 213(d)(3) of the Social Security 

Act, on the question of whether service in positions 

covered by a retirement system established by the 

state or by a political subdivision thereof should be 

excluded from or included under an agreement under 

this chapter. The notice of referendum required by s. 

218(d)(3)(C) of the Social Security Act to be given to 

employees shall contain or shall be accompanied by a 

statement, in such form and such detail as the agency 

795 

or individual designated to supervise the referendum 

shall deem necessary and sufficient, to inform the 

employees of the rights which will accrue to them and 

their dependents and survivors, and the liabilities to 

which they will be subject, if their services are included 

under an agreement under this chapter. 

(2) Upon receiving evidence satisfactory to him 

that with respect to any such referendum the conditions 

specified in s. 218(d)(3) of the Social Security 

Act have been met, the Governor, or an official of the 

state designated by him for the purpose, shall so certify 

to the Secretary of Health, Education and Welfare. 

Hlstory.-8. 12, ch. 29824, 1955; 8. 2, ch. 61-138.

Ch.651 CONTINUING CARE CONTRACTS F.S.1983 

651.011 

651.015 

651.021 

651.022 

651.023 

651.026 

651.033 

651.035 

651.041 

651.051 

651.055 

651.061 

651.065 

651.071 

651.081 

651.085 

651.091 

651.095 

651.105 

651.106 

651.107 

651.108 

651.111 

651.114 

651.121 

651.125 

651.13 

651.131 

651.132 

651.133 

651.134 

Definitions. 

Administration; forms; fees; rules; fines. 


Provisional certificate of authority; application. 

Certificate of authority; application; renewal. 

Annual statements. 

Escrow accounts. 

Minimum liquid reserve requirements. 

Use of reserves; investment purposes. 

Maintenance of assets and records in state. 

Agreements; right to rescind. 

Dismissal or discharge of resident; refund. 

Waiver of statutory protection. 

Agreements as preferred claims on liquidation. 

Continuing care facilities residents' organizations. 

Quarterly meetings between residents and 

the governing body of the facility. 

Availability, distribution, and posting of 

reports and records; requirement of full 

disclosure. 

Advertisements; requirements; penalties. 

Examination and inspections; fines. 


or revocation of certificate of authority. 

Duration of suspension; obligations during 

suspension period; reinstatement. 

Administrative fines. 

Requests for inspections. 

Delinquency proceedings. 

Advisory council. 

Criminal penalties; injunctive relief. 

Civil action. 

Actions under prior law. 

Amendment or renewal of existing contracts. 

Provisional certificates issued under prior 

law. 

Investigatory records. 

'651.011 Definitions.-For the purposes of this 

chapter, the term: 

(1) "Advisory council" means the Continuing 

Care Advisory Council established by s. 651.121. 

(2) "Continuing care" or "care" means furnishing 

pursuant to an agreement shelter, food, and either 

nursing care or personal services as defined in s. 

400.402(8), whether such nursing care or personal 

services are provided in the facility or in another setting 

designated by the agreement for continuing care, 

to an individual not related by consanguinity or affinity 

to the provider furnishing such care, upon payment 

of an entrance fee. Other personal services provided 

shall be designated in the continuing care 

agreement. Agreements to provide continuing care 

include agreements to provide care for any duration, 

CHAPTER 651 

CONTINUING CARE CONTRACTS 

796 

including agreements that are terminable by either 

party. 



(4) "Entrance fee" means an initial or deferred 

payment of a sum of money or property made as full 

or partial payment to assure the resident a place in a 

facility. An accommodation fee, admission fee, or 

other fee of similar form and application shall be considered 

to be an entrance fee. 

(5) "Facility" means a place in which it is undertaken 

to provide continuing care. 

(6) "Licensed" means that the provider has obtained 

a certificate of authority from the department. 

(7) "Provider" means the owner or operator, 

whether a natural person, partnership or other unincorporated 

association, however organized, trust, or 

corporation, of an institution, building, residence, or 

other place, whether operated for profit or not, which 

owner or operator undertakes to provide continuing 

care for a fixed or variable fee, or for any other remuneration 

of any type, whether fixed or variable, for 

the period of care, payable in a lump sum or lump 

sum and monthly maintenance charges or in installments. 

(8) "Records" means the permanent financial, directory, 

and personnel information and data maintained 

by a provider pursuant to this chapter. 

