Florida Statutes 1973, Volume 2 -...

Ch. 632 INSURANCE CODE; FRATERNAL BENEFIT SOCIETIES Ch. 632

(3) Any of the foregoing provisions or portions thereof not applicable by reason of the plan of insurance or because the certificate is an annuity certificate may, to the extent inapplicable, be omitted from the certificate.

History.-n8o, ch. 59-205 ; ~§13, 35 , ch. 69-106.

632.311 Prohibited provisions.-After one year from the effective date of this chapter, no life benefit certificate shall be delivered or issued for delivery in this state containing in substance any of the following provisions:

(1) Any provision limiting the time within which any action at law or in equity may be commenced to less than two years after the cause of action accrues;

(2) Any provision by which the certificate purports to be issued or to take effect more than six months before the original application for the certificate was made, except in case of transfer from one form of certificate to another in connection with which the member is to receive credit for any reserve accumulation under the form of certificate from which the transfer is made; or

(3) Any provision for forfeiture of the certificate for failure to repay any loan thereon or to pay interest on such loan while the total indebtedness, including interest, is less than the loan value of the certificate.

Blstor,..-§781, ch. 59-205. Note.-Simllar provisions found In former 1837.45.

632.321 Premiums defined.-As used in this chapter "premiums" means premiums, rates, or other required contributions by whatever name known.

Blstorr.-1782, ch . 59-205.

632.331 Accident and health insurance and total and permanent disability insurance certificates; filing and approval.-

(!) No domestic, foreign or alien society authorized to do business in this state shall issue or deliver in this state any certificate or other evidence of any contract of accident insurance or health insurance or of any total and permanent disability insurance contract unless and until the form thereof, together with the form of application and all riders or endorsements for use in connection therewith, shall have been filed with the department.

(2) The department shall have power, from time to time, to make, alter and supersede reasonable regulations prescribing the required, optional and prohibited provisions in such contracts, and such regulations shall conform, as far as practicable, to the provisions of part VI of chapter 627 (disability insurance policies). Where the department deems inapplicable, either in part or in their entirety, the provisions of said part VI, it may prescribe the portions or summa·ry thereof of the contract to be printed on the certificate issued to the member.

(3) Any filing made hereunder shall be

deemed approved unless disapproved within sixty days from the date of such filing.

Bls&ory.-1783, ch . 59-205; 1113, 35, cb. 69-106.

632.341 Reinsurance.-A domestic society may, by a reinsurance agreement, cede any individual risk or risks in whole or in part to an insurer (other than another fraternal benefit society) having the power to make such reinsurance and authorized to do business in this state, or if not so authorized, one which is approved by the department; but no such society may reinsure substantially all of its insurance in force without the written permission of the department. It may take credit for the reserves on such ceded risks to the extent reinsured, but no credit shall be allowed as an admitted asset or as a deduction from liability, to a ceding society for reinsurance made, ceded, renewed, or otherwise becoming effective after the effective date of this chapter, unless the reinsurance is payable· by the assuming insurer on the basis of the liability of the ceding society under the contract or contracts reinsured without diminution because of the insolvency of the ceding society.

Hlstory .-1784, ch. 59-205; H 13, 35, ch . 69-106 .

632.351 Funds.-(1) All assets shall be held, invested and

disbursed for the use and benefit of the society and no member or beneficiary shall have or acquire individual rights therein or become entitled to any apportionment or the surrender of any part thereof, except as provided in the contract.

(2) A society may create, maintain, invest, disburse and apply any special fund or funds necessary to carry out any purpose permitted by the laws of such society.

(3) Every society, the admitted assets of which are less than the sum of its accrued liabilities and reserves under all of its certificates when valued according to standards required for certificates issued after one year from the effective date of this chapter, shall, in every provision of the laws of the society for payments by members of such society, in whatever form made, distinctly state the purpose of the same and the proportion thereof which may be used for expenses, and no part of the money collected for mortuary or disability purposes or the net accretions thereto shall be used for expenses.

Blstory.-§785, ch . 59·205. Note.-Simllar provisions found In former 1§837.17, 837.20,

837.38, 837.41, 837.48.

632.361 Investments.-A society shall invest its funds only in such investments as are authorized by the laws of this state for the investment of assets of life insurers and subject to the limitations thereon. Any foreign or alien society permitted or seeking to do business in this state which invests its funds in accordance with the laws of the state, district, territory, country or province in which it is incorporated,

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Ch. 632 INSURANCE CODEj FRATERNAL BENEFIT SO('IETIES ('h. 632

shall be held to meet the requirements of this section for the investment of funds.

Blatorr.-1788, cb. 59-205. Note.-Simllar provisions found 1D former fl3'7.11.

632.371 Annual statement.-Reports shall be filed and synopses of annual statements shall be published in accordance with the provisions of this section.

(U Every society transacting business in this state shall annually, on or before March 1, unless for cause shown such time has been extended by the department, file with the department a true statement of its financial condition, transactions and affairs for the preceding calendar year and pay a . fee for filing same, as provided in §624.501(4). The statement shall be in the general form and context as approved by the national a ssociation of insurance commissioners for fraternal benefit soc ieties and as supplemented by additional information required by the department.

(2) A synopsis of its annual statement providing an explanation of the facts concerning the condition of the society thereby disclosed shall be printed and mailed to each benefit member of the society not later than June 1 of each year, or, in lieu thereof. such synopsis may be published in the society's official publication.

( 3 ) The department shall deposit all fees received by it under this section to the credit of the insurance commissioner's regulatory trust fund.

Hlslory.-!787, ch . 59-205: !18, ch . 65-269 : H l3 , 35. ch . 69-106 . Note .-Stmllar provisions founa In former H637.33, 637.37.

sioners' reserve valuation method as hereafter defined. If the premium charged is less than the tabular net premium according to the basis of valuation used. an additional reserve equal to the present value of the deficiency in such premiums shall be set up and maintained as a liability. The reserve liabilities shall be properly adjusted in the event that the midyear or tabular values are not appropriate.

(2) Reserves according to the commissioners' reserve valuation method, for life insurance and endowment benefit!> of certificates providing for a uniform amount of insurance and requiring the payment of uniform premiums shall be the excess, if any, of the present value, at the date of valuation, of such future guaranteed benefits provided for by such certificates, over the then present value of any future modified net premiums therefor. The modified net premiums for any such certificate ~hall be !>Uch uniform percentage of the respective contract premium!> for such benefits that the present value, at the date 'of issue of the certificate, of all sue h modified net premiums shall be equal to the sum of the then present value of such benefits pro,·ided for by the certificate and the excess of (a) over (b), as follows:

(a) A net len! premium equal to the present value, at the date of issue, of such benefits provided for after the first certificate vear divided by the present value, at the date of is'sue, of an annuity of one per annum payable on the first and each subsequent anniversary of such certificate on which a premium falls due: provided howe,·er, that such net level annual

632.381 Annual valuation of certificates.- premium shall not exceed the net Je,·el annual (1) As a part of the annual statement re- premium on the nineteen-year premium whole

quired under ~632.371. each society shall, on life plan for insurance of the same amount at or before March 1, file with the department an age one ~·ear higher than the age at issue a valuation of its certificates in force on De- of such certificate: and cember 31 last preceding provided. the de- (b) A net one-year term premium for such partment may, in its discretion for cause benefits provided for in the first certificate shown, extend the time for filing such valua- year. tion for not more than two calendar months. (3) Reserves according to the commission-Such report of valuation shall show. as reserve ers' resen·e valuation method for liabilities, the difference between the present (a) Life insurance benefits for varying midyear value of the promised benefits provided amounts of benefits or requiring the payment of in the certificates of such society in force and varying premiums, the present midyear value of the future net (b) Annuity and pure endowment benefits, premiums as the same are in practice actually (c) Disability and accidental death benefits collected, not including therein any value for in all certificates and contracts, and the right to make extra as!>essments and not (d) All other benefits except life insurance including any amount by which the present and endowment benefits. shall be calculated bv midyear value of future net premiums exceeds a method consistent with the principles of subthe present midyear value of promised benefits section (2) above. on individual certificates. At the option of any (4) The present value of deferred payments society, in lieu of the above, the valuation may due under incurred claims or matured certifishow the net tabular value. Such net tabular cates shall be deemed a Iiabilitv of the societv value as to certificates issued prior to one year and shall be computed upon mortality and inafter the effective date of this chapter shall terest standards prescribed in the follo"·ing be determined in accordance with the provi- subsection. sions of Jaw applicable prior to the effective (5) Such valuation and underlying data date of this chapter and as to certificates issued shall be certified by a competent actuary or, on or after one year from the effective date at the expense of the societ~·. ,·erified by the of this chapter shall. not be Jess than the re- actuary of the department of insurance of the serves determined according to the commis- state of domicile of the society.

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(6) The minimum standards of valuation for certificates issued prior to one year from the effective date of this chapter shall be those provided by the law applicable immediately prior to the effective date of this chapter but not lower than the standards used in the calculating of rates for such ·certificates.

( 7) The minimum standard of valuation for certificates issued from and after the effective date of this act shall be three and one half per cent interest and the following tables:

(a) For certificates of life insurance -American men ultimate table of mortality, with Bowerman's or Davis' extension thereof, or with the consent of the department, the commissioners' 1941 standard ordinary mortality table, the 1941 standard industrial mortalitv table or the commissioners' 1958 standard. ordinary mortality table; provided, that for any category of such certificates, based on the last mortality table listed above, issued on female risks modified net premiums and present values, referred to in subsection (2) of this section, may be calculated according to an age not more than three years younger than the actual age of the insured.

(b) For annuity and pure endowment certificates, including life annuities and settlements available under optional modes of settlement in such certificates, but excluding any disabilitv or accidental death benefits in such certificates-the 1937 standard annuity mortality table or the annuity mortality table for 1949, ultimate, or any modification of either of these tables approved by the department;

(c) For disability benefits issued in connection with life benefit certificates-Hunter's disability table; except, that for total and permanent disability benefits the class three disability table (1926) modified to conform to the contractual waiting period, or the tables of period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 disability study of the society of actuaries, with due regard to the type of benefit shall be used to compute the reserves . Any such table for active lives, shall be combined with a mortality table permitted for calculating the reserves for life insurance certificates;

(d) For accidental death benefits issued in connection with life benefit certificates-the intercompany double indemnity mortality table or the 1959 accidental death benefits table. Either table shall be combined with a mortality table permitted for calculating the reserves for life insurance certificates; and

(e) For noncancellable accident and health benefits-the class three disability table (1926) with conference modifications or, with the consent of the department, tables based upon the society's own experience.

(8) The department may, in its discretion, accept other standards for valuation if it finds that the reserves produced thereby will not be less in the aggregate than reserves computed in accordance with the minimum

valuation standard herein prescribed. The department may, in its discretion, vary the standards of mortality applicable to all certificates of insurance on substandard lives or other extra hazardous lives by any society authorized to do business in this state. Whenever the mortality experience under all certificates valued on the same mortality table is in excess of the expected mortality according to such table for a period of three consecutive years , the department may require additional reserves when deemed necesRary in its judgment on account of such certificates.

(9) Any society, with the consent of the insurance supervisory official of the state of domicile of the society and under such conditions, if any, which he may impose, may establish and maintain reserves on its certificates in excess of the reserves required thereunder, but the contractual rights of any insured member shall not be affected thereby.

Hlstory.-!788 , ch . 59-205; U . ch . 65-15 ; H 13 , 35. ch . 69-106 . Note .--slmll~~or provisions round In !ormer §1637.17, 637 .18,

637.34, 637.36.

632.391 Annual statement; penalty for failure to file or to comply.-A society neg lecting to file the annual statement in the form and within the time provided by this section shall forfeit one hundred dollars for each day during which such 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 oy it under this section to the credit of the insurance commissioner'g regulatory trust fund.

History .- §789, ch .i9-205; §U, ch. 65-269; 1§13 , 35, ch. 69-106.

632.401 Examination of domestic societies.( ! ) The department, or any person it may

appoint, shall have the power of visitation and examination into the affairs of any domestic society and it shall make such examination at least once in every three years. It may employ assistants for the purpose of such examination, and it, or any person it may appoint, shall have free access to all books, papers and documents that relate to the business of the society.

(2) In making any such examination · the department may summon and qualify as witnesses under oath and examine its officers, agents and employees or other persons in relation to the affairs, transactions and condition of the society.

(3 ) A summary of the report of the department and such recommendations or statements of the department as may accompany such report, shall be read at the first meeting of the board of directors or corresponding body of the society following the receipt thereof, and if directed so to do by the department, shall also be read at the first meeting of the supreme legislative or governing body of the society following the receipt thereof. A copy of the report, recommendations and statements of the department shall be furni shed by the society to each member of such board of direc-

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tors or other governing body. ( 4) The expense of each examination and of

each valuation, including compensation and actual expense of examiners, shall be paid by the society examined or whose certificates are valued, upon statements furnished by the department.

Hlstory .-§790, ch. 59-205; §§13, 35, ch. 69-106 . Note.-Simllar provisions found In former §1637.52, 637.53.

632.411 Examination of foreign and alien societies.-The department, or any person whom it may appoint, may examine any foreign or alien society transacting or applying for admission to transact business in this state. It may employ assistants and it, or any person it may appoint, shall have free access to all books, papers and documents that relate to the business of the soCiety. It may in its discretion accept, in lieu of such examination, the examination of the insurance department of the state, territory, district, province or country where such society is organized. The compensation and actual expenses of the examiners making any examination or general or special valuation shall be paid by the society examined or by the society whose certificate obligations have been valued, upon statements furnished by the department.

Hlstory.-§791, ch. 59-205; §§13, 35, ch . 69-106 . Note.-Simllar provisions found In former §637.56.

632.421 No adverse publications.-Pending, during or after an examination or investigation of a society, either domestic, foreign or alien, the department shall make public no financial statement, report or finding, nor shall it permit to become public any financial statement, report or finding affecting the status, standing or rights of any society, until a copy thereof shall have been served upon the society at its principal office and the society shall have been afforded a reasonable opportunity to answer any such financial statement, report or finding and to make such showing in connection therewith as it may desire.

Hlstory.-§792, ch. 59-205; 1!13, 35, ch . 69-106. Note.-Simuar provisions found In former §637.57.

632.431 Taxation.-Every society organized or licensed under this chapter is hereby declared to be a charitable and benevolent institution, and all of its funds shall be exempt from all and every state, county, district, municipal and school tax other than taxes on real estate and office equipment, and other than the fees and licenses provided for in this chapter and the annual license tax provided for in §624.501.

History.-§ 793, ch. 59-205. Note.-Simllar provisions found In former §637.60.

632.441 Licensing of agents.-(1) Agents of societies shall be licensed as

for life insurance agents in accordance with the applicable provisions of part I of chapter 626 (licensing procedures law). All sums collected by the department for or in connection with such licensing shall be deposited by it

in or to the credit of the same funds provided for in part IV of chapter 624, as apply in the case of similar sums collected by it under part I of chapter 626 for or in connection with the licensing of life insurance agents.

(2) The term "agent" as used in this section means any authorized or acknowledged agent of a society who acts as such in the solicitation, negotiation or procurement or making of a life insurance, accident and health insurance or annuity contract; except that the term "agent" shall not include:

(a) Any regular salaried officer or employee of a licensed society who devotes substantially all of his services to activities other than the solicitation of fraternal insurance contracts from the public, and who receives for the solicitation of such contracts no commission or other compensation directly dependent upon the amount of business obtained; or

(b) Any agent or representative of a society who devotes, or intends to devote, less than fifty per cent of his time to the solicitation and procurement of insurance contracts for such society. Any person who in the preceding calendar year has solicited and procured life insurance contracts on behalf of any society in an amount of insurance in excess of fifty thousand dollars or, in the case of any other kind or kinds of insurance which the society might write, on the persons of more than twenty-five individuals and who has received or will receive a commission or other compensation therefor, shall be presumed to be devoting, or intending to devote, fifty per cent of his time to the solicitation or procurement of insurance contracts for such society.

(3) A fraternal benefit society shall be deemed to be an "insurer" within the intent of such part I of chapter 626 and for the purposes of this section.

Hlstory.-§794, ch . 59-205; §§13, 35, ch. 69-106. Note.-Simllar provisions found In former §637.66.

