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Florida Senate
-
2026
SB 234
By
Senator Smith
17-00289A-26 2026234__
1 A bill to be entitled
2 An act relating to insurers’ financial transactions;
3 amending s. 624.424, F.S.; requiring certain insurers
4 to annually provide specified information to the
5 Office of Insurance Regulation; defining the term
6 “managing general agent”; requiring the office to
7 contract annually with a specified entity to conduct a
8 review of certain transactions; specifying a
9 requirement of such contract; requiring insurers to
10 post certain information on their websites; specifying
11 that certain information is not considered a trade
12 secret and is subject to public disclosure; creating
13 s. 624.4244, F.S.; prohibiting an insurer from
14 engaging in certain transactions with affiliates;
15 specifying prohibited transactions; prohibiting an
16 insurer from declaring or paying dividends to
17 shareholders or issuing executive bonuses under
18 certain circumstances; providing an effective date.
19
20 Be It Enacted by the Legislature of the State of Florida:
21
22 Section 1. Subsection (13) of section 624.424, Florida
23 Statutes, is amended to read:
24 624.424 Annual statement and other information.—
25 (13)
(a)
Each insurer doing business in this state which
26 pays a fee, commission, or other financial consideration or
27 payment to any affiliate directly or indirectly
shall annually
28
is required upon request to
provide to the office
all of the
29
following
any
information
:
the office deems necessary. The fee,
30
commission, or other financial consideration or payment to any
31
affiliate must be fair and reasonable. In determining whether
32
the fee, commission, or other financial consideration or payment
33
is fair and reasonable, the office shall consider, among other
34
things, the actual cost of the service being provided.
35
1.
A
description and cost analysis
of each service provided
36
by an affiliat
e
, including the actual cost of the service
, the
37
amount charged to the insurer,
the basis used to
determine the
38
amount charged to the insurer
, and any profit margin included in
39
the amount charged
.
40
2.
A
benchmarking study
demonstrating that the fee,
41
commission, or other financial consideration is c
omparable to
42
the rates
ordinarily payable to vendors independent of and
43
unaffiliated with the insurer
.
44
3.
The total amount of affiliate fees, commissions, or
45
other financial consideration
s
for the reporting period, whether
46
paid by the insurer or forgiven by the affiliate,
reported both
47
in dollars and as a percentage of the insurer’s gross written
48
premiums for that period.
49
4.
A certification that
the
percentage reported in
50
subparagraph 3. does not exceed 20 percent, or a certification
51
that any amount exceeding 20 percent is necessary for the
52
insurer’s operations, including the specific reasons
why
such
53
fees, commissions, or other financial considerations
are
54
necessary. If the percentage reported in subparagraph 3. exceeds
55
20 percent, the insurer must also report the total amount of any
56
dividends
and
officer and director compensation paid during the
57
same period.
58
(b) As used in this paragraph, the term “managing general
59
agent” has the same meaning as provided in s. 626.015. Each
60
insurer doing business in this state which pays a fee,
61
commission, or other financial consideration or payment to a
62
managing general agent
shall
annually
provide to the office all
63
of the following information:
64
1.
The total amount of managing general agent fees,
65
commissions, or other financial consideration
s
for the reporting
66
period, whether paid by the insurer or forgiven by the managing
67
general agent,
reported both in dollars and as a percentage of
68
the insurer’s gross written premiums for that period.
69
2.
A certification that the percentage reported under
70
subparagraph 1
.
does not exceed 20 percent, or a certification
71
that any amount exceeding 20 percent is necessary for the
72
insurer’s operations, including the specific reasons
why
such
73
fees, commissions, or other financial considerations
are
74
necessary.
If the percentage reported in subparagraph
1
. exceeds
75
20 percent, the insurer must also report the total amount of any
76
dividends
and
officer and director compensation paid during the
77
same period.
78
(c)
The office shall contract
annually
with an independent
79
third-party entity with expertise in insurance regulation to
80
conduct a review of affiliate and managing general agent
81
transactions reported under this subsection. The contract must
82
require submission of a final report to the office by February 1
83
of each year, which
report
must identify any affiliate and
84
managing general agent transactions that are not fair and
85
reasonable.
86
(d)
Insurers shall annually post the information reported
87
under paragraphs (a) and (b) on their website
s
in a clear and
88
readily accessible format. Information disclosed under
89
paragraphs (a) and (b) is not considered a trade secret and is
90
subject to public disclosure.
91 Section 2. Section 624.4244, Florida Statutes, is created
92 to read:
93
624.4244
Prohibitions relating to affiliate transactions
.
—
94
(1)
An insurer may not engage in any transaction or series
95
of transactions with an affiliate
which
have
the purpose or
96
effect of misrepresenting or misstating the insurer’s financial
97
condition. Prohibited transactions include, but are not limited
98
to, transactions in which an affiliate forgives, waives, or
99
otherwise cancels fees or other amounts owed by the insurer for
100
the purpose or effect of manipulating the insurer’s financial
101
position, or engaging in circular transactions intended to
102
misrepresent the insurer’s financial condition.
103
(2)
An insurer may not declare or pay dividends to
104
shareholders or issue executive bonuses if the insurer is in
105
hazardous financial condition
, as defined in s. 627.942,
or if
106
its financial statements or reports to the office indicate that
107
the insurer’s financial condition has been materially affected
108
by high affiliate fees or expenses.
109 Section 3. This act shall take effect July 1, 2026.