(9) "Resident" means a purchaser of or a nominee 

of, or a subscriber to, a continuing care agreement. 

Such an agreement may not be construed to give the 

resident a part ownership of the facility in which the 

resident is to reside, unless expressly provided for in 

the agreement. 

History.-s. 1, eli. 77-323; s. 170, cb. 79-164; ss. 1, 25, cb. 81-292; s. 2, ch. 

81-318; s. 3, ch. 83-265; ss. 1, 31, 33, 35, ch. 83-328. 



'651.015 Administration; forms; fees; rules; 

fines.-The administration of this chapter is vested 

in the department, which shall: 

(1) Prepare and furnish all forms necessary under 

the provisions of this chapter in relation to applications 

for certificates of authority or renewals thereof, 

statements, examinations, and other required reports. 

(2) Collect in advance, and the applicant shall 

pay in advance, the following fees: 

(a) At the time of filing an application for a certificate 

of authority, an application fee in the amount 

of $75 for each facility. 

(b) At the time of renewal of a certificate of authority, 

a renewal fee in the amount of $75 for each 

year or part thereof for each facility where continuing 

care is provided. 

(c) A late fee in an amount equal to 50 percent of 

the renewal fee in effect on the last preceding regular 

renewal date. In addition to any other penalty that 

may be provided for under this chapter, the department 

may levy a fine not to exceed $50 a day for each 

day of noncompliance.

F.S.1983 CONTINUING CARE CONTRACTS Ch.651 

(d) An investigation fee, to be paid upon original 

application, in the amount of $100 for each facility 

where continuing care is provided. Upon application 

subsequent to the denial of an earlier application or 

subsequent to the revocation, suspension, or surrender 

of a certificate of authority, the department shall 

collect in advance, and the applicant shall pay in advance, 

a second investigation fee in the amount of 

$100. 

(e) For the issuance of the provisional certificate 

of authority, a fee in the amount of $50. 

(3) Adopt rules, within the standards of this 

chapter, necessary to effect the purposes of this chapter. 

Specific provisions in this chapter relating to any 

subject shall not preclude the department from 

adopting rules concerning such subject if such rules 

are within the standards and purposes of this chapter. 

(4) Impose administrative fines and penalties 

pursuant to this chapter. 

(5) Deposit all fees and fines collected under the 

provisions of this chapter into the Insurance Commissioner's 


History.-s. 1, ch. 77-323; s. 249, ch. 79-400; ss. 2, 25, ch. 81-292; s. 2, ch. 

81-318; s. 3, ch. 83-265; ss. 2, 31, 33, 35, ch. 83-328. 



1651.021 Certificate of authority required. 

(1) No person may engage in the business of providing 

continuing care or issuing continuing care 

agreements or construct a facility for the purpose of 

providing continuing care in this state without a certificate 

of authority therefor obtained from the department 

as provided in this chapter. This subsection 

shall not be construed to prohibit preparation of the 

construction site or construction of a model residence 

unit for marketing purposes, or both. 

(2)(a) Before commencement of construction for 

any expansion of a certificated facility equivalent to 

the addition of at least 20 percent of existing units, 

written approval must be obtained from the department. 

This provision does not apply to construction 

for which a certificate of need, as provided in chapter 

381, is required. 

(b) The application for such approval shall be on 

forms provided by the department. The application 

shall include the feasibility study required by ss. 

651.022(3) and 651.023(1)(b) and such other information 

as required by s. 651.023. 

(c) In determining whether an expansion should 

be approved, the department shall utilize the criteria 

provided in ss. 651.022(5) and 651.023(5). 


83-265; ss. 3, 31, 33, 35, ch. 83-328. 



1651.022 Provisional certificate of authority; 

application.- 

(1) Each applicant for a certificate of authority 

shall first apply for and obtain a provisional certificate 

of authority pursuant to this section. 

(2) The application for a provisional certificate of 

authority shall be on a form prescribed by the department 

and shall contain, or be accompanied by, at 

least the following information 2and items: 

797 

(a) If the applicant or provider is a corporation, a 

copy of the charter; if the applicant or provider is a 

partnership or other unincorporated association, a 

copy of the partnership agreement, articles of association, 

or other membership agreement; and, if the applicant 

or provider is a trust, a copy of the trust 

agreement or instrument. 

(b) The full names, residences, and business addresses 

of: 

1. The proprietor, if the applicant or provider is 

an individual. 