632.442 Registration.-Every society shall on forms prescribed by the department of insurance register on or before March 1 of each year the names of and residence address of each agent or representative who devotes or intends to devote less than fifty per cent of his time to the solicitation and procurement of insurance contracts for such society, as provided in ~632.441 (2) (b), and shall within thirty days of termination of employment notify the department of insurance of such termination. Any such agent employed subsequent to March 1 filing shall be registered with the department of insurance within ten days of such employment.

History.-!1 , ch. 63-85; §§13, 35 , ch. 69-106 .

632.451 Agent license required.-(!) Any person who in this state acts as in

surance agent for a society without having authority so to do by virtue of a license issued and in force pursuant to the provisions of this chapter shall, except as . provided in §632.441 (2), be guilty of a misdemeanor of the second

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degree, punishable as provided in §775.082 or §775.083.

(2) No society doing business in this state shall pay any commission or other compensation to any person for any services in obtaining in this state any new contract of life, accident or health insurance, or any new annuity contract, except to a licensed insurance agent of such society and except an agent exempted under §632.441 (2).

History.-§795, ch. 59-205; §656, ch. 71·136. Note.-Bimllar provisions found In former §637.66.

632.461 Agent's qualifications.-The department shall not issue or permit to exist a license as agent of a fraternal benefit society as to an individual not qualified therefor as follows:

(1) Must be a resident of and in this state; (2) Must be trustworthy; (3) Must be competent to act as an agent

of such a society; and (4) Must take and successfully pass any

written examination required as a prerequisite to such licensing under §632.471 and part I of chapter 626.

Hlstory.-1796, ch. 59-205; §113, 35, ch. 69-106. Note.-Bimllar provisions found In rormer § 637.66.

632.471 Examination for agent's license.(1) Any examination for a fraternal agent's

license shall include questions relative only to fraternal insurance, the types of certificates, policies, or contracts in general proposed to be solicited under the license, and the laws of this state which relate to the activities of the proposed licensee as a fraternal insurance agent.

(2) No such examination for license shall be required as to any fraternal insurance agent who was duly licensed as such in this state immediately prior to the effective date of this code, and under laws then in force.

Blotor,..-1787, ch. 68-206. Note.-Bimllar provisions found In former 1637.66.

632.481 Misrepresentation.-(!) No person shall cause or permit to be

made, issued or circulated in any form: (a) Any misrepresentation or false or mis

leading statement concerning the terms, benefits or advantages of any fraternal insurance contract now issued or to be issued in this state, or the financial condition of any society;

(b) Any false or misleading estimate or statement concerning the dividends or shares of surplus paid or to be paid by any society on any insurance contract; or

(c) Any incomplete comparison of an insurance contract of one society with an insurance

sible duration thereof as determined by the life expectancy of the insured; or if it omits from consideration:

3. Any benefit or value provided in the contract;

4. Any differences as to amount or period of rates; or

5. Any differences in limitations or conditions or provisions which directly or indirectly affect the benefits. In any determination of the incompleteness or misleading character of any comparison or statement, it shall be presumed that the insured had no knowledge of any of the contents of the contract involved.

(2) Any person who violates any provision of such violation, shall be guilty of a misdemeanor of the second degree, punishable as provided in §775.082 or §775.083, and shall in addition, be liable for a civil penalty in the amount of three times the sum received by such violator as compensation or commission, which penalty may be sued for and recovered by any person or society aggrieved for his or its own use and benefit in accordance with the provisions of civil practice.

History.-§798, ch. 59-205; §657, ch. 71·136. Note.-Bimllar provisions found In former 1637.66.

632.491 Discrimination and rebates.-(1) No society doing business in this state

shall make or permit any unfair discrimination between insured members of the same class and equal expectation of life in the premiums charged for certificates of insurance, in the dividends or other benefits payable thereon or in any other of the terms and conditions of the contracts it makes.

(2) No society, by itself, or any other party, and no agent or solicitor, personally, or by any other party, shall offer, promise, allow, give, set off, or pay, directly or indirectly, any valuable consideration or inducement to, or for insurance, on any risk authorized to be taken by such society, which is not specified in the certificate. No member shall receive or accept, directly or indirectly, any rebate of premium, or part thereof, or agent's or solicitor's commission thereon, payable or any certificate or receive or accept any favor or advantage or share in the dividends or other benefits to accrue on, or any valuable consideration or inducement not specified in the contract of insurance.

Blotor7 .-f 788, ch. 58-205.

contract of another society or insurer for the 632.501 Service of process.-purpose of inducing the lapse, forfeiture or (1) Every society authorized to do business surrender of any insurance contract. A com- in this state shall appoint in writing the insurparison of insurance contracts is incomplete if ance commissioner and treasurer and each sueit does not compare in detail: cessor in office to be its true and lawful at-

1. The gross rates, and the gross rates less torney upon whom all lawful process in any acany dividend or other reduction allowed at the tion or proceeding against it shall be served, and date of the comparison; and shall agree in such writing that any lawful pro-

2. Any increase in cash values, a~d all the cess against it which is served on said attorney benefits provided by each contract for the pos- shall be of the same legal force and validity as if

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served upon the society, and that the authority shall continue in force so long as any liability remains outstanding in this state. Copies of such appointment, certified by the department, shall be deemed sufficient evidence thereof and shall be admitted in evidence with the same force and effect as the original thereof might be admitted.

(2) Service shall only be made upon the insurance commissioner and treasurer, or if absent, upon the person in charge of his office. It shall be made in duplicate and shall constitute sufficient service upon the society. When legal process against a society is served upon the insurance commissioner and treasurer, he shall forthwith forward one of the duplicate copies by registered mail, prepaid, directed to the secretary or corresponding officer. No such service shall require a society to file its answer, pleading or defense in less than thirty days from the date of mailing the copy of the service to a society. Legal process shall not be served upon ' a society except in the manner herein provided.

Hlstory.-§800, ch . 59-205 ; U 13, 35, ch. 69-106. Note.-s1m1lar provisions found In former §837.27.

632.511 Consolidations and mergers.-(!) A domestic society may consolidate or

merge with any other society by complying with the provisions of this section. It shall file with the department :

(a) A certified copy of the written contract containing in full the terms and conditions of the consolidation or merger;

(b) A sworn statement by the president and secretary or corresponding officers of each society showing the financial condition thereof on a date fixed by the department but not earlier than December 31, next preceding the date of the contract;

(c) A certificate of such officers, duly verified by their respective oaths, that the consolidation or merger has been approved by a twothirds vote of the supreme legislative or governing body of each society; and

(d) Evidence that at least sixty days prior to the action of the supreme legislative or governing body of each society, the text of the contract has been furnished to all members of each society either by mail or by publication in full in the official organ of each society.

(2) The affidavit of any officer of the society or of anyone authorized by it to mail any notice or document, stating that such notice or document has been duly addressed and mailed shall be prima facie evidence that such notice 'or document has been furnished the addressees.

(3) If the department finds that the contract is in conformity with the provisions of this section, that the financial statements are correct and that the consolidation or merger is just and equitable to the members of eacJ:l society, it shall approve the contract and Issue its certificate to such effect. Upon such approval, the contract shall be in full force and

effect unless any society which is a party to the contract is incorporated under the laws of any other state. In such event the consolidation or merger shall not become effective unless and until it has been approved as provided by the laws of such state and a certificate of such approval filed with the department or, if the laws of such state contain no such provision, then the consolidation or merger shall not become effective unless and until it has been approved by the insurance supervisory official of such state and a certificate of such approval filed with the department.

Hlstory.-§801 , ch . 59·205 : H 13 , 35, ch. 69- 106 . Note .-Sim!lar :>rovlslons !ouna m former ~637.21 .

632.521 Same; effect.-Upon the consolidation or merger becoming effective as provided in ~632.511, all the rights, franchises and interests of the consolidated or merged societies in and to every species of property, real, personal or mixed, and things in action thereunto belonging shall be vested in the society resulting from or remaining after the consolidation or merger without any other instrument; except that conveyances of real property may be evidenced by proper deeds, and the title to any real estate or interest therein, vested under the laws of this state in any of the societies consolidated or merged, shall not revert or be in any way impaired by reason of the consolidation or merger, but shall vest absolutely in the society resulting from or remaining after such consolidation or merger.

Rlstory.-§802, ch. 59-205. Note.-81mllar provisions lound In former §637.21.

632.531 Conversion into mutual life insur· er.-Any domestic fraternal benefit society may be converted and licensed as a mutual life insurer by compliance with the applicable requirements of chapter 628, if such plan of convers ion has been approved by the department. Such plan shall be pre.pared in writing setting forth in full the terms and conditions thereof. The board of directors shall submit the plan to the supreme legislative or governing body of such society at any regular or special meeting thereof, by giving a full, true and complete copy of the plan with the notice of such meeting. The notice shall be given as provided in the laws of the society for the convocation of a regular or special meeting of such body, as the case may be. The affirmative vote of twothirds of all members of such body shall be necessary for the approval of the agreement. No such conversion shall take effect unless and until approved by the department, which may give such approval if it finds that the proposed change is in conformity with the requirements of law and not prejudicial to the certificate holders of the society.

History.-!803 , ch . 59-205 ; !§ 13, 35, ch . 69-106. Note.-81mllar provisions found In former §637.65.

632.541 Injunction; liquidation; receivership of domestic society.-

( 1) When the department upon investigation finds that a domestic society:

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(a) Has exceeded its powers; (b) Has failed to comply with any provision

of this chapter; (c) Is not fulfilling its contracts in good

faith; (d) Has a membership of less than four

hundred after an existence of one year or more; or

(e) Is conducting business fraudulently or in a manner hazardous to its members, creditors, the public or the business; it shall notify the society of its findings, state in \\Titing the reasons for its dissatisfaction, and require the society to show cause on a date named why it should not be enjoined from carrying on any business until the violation complained of shall have been corrected, or why an action in quo warranto should not be commenced against the society.

(2) If on such date the society does not present good and sufficient reasons why it should not be so enjoined or why such action should not be commenced, the department may present the facts relating thereto to the department of legal affairs which shall, if it deems the circumstances warrant, commence an action to enjoin the society from transacting business or in quo warranto. The court shall thereupon notify the officers of the society of a hearing. If after a full hearing it appears that the society should be so enjoined or liquidated or a receiver appointed, the court shall enter the necessary order.

(3) No society so enjoined shall have the authority to do business until:

(a) The department finds that the violation complained of has been corrected;

(b) The costs of such action have been paid by the society if the court finds that the society was in default as charged;

(c) The court has dissolved its injunction; and

(d) The department has reinstated the society's license.

( 4) If the court orders the society liquidated, it shall be enjoined from carrying on any further business, whereupon the receiver of the society shall proceed at once to take possession of the books, papers, money and other assets of the society and, under the direction of the court, proceed forthwith to close the affairs of the society and to distribute its funds to those entitled thereto.

(5) No action under this section shall be recognized in any court of this state unless brought by the department of legal affairs upon request of the department of insurance. Whenever a receiver is to be appointed for a domestic society, the court shall appoint the department

of insurance as such receiver. (6) The provisions of this section relating

to hearing by the department of insurance, action by the department of legal affairs at the request of the department of insurance, hearing by the court, injunction and receivership shall be applicable to a society which voluntarily determines to discontinue business.

Hislory.-!804, ch. 59-205; §§11, 13, 35, ch. 69-106 . Note .-Simllar provisions found m former §§637.06, 637.54.

632.551 lnjunction.-No application or petition for injunction against any domestic, foreign or alien society, or branch thereof, shall be recognized in any court of this state unless made by the department of legal affairs upon request of the department of insurance.

Hislory.-§805, ch. 59-205; Ull, 13, 35, ch. 69-106. Note.-Simllar provisions found In former §637 .55.

632.561 Review.-All decisions and findings of the department made under the provisions of this chapter shall be subject to review by the court in accordance with the provisions of §624.329 of this code.

Hislory.-!806, ch . 59-205 ; §§13, 35, ch. 69-106 . .Note.-Simllar provisions found In former 1637.28.

632.571 Other provisions applicable.-In addition to the provisions heretofore contained or referred to in this chapter, other chapters and provisions of this code shall apply to fraternal benefit societies, to the extent applicable and not in conflict with the express provisions of this chapter and the reasonable implications thereof, as follows:

(1) Part I of chapter 624 (scope of code); (2) Part II of chapter 624 (department of

insurance); (3) The following sections of part III of

chapter 624 (authorization of insurers and general requirements):

(a) Section 624.404 (eligibility of insurers for certificate of authority);

(b) Section 624.405 (name of insurer); (4) Section 624.501 (filing, license, and

miscellaneous fees); (5) Part I of chapter 626 (licensing pro

cedures law); (6) Part VII of chapter 626 (trade practices

and frauds) ; (7) Section 627.424 (minor may give ac

quittance); (8) Section 627.428 (attorney's fee); (9) Section 627.479 (prohibited policy

plans); (10) Part I, chapter 631 (insurer insolvency;

rehabilitation and liquidation). Hislory.-§807, ch . 59-205; §§13, 35, ch. 69-106. Note.-Simllar provisions found In former ff635.l'l, 835.23,

637.15, 637.58, 637.61, 637.62, 637.63, 637.114.

1557

Ch. 633 'FIRE PREVENTION AND CONTROL Ch. 633

CHAPTER 633

FIRE PREVENTION AND CONTROL

633.01

633.02

633.021 633.03 633.05

633.051

633.061

633.071

633.081

633.083

633.091

State fire marshal; powers and duties.

Agents ; powers and duties; compensa-tion.

Definitions. Investigation of fire; reports. Regulations concen1ing gunpowder,

explosives, crude petroleum, portable fire extinguishers, and fire prevention.

Procedures for adoption of regulations.

License or permit required of organizations and individuals servicing, recharging, repairing, testing, mspecting, or installing all fire extinguishers and systems.

Standard service tag required on all fire extinguishers and systems; serial number required on all portable fire extinguishers.

Inspection of buildings and equipment; orders concerning.

Sale or use of certain types of fire extinguishers prohibited; penalty.

Review; circuit court.

633.01 State fire marshal; powers and duties.-The head of the department of insurance shall be designated as state fire marshal and hereinafter shall enforce all laws and provisions of this chapter relating to:

(1) Prevention of fires; (2) Storage, sale, use, keeping, manufac

ture, handling, transportation or other disposition of combustibles, explosives, flammables, gunpowder, carbide, and crude petroleum or any of its products and may prescribe the material or receptacles and building to be used for such purpose;

(3) Installation and maintenance of fire alarm systems and fire-extinguishing equipment;

( 4) Servicing, recharging, marking, and tagging of portable fire extinguishers and shall provide standards of operation for those engaged in such activities;

(5) Construction, maintenance, and regulation of fire escapes;

(6) The means and adequacy of exits from all buildings in event of fire; and

(7) Suppression of arson and the investigation of fires.

Hlstorr.-§1, ch. 20671, 1941; 11. ch. 65-216 ; 11. ch. 67·78; §§13, 35, ch . 69-106; §3, ch. 70-299; §5, ch . 71-271.

633.02 Agents; powers and duties; compensation.- The state fire marshal shall appoint such agents as may be necessary to carry out effectively the provisions of this chapter, who shall be reimbursed for traveling expenses as provided in §112.061, in addition to their salary, when traveling or making investigations in the performance of their duties. Such

633.101 Hearings; investigations; taking testimony, etc., by state fire marshal.

633.111 State fire marshal to keep records of

633.121 633.13 633.14 633.15

fires; reports of agents. Fire chiefs, mayors, etc., as agents. State fire marshal; authority of agents. Agents ; arrests, summonses, arms, etc. State fire marshal; rules and regula-

tions; violation. 633.161 Cease and desist orders; notice to cor

rect hazardous condition; notice of violation; hearings and review; penalties.

633.162 Procedure for suspension or revocation of license or permit.

633.163 Administrative fines for violation of cease and desist or corrective order.

633.171 Penalty for violations of law, rules and regulations, or order to cease and desist or failure to comply with corrective order.

633.18 State fire marshal; hearings, investiga-tions, subpoenas, etc.

633.19 Review of order of the state fire marshal.

agents shall be at all times under the direction and control of the fire marshal, who shall fix their compensation, and all orders shall be issued in his name and by his authority.

History .-!2. ch. 20671. 1941 ; H, ch . 57-102; §19, ch . 63-400; §4, ch . 67-78; §§13, 35, ch . 69-106; §3, ch . 70-299.

633.021 Definitions.-(!) "Explosives" shall mean any chemical

compound or mixture that has the property of yielding readily to combustion or oxidation upon the a pplication of heat, flame or shock, and capable of producing an explosion and commonly used for that purpose, including but n6t limited to dynamite, nitroglycerin, trinitrotoluene, ammonium nitrate when combined with other ingredients to form an explosive mixture, blasting caps and detonators; but not including cartridges for firearms, and not including fireworks as defined in chapter 791.

(2) "Handling" shall mean touching, holding, taking up, moving, controlling or otherwise affecting with the hand or by any other agency. As used in ~ ~633.05 (2) and 633.081, its meaning and application shall be limited to handling having a direct relationship to transportation.

(3) "Highway" shall mean every way or place of whatever nature within the state open to the use of the public, as a matter of right, for purposes of vehicular traffic, and shall include public streets, a!.leys, roadways or driveways upon grounds of colleges, universities and institutions, and other ways open to travel by the public, notwithstanding that the same shall have been temporarily closed for the purpose of construction, reconstruction, maintenance or re-

1558

Ch. 633 FIRE PREVENTION AND CONTROL Ch. 633

pair. It shall not include a roadway or driveway upon grounds owned by private persons.

(4) "Keeping" shall mean possessing, holding, retaining-, maintaining or having habitually in stock for sale.

(5) "Manufacture" shall mean the compounding, combining, producing or making of anything, or the working of anything by hand, by machinery, or by any other agency into forms suitable for use.

(6) "Motor vehicle" shall mean every device propelled by power other than muscular ~n, upon, or by which any person or property IS or may be transported or drawn upon a highway, except devices moved or used exclusiYely upon stationary rails or tracks.

(7) "PriYate carrier" shall mean any motor vehicle, aircraft or vessel operating intrastate in which there is identity of ownership between freight and carrier.

(8) "Sale" shall mean the act of selling; the act whereby the ownership of property is transferred from one person to another for a sum of money or, loosely, for any consideration. It shall include delivery of merchandise with or without consideration.

(~) "Storing" shall mean accumulating, laymg away or depositing for preservation or as a reserve fund in a store, warehouse, or other source from which supplies may be drawn or within which they may be deposited. The term as used in ~~633 .05(2) and 633.081 shall be limited in meaning and application to storage having a direct relationship to transportation.

( 10) "Transportation" shall mean the conveying or carrying of property from one place to another by motor vehicle, aircraft or vessel subject to such limitations as set forth in §552.12, except as used in ~633.05 (2), in \vhich only the motor vehicles, aircraft or vessels of the armed forces and other federal agencies are specifically exempted.

(11) "Use" shall mean application, employment; that enjoyment of property which consists of its employment, occupation, exercise or practice. History.-~~- ch . o f>- ~1 6: ~ 6. ch . 7 1- ~71.

633.03 Investigation of fire; reports.-The state fire marshal shall investigate the cause, origin, and circumstances of every fire occurring in this state wherein property has been damaged or destroyed where there is probable cause to believe that the fire was the result of carelessness or design. Report of all such investigations shall be made on approved forms to be furnished by the fire marshal.

History.-~ : !. ch . 20671. 19~1: ~~ - ch . 67-7M: ~~1 :1. :!;\ r h . li~l - Hlti: ~: ! . t•h . 70-2!1!1.

633.05 Regulations co.ncerning gunpowder, expiosives, crude petroleum, portable fire extinguishers, and fire prevention.-The state fire marshal shall make and promulgate all rules and regulations necessary to effectuate the enforcement of his powers and duties, including,

but not limited to, the making and promulgation of rules and regulations for the:

(1) Prevention of fires; (2) Storage, sale, use, keeping, manufac

ture, handling, transportation or other disposition of combustibles, explosives, flammables, gunpowder, carbide, and crude petroleum or any of its products, and may prescribe the material or receptacles and building to be used for such purpose;

(3) Installation and maintenance of fire alarm systems and fire-extinguishing equipment;

( 4) Servicing, recharging, marking and tagging of portable fire extinguishers, and shall provide standards of operation for those engaged in such activities;

( 5 ) Construction, maintenance, and regulation of fire escapes;

(6) The means and adequacy of exits from all buildings in event of fire; and

(7) Suppression of arson and the investigation of fires.

H1story.-~5 . ch . 20671 , 1941; Ul . 2. ch. 2n11, 1955; 14, ch. 65-~16 : ~~- ch. 67-7M: ~~1 3 . 35. ch . 69- 106: §3. ch . 70-~!l!l : ~ - ch . 71 -~71.

633.051 Procedures for adoption of regulations.-

(1) (a) Said regulations authorized in §633.05 to be made and promulgated by the state fire marshal shall be such as are reasonably necessary for the protection of the health, welfare and safety of the public and of persons possessing, handling and using such materials and products, and shall be in substantial conformity with generally accepted standards of safety concerning such several subject matters. In the making and promulgation of such re~ulations, the state fire marshal shall give consideration to rules and standards of safety of reputable national institutes, organizations, or bureaus in relation to any of said materials and products, and which rules and standards have been adopted by such organizations as result of demonstrated credible experience.

(b) Such regulations and any addition to or amendment thereof shall be adopted after a full public hearing and in accordance with the procedures for the filing and taking effect of rules as provided in §120.041.

(2) The provisions of this section and §633.05 are cumulative and shall not be construed as repealing or affecting any other law of this state particularly relating to the regulation of any of the materials or products described herein.

History.-§5, ch . 65-216; §3, ch. 67-78; 1§10, 13, 35, ch. 69· 106: ~~~- :1. t•h . 70-~'\l!l.

633.061 License or permit required of organizations and individuals servicing, recharging, repairing, testing, inspecting or installing all fire extinguishers and systems.-

( 1) It shall be unlawful for any organization or individual to engage in the business of servicing, repairing, recharging, testing, inspect-

1559


ing, or installing any fire extinguisher or system in this state except in conformity with the provisions of this chapter. Each organization or individual engaging in such activity must be possessed of a valid and subsisting license issued by the state fire marshal. All fire extinguishers and systems required by the state fire marshal's rules and regulations must be serviced by an organization or individual licensed under the provisions of this chapter. A further requirement, in the case of multiple locations where such servicing or recharging is taking place, is that each licensee maintaining more than one place of business where actual work is carried on shall possess an additional license, as herein set forth, for each location. Licensees shall be limited as to specific type of work performed dependent upon the class of license held. Licenses and fees therefor are required for the following:

Class A ------------------------------------------------------------ $55 To service, recharge, repair, install, or inspect all types of fire extinguishers and systems, including recharging carbon dioxide units, and to conduct hydrostatic tests on all types of fire extinguishers, including carbon dioxide units. Class B _ ------------------------------------------------------------$45 To service, recharge, repair, install, or inspect all types of fire extinguishers and systems, including recharging carbon dioxide units and conducting hydrostatic tests on water, water chemical, and dry chemical types of extinguishers only. Class C ------------------------------------------------------------- $40 To service, recharge, repair, install, or inspect all types of fire extinguishers and systems, except recharging carbon dioxide units; and to conduct hydrostatic tests of water, water chemical, and dry chemical types of fire extinguishers only. Class D __ ---------------------- ----------------- ------------------ $35 To service, recharge, repair, install, or inspect all types of fire extinguishers and systems except recharging of carbon dioxide units. No hydrostatic testing allowed with this license. (2) Each individual actually performing the

work of servicing, recharging, repairing, installing, testing, or inspecting fire extinguishers and systems must be possessed of a valid and subsisting permit issued by the state fire marshal. Permittees shall be limited as to specific type of work performed dependent upon the class of permit held. Permits and fees therefor are required for the following:

Class 1 --------------------------------------------- ----------·-------- $5 Servicing, recharging, repairing, installing, or inspecting all types of fire extinguishers and systems, including carbon dioxide units, and conducting hydrostatic tests on all types of fire extinguishers, including carbon dioxide units.

Class 2 ---------------------------------------------------------------- $5 Servicing, recharging, repairing, installing, or inspecting all types of fire extinguishers and systems, including carbon dioxide units, and conducting hydrostatic tests on water, water chemical and dry chemical types of fire extinguishers only. Class 3 ------------------- ------------------------------- -------------- $5 Servicing, recharging, repairing, installing, or inspecting all types of fire extinguishers and systems except recharging of carbon dioxide units; also conducting hydrostatic tests on water, water chemical, and dry chemical types of fire extinguishers only. Class 4 --------------------------- ------------------------------------- $5 Servicing, recharging, repairing, installing, or inspecting all types of fire extinguishers and systems except recharging of carbon dioxide units. No hydrostatic testing allowed with this permit. (3)(a) Said licenses and permits shall be

issued by the state fire marshal for each license year beginning January 1 and expiring the following December 31, except that any such license or permit in force immediately prior to June 15, 1971, and any such license or permit issued after that date but prior to December 31, 1971, shall expire as of midnight December 31, 1971. The forms of such licenses and permits and applications therefor shall be prescribed by ·the state fire marshal; except that in addition to such other information and data as that officer shall determine is appropriate and required for said forms there shall be included in said forms the following matters:

(b) Each of such applications shall be in such form as to provide that the data and other information set forth therein shall be sworn to by the applicant or, if a corporation, by an officer thereof. Application for a permit shall include the name of the licensee employing such permittee, and the permit issued in pursuance thereof shall also set forth the name of such licensee. A permit shall be valid solely for use by the holder thereof in his employment by the licensee named therein.

(c) No license shall be issued by the state fire marshal until he has satisfied himself that the applicant for said license is properly equipped to carry out the type of work specified in the application.

(d) No permit of any class shall be issued to a person for the first time by the state fire marshal until the applicant has satisfactorily passed an examination to determine his competency to perform such operations as may be specified in the application. When filing application for such examination, an applicant shall be required to pay a filing fee of $10, said fee not to be refundable in the event the applicant does not appear for examination.

(4) Permittees must have a valid and subsisting permit upon their persons at all times

1560


while engaging in the servicing, recharging, repairing, testing, inspecting, or installing of fire extinguishers and systems, and all licensees and permittees must be able to produce said license or permit upon demand.

(5) The fees collected for any such licenses and permits and the filing fees for permit examination are hereby appropriated for the use of the state fire marshal in the administration of this chapter and shall be deposited in the state fire marshal 's trust fund.

(6) The provisions of this chapter shall not apply to inspections by fire chiefs, fire inspectors, fire marshals, or insurance company inspectors. The provisions of this chapter relating to licenses and permits shall not apply to those engaged in the business of servicing, recharging, repairing, testing, and inspecting automatic water sprinkler systems, water spray systems, foam-water sprinkler systems, and foam-water spray systems.

(7) All fire extinguishers covered under this chapter and which are required by the state fire marshal's rules and regulations must be serviced, recharged, repaired, tested, inspected, and installed in compliance with the provisions of the National Fire Protection Association's pamphlet 10, 1970 edition.

History .- §6. ch . 65-216; §4. ch . 67-78; §§13. 35. ch . 69-106: §1. ch . 71 -141.

633.071 Standard service tag required on all fire extinguishers and systems; serial number required on all portable fire extinguishers.-

(!) The state fire marshal shall make and promulgate specifications as to the size, shape, color, and information and data contained thereon of service tags to be attached to all fire extinguishers and systems which are required by the state fire marshal's rules and regulations, whether they be portable, stationary, or on wheels when they are installed, serviced, repaired, tested, recharged, or inspected. It shall be unlawful to service, test, repair, inspect, install, or recharge any of the above fire extinguishing units without attaching one of these tags completed in detail, including the actual month work was performed, or to use a tag not meeting the specifications set forth by the state fire marshal.

(2) All portable fire extinguishers which are required by the state fire marshal's rules and regulations must be listed by Underwriters ' Laboratories, Inc. or approved by Factory Mutual and carry an Underwriters' Laboratories or manufacturer's serial number. These listings, approvals, and serial numbers may be stamped on the manufacturer's identification and instructions plate or on a separate Underwriters' Laboratories or Factory Mutual plate soldered or attached to the extinguisher shell in some permanent manner.

History.-§7. ch. 65-2 16: §4. ch . 67-711: §§1 3. 3fi. ch . 69-!06: §2. ch . 71-141.

ment; orders concerning.-The state fire marshal and his agents shall, when they deem it necessary, inspect at any reasonable hour any and all buildings, equipment and vehicular equipment on premises within their jurisdiction and, if it be found that any building or structure shall want for repairs , lack of sufficient fire escapes, alarm apparatus, fire extinguishing equipment, dilapidated condition or from any other cause be especially liable to fire, and which is situated so as to endanger life or property or whenever the fire marshal or his agents shall find radioactive materials being handled, stored or transported intrastate by private carrier in a manner dangerous to life or whenever the fire marshal or his agents shall find in any building combustible or explosive matter, or flammable conditions dangerous to the safety of such building or to property and life, it may order the same removed or remedied within a reasonable length of time.

History .- §6, ch . 20671 . 1941; §8, ch . 65 - 216 ; §4, ch . 67-78; §113, 35. ch . 69-106: §3. ch . 70-299.

Note.-F orme rly ~ 633 .06 .

633.083 Sale or use of certain types of fire extinguishers prohibited; penalty.:_

( 1) (a) In public buildings, public places, businesses where there is public occupancy, or any place where the public comes to transact business or seek entertainment, food, etc., it shall be unlawful to have for use any of the following types of fire extinguishers:

1. Carbon tetrachloride; 2. Chlorobromomethane; 3. Bromochlorodifluoromethane; 4. Dibromodifluoromethane; 5. Dichlorodifluoromethane; 6. Azeotropic chloromethane; 7. 1,2 dibromo-2-chloro-1, 1,2 trifluoro

ethane; 8. 1,2 dibromo-2, 2-difluoroethane; 9. Methyl bromide;

10. Ethylene dibromide; 11. Hydrogen bromide; 12. Methylene bromide; 13. Bromodifluoromethane; and 14. Any other toxic or poisonous vaporizing

liquid fire extinguishers. (b) It is unlawful to offer for sale or sell

in this state any of the types of fire extinguishers listed in paragraph (a).

(2) It is unlawful for any person, directly or through an agent, to sell or offer for sale in this state any make, type, or model of fire extinguisher, either new or used, . unless such make, type, or model of extinguisher has first been tested and is currently approved or listed by Underwriters' Laboratories, Inc., Factory Mutual Laboratories, Inc. or other nationally recognized testing laboratory.

(3) A person who violates any of the provisions of this section is guilty of a misdemeanor of the second degree, punishable as provided in §775.082 or §775.083.

History .-§§1-:1. ch . 7!\-41 7: §6f>~. ch . 71-1:16.

633.081 Inspection of buildings and equip·

1561

633.091 Review; circuit court.-Any such


owner or occupant within the time provided by the Florida appellate rules, shall be entitled to test the validity of the order by suit for declaratory decree in the circuit court of the county in which the property is located, but such proceedings shall not operate as a supersedeas save and except for a period of fifteen days from the entry thereof after which time the said order shall remain ir{ full force and effect and shall be complied with unless the time be extended by order of the circuit court.

History .-§6, ch. 20671, 1941 ; ~26 , ch. 63-512; §9, ch. 65-216; §I, ch. 69-267.

Note.-Formerly ! 633 .07.

633.101 Hearings; investigations; taking testimony, etc., by state fire marshal.-

(1) The state fire marshal may in h~s discretion take or cause to be taken the testimony on oath of all persons whom he believes to be cognizant of any facts in relation to matters under investigation.

(2) If he shall be of the opinion that th~re is sufficient evidence to charge any person w1th an offense, he shall cause the arrest of such person and shall furnish to the prosecuting officer of any court having jurisdiction of said offense all information obtained by him, including a copy of all pertinent and material testimony taken, together with the names and addresses of all witnesses. In the conduct of such investigations, the fire marshal may .request such assistance as may reasonably be g1ven by such prosecuting officers and other local officials.