2. Every partner or member, if the applicant or 

provider is a partnership or other unincorporated association, 

however organized, having fewer than 50 

partners or members, together with the business 

name and address of the partnership or other organization. 

3. The principal partners or members, if the applicant 

or provider is a partnership or other unincorporated 

association, however organized, having 50 or 

more partners or members, together with the business 

name and business address of the partnership or 

other organization. If such unincorporated organization 

has officers and a board of directors, the full 

name and business address of each officer and director 

may be set forth in lieu of the full name and business 

address of its principal members. 

4. The corporation and each officer and director 

thereof, if the applicant or provider is a corporation. 

5. Every trustee and officer, if the applicant or 

provider is a trust. 

6. The manager, whether an individual, corporation, 

partnership, or association. 

7. Any stockholder holding at least a lO-percent 

interest in the operations of the facility in which the 

care is to be offered. 

8. Any person whose name is required to be provided 

in the application under the provisions of this 

paragraph and who owns any interest in or receives 

any remuneration from, either directly or indirectly, 

any professional service firm, association, trust, partnership, 

or corporation providing goods, leases, or 

services to the facility for which the application is 

made, with a real or anticipated value of $500 or 

more, and the name and address of the professional 

service firm, association, trust, partnership, or corporation 

in which such interest is held. The applicant 

shall describe such goods, leases, or services and the 

probable cost to the facility or provider and shall describe 

why such goods, leases, or services should not 

be purchased from an independent entity. 

9. Any person, corporation, partnership, association, 

or trust owning land or property leased to the 

facility, along with a copy of the lease agreement. 

10. Any affiliated parent or subsidiary corporation 

or partnership. 

(c)1. Evidence that the applicant is reputable and 

of responsible character. If the applicant is a firm, association, 

organization, partnership, business trust, 

corporation, or company, the form shall require evidence 

that the members or shareholders are reputable 

and of responsible character, and the person in 

charge of providing care under a certificate of authority 

shall likewise be required to produce evidence of 

being reputable and of responsible character.


2. Evidence satisfactory to the department of the 

ability of the applicant to comply with the provisions 

of this chapter and with rules adopted by the department 

pursuant to this chapter. 

3. A statement of whether a person identified in 

the application for a provisional certificate of authority 

or the administrator or manager of the facility, if 

such person has been designated, or any such person 

living in the same location: 

a. Has been convicted of a felony or has pleaded 

nolo contendere to a felony charge, or has been held 

liable or has been enjoined in a civil action by final 

judgment, if the felony or civil action involved fraud, 

embezzlement, fraudulent conversion, or misappropriation 

of property. 

b. Is subject to a currently effective injunctive or 

restrictive order or federal or state administrative order 

relating to business activity or health care as a result 

of an action brought by a public agency or department, 

including, without limitation, an action affecting 

a license under chapter 400. 

The statement shall set forth the court or agency, the 

date of conviction or judgment, and the penalty imposed 

or damages assessed, or the date, nature, and 

issuer of the order. Before determining whether a 

provisional certificate of authority is to be issued, the 

department may make an inquiry to determine the 

accuracy of the information submitted pursuant to 

subparagraphs 1. and 2. 

(d) The agreements for continuing care to be entered 

into between the provider and residents which 

meet the minimum requirements of s. 651.055. 

(e) Any advertisement or other written material 

proposed to be used in the solicitation of residents. 

(f) Such other reasonable data, financial statements, 

and pertinent information as the department 

may require with respect to the provider or the facility, 

or its directors, trustees, members, branches, subsidiaries, 

or affiliates, to determine the financial status 

of the facility and the management capabilities of 

its managers and owners, including the most recent 

audited financial statements of comparable facilities 

owned, managed, or developed by the applicant or its 

principal. 

(3) In addition to the information required in 

subsection (2), an applicant for a provisional certificate 

of authority shall submit a preliminary feasibility 

study to the department. The preliminary feasibility 

study shall include at least the following information: 

(a) A description of the proposed facility, including 

the location, size, anticipated completion date, 

and the proposed construction program. 

(b) An identification and evaluation of the potential 

market, including a demographic and economic 

profile of the population in the market area of the facility. 

(c) An evaluation of the potential market within 

a 50-mile radius of the facility. 