(3) The fire marshal may summon and compel the attendance of witnesses before him to testify in relation to any matter which is, by the provisions of this chapter, a subject of inquiry and investigation, and he may require the production of any book, paper or document deemed pertinent thereto by him, and may seize furniture and other personal property to be held for evidence.

(4) All persons so summoned an? so testifying shall be entitled to the same w1tness fees and mileage as provided for witnesses testifying in the circuit courts of this state, and officers serving subpoenas or orders of the fire marshal shall be paid in like manner for like services in such courts, from the funds herem provided.

History.-§7 ch . 20671, 1941; §9, ch. 65-216; §4, ch. 67-78 ; 1§13, 35, ch . 69-106; §a. ch . 70.299.

Note.-Former1y §633.08.

633.111 State fire marshal to keep records of fires· reports of agents.-The state fire marshal' shall keep in his office a re.cord of all fires occurring in this state upon wh1ch he had caused an investigation to be made and all facts concerning the same, such as the damage caused thereby, whether such losses were covered by insurance, and to what amount. Such records shall be made daily from the reports furnished him by his agents or others.

History.-§8, ch. ·20671, 1941; §9, cb. 65-216 ; §4, ch. 67-78; §§13, 35, ch . 69-106; §3, ch . 70.299.

Note.-Former1y !633.09.

633.121 Fire chiefs, mayors, etc., as agents.

-Chiefs of fire departments (and mayors of municipalities having no organized fire departments) shall be ex officio agents of the state fire marshal and shall make similar reports on forms to be furnished by the fire marshal.

Hlatory.-19 . ch. 20671, 1941; 19, ch. 65-216; 14. ch. 67-78; §§13, 35. ch. 69-106; §3, ch . 70.299.


633.13 State fire marshal; authority of agents.-The authority given the state fire marshal under this law may be exercised by his agents, either individually or in conjunction with any other state or local official charged with similar responsibilities.

History.-§!, ch. 21847, 1943; §§13, 35. ch . 69-106: §3. rh. 70-~99.

633.14 Agents; arrests, summonses, arms, etc.-Agents of the state fire marshal shall have the same authority to serve summonses, make arrests, carry firearms and make searches and seizures, as the sheriff or his deputies, in the respective counties where such investigations, hearings or inspections may be held; and affidavits necessary to authorize any such arrests, searches or seizures may be made before any magistrate having authority under the law to issue appropriate processes.

History.-§!. ch. 21847, 1943: §§13. 35. r h . !i9-lO(i; ~:l. r h . 70-~HH .

633.15 State fire marshal; rules and regulations; violation.-This law, and all regulations prescribed by the state fire marshal hereunder, shall have the same force and effect in each and every incorporated town or city, as the ordinances of such respective municipalities, and shall be enforceable in the municipal courts in the same manner as such ordinances.

History.-§!, ch. 21847, 1943; §§13, 35, ch . 69-106; §3. ch. 70-299.

633.161 Cease and desist orders; notice to correct hazardous condition; notice of violation; hearings and review; penalties.-

(1) Whenever the state fire marshal shall have reason to believe that any person is or has been violating any provisions of this chapter or any rules or regulations adopted and promulgated pursuant thereto, he may issue to such person an official notice of violation or notice to correct hazardous condition under §633.081. If said person fails or refuses to comply with the requirements for compliance or correction as set forth in the notice of violation or correction by the date specified in the notice, the state fire marshal or his deputy may issue and deliver to such person an order to cease and desist such violation or to correct such hazardous condition.

(2) Any person aggrieved by any cease and desist or corrective order of the state fire marshal may demand a hearing. If such aggrieved person is a licensee or permittee under this chapter and if the state fire marshal has filed notice and charges against such permittee or licensee under the provisions of §633.162, such grievance shall be heard or disposed of by the state fire marshal under that section. Such demand for hearing shall be in writing, shall

1562


summarize the information and grounds for the relief sought at the hearing, and shall be served upon or delivered to the state fire marshal within fifteen days from the date that the order is delivered to or received by such aggrieved person. The state fire marshal shall grant such request within fifteen days after the same is received, and the state fire marshal shall give at least ten days' written notice of the date and place of hearing. All hearings hereunder shall be conducted in accordance with provisions of chapter 624 and §633.101. All final orders or decisions of the state fire marshal rendered after demand and hearing in accordance with this section shall be subject to review as provided in §633.19.

(3) Unless an order or notice is remanded by the state fire marshal after hearing in accordance with subsection (2), any person who violates or fails to comply with any notice to correct or cease and desist order under subsection (1) shall be guilty of a misdemeanor and be punished as provided for in §633.171.

History.-§10, ch . 65-216; §4, ch . 67-78; §§13, 35, ch . 69-106; §3, ch. 71-141.

633.162 Procedure for suspension or revocation of license or permit.-

( I) The violation of any of the provisions of this chapter or any rules and regulations adopted and promulgated pursuant thereto or failure or refusal to comply with any notice of violation, notice to correct, or cease and desist order entered pursuant to §633.161 by any person possessed of a license or permit shall be cause for revocation or suspension of such license or permit by the state fire marshal after such officer shall determine that person is guilty of such violation.

(2) Whenever the state fire marshal shall have reason to believe that any person is or has been violating the provisions of this chapter or any rules or regulations adopted and promulgated pursuant thereto, or is violating or has violated a cease and desist or corrective order, he shall issue to such person a statement of the charges in that respect, together with written notice of his intention to suspend or revoke the license or permit.

(3) If within twenty days after the date of mailing said statement of charges the licensee or permittee has not filed with the state fire marshal at his office in Tallahassee a written answer to such charges, coupled with a written request for a hearing thereon, the state fire marshal may proceed to suspend or revoke the license or permit.

(4) If within such twenty days an answer and request for hearing is filed with the state fire marshal, he shall hold a hearing with respect to the charges within sixty days from the date of the mailing of the statement of charges, unless postponed by mutual consent of the parties. The state fire marshal shall give the licensee or permittee written notice of the hearing not less

than ten days in advance of the hearing date. (5) At the conclusion of such hearing and

after consideration by the state fire marshal of the evidence produced thereat, should he find in his judgment that said charge of violation has been proved he shall enter his order suspending or revoking the license or permit of the person charged. An order of suspension shall state the period of time of such suspension, which period shall not be in excess of one year from the date of such order. An order of revocation may be entered for a period of not exceeding two years. Such order shall effect revocation of license or permit then held by said person and during such period of time no license or permit shall be issued said person. If, during the period between the filing of charges and entry of an order of suspension or revocation by the state fire marshal, a new license or permit has been issued the person so charged, any order of suspension or revocation shall operate effectively with respect to said new license or permit held by such person. After such hearing, should the state fire marshal determine that the charge has not been sustained he shall enter his order to that effect.

History.-§4, ch. 71-141.

633.163 Administrative fines for violation of cease and desist or corrective order.-If any person violates a cease and desist or corrective order, the state fire marshal may impose a civil penalty not to exceed · $250 for each offense or suspend or revoke the license or permit issued to such person in accordance with the procedure set forth in §633.162. The cost of the proceedings is to be in addition to any penalties imposed. The state fire marshal may allow the licensee or permittee a reasonable period, not to exceed thirty days, within which to pay to the state fire marshal the amount of the penalty so imposed. If the licensee or permittee fails to pay the penalty in its entirety to the state fire marshal at his office in Tallahassee within the period so allowed, the licenses or permits of the licensee or permittee shall stand revoked upon expiration of such period and without any further proceedings.

History.-§5, ch. 71-14 1.

633.171 Penalty for violations of law, rules and regulations, or order to cease and desist or failure to comply with corrective order.-

(1) The violation of any provision of this law, or any order, rule, or regulation of ~he state fire marshal or order to cease and des1st or to correct conditions issued hereunder, shall constitute a misdemeanor of the second degree, punishable as provided in §775.082 or §775.083.

(2) It shall constitute a misdemeanor of the second degree, punishable as provided in §775.082 or §775.083, to:

(a) Steal a fire extinguisher or system. (b) Render a fire extinguisher or system,

which is required by the state fire marshal's

1563

Ch. 633 FIRE PREYENTION AND CONTROL Ch. 633

rules and regulations, inoperative except during such time as said extinguisher or system is being serviced, tested, repaired, or recharged.

(c) Obliterate the serial number on a fire extinguisher.

(d) Knowingly improperly service, recharge, repair, test, or inspect a fire extinguisher or system.

(e) Use the permit number of another person.

(f) Hold a permit and allow another person to use said permit number.

(g) Use, or permit the use of, any license by any individual or organization other than the one to whom the license is issued.

History.-§1. ch. 21847, 1943; 111, ch. 65-216; 1§13, 35, ch. 69-106: §659, ch . 71-136: §7A, ch. 71 -141.


633.18 State fire marshal; hearings, investigations, subpoenas, etc.-Any agent designated by the state fire marshal for such purposes, may hold hearings, sign and issue subpoenas, administer oaths, examine witnesses, receive evidence, and require by subpoena the attendance and testimony of witnesses and the production of such accounts, records, memoranda or other evidence, as may be material for the determination of any complaint or conducting any inquiry or investigation under this law. In case of disobedience to a subpoena, the state fire marshal or his agent may invoke the aid of any court of competent jurisdiction in requiring the attendance and testimony of witnesses and the production of

accounts, records, memoranda or other evidence and any such court may in case of contumacy or refusal to obey a subpoena issued to any person, issue an order requiring the person to appear before the state fire marshal's agent or produce accounts, records, memoranda or other evidence, as so ordered, or to give evidence touching any matter pertinent to any complaint or the subject of any inquiry or investigation, and any failure to obey such order of the court shall be punished by the court as a contempt thereof.

History.-§1, ch. 21847, 1943; 112, ch. 65-216; 1113, 35, ch. 69-106: §3, ch . 70-299.

Note.-Former1y 1633.17.

633.19 Review of order of the state fire marshal.-

(1) All final orders relating to suspension or revocation of license or permit or the imposition of administrative penalty shall be subject to review by certiorari by the circuit court of Leon County. Such review shall be commenced within the time provided by the Florida appellate rules after the rendition of such order or decision and in compliance with the Florida appellate rules.

(2) The cost of the record is to be paid by the person seeking review. Any record required to be filed in such review shall be certified by the state fire marshal or his deputy. No such review shall operate as a supersedeas with respect to any order issued under the provisions of §633.-161 or any order of suspension or revocation unless so ordered by the circuit court.

History.-§6, ch . 71-141.

1564

Ch. 634 AUTOMOBILE INSPECTION AND WARRANTY ASSOCIATIONS Ch. 634

CHAPTER 634

AUTOMOBILE INSPECTION AND WARRANTY ASSOCIATIONS

634.011 634.021 634.031 634.041 634.052 634.061

634.071 634.081

634.091

Definitions. Powers of department; rules. License required. Qualifications for license. Required deposit or bond. Application for and issuance of li

cense. License expiration, renewal. Suspension, revocation of license for

violations and special grounds. Procedure to suspend or revoke li-

cense. 634.101 Order, notice of suspension or revo

cation of license; effect; publication. 634.111 Duration of suspension; association's

obligations during suspension period; reinstatement.

634.121 Filing, approval of forms, rate filings. 634.131 Tax on premiums and assessments. 634.141 Examination of associations.

634.011 Definitions.-As used in this act: (1) "Automobile inspection and warranty

association" or "association" means any corporation or any other organization (other than an authorized insurer) issuing automobile warranties as herein defined.

(2) "Insurer" means any property or casualty insurer duly authorized to transact such business in this state.

(3) "Automobile warranty" or "warranty" means any contract or agreement indemnifying the warranty holder against loss caused by wear, tear, or failure of any mechanical or other component part of the automobile due to the defect in material or workmanship arising out of the ownership, operation, and use of such automobile; provided, however, that nothing in this act shall prohibit or affect the giving of usual performance guarantees by manufacturers or dealers in connection with the sale of automobiles.

( 4) "Salesman" means any person employed or otherwise retained by an insurer or an automobile inspection and warranty association for the purpose of selling or issuing automobile warranties.

(5) "Rate" means the unit charge by which the measure of exposure in a warranty is multiplied to determine the premium.

(6) "Premium" means the consideration paid, or to be paid, to an insurer, or automobile inspection and warranty association for the issuance and delivery of any binder or warranty.

(7) "Department" means the department of insurance.

History.-§!, ch. 59-llO; §§13, 35, ch. 69-106; §268, ch. 71-377.

634.021 Powers of department; rules.-The department shall administer this act and to that end it may adopt, promulg:J.te and en-

634.151

634.161 634.171 634.181

634.191

634.201

634.211

634.221 634.231 634.241 634.251

Service of process; appointment of commissioner as process agent.

Serving process. Salesman to be registered. Grounds for compulsory refusal, sus

pension, or revocation of registration of salesmen.

Grounds for discretionary refusal, suspension, revocation of registration of salesmen.

Procedure for refusal, suspension, or revc>cation of registration of salesmen.

Administrative fine in lieu of suspension or revocation of registration.

Disposition of taxes and fees. Insurance business not authorized. Fronting not permitted. Penalty for violation.

force rules and regulations necessary and proper to effectuate any provisions of this act. Hlstory.-~2. ch. 59-110 ; §§13, 35, ch . 69-106 .

634.031 License required.-(1) No automobile inspection and warranty

association shall transact, attempt to transact, or in any manner hold itself out as trans·acting such business in this state unless it is authorized therefor under a subsisting license issued to it by the department. The association shall pay to the department a license tax of one hundred dollars for such license, for each license year or part thereof the license is in force.

(2) An insu:rer while authorized to transact property or casualty insurance in this state may transact also an automobile inspection and warranty business without additional qualifications or authority, but otherwise subject to the applicable provisions of this act.

Hlstory.-§3, ch. 59-110; §§13, 35, ch. 69-106.

634.041 Qualifications for license. - The department shall not issue a license to any such association unless the association is qualified therefor as follows:

(1) Is a solvent corporation formed under the laws of Florida or of another state, district, territory or possession of the United States.

(2) Furnishes the department with evidence satisfactory to it that the management of the association is competent and trustworthy, and can successfully manage its affairs in compliance with law.

(3) Proposes to use and uses in its business a name, together with trade mark or emblem, if any, which is distinctive and not so similar to the name of any other association, corporation, or organization already doing business in this state as likely to mislead or confuse the public.

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(4) quired

(5) act.

Makes the deposit or files the bond reunder §634.052. Is otherwise in compliance with this

History.-§4, ch. 59- 110; 1§13, 35, ch . 69-106.

634.052 Required deposit or bond.-(1) To assure the faithful performance of

its obligations to its members or subscribers every automobile inspection and warranty association shall, prior to issuance of its license by the department, deposit with the department securties of the type eligible for deposit by insurers under §625.52 of the insurance code, and having at all times a market value of not less than fifty thousand dollars; except, that any such association doing such a business in this state on or before April 1, 1959, shall on or before October 1, 1959, so deposit such securities in the value of not less than twenty-five thousand dollars, and on or before October 1, 1961, so deposit additional such securities having a value of not less than twenty-five thousand dollars, in order to bring its total deposit of securities to a value of not less than fifty thousand dollars not later than October 1, 1961.

(2) In lieu of any deposit of securities required under subsection (1), the association may file with the department a surety bond in like amount. The bond shall be one issued by an authorized surety insurer, shall be for the same purpose as the deposit in lieu of which it is filed, and shall be subject to the department's approval. No such bond shall be cancelled or subject to cancellation unless at least thirty days' advance notice thereof in writing is filed with the department.

(3) The state shall be responsible for the safekeeping of all securities deposited with the department under this act. Such securities shall not, on account of being in this state, be subject to taxation, but shall be held exclusively and solely to guarantee the association's faithful performance 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) Such 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 proof satisfactory to it 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 parties entitled thereto, on presentation of the department's receipts for such securities, or release any bond filed with it in lieu of such deposit.

llistory.-§5, ch. 59-110 ; §§13, 35, ch. 69-106.

634.061 Application for and issuance of license.-

(1) Application for license as an automobile inspection and warranty association shall be made to and filed with the department on printed forms as prescribed and furnished by it.