(d) Identification of existing and proposed competitive 

or similar facilities within a lOO-mile radius 

of the facility and, to the extent such information is 

available, the occupancy rate for such existing facilities 

for the last 3 years. 

(e) Projected revenues, including anticipated entrance 

fees; monthly service fees; nursing care rates, 

if applicable; and all other sources of revenue, including 

the total amount of debt financing required. 

(f) Projected expenses, including staffing requirements 

and salaries; cost of property, plant, and 

equipment, including depreciation expense; interest 

expense; and other operating expenses. 

(g) Current assets and liabilities of the applicant. 

(h) Expectations of the financial condition of the 

project, including the projected cash flow and a projected 

balance sheet and an estimate of the funds anticipated 

to be necessary to cover start-up losses. 

(i) The name of the person who prepared the feasibility 

study and the experience of such person in 

preparing similar studies or otherwise consulting in 

the field of continuing care. 

(4) If an applicant has or proposes to have more 

than one facility offering continuing care, separate 

applications for a provisional certificate of authority 

and for a certificate of authority shall be made for 

each facility. 

(5) Within 14 days of receipt of an application for 

a certificate of authority, the department shall issue 

a written acknowledgment to the applicant. The department 

shall grant a provisional certificate of authority 

to an applicant who meets the qualifications 

of this section upon a determination by the department 

that the feasibility study was based on sufficient 

data and reasonable assumptions and that the 

applicant will be able to provide continuing care as 

proposed and meet all financial obligations related to 

its operations, including the financial requirements 


(6) The issuance of a provisional certificate of authority 

entitles the applicant to collect entrance fees 

and reservation deposits from prospective residents. 

All entrance fees and deposits collected shall be 

placed in an escrow account or on deposit with the 

department, pursuant to s. 651.033, until a certificate 

of authority is issued by the department. After the 

certificate of authority is issued, the initial entrance 

fees shall be escrowed as provided in s. 651.023. 

History.-ss. 4, 33, ch. 83-328. 

'Note.-Expires October 1, 1993, pursuant to •. 33, ch. 83-328, and is scheduled 


INote.-The words "and items" were inserted by the editors. 

1651.023 Certificate of authority; application; 

renewal.- 

(1) After issuance of a provisional certificate of 

authority, the holder of such certificate may apply 

for a certificate of authority on a form prescribed by 

the department, which application shall contain at 

least the following information: 

(a) Any change in status with respect to the information 

required to be filed under s. 651.022(2) in the 

application for a provisional certificate of authority. 

(b) A final feasibility study containing any 

changes in the feasibility study required to be filed 

under s. 651.022(3) in the application for a provisional 

certificate of authority. The final feasibility study 

shall also contain an independent evaluation, by the 

consultant who prepared the study, of the underlying 

assumptions used as a basis for the forecasts in the 

study. 

798

F.S.1983 CONTINUING CARE CONTRACTS Ch.651 

(c) Proof that the project has a minimum of 50 

percent of the units reserved for which the provider 

is charging an entrance fee. In order for a unit to be 

considered reserved under this paragraph, the provider 

must collect a minimum deposit of 10 percent 

of the then current entrance fee for that unit, and 

must assess a forfeiture penalty of 2 percent of the 

entrance fee due to termination of the reservation after 

30 days for any reason other than the death or serious 

illness of the prospective resident, the failure of 

the provider to meet its obligations under the reservation 

agreement, or other circumstances beyond the 

control of the prospective resident that equitably entitles 

the prospective resident to a refund of his deposit. 

The reservation agreement shall state the cancellation 

policy and the terms of the continuing care 

agreement to be entered into. The department may 

require the holder of such certificate to disclose to 

the prospective resident on forms prescribed by the 

department such additional financial information as 

the department may deem necessary. The provisions 

of this paragraph shall not be construed to alter the 

provisions of s. 651.055. 

(d) Proof that commitments have been secured 

by the applicant for both construction financing and 

long-term financing. 

(e) Proof that all conditions have been satisfied 

to activate the commitment to disburse funds other 

than the obtaining of the certificate of authority, the 

completion of construction, or the closing of the purchase 

of realty or buildings for the facility. 

(f) Proof that the aggregate 'amount of entrance 

fees received by or pledged to the applicant, plus anticipated 

proceeds from any long-term financing 

commitment, plus funds from all other sources in the 

actual possession of the applicant, equal not less than 

100 percent of the aggregate cost of constructing or 

purchasing, equipping, and furnishing the facility 

plus 100 percent of the anticipated start-up losses of 

the facility. 

(g) A financial statement, audited by an independent 

certified public accountant, in accordance with 

generally accepted accounting principles, which 

statement shall contain at least the following information 

about the applicant: 

1. A balance sheet of all of the assets and liabilities 

of the applicant. 

2. A statement of income and expenses for the 

I-year period ending December 31 immediately preceding 

the date of application and for the one or 

more quarters after December 31 preceding the date 

of application. The department may request an income 

statement for prior periods if it determines that 

such information is necessary to evaluate the financial 

status of the applicant. 

3. A statement of changes in financial position for 

the year ending December 31 immediately preceding 

the date of application. 

(h) Proof that the applicant will be able to comply 

with the escrow requirements of subsection (2) 

and s. 651.035. 

(i) Such other reasonable data, financial statements, 


may require with respect to the applicant or the facility, 


or affiliates, to determine the financial sta- 

799 

tus of the facility and the management capabilities of 

its managers and owners. 

(2) No more than 25 percent of the moneys paid 

for all or any part of an initial entrance fee may be included 

or pledged for the construction or purchase of 

the facility, or included or pledged as security for 

long-term financing. The term "initial entrance fee" 

means the total entrance fee charged by the facility 

to the first occupant of a unit. A minimum of 75 percent 

of the moneys paid for all or any part of an initial 

entrance fee collected shall be placed in an escrow 

account or on deposit with the department as 

prescribed in s. 651.033 until: 

(a) Payment in full has been received for no less 

than 70 percent of the total units; and 

(b) A certificate of occupancy has been issued. 

(3) In lieu of fulfilling the requirements in subsection 

(2), the provider may have sufficient funds in 

the escrow account to meet all outstanding debts on 

the facility and equipment. The department may authorize 

the release of such funds to retire all outstanding 

debts on the facility and equipment upon 

application of the provider and upon the provider's 

showing that the provider will grant to the residents 

a first mortgage on the land, buildings, and equipment 

that constitute the facility. Such mortgage shall 

secure the refund of the entrance fee in the amount 

required by this chapter. The granting of such mortgage 

shall be subject to the following: 

(a) The first mortgage may be granted to a trust 

which is beneficially held by the residents. The mortgage 

may secure payment on bonds issued to the residents 

or trustee. Such bonds shall be redeemable after 

termination of the residency agreement in the 

amount and manner required by this chapter for the 

refund of an entrance fee. 

(b) Before granting a first mortgage to the residents, 

all construction must be substantially completed 

and substantially all equipment purchased. 

No part of the entrance fees may be pledged as security 

for a construction loan or otherwise used for construction 

expenses before the completion of construction. 

(c) If the provider is leasing the land or buildings 

used by the facility, the leasehold interest must be 

for a term of at least 30 years. 

(4) Upon a showing, to the satisfaction of the department, 

that the provider has sufficient funds to 

meet the escrow requirements of s. 651.035 and that 

the provider is otherwise in a financially sound position, 

and upon fulfillment of the requirements of 

subsection (2), the department shall authorize the release 

of the remaining 75 percent of the initial entrance 

fees collected; except that at least 10 percent 

of all initial entrance fees collected shall remain in 

the escrow account for a period of 6 months from the 

issuance of the certificate of occupancy, during which 

time these funds shall be released only for the refund 

of such entrance fees due because of the cancellation 

of a contract. 

(5) The application for a certificate of authority 

shall be accompanied by the forms of the agreements 

proposed to be used by the provider in the furnishing 

of care. If the department finds that the agreements 

comply with s. 651.055, it shall approve them. Thereafter, 

no other form of agreement may be used by the


provider until it has been submitted to the department 

and approved by the department as complying 

with s. 651.055. 

(6) The department shall issue a certificate of authority 

upon its determination that the applicant has 

submitted all of the information required by this section, 

that all escrow requirements have been satisfied, 

and that the fees prescribed in s. 651.015(2) 

have been paid. 

(7) The department may not issue a certificate of 

authority under this chapter to any facility which 

does not have a component which is to be licensed 

pursuant to chapter 395 or part I or part II of chapter 

400. 