(2) In addition to information relative to its qualifications as called for under §634.041, the application shall show:

(a) Location of applicant's home office. (b) Name and residence address of each di

rector or officer of applicant. (c) Other pertinent information as required

by the department. (3) The application when filed shall be ac

companied by: (a) A copy of the applicant's articles of in

corporation, certified by the public official having custody of the original and a copy of its by-laws certified by its secretary.

(b) A copy of the most recent financial statement of applicant, verified under the oath of at least two of its principal officers.

(c) License fee in the amount of one hundred dollars, as required under §634.031.

( 4) Upon completion of the application for license the department shall examine the same and make such further investigation of applicant as it deems advisable. If it finds that the applicant is qualified therefor under this act, it shall issue to the applicant a license as an automobile inspection and warranty association. If the department does not so find, it shall refuse to issue the license and shall give the applicant written notice of such refusal, setting forth the grounds therefor. Any such notice of refusal shall be accompanied by refund of the annual license fee theretofore tendered in connection with the application. The department shall act upon any such application within a reasonable period of time after its completion.

Hlstory.-§6, ch. 59-110; 1§13, 35, ch. 69-106 .

634.071 License expiration, renewal.-Each license as an automobile inspection and warranty association issued under this act shall expire on the September 30 next following date of issuance. If the association is then qualified therefor under this act, its license may be renewed annually upon its request therefor and payment to the department of license tax in the amount of one hundred dollars in advance for each such license year.

Hlstory.-§7, ch. 59-110; U13, 35, ch. 69-106.

634.081 Suspension, revocation of license for violations and special grounds.-

(!) The department may, in its discretion, suspend, revoke or refuse to renew the license of any automobile inspection and warranty association if it finds that the association has violated any lawful order of the department or any provision of this act.

(2) The department shall suspend or re-

1566


voke an automobile inspection and warranty association's license if it finds that such association:

(a) Is in unsound condition, or in such condition, or using such methods and practices in the conduct of its business, as to render its further transaction of warranties in this state hazardous or injurious to its warranty holders or to the public.

(b) Has refused to be examined or to produce its accounts, records and files for examination, or if any of its officers have refused to give information with respect to its affairs or to perform any other legal obligation as to such examination, when required by the department.

(c) Has failed to pay any final judgment rendered against it in this state within ninety days after the judgment became final.

(d) With such frequency as to indicate its general business practice in this state, has without just cause refused to pay proper claims arising under its warranties, or without just cause compels warranty holders to accept less than the amount due them or to employ attorneys or to bring suit against the association to secure full payment or settlement of such claims.

(e) Is affiliated with and under the same general management or interlocking directorate or ownership as another automobile inspection and warranty association which transacts direct warranties in this state without having a license therefor.

(3) The department may, in its discretion and without advance notice or hearing thereon, immediately suspend the license of any automobile inspection and warranty association as to which proceedings for receivership, conservatorship, rehabilitation, or other delinquency proceedings, have been commenced in any state.

(4) Violation of this act by an insurer shall be grounds for suspension or revocation of the insurer's certificate of authority in this state, in accordance with procedures and conditions provided for in part III of chapter 624 of the insurance code.

Blstor;r.-§8, ch. 59-110; 1§13, 35, ch. 69-106.

634.091 Procedure to suspend or revoke license.-

(1) Except where hearing is expressly not required under §634.081, no order of the department suspending or revoking an association's license shall be effective unless made after a hearing of which notice and order directing the association to show cause thereat why its license should not be so suspended or revoked was mailed to the association by registered or certified mail addressed to its home office or principal place of business in the United States not less than thirty days in advance.

(2) The notice shall contain, in addition to a statement of the time and place of the hearing and the order to show cause, a concise

statement of the particulars of the grounds for such proposed suspension or revocation in such details as reasonably to inform the association thereof.

(3) Except, that the association may in writing filed with the department within the thirty days' period waive the hearing, in which case the department may forthwith issue its order of suspension or revocation of the license.

Bistory.-§9, ch . 59-110; §§13, 35, ch. 69-106.

634.101 Order, notice of suspension or revocation of license; effect; publication.-

(!) Suspension or revocation of an association 's license shall be by the department's order mailed to the association by registered or certified mail. The department shall promptly also give notice of such suspension or revocation to the association's salesmen in this state of record in the department's office. The association shall not solicit or write any new warranties in this state during the period of any such suspension or revocation, nor after such revocation renew any business previously written.

(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.

Blstory.-§10, ch. SU-110 ; §§13, 35, ch. 69-106.

634.111 Duration of suspension; association's obligations during suspension period; reinstatement.-

( I) Suspension of an association's license shall be for such period not to exceed one year, as is fixed by the department in the order of suspension, unless the department shortens or rescinds such suspension or the order upon which the suspension is based is modified, rescinded or reversed.

(2) During the period of suspension the association shall file its annual statement, pay fees, licenses and taxes as required under this chapter as if the license had continued in full force.

(3) Upon expiration of the suspension period (if within such period the license has not otherwise terminated) the association's license shaJI automatically reinstate unless 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, and of which the department shall give the association notice not less than thirty days in advance of the expiration of the suspension period. If not so automatically reinstated the license shall be deemed to have expired as of the end of the suspension period or upon failure of the association to continue the license during the suspension period, whichever event first occurs.

(4) Upon reinstatement of the association license, or reinstatement of the certificate of authority of an insurer following suspension, the authority of its salesmen in this state to

1567


represent the association or insurer shall likewise reinstate. The department shall promptly notify the association or insurer and its salesmen in this state of record in its office of such reinstatement.

History.-§11, ch. 59-110; §§13, 35, ch . 69-106.

634.121 Filing, approval of forms, rate filings.-

(1) No warranty form nor related form shall 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 thirty days in advance of issuance or use. At the expiration of thirty days from 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 fifteen 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 thirty 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 insurer and automobile inspection and warranty association shall file with the department the rate to be charged for each warranty and the premium, including all modifications of rates and premiums, to be paid by the warranty holder. Every filing shall state the proposed effective date thereon. Such filing shall be made not less than thirty days prior to its effective date.

Blslory.-112, ch. 59-110; 1113, 35, ch . 69-106.

634.131 Tax on premiums and assessments.-

(1) In addition to the license taxes provided for in this act for automobile inspection and warranty 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 form as prescribed and furnished by the department, showing all warranty premiums or assessments received by it from warranty holders in this state, during the preceding calendar year, and shall pay to the state treasurer a tax in an amount equal to two per cent of the gross amount of such premiums or assessments. Provided that the same exemptions and credits as set forth in §§624.512 and 624.514 of the insurance code allowed to insurers shall apply to insurers and automobile inspection and warranty associations under this act.

(2) Premiums and assessments received by insurers and taxed under this section shall not be subject to any premium tax provided for in the insurance code.

History.-U3, ch. 59-110; §2, ch. 61-119; §30, ch. 65-269; 1§13, 35, ch. 69-106.

634.141 Examination of associations.-Automobile inspection and warranty associations licensed under this act shall be subject to periodic examination by the department in the same manner and subjed to the same terms and conditions as applies to insurers under part II of chapter 624 of the insurance code.

Hlstory.-§14, ch. 59-110; §§13, 35, ch. 69-106.

634.151 Service of process; appointment of commissioner as process agent.-

(1) Each association applying for authority to transact business in this state, whether domestic or foreign, shall file with the department its appointment of the insurance commissioner and treasurer and his successors in office, on a form as furnished by the department, as its attorney to receive service of all legal process issued against it in any civil action or proceeding in this state, and agreeing that process so served shall be valid and binding upon the association. The appointment shall be irrevocable, shall bind the association and any successor in interest as to the assets or liabilities of the association, and shall remain in effect as long as there is outstanding in this state any obligation or liability of the association resulting from its warranty transactions therein.

(2) At the time of such appointment of the insurance commissioner and treasurer as its process agent the association shall file with the department designation of the name and address of the person to whom process against it served upon the insurance commissioner and treasurer is to be forwarded. The association may change the designation at any time by a new filing.

Hlatory.-115, ch. 59-110; 1113, 35, ch. 69-106.

634.161 Serving process.-(1) Service of process upon the insurance

commissioner and treasurer as process agent of the association shall be made by serving copies in triplicate of the process upon the insurance commissioner and treasurer or upon his assistant, deputy, or other person in charge of his office. Upon receiving such service the insurance commissioner and treasurer shall file one copy with the department, return one copy with his admission of service, and promptly forward one copy &f the process by registered or certified mail to the person last designated by the association to receive the same, as provided under §634.151.

(2) Process served upon the insurance commissioner and treasurer and copy thereof forwarded as in this section provided shall for all purposes constitute valid and binding service thereof upon the association.

Hlslory.-118, ch. 58-110; 1113, 35, cb. 69-106.

634.171 Salesman to be registered.-Every automobile inspection and warranty 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 salesman employed by it, and shall within thirty days after termination of the employment notify the department of such termination. Any salesman employed subsequent to the October 1

1568

Ch. &34 AUTOMOBILE INSPECTION AND WARRANTY ASSOCIATIONS Ch. 634

filing date shall be registered with the department within ten days after such employment. No employee or salesman of an automobile inspection and warranty 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.

Hlstory.-§17, ch . 59-110; §§13, 35, ch. 69-106.

634.181 Grounds for compulsory refusal, suspension, or revocation of registration of salesmen.-The department shall deny, suspend, revoke, or refuse to renew or continue the registration of any such salesman if it finds after notice and hearing thereon as provided for in §634.201 that as to the salesman, any one or more of the following applicable grounds exist:

(1) Material misstatement, misrepresentation or fraud in registration.

(2) If the registration is willfully used, or to be used, to circumvent any of the requirements or prohibitions of this act.

(3) Willful misrepresentation of any warranty contract or willful deception with regard to any such contract, done either in person or by any form of dissemination of information or advertising.

(4) If in the adjustment of claims arising out of warranties, he has materially misrepresented to a warranty holder or other interested party 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 providL'-1 in and contemplated by the contract.

(5) For demonstrated lack of fitness or trustworthiness to engage in the business of warranty.

(6) For 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 association, insurer, or warranty holder or to others, and received in conduct of business under the registration.

(9) For rebating, or attempt thereat, or for unlawfully dividing or offering to divide his commission with another.

(10) Willful failure to comply with, or willful violation of any proper order, rule or regulation of the department, or willful violation of any provision of this act.

Hlstory.-§18, ch. 59-110; §§13, 35, ch. 69-106 .

634.191 Grounds for discretionary refusal, suspension, revocation of registration of sales~

men.-The department may, in its discretion, deny, suspend, revoke or refuse to renew or continue the registration of any salesman if it finds after notice and hearing thereon as provided in §634.201 that as to the salesman any one or more of the following applicable grounds exist under circumstances for which such denial, suspension, revocation or refusal is not mandatory under §634.181:

(1) For any cause for which' granting of the registration could have been refused had it then existed and been known to the department.

(2) Violation of any provision of this act or of any other law applicable to the business of warranties in the course of dealings under the registration.

(3) Has violated any lawful order or rule or regulation of the department.

( 4) Failure or refusal, upon demand, to pay over to any association or insurer he represents or has represented any money coming into his hands belonging to the association or insurer.

(5) If in the conduct of business under the registration he has engaged in unfair methods of competition or in unfair or deceptive acts or practices, as such methods, acts, or practices are or may be defined under part VII of chapter 626 of the insurance code, or has otherwise shown himself to be a source of injury or loss to the public or detrimental to the public interest.

(6) Conviction of a felony. Hlstory.-§19, ch. 59-110; §§13, 35, ch. 69-106 .

634.201 Procedure for refusal, suspension, or revocation of registration of salesmen.-

(1) If any salesman is convicted by a court of a violation of this act, the registration of such individual shall thereby be deemed to be immediately revoked, without any further procedure relative thereto by the department.

(2) As to a registration denied, suspended or revoked by the department the person aggrieved thereby shall have the right to a hearing thereon before the department, and may have the order reviewed by certiorari by the circuit court in and for Leon county within the time and in the manner provided by the Florida appellate rules.

(3) If after an investigation, or upon other evidence, the department has reason to believe that there may exist any one or more grounds for the suspension, revocation, or refusal to renew or continue the registration of any: salesman, as such grounds are specified in **634.181 and 634.191, the department shall mail written notice of its intention to suspend, revoke, or refuse to renew or continue the registration, as the case may be, accompanied by a copy of the charges against the salesman,. to the salesman and to the association or insurer represented by the salesman.

1569


Such notice and charges shall be mailed by registered or certified mail, addressed to the salesman at his residence or principal business address last of record with the department, and to the association or insurer addressed to its last address of record with the department. The notice shall be deemed given when so addressed and mailed postage prepaid at a United States post office.

(4) If within twenty days after the date of mailing the notice and charges as provided for in subsection (3), neither the salesman, nor the association or insurer, has filed with the department at its office in Tallahassee a written answer to such charges coupled with a written request for a hearing thereon, the department may proceed to suspend, revoke, or refuse to renew the registration.

(5) If, within such twenty days an answer and request for hearing is so filed with the department, the department shall hold a hearing with respect to the charges, the hearing to be held within sixty days of the date of the mailing of the notice and charges referred to in subsection (3), unless postponed by mutual consent of the parties. The department shall give the salesman and each association or insurer that has filed with it the answer to the charges and request for hearing as provided in subsection ( 4), written notice of the hearing and of the matters to be considered thereat not less than ten days in advance of the hearing date.

(6) All such hearings shall be public at such place in this state deemed by the department to be convenient to parties and witnesses.

(7) An examiner designated by the department shall preside at the hearing and shall sit in the capacity of a quasi-judicial officer.

(8) The department's statement of charges, papers, documents, reports or evidence relative to the subject of a hearing under this section shall not be subject to subpoena without its consent until after the same shall have been published at the hearing, unless after notice to the department and hearing, the court determines that the department would not be unnecessarily hindered or embarrassed.

(9) Following the hearing the department shall make its order thereon and mail a copy thereof by registered or certified mail to the address last of record in its office of each party to the hearing. If by its findings made upon the hearing the department finds that one or more of the grounds therefor exist as specified in §§634.181 and 634.191, its order shall incorporate the taking of action relative to suspension, revocation, or refusal to renew or continue the registration as required under §634.181 or as authorized under §634.191.

(10) Whenever it appears that any licensed insurance agent has violated the provisions of this act, the department may take such ac-

tion relative thereto as is authorized by the insurance code as for a violation of the insurance code by such agent.

Wstor;r.-§20, ch. 58-110; 127, ch. 63-512; 1§13, 35, ch. 69-106.

634.211 Administrative fine in lieu of suspension or revocation of registration.-

(!) If, upon procedures provided for in this act, the department finds that one or more grounds exist for the suspension, revocation, or refusal to renew or continue any registration issued under this act, the department may, in its discretion, in lieu of such suspension, revocation or refusal, on a first offense and except where such suspension, revocation or refusal is mandatory, impose upon the registrant an administrative penalty in the amount of $100, or if the department has found willful misconduct or willful violation on the part of the registrant, an administrative fine of $500. The administrative penalty may, in the department's discretion, 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 as to which the grounds for suspension, revocation or refusal related.

(2) The department may allow the registrant a reasonable period, not to exceed thirty 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 at Tallahassee within the period so allowed, the registration of the registrant shall stand suspended, revoked, or renewal or continuation refused, as the case may be, upon expiration of such period and without any further proceedings.

Histor:r.-§21, ch. 59-110; §30, ch . 65-269; 1§13, 35, ch. 69-106.

634.221 Disposition of taxes and fees.-Ail license taxes, taxes on premiums and assessments, registration fees, and administrative fines and penalties collected under this act from automobile inspection and warranty associa-tions shall be deposited to the credit of the insurance commissioner's regulatory trust fund.

History.-!22, ch. 59-110; (I) !2, ch. 61-119; §20, ch. 65-268. cf.-§624.523 Regulatory trust fund.

634.231 Insurance business not authorized.-Nothing in this act shall be deemed to authorize any automobile inspection and warranty association to transact any business other than that of automobile warranty as herein defined; or otherwise to engage in the business of insurance unless such association is authorized therefor as an insurer under a certificate of authority issued by the department under the insurance code of this state.

History.-§23, ch. 59-110; 1§13, 35, ch. 68-106.

634.241 Fronting not permitted.-No authorized insurer or licensed automobile inspection and warranty association shall act as a fronting company for any unauthorized insurer or unlicensed automobile inspection and warranty association. A fronting company is an author-

1570


ized insurer or licensed automobile inspection and warranty association which by reinsurance or otherwise generally transfers to one or more unauthorized insurer or unlicensed automobile inspection and warranty associations substantially all of the risk of loss under warranties written by it in this state.

BldorJ.-12'· cb. 68-110.

634.251 Penalty for violation.-Any individ-

ual who knowingly makes a false or otherwise fraudulent application for license or registration under this act, or who knowingly violates any provision thereof, shall in addition to any applicable denial, suspension, revocation, or refusal to renew or continue any license or registration, be guilty of a misdemeano.r of t~e second degree, punishable as prov1ded m §775.082 or §775.083. Each instance of violation shall be considered a separate offense.

History.-§25, ch . 59-110; §660, ch . 71-136.

1571

Ch. 635 REGULATION OF MORTGAGE GUARANTY INSURANCE Ch. 635

CHAPTER 635

REGULATION OF MORTGAGE GUARANTY INSURANCE

635.011 Definitions. 635.021 Authority to transact business. 635.031 Additionallimitations. 635.041 Contingency reserve.

635.011 Definitions.-In this act unless the context or subject matter otherwise requires:

(1) "Mortgage guaranty insurance" means a form of casualty or surety insurance insuring lenders against:

(a) Financial loss by reason of nonpayment of principal, interest, and other sums agreed to be paid under the terms of any note, bond, or other evidence of indebtedness secured by a mortgage, deed of trust, or other instrument constituting a lien or charge on real estate which contains a residential building or a building designed to be occupied for industrial or commercial purposes.

(b) Financial loss by reason of nonpayment of rent and other sums agreed to be paid under the terms of a written lease for the possession, use, or occupancy of real estate, provided such real estate is designed to be occupied for industrial or commercial purposes.

(2) "Contingency reserve" means an additional premium reserve established for the protection of policyholders against the effect of adverse economic cycles.

(3) "Department" means the department of insurance.

History.-~ ! . ch . 59- 182; §§13, 35, ch. 69-106; ~ 1 . ch . 71-151; §269, ch. 71 -~77.

635.021 Authority to transact business.Mortgage guaranty insurance may be transacted by a stock casualty insurer or a stock surety insurer holding a certificate of authority for the transaction of insurance in this state.

BlatorJ'.-12, eb. 58-182.

635.031 Additional limitations.-In addition to laws otherwise applicable, mortgage guaranty insurers shall be subject to the following limitations:

(1) No such insurer shall retain risk as to any one subject of insurance in any amount exceeding ten percent of its surplus as to policyholders. In determining amount of risk retained, applicable reinsurance in any assuming insurer authorized to transact insurance in this state or approved by the department shall be deducted from the total direct risk insured.

(2) Mortgage guaranty insurance shall be written with respect to real estate loans only on those loans which a bank, a savings and loan association, or an insurance company regulated by this state or an agency of the federal government could make.

BlltorJ'.-13, eb. 58-182; tl, ch. 63-•28; tl, ch. 85-•V.; U13, Y>, ch . 69-106; ~2. ch . 71 -15 1.

635.041 Contingency reserve.-

635.051

635.061 635.071 635.081

Licensing of mortgage guaranty in-surance agents.

Premium cost. Filings, approval of forms, rate filings. Administration and enforcement.

(1) Each mortgage guaranty insurer shall establish a special contingency reserve out of net premiums (gross premiums less premiums returned to policyholders) remaining after establishment of the unearned premium reserve. To such contingency reserve the insurer shall contribute an amount equal to fifty per cent of such remaining premiums.

(2) Subject to the department's approval, the contingency reserve shall be available for loss payments only when the insurer's incurred losses in any one calendar year exceed the rate formula expected losses by ten per cent of the corresponding earned premiums.

(3) In event of release of the contingency reserve for payment of losses, as approved by the department, the · contributions required under subsection (1), shall be treated on a firstin-first-out basis.

( 4) The contingency reserve pertaining to a part~cular insurance policy shall be maintained (subject to prior payment of losses therefrom as provided in subsection (3)) for the term of the policy.

BlstorJ'.-t•. eh. 58-182; tt13, 35, cb. 88-108.

635.051 Licensing of mortgage guaranty Insurance agents.-

(1) Agents of mortgage guaranty insurers shall be licensed, and be subject to the same qualifications and requirements, as apply to general lines agents under the laws of this state, except:

(a) That no particular preliminary specialized education or training shall be required of an applicant for such an agent's license if, as part of the application for license, the insurer guarantees that the applicant will receive the necessary training to enable him properly to hold himself out to the public as a mortgage guaranty insurance agent, and if the department, in its discretion, accepts such guaranty;

(b) The agent's license shall be a limited license, limited to the handling of mortgage guaranty insurance only; and

(e) An examination may be required of an applicant for such a license in the discretion of the department.

(2) Any general lines agent shall qualify to represent a mortgage guaranty insurer without additional examination.

(3) The department shall charge and collect the same applicable license taxes and fees for or in connection with such application and license as apply to general lines agents. The department shall deposit such license taxes and fees in such funds and for such uses as

1572

Ch. 635 REGULATION OF MORTGAGE GUARANTY INSURANCE Ch. 635

is provided by laws applicable to like license taxes and like fees in the case of general lines agents.

Bla&ory.-15, ch. U-182; 1113, 35, ch. 80-108.

635.061 Premium cost.-The premium cost of mortgage guaranty insurance shall not be deemed for any purpose to constitute a part of the cost of or interest upon any mortgage loan.

Bls&orr.-18, cb. &9-182.

635.071 Filings, approval of forms, rate fil-ings.

(1) No policy form or related form shall be issued or used in this state unless it has been filed with and approved by the depart-

1573

ment as provided by Jaws applicable to casualty .or surety insurance.

(2) In addition, each insurer shall file with the department the rate to be charged and the premium including all modifications of rates and premiums to be paid by the policyholder.

Hlstory.-§7, ch. 59-182 ; 1§13, 35, ch. 69-106.

635.081 Administration and enforcement.The department shall have the same powers of administration and enforcement of the provisions of this act, and to make rules and regulations for the effectuation of any provisions of this act, as it has with respect to casualty or surety insurers in general under the insurance laws of this state.

Hlstorr.-18. ch. 59-182 ; 1§13, 35, ch. 69-106.

Ch. 637 NONPROFIT CORPORATIONS-PROFESSIONAL SERVICE PLANS Ch. 637

CHAPTER 637

NONPROFIT CORPORATIONS-PROFESSIONAL SERVICE PLANS

PART I NONPROFIT OPTOMETRIC SERVICE CORPORATIONS (§§637.011-637.161)

PART II NONPROFIT PHARMACEUTICAL SERVICE CORPORATIONS ( § §637.171-637.321)

PART I

NONPROFIT OPTOMETRIC SERVICE CORPORATIONS

637.011 637.021 637.031 637.041 637.051

637.061 637.071 637.081

Optometric service plan corporations. Incorporation. Contracts. License. Charter, bylaws, contracts, rates;

amendments, approval by department of insurance.

Annual reports or statements. Examination. Acquisition costs.

637.011 Optometric service plan corporations.-

(1) Any thirty or more persons wishing to form a corporation for the purpose of establishing, maintaining and operating a nonprofit optometric service plan or plans in the state whereby optometric service or care may be provided in whole ot· in part by the said corporation, or by optometrists participating in such service plan or plans, to such of the public as become subscribers to said plan or plans under a contract or contracts with such corporation may become incorporated under laws of Florida governing the incorporation of benevolent or charitable associations and similar corporations not for profit, and any such corporation heretofore or hereafter incorporated, whose charter or certificate of incorporation has or shall have the consent or approval of the department of insurance of the state, shall be governed by this chapter and subject to regulation and supervision by the department and to all provisions of the laws of Florida applicable to health or disability insurance, except as otherwise provided by this chapter. The term "optometric service plan" as used in this chapter includes the contracting for the payment of fees toward, or the furnishing of, professional services or opthalmic materials authorized or permitted to be furnished by a duly licensed doctor of optometry.

(2) Every corporation licensed under provisions of this chapter is hereby declared to be a charitable and benevolent institution.

Blstory.-11. ch. 67-352; 1113, 35, ch . 68-106.

637.021 Incorporation.-(!) Any nonprofit optometric service plan

corporation shall be incorporated under ~he provisions of the laws of the state govermng the incorporation of benevolent or charitable associations and similar corporations not for profit, except when such provisions are in conflict with the provisions of this chapter, and every charter or certificate of such corporation shall have endorsed thereon or annexed thereto

637.091 637.101 637.111 637.121 637.131 637.141

637.151 637.161

Investments and funds. Review of dispute. Dissolution or liquidation. Revocation of license. Licenses and taxes. Regulation of employees or represent

atives of optometric service corporations.

Preexisting service plan corporations. Penalties.

the consent of the department of insurance of the state.

(2) The directors of every such optometric service plan corporation must at all times include representatives of the licensed optometrists and the general public.

(3 J At least a majority of the directors of every such optometric service plan corporation must at all times be licensed optometrists.

Hlstory .-J2, ch . 67·352; 1113. 35, ch. 69-106.

637.031 Contracts.-The rates charged by such corporation to the subscribers for optometric care shall at all times be subject to the approval of the department of insurance of the state.

Hlstory.-!3. ch. 67-352 ; 1113, 35 , ch . 68-106.

637.041 License.-(!) No corporation subject to the provisions

of this chapter shall issue contracts to subscribers until the department of insurance has, by formal certificate or license, authorized it to do so. Application for such certificate of au-thority or license shall be made on forms to be supplied by the department and containing such information as it shall deem necessary.

(2) Each application for such certificate of authority or license, as a part thereof, shall be accompanied by copies of the following documents, duly certified to by at least two of the executive officers of such corporation:

(a) Charter or certificate of incorporation, with all amendments thereto.

(b) Bylaws, with all amendments thereto. (c) Proposed contracts between the corpo

ration and any party for the furnishing of or the payment in whole or in part for optometric services furnished the subscribers by duly licensed optometrists.

(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 charged, or proposed to be charged, to subscribers for each form of such contract.

1574


(e) Financial statement of the corporation, which shall include the amounts of each contribution paid or agreed to be paid to the corporation having working capital, the name or names of each contributor, and the terms of each contribution.

(3) (a) The department of insurance shall issue a certificate of authority or license to each applicant upon the payment of the fees provided for in §624.501 and upon being satisfied as to the following:

1. That the applicant has been organized bona fide for the purpose of establishing, maintaining, and operating a nonprofit optometric service plan.

2. That each contract executed or proposed to be executed by the applicant and the optometrist obligates, or will when executed obligate, each optometrist thereto 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.

3. That each contract issued or proposed to be issued to subscribers to the plan is in a form approved by the department and that the rates charged or proposed to be charged for each form of such contract and benefits to be provided are fair and reasonable.

4. That no contributions to the funds of the corporation for working capital are repayable by the corporation except out of earned income over and above operating expenses and optometric expenses and such reserve as the department may deem adequate.

5. That the amount of money actually received by the applicant upon the terms specified in subparagraph 4. hereof, for working capital, is sufficient to carry all acquisition costs and operating expenses for a period of at least three months from the date of the issuance of the certificate of authority or license.

(b) Such certificate of authority or license shall be effective until revoked by the department as hereinafter provided, and any corporation to which such certificate of authority or license has been issued shall, until revocation thereof, be authorized to issue contracts, in the form or forms filed with the department, to the persons who may become subscribers.

Bldorr.-14, ch. 87-352; 1113, 35, ch. 88-108.

637.051 Charter, bylaws, contracts, rates; amendments, approval by department of insurance.-No corporation subject to the provisions of this chapter shall amend its charter or certificate of incorporation, its bylaws, the terms and provisions of contracts executed or to be executed with optometrists, or 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 of insurance; 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 of insurance. Upon the adoption of any amend-

ment or change, and following its approval by the department, such corporation shall file a copy thereof with the insurance department duly certified by at least two of the executive officers of such corporation.

Biltorr.-15, ch. 67-352; 1§13, 35, ch. 68-106.

637.061 Annual reports or statements. -Every corporation subject to the provisions of this chapter shall annually on or before March 1, file in the office of the department of insurance a statement verified by at least two of the principal officers of said corporation showing its condition on December 31 next preceding, which shall be in such form and contain such matters as the department of insurance shall prescribe.

Hlatory.-16, ch. 67-352; H13, 35, ch. 69-106.

637.071 Examination.-The department of insurance, any agent or examiner of the department, or any other person whom the department appoints shall have the power of visitation and examination into the affairs of any such corporation and free access to all of the books, papers and documents that relate to the business of the corporation, and may summon and qualify witnesses under oath and examine its officers, agents, and employees or other persons in relation to the affairs, transactions and condition of the corporation. The corporation whose affairs are examined shall pay to the department of insurance the traveling and other expenses of examination pursuant to §624.320.

Blotorr.-17, ch. 87-352; 1113, 35, ch. 88-108.

637.081 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.

Hldorr.-18, ch. 87-352; 1113, 35, ch. 88·108.

637.091 Investments and funds.-The funds of any corporation subject to the provisions of this chapter shall be invested only in securities permitted by the laws of the state for the investment of assets of life insurance companies.

Blstorr.-19, ch. 67-352.

637.101 Review of dispute.-(1) Any dispute arising between a corpora

tion subject to the provisions of this chapter and any optometrist with whom such corporation has a contract as provided herein may be submitted to the department of insurance for its decision with respect thereto.

(2) All final orders of the department of insurance made under the provisions of this law may be appealed to the District Court of Appeal, First District, in the manner a.nd within the time provided by the Florida Appellate Rules.

Rlstorr.-110, ch. 87-352; ft13, 35, ch. 88-108.

637.111 Dissolution or liquidation.-Any dissolution or liquidation of a corporation subject to the provisions of this chapter shall be under the supervision of the department of in-

1575


surance, which shall have all powers with respect thereto granted to it under the Jaws of the state with respect to the dissolution and liquidation of life insurance companies.

Hlstory.-§11, ch. 67-352; §§13, 35, ch. 69-106.

637.121 Revocation of license.-Whenever the department of insurance shall have reason to believe that any corporation subject to the provisions of this chapter is being operated for profit or fraudulently conducted or is not complying with the provisions of this chapter, it shall be authorized to suspend or revoke the certificate of authority or license theretofore granted and may at any time thereafter institute or cause to be instituted, after due notice to the corporation and an opportunity given to the corporation to be heard, the necessary proceedings under the laws of the state relating to the dissolution of insurance companies, and any dissolution or liquidation of a corporation subject to the provisions of this chapter shall be under the supervision of the department of insurance.

HlstorJ' .-112, ch. 67-352; §§13, 35, ch . 68-106.

637.131 Licenses and taxes.-( I) Every corporation licensed under this

chapter, its representatives, and all of its properties and funds shall be exempt from all taxes and license fees; provided, that suc·h corporation shall be subject to the same license fees and premium receipt taxes imposed by general law upon and against and payable by fraternal benefit societies operating under the provisions of chapter 632, and with respect to the computation of such premium receipt 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."

(2) If the charter or certificate of incorporation specifies among its purposes the establishment, maintenance and operation of an optometric service plan, it shall be referred to the department of insurance, and such charter or certificate shall not be filed until the consent of the department of insurance shall be endorsed thereon and annexed thereto.

HlstorJ.-113, ch. 67-352; lf13, 35, ch. 68-106.

637.141 Regulation of employees or representatives of optometric service corporations. -Every representative or employee of any corporation subject to the provisions of this chapter who sells or writes certificates for optometric service for said corporation shall be registered by said corporation with the department of insurance. Said registration shall be on forms prescribed by the department of insurance and shall show such information as may be requested by it. Said registration shall be made on or before the date of employment by said corporation of said representative or employee.

In addition to the foregoing described registration, the corporation shall pay to the department of insurance a permit fee of six dollars for each such representative or employee and a like amount October 1 of each year thereafter; provided, that said permit fee shall be only three dollars in case the said representative or employee is not employed prior to April 1 of the then current year. No such permit shall be transferable from one person or corporation to another and shall be revocable by the department of insurance for cause, after due notice to employee or representative and corporation followed by a hearing before the department of insurance.

Hlstory.-§14, ch. 67-352; §113, 35, ch. 69-106.

637.151 Preexisting service plan corporations.-No nonprofit corporation organized under the laws of this state prior to July 11, 1967, to operate an optometric service plan or plans in the state or any of the counties thereof, whose charter or certificate of incorporation has, prior to July 11, 1967, been approved or consented to by the insurance commissioner of the state, shall be required to incorporate or reincorporate as provided herein, but every such corporation desiring to operate such a plan or plans state-wide shall file with the insurance commissioner its acceptance of part I of this chapter within six months from July 1, 1967, and every such corporation so accepting part I shall continue and shall have all the powers, authority and exemptions of part I and be subject to all the provisions thereof; provided, however, that the provisions of part I of this chapter shall not apply to organized nonprofit corporations herein defined and heretofore existing whose charter and bylaws have not been filed with, or which have not received a certificate of authority or license from, the insurance commissioner of the state prior to July 11, 1967, nor to such corporations which are now in operation and have heretofore operated within the confines of a single county.

HlstorJ.-115, ch . 67-352.

637.161 Penalties.-(!) Any person or corporation engaging

in the business of operating a nonprofit optometric service plan without first having pro.~ cured a license from the department of insurance, as required by this part, and any person or corporation violating any of the provisions of this part shall be guilty of a misdemeanor of the first degree, punishable as provided in §775.082 or §775.083.

(2) Any person making any willfully false statements in any written documents required by any section of this chapter to be filed with the department of insurance or any examiner at. any investigation or hearing conducted by sa1d department of insurance or examiner shall be guilty of perjury.

History.-~ l fi, ch. 67-:!!;2; ~~ 1: !, :!!;, ch . (;fi. JIIn; ~(i l . ch . 71 -J:m.

1576


PART II

NONPROFIT PHARMACEUTICAL SERVICE CORPORATIONS

637.171

637.181 637.191 637.201 637.211

637.221 637.231 637.241

Pharmaceutical service plan corpora-tions.

Incorporation. Contracts. License. Charter, bylaws, contracts, rates;


Annual reports or statements. Examination. Acquis ition costs.

637.171 rations.-

Pharmaceutical service plan corpo-

(1 ) Any thirty or more persons wishing to form a corporation for the purpose of establishing, maintaining and operating a nonprofit pharmaceutical service plan or plans in this state whereby pharmaceutical service or care may be provided in whole or in part by the said corporation, or by pharmacists participating in such service plan or plans, to such of the public as become subscribers to said plan or plans under a contract or contracts with such corporation may become incorporated under laws of Florida governing the incorporation of benevolent or charitable associations and similar corporations not for profit, and any such corporation heretofore or hereafter incorporated, whose charter or certificate of incorporation has or shall have the consent or approval of the department of insurance of the state, shall be governed by this chapter and subject to regulation and supervis ion by the department of insurance and to all provisions of the laws of Florida applicable to health or disability insurance, except as otherwise provided by this chapter. The term "pharmaceutical service plan" as used in this chapter includes the contracting for the payment of fees toward, or the furnishing of, professional services and pharmaceutical products authorized or permitted to be furnished or dispensed by a duly licensed pharmacist.

(2) Every corporation licensed under provisions of this chapter is hereby declared to be a charitable and benevolent institution.

Hlstory .-§1, ch . 67-587 ; §!13, 35, ch. 69-106 .

637.181 Incorporation.-(1) Any nonprofit pharmaceutical service

plan corporation shall be incorporated under the provisions of the laws of the state governing the incorporation of benevolent or charitable associations and similar corporations not for profit, except when such provisions are in conflict with the provisions of this chapter, and every charter or certificate of such corporation shall have endorsed thereon or annexed thereto the consent of the department of insurance.

(2) The directors of such pharmaceutical service plan corporation must at all times include representatives of the licensed pharmacists and the general public.

(3) At least a majority of the directors of

637.251 637.261 637.271 637.281 637.291 637.301

637.311 637.321

Investments and funds. Review of dispute . Dissolution or liquidation. Revocation of license. Licenses and taxes. Regulation of employees or represent

atives of pharmaceutical service corporations.

Preexisting service plan corporation. Penalties.

every such pharmaceutical service plan corporation must at all times be licensed pharmacists.

Hlstory .-12, ch. 67-587; §§ 13, 35, ch . 69-106.

637.191 Contracts.-The rates charged by such corporation to the subscribers for pharmaceutical care shall at all times be subject to the approval of the department of insurance of the state.

History.-§3 , ch . 67-587; 1§13, 35, ch . 69-106.

637.201 License.-(1) No corporation subject to the provi

sions of this chapter shall issue contracts to subscribers until the department of insurance has, by formal certificate or license, authorized it to do so. Application for such certificate of authority or license shall be made on forms to be supplied by the department of insurance and containing such information as it shall deem necessary.

(2 ) Each application for such certificate of authority or license, as a part thereof, shall be accompanied by copies of the following documents, duly certified to by at least two of the executive officers of such corporation:


(b) Bylaws, with all amendments thereto. (c) Proposed contracts between the corpo

ration and any party for the furnishing of or the payment in whole or in part for pharmaceutical services and pharmaceutical products furnished or dispensed to the subscribers by duly licensed pharmacists.

(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 charged, or proposed to be charged, to subscribers for each form of such contract.

(e) Financial statement of the corporation which shall include the amounts of each contribution paid or agreed to be paid to the corporation having working capital, the name or names of each contributor, and the terms of each contribution.

(3) (a) The department of insurance shall issue a certificate of authority or license to each applicant upon the payment of the fees provided for in §624.501 and upon being satisfied as to the following:

1. That the applicant has been organized

1577


bona fide for the purpose of establishing, maintaining, and operating a nonprofit pharmaceutical service plan.

2. That each contract executed or proposed to be executed by the applicant and the pharmacist obligates, or will when executed obligate, each pharmacist thereto 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.

3. That each contract issued or proposed to be issued to subscribers to the plan is in a form approved by the department of insurance and that the rates charged or proposed to be charged for each form of such contract and benefits to be provided are fair and reasonable.

4. That no contributions to the funds of the corporation for working capital are repayable by the corporation except out of earned income over and above operating expenses and pharmaceutical expenses and such reserve as the department of insurance may deem adequate.

5. That the amount of money actually received by the a pplicant upon the terms specified in subparagraph 4. hereof, for working capital , is sufficient to carry all acquisition costs and operating expenses for a period of at least three months from the date of the issuance of the certificate of authority or license.

(b) Such certificate of authority or license shall be effective until revoked by the department of insurance as hereinafter provided, and any corporation to which such certificate of authority or license has been issued shall, until revocation thereof, be authorized to issue contracts, in the form or forms filed with the department of insurance, to the persons who may become subscribers.

Hlstory.-§4, ch . 67-587; 1§13, 35 , ch. 68-106.

637.211 Charter, bylaws, contracts, rates; amendments, approval by department of insurance.-No corporation subject to the provisions of this chapter shall amend its charter or certificate of incorporation, its bylaws, the terms and provisions of contracts executed or to be executed with pharmacists, or 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 of insurance; 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 of insurance. Upon the adoption of any amendment or charge, and following its approval by the department of insurance, such corporation shall file a copy thereof with the department of insurance duly certified by at least two of the executive officers of such corporation.

Hlstory.-§5, ch. 67-587; 1113, 35, ch. 88-108.

637.221 Annual reports or statements.Every corporation subject to the provisions of this chapter shall annually on or before March 1, file in the office of the department of insur-

ance a statement verified by at least two of the principal officers of said corporation showing its condition on December 31 next preceding, which shall be in such form and shall contain such matters as the department of insurance shall prescribe.

Hlstory.-16, ch. 67-587; 1§13, 35, ch. 69-108 .

637.231 Examination.-The department of insurance, any agent or examiner of the department, or any other person whom the department appoints shall have the power of visitation and examination into the affairs of any such corporation and free access to all of the books, papers and documents that relate to the business of the corporation, and may summon and qualify witnesses under oath and examine its officers, agents, and employees or other persons in relation to the affairs, transactions and condition of the corporation. The corporation whose affairs are examined shall pay to the department of insurance the traveling and other expenses of examination pursuant to §624.320.

Hlslory.-17. ch . 67-587 ; 1113. 35, ch . 88-108.


Hlstory.-§8, ch. 67-587; 1113, 35, ch . 88-106 .

637.251 Investments and funds.-The funds of any corporation subject to the provisions of this chapter shall be invested only in securities permitted by the laws of the state for the investment of assets of life insurance companies.

Hlslory.-§9, ch. 67-587.

637.261 Review of dispute.-(1) Any dispute arising between a corpora

tion subject to the provisions of this chapter and any pharmacist with whom such corporation has a contract as provided herein may be submitted to the department of insurance f~ its decision with respect thereto.

(2) All final orders of the department of insurance made under the provisions of this chapter may be appealed to the District Court of Appeal, First District, in the manner and within the time provided by the Florida Appellate Rules.

Hlstory.-110. ch. 87-587; 1113, 35, ch. 88-108.

637.271 Dissolution or liquidation.-Any dissolution or liquidation of a corporation subject to the provisions of this chapter shall be under the supervisio-n of the department of insurance, 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 life insurance companies.

Hlstory.-111, ch. 87-587; 1113, 35, ch. 88-108.

637.281 Revocation of license.-Whenever the department of insurance shall have reason to believe that any corporation subject to the provisions of this chapter is being operated for

1578


profit or fraudulently conducted or is not complying with the provisions of this chapter, it shall be authorized to suspend or revoke the certificate of authority or license theretofore granted and may at any time thereafter institute or cause to be instituted, after due notice to the corporation and an opportunity given to the corporation to be heard, the necessary proceedings under the laws of the state relating to the dissolution of insurance companies, and any dissolution or liquidation of a corporation subject to the provisions of this chapter shall be under the supervision of the department of insurance.

History.-§12, ch. 67-587; §§13, 35, ch. 69-106.

637.291 Licenses and taxes.-(1) Every corporation licensed under this

chapter, its representatives, and all of its Rroperties and funds shall be exempt from all taxes and license fees; provided, that such corporation shall be subJect to the same license fees and premium receipt taxes imposed by general law upon and against and payable by fraternal benefit societies operating under the provisions of chapter 632, and with respect to the computation of such premium receipt 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."

(2) If the charter or certificate of incorporation specifies among its purposes the establishment, maintenance and operation of a pharmaceutical service plan, it shall be referred to the department of insurance, and such charter or certificate shall not be filed until the consent of the department of insurance shall be endorsed thereon and annexed thereto.

Hlstory.-§13, ch. 67-587; 1§13, 35, ch. 69-106.

637.301 Regulation of employees or representatives of pharmaceutical service corporations.-Every representative or employee of any corporation subject to the provisions of this chapter who sells or writes certificates for pharmaceutical service for said corporation shall be registered by said corporation with the department of insurance. Said registration shall be on forms prescribed by the department of insurance and shall show such information as may be requested by the department. Said registration shall be made on or before the date of employment by said corporation of said representative or employee. In addition to the foregoing described registration, the corporation shall pay to the department a permit fee of six dollars for each such representative or employee and a like amount October 1 of each year thereafter; provided, that said permit fee shall be only

three dollars in case the said representative or employee is not employed prior to April 1 of the then current year. No such permit shall be transferable from one person or corporation to another and shall be revocable by the department for cause, after due notice to employee or representative and corporation followed by a hearing before the department or its agent.

Hlstory.-§14, ch . 67-587; §§13, 35, ch. 69-106 .

637.311 Preexisting service plan corporation.-No nonprofit corporation organized under the laws of this state prior to August 4, 1967, to operate a pharmaceutical service plan or plans in the state or any of the counties thereof, whose charter or certificate of incorporation has, prior to August 4, 1967, been approved or consented to by the insurance commissioner of the state, shall be required to incorporate or reincorporate as provided herein, but every such corporation desiring to operate such a plan or plans state-wide shall file with the insurance commissioner its acceptance of part II of this chapter within six months from July 1, 1967, and every such corporation so accepting part II shall continue and shall have all the powers, authority and exemptions of part II of this chapter and be subject to all the provisions thereof; provided, however, that the provisions of this part shall not apply to organized nonprofit corporations herein defined and heretofore existing whose charter and bylaws have not been filed with, or which has not received a certificate of authority or license from, the insurance commissioner of the state prior to August 4, 1967, nor to such corporations which are now in operation and have heretofore operated within the confines of a single county.

History.-§15, ch . 67-587.

637.321 Penalties.-(!) Any person or corporation engaging in

the business of operating a nonprofit pharmaceutical service plan without first having procured a license from the department of insurance, as required by this part, and any person or corporation violating any of the provisions of this part, shall be guilty of a misdemeanor of the first degree, punishable as provided in §775.082 or §775.083.

(2) Any person making any willfully false statements in any written documents required by any section of this chapter to be filed with the department of insurance or any examiner at any investigation or hearing conducted by said department of insurance or examiner shall be guilty of perjury.

History.-*l!i. ch. fi7·'>H7; *~1:1. :J:). ch. fiH.JIIfi; *fifi~. ch. 71 -l:lfi.

1579

Ch. 6:l8 AMBULANCE SERVICE CONTRACTS Ch. 638

CHAPTER 638

AMBULANCE SERVICE CONTRACTS

638.011 638.021 638.031 638.041 638.051

638.061 638.071 638.081 638.091

638.101

638.111

638.121

638.131 638.141 638.151

Declaration of policy. Definitions. Powers of department; rules. Certificate of authority required. Certificate of authority; annual state-

ment; renewal. Capital funds required. Special surplus requirements. Required deposit or bond. Suspension, revocation of certificate

of authority for violations and special grounds.

Procedure to suspend or revoke certificate of authority.

Order, notice of suspension or revocation of certificate of authority; effect; publication.

Duration of suspension; association's obligations during suspension period; reinstatement.

Filing, approval of forms, rate filings. Tax on premiums and assessments. Examination of associations.

638.011 Declaration of policy.-It shall be deemed contrary to public policy if any person receives, holds, controls, or manages funds or proceeds received from the sale of or from a contract to sell pre-need ambulance service, whether the payments for same are made outright or on an installment basis, prior to the need of the service by persons so purchasing it, or for whom it is purchased, unless such person holds, controls, or manages such funds, subject to the limitations and regulations prescribed by the following sections.

Blstor:r.-§1, ch. 61-387.

638.021 Definitions.-As used in this act: (1) Ambulance service association or asso

ciation means any person (other than an authorized insurer) issuing ambulance service contracts as herein defined.

(2) Insurer means any property or casualty insurer duly authorized to transact such business in this state.

(3) Ambulance service contract or pre-need 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 ambulance service or undertakes to provide any type ambulance service on a pre-need basis.

( 4) Salesman means any person employed or otherwise retained by an insurer or ambulance service association for the purpose of selling or issuing ambulance service contracts.

(5) Department means the department of insurance.

(6) Person includes an individual, insurer, company, association, organization, Lloyds, society, reciprocal insurer or interinsurance,

638.161

638.171 638.181 638.191

638.201

638.211

638.221

638.231 638.241 638.251 538.261

638.271

Service of process; appointment of commissioner as process agent.

Serving process. Salesmen to be registered. Grounds for compulsory refusal, sus

pension, or revocation of registration of salesmen.

Grounds for discretionary refusal, suspension, revocation of registration of salesmen.

Procedure for refusal, suspension or revocation of registration of salesmen.

Administrative fine in lieu of suspen-sion or revocation of registration.

Disposition of taxes and fees. Insurance business not authorized. Fronting not permitted. Certain ambulance service associ

ations' relations with funeral directors prohibited.

Penalty for violation.

exchange, partnership, syndicate, business trust, corporation, agent, general agent, broker, solicitor, service representative, adjuster and every legal entity.

History.-§2. ch. 61-387; §§13, 35, ch. 69-106; §270, ch. 71-377.

638.031 Powers of department; rules.The department of insurance shall administer this act and to that end it may adopt, promulgate, and enforce rules and regulations necessary and proper to effectuate any provisions of this act.

Hlstor:r.-13, ch . 61-387; 1113, 35, ch. 68-106 .

638.041 Certificate of authority required.(!) No person shall receive, hold, control,

or manage any funds tendered as payment on any ambulance service contract until such person is possessed of a certificate of authority, or renewal thereof, issued by the department of insurance under the circumstances hereinafter stated. An original certificate of authority shall expire on March 1 succeeding its issuance, and annually thereafter, or before March 1, a renewal thereof shall be issued under conditions herein set forth.

(2) An insurer while authorized to transact property or casualty insurance in this state may transact an ambulance service contract business without additional qualification or authority, but otherwise subject to the applicable provisions of this act.

Blator:r.-14, ch. 61-387; 1113, 35, ch. 88-108.

638.051 Certificate of authority; annual statement; renewal.-

(!) An application to the department of insurance for a certificate of authority shall be accompanied by the statement and other matters described below and by the deposit required by §638.081. Annually thereafter on or before March 1, such person shall file said statement, as of January 1 of the calendar year in which it is

1580

Ch. 638 AMBULANCE SERVICE CONTRACTS Ch. 638

filed, and such other information and data which may be required by the department of insurance.

(2) Such statement shall be in such form as shall evidence to the department the following:

(a) The types of ambulance service contracts proposed to be written; and if a person is bound upon the effective date of this act by any ambulance service contract, or if the statement accompanies an application for a renewal of a certificate of authority, an itemization of all outstanding ambulance service contracts, the dates upon which such contracts were entered, the names of all parties involved in such contracts or having any right thereunder, the amount paid in on ·each contract, and if payments are not completed, the amounts intended to be paid on each contract.

(b) Name and address of place of business of person offering to write ambulance service contracts.

(c) That such person offering the statement had sufficient funds available during the calendar year to perform his obligations under his contracts; and that he has complied with this act and any rules and regulations of the department.

(d) Such other information as may be considered necessary by the department in order for it to meet its responsibilities under this act.

(3) Any statement presented shall be certified by an independent certified public accountant, except that any insurer required to file statements under chapter 624 may· include therein any statement of business written under this act.

( 4) The fee payable to the department for issuance of the original certificate and each annual renewal thereof shall be $100.00, which sum shall accompany each application for original certificate and thereafter each annual statement.

(5) Upon the depar.tment's being satisfied that the statement and matters which may accompany it meet the requirements of this act and of its rules and regulations, it shall issue to such person said certificate of authority or renewal thereof.

Hlstory .-!5, ch . 61-387 ; H13. 35, ch. 69-106.

638.061 Capital funds required.-Any person applying for his original certificate of authority in this state after the effective date of this act or continuing such original certificate of authority, shall possess and thereafter maintain 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 amount not less than twenty-five thousand dollars, and shall possess when first so authorized such additional surplus as is required under §638.071.

Blstory.-§6, ch. 61 -387.

638.071 Special surplus requirements.-In addition to the paid-in capital funds required

in §638.061, any person hereafter applying for an initial certificate of authority in this state shall possess a surplus of twenty thousand dollars, which after the issuance of its initial certificate of authority such person may ·use the special surplus required under this section in the normal course of business only.

Blstory.-§7, ch 61-387.

638.081 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 license by the department of insurance, d·eposit with the department securities of the type eligible for deposit by insurers under §625.52, of the insurance code, and having at all times a market value of not Jess than twenty thousand dollars; except that any such association doing such a business in this state on or before April 1, 1961, shall on or before October 1, 1961, so deposit such securities in the value of not less than ten thousand dollars, and on or before October 1, 1962, so deposit additional such securities having a value of not less than ten thousand dollars, in order to bring its total deposit of securities to a value of not less than twenty thousand dollars not later than October 1, 1962.

(2) In lieu of any deposit of securities required under subsection (1), the association may file with the department a surety bond in like amount. The bond shall be one issued by an authorized surety insurer, shall be for the same purpose as the deposit in lieu of which it is filed, and shall be subject to the department's approval. No such bond shall be cancelled or subject to cancellation unless at least thirty days advance notice thereof in writing is filed with the department.

(3) The state shall be responsible for the safekeeping of all securities deposited with the department under this act. Such securities shall not, on account of being in this state, be subject to taxation, but shall be held exclusively and solely to guarantee the association's faithful performance 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) Such 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 proof satisfactory to it 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 parties entitled thereto, on presentation of the department's re-

1581


ceipts for such securities, or release any bond filed with it in lieu of such deposit.

Hlstory .- §8. ch . 61-387 ; §!13. 35. ch . 69-106.

638.091 Suspension, revocation of certificate of authority for violations and special grounds.

(1) The department may, in its discretion, suspend, revoke or refuse to renew the certificate of authority of any ambulance service association if it finds that the association has violated any lawful order of the department or any provision of this act.

(2) The department shall suspend or revoke an ambulance service association's certificate of authority if it finds that such association:

(a) Is in unsound condition, or in such condition, or using such methods and practices in the conduct of its business, as to render its further transaction of contracts in this state hazardous or injurious to the public.

(b) Has refused to be examined or to produce its accounts , records and files for examination, or if any of its officers have refused to give information with respect to its affairs or to perform any other legal obligation as to such examination, when required by the department.

(c) Has failed to pay any final judgment rendered against it in this state. within ninety days after the judgment became final.

(d) With such frequency as to indicate its general business practice in this state, has without just cause refused to pay proper claims arising under its contracts, or without just cause compels contract holders to accept less than the amount due them or to employ attorneys or to bring suit against the association to secure full payment or settlement of such claims.

(e) 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 therefor.

(3) The department may, in its discretion and without advance notice or hearing thereon, immediately 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.

( 4) Violation of this act by an insurer shall be grounds for suspension or revocation of the insurer's certificate of authority in this state, in accordance with procedures and conditions provided for in part III of chapter 624 of the insurance code.

Histor:r.-18, ch. 61-387; 1113, 35, ch. 68-106.

638.101 Procedure to suspend or revoke certificate of authority.-

(!) Except where hearing is expressly not required under §638.091, no order of the department suspending or revoking an association's certificate of authority shall be effective unless made after a hearing of which notice and order directing the association to show cause thereat why its certificate of authority

should not be so suspended or revoked was mailed to the association by registered or certified mail addressed to its home office or principal place of business in the United States not less than thirty days in advance.

(2) The notice shall contain, in addition to a statement of the time and place of the hearing and the order to show cause, a concise statement of the particulars of the grounds for such proposed suspension or revocation in such details as reasonably to inform the association thereof.

~3) Except, . that the association may in wntmg filed with the department within the thi~ty days period waive the hearing, and in which case the department may forthwith issue its order of suspension or revocation of the certificate of authority.

Hlstory .-§10, ch. 61-387; 1113, 35, ch. 68·108.

638.111 Order, notice of suspension or revocat!on of certificate of authority; effect; publication.-

(1) Suspension or revocation of association's certificate of authority shall be by the department's order mailed to the assoc:iation by registered or certified ·mail. The department shall promptly also give notice of such suspension or revocation to the association's salesmen in this state of record in the department's office. The association shall not solicit or write any new contracts in this state during .the period of any such suspension or revocatwn, nor after such revocation renew any business previously written.

(2) In. its discretion the department may cause notice of any such revocation to be publi_shed i!l one o~ more newspapers of general c1rculatwn pubhshed in this state.

Hlstory.-111, ch . 61-387; 1113, 35, ch. 68-108 .

638.121 Duration of suspension; association's obligations during suspension period; reinstatement.-

( I) Suspension of an association's certificate of authority shall be for such period not to exceed one year, as is fixed by the department in the order of suspension, unless the department shortens or rescinds such suspension or the order upon which the suspension is based is modified, rescinded or reversed.

(2) During the period of suspension the association shall file its annual statement, pay fees, licenses and taxes as required under this chapter as if the certificate of authority has continued in full force.

(3) Upon expiration of the suspension period (if within such period the certificate of authority has not otherwise terminated) the association's certificate of authority shall automatically reinstate unless 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, and of which the department shall give the association notice not

1582


less than thirty days in advance of the expiration of the suspension period. If not so automatically reinstated the certificate of authority shall be deemed to have expired as of the end of the suspension period or upon failure of the association to continue the certificate of authority during the suspension period, whichever event first occurs.

( 4) Upon reinstatement of the certificate of authority of an insurer or association following suspension, the authority of its salesmen in this state to represent the association or insurer shall likewise reinstate. The department shall promptly notify the association or insurer and its salesmen in this state of record in its office of such reinstatement.

Hlstor:r .-112, ch. 61-387; 1113, .35, ch . 69-106.

638.131 Filing, approval of forms, rate filings.-

(1) No contract form nor related form shall 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 thirty days in advance of issuance or use. At the expiration of thirty days from 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 fifteen 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 thirty 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 insurer or ambulance service association shall file with the department 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 thereon. Such filing shall be made not less than thirty days prior to its effective date.

Hlstor:r.-113, ch. 61-387; 1113, 35, ch. 69-106.

638.141 Tax on premiums and assessments.-

(1) In addition to the taxes provided for in this act 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 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 state treasurer a tax in an amount equal to two per cent of the gross amount of such premiums or assessments. Provided that the same exemptions and credits as

set forth in §§624.512 and 624.514 of the insurance code allowed to insurers shall apply to insurers and ambulance service associations under this act.

(2) Premiums and assessments received by insurers and taxed under this section shall not be subject to any premium tax provided for in the insurance code.

Hlstor:r.:-114, ch. 61-387; 130, ch. 65-269; 1113, 35, ch. 60·106.

638.151 Examination of associations.-Ambulance service associations licensed under this act shall be subject to periodic examination by the department in the same manner and subject to the same terms and conditions as applies to insurers under part II of chapter 624 of the insurance code.

Hlstory.-115, ch. 61-387; 1113, 35, ch. 69-106.

638.161 Service of process; appointment of commissioner as process agent.-

(1) Each association applying for authority to transact business in this state, whether domestic or foreign, shall file with the department its appointment of the insurance commissioner and treasurer and his successors in office, on a form as furnished by the department, as its attorney to receive service of legal process issued against it in any civil action or proceeding in this state, and agreeing that process so served shall be valid and binding upon the association. The appointment shall be irrevocable, shall bind the association and any succ~ssor in in- , terest as to the assets or liabilities of the association, and shall remain in effect as long as there is outstanding in this state any obligation or liability of the association resulting from its contract transactions therein.

(2) At the time of such appointment of the insurance commissioner and treasurer as its process agent the association shall file with the department designation of the name and address of of the person to whom process against it served upon the insurance commissioner and treasurer is to be forwarded. The association may change the designation at any time by a new filing.

Hlstor:r.-116, ch. 61-387; 1§13, 35, ch. 69-106.

638.171 Serving process.-(!) Service of process upon the insurance

commissioner and treasurer as process agent of the association shall be made by serving copies in triplicate of the process upon him or upon his assistant, deputy, or other person in charge of his office. Upon receiving such service the insurance commissioner and treasurer shall file one copy with the department, return one copy with his admission of service, and promptly forward one copy of the process by registered or certified mail to the person last designated by the association to receive the same, as provided under §638.161.

(2) Process served upon the insurance commissioner and treasurer and copy thereof forwarded as in this section provided shall for all purposes constitute valid and binding service thereof upon the association.

Hlatory.-117, eh. 111-387; 1113, 35. cb. 69-106.

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638.181 Salesmen to be registered.-(!) 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 salesman employed by it, and shall within thirty days after termination of the employment notify the department of such termination. Any salesman employed subsequent to the October 1 filing date shall be registered with the department within ten days after such employment. No employee or salesman 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.

Blalorr.-118, ch. 61-387; U13, 35, ch. 68-106.

638.191 Grounds for compulsory refusal, suspension, or revocation of registration of salesmen.-The department shall deny, suspend, revoke, or refuse to renew or continue the registration of any such salesman if it finds after notice and hearing thereon as provided for in §638.211 that as to the salesman, any one or more of the following applicable grounds exist: ~

(1) Material misstatement, misrepresentation or fraud in registration.

(2) If the registration is willfully used, or to be used,. to circumvent any of the requirements or prohibitions of this act.

(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) If in the adjustment of claims arising out of any contract, he has materially misrepresented to a contract holder or other interested party 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.

(5) For demonstrated lack of fitness or trustworthiness to engage in the business of ambulance service contracts.

(6) For 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 association, insurer, or contract holder or to others, and received in conduct of business under the registration.

(9) For rebating, or attempt thereat, or for unlawfully dividing or offering to divide his com~ission with another.

(10) Willful failure to comply with, or willful violation of any proper order, rule or regulation of the department, or willful violation of any provision of this act.

Blalorr.-118, ch. 61· 387; U13, 35, ch. 68-106.

638.201 Grounds for discretionary refusal, suspension, revocation of registration of salesmen.-The department may, in its discretion, deny, suspend, revoke or refuse to renew or continue the registration of any salesman if it finds after notice and hearing thereon as provided in §638.211 that as to the salesman any one or more of the following applicable grounds exist under circumstances for which such denial, suspension, revocation or refusal is not mandatory under §638.191:

(1) For any cause for which granting of the registration could have been refused had it then existed and been known to the department.

(2) Violation of any provision of this act or of any other law applicable to the business of ambulance service contracts in the course of dealings under the registration.

(3) Has violated any lawful order or rule or regulation of the department.

( 4) Failure or refusal, upon demand, to pay over to any association or insurer he represents or has represented any money coming into his hands belonging to the association or insurer.

(5) If in the conduct of business under the registration he has engaged in unfair methods of competition or in unfair or deceptive acts or practices, as such methods, acts or practices are or may be defined under part VII of chapter 626 of the insurance code, or has otherwise shown himself to be a source of injury or loss to the public or detrimental to the public interest.

(6) Conviction of a felony. Blstorr.-120, ch. 61-387; U13, 35, ch. 88-106.

638.211 Procedure for refusal, suspension or revocation of registration of salesmen.-

(!) If any salesman is convicted by a court of a violation of this act, the registration of such individual shall thereby be deemed to be immediately revoked, without any further procedure relative thereto by the department.

(2) As to a registration denied, suspended or revoked by the department the person aggrieved thereby shall have the right to a hearing thereon before the department, and ma7. have the adverse decision of the department reviewed by certiorari by the circuit court in and for Leon county within the time and in the manner provided by the Florida appellate rules.

(3) If after an investigation, or upon other evidence, the department has reason to believe that there may exist any one or more grounds for the suspension, revocation, or refusal to renew or continue the registration of any salesman, as such grounds are specified in §§638.191 and 638.201, the department shall mail written notice of its intention to suspend, revoke, or refuse to renew or continue the registration, as the case may be, accompanied by a copy of the charges against the salesman, to the salesman and the association or insurer represented by the salesman. Such notice and charges shall be mailed by registered or certified mail, addressed to the salesman

1584


at his residence or principal business address last of record with the department, and to the association or insurer addressed to its last address of record with the department. The notice shall be deemed given when so addressed and mailed postage prepaid at a United States post office.

(4) If within twenty days after the date of mailing the notice and charges as provided for in subsection (3) above, neither the salesman, nor the association or insurer, has filed with the department at its office in Tallahassee a written answer to such charges coupled with a written request for a hearing thereon, the department may proceed to suspend, revoke, or refuse to renew the registration.

(5) If, within such twenty days an answer and request for hearing is so filed with the department, the department shall hold a hearing with respect to the charges, the hearing to be held within sixty days of the date of the mailing of the notice and charges referred to in subsection (3), above, unless postponed by mutual consent of the parties. The department shall give the salesman and each association or insurer that has filed with it the answer to the charges and request for hearing as provided in subsection (4), written notice of the hearing and of the matters to be considered thereat not less than ten days in advance of the hearing date.

(6) All such hearings shall be public at such place in this state deemed by the department to be convenient to parties and witnesses.

(7) An examiner designated liy the department, shall preside at the hearing and shall sit in the capacity of a quasi-judicial officer.

(8) The department's statement of charges, papers, documents, reports or evidence relative to the subject of a hearing under this section shall not be subject to subpoena without its consent until after the same shall have been published at the hearing, unless after notice to the department and hearing, the court determines that the department would not be unnecessarily hindered or embarrassed.

(9) Following the hearing the department shall make