(8) The certificate of authority shall be renewable 

annually on or before September 30 upon payment of 

the renewal fee prescribed in s. 651.015(2) and upon 

a determination by the department that the provider 

continues to meet the requirements of this chapter. If 

the provider fails to meet the requirements of this 

chapter, the department may issue a renewal certificate 

if it notifies the provider of any deficiencies and 

requires the provider to correct such deficiencies 

within a period to be determined by the department. 

If such deficiencies are not corrected within 20 days 

after the notice to the provider, or 3within less time at 

the discretion of the department, the department 

shall notify the advisory council, which may assist 

the facility in formulating a remedial plan to be submitted 

to the department no later than 60 days from 

the date of notification. The time period granted to 

correct deficiencies may be extended upon submission 

of a plan for corrective action approved by the 

department. If such deficiencies have not been 

cleared by the expiration of such time period, as extended, 

the department shall petition for a delinquency 

proceeding or pursue such other relief as is 

provided for under s. 651.114, as the circumstances 

may require. 

History.-ss. 5, 33, ch. 83-328. 



IN ote.- The words "amount or' were inserted by the editors. 

' N ote.- The words 'within less' were substituted by the editors for the 

words "prior to such." 

'651.026 Annual statements.- 

(1) Annually, on or before July 1, the provider 

shall file an annual statement and such other information 

and data, showing its condition as of the last 

day of the preceding calendar year, except as provided 

in subsection (5). If the department does not receive 

the required information on or before July 1, a 

late fee may be charged pursuant to s. 651.015(2)(c). 

(2) The annual statement shall be in such form as 

the department prescribes and shall contain at least 

the following: 

(a) Any change in status with respect to the information 

required to be filed under s. 651.022(2). 

(b) Financial statements audited by an independent 

certified public accountant, which shall contain, 

for two or more periods if the facility has been in existence 

that long, the following: 

1. An accountant's opinion and, in accordance 

with generally accepted accounting principles: 

a. A balance sheet; 

b. A statement of income and expenses; 

c. A statement of equity or fund balances; and 

d. A statement of changes in financial position; 

and 

2. Notes to the financial statements considered 

customary or necessary to full disclosure or adequate 

understanding of the financial statements, financial 

condition, and operation. 

(c) The following financial information: 

1. A detailed listing of the assets maintained in 

the liquid reserve as required in s. 651.035 and in accordance 

with part II of chapter 625; 

2. A schedule giving additional information relating 

to property, plant, and equipment having an original 

cost of at least $25,000, so as to show in reasonable 

detail with respect to each separate facility original 

costs, accumulated depreciation, net book value, 

appraised value or insurable value and date thereof, 

insurance coverage, encumbrances, and net equity of 

appraised or insured value over encumbrances. Any 

property not used in continuing care shall be shown 

separately from property used in continuing care; 

3. The level of participation in Medicare or Medicaid 

programs, or both; 

4. A statement of all fees required of residents, 

including, but not limited to, a statement of the entrance 

fee charged, the monthly service charges, the 

proposed application of the proceeds of the entrance 

fee by the provider, and the plan by which the 

amount of the entrance fee is determined if the entrance 

fee is not the same in all cases; and 

5. Any change or increase in fees when the provider 

changes either the scope of, or the rates for, 

care or services, regardless of whether the change involves 

the basic rate or only those services available 

at additional costs to the resident. 

(d) Such other reasonable data, financial statements, 


may require with respect to the provider or the facility, 


or affiliates, to determine the financial status 

of the facility and the management capabilities of 

its managers and owners. 

(e) Except as provided in subsection (5), 60 days 

before the commencement of each calendar year or 

official opening date, whichever is applicable, each 

facility shall file a computation of the annual 

long-term debt service and a projected annual revenue 

and expense summary, excluding depreciation 

and any expenses included in s. 651.035(1), on a form 

prescribed by the department. This projection shall 

serve as the basis for determining the amount of the 

minimum liquid reserve required by s. 651.035. 

(3) A facility, within no more than 5 years of the 

opening date, shall show a ratio of no less than 1 to 1 

of current assets to current liabilities. 

(4) If the provider is an individual, the annual 

statement shall be sworn to by him; if a limited partnership, 

by the general partner; if a partnership other 

than a limited partnership, by all the partners; if any 

other unincorporated association, by all its members 

or officers and directors; if a trust, by all its trustees 

and officers; and, if a corporation, by the president 

and secretary thereof. 

(5) A provider which has a component insured or 

800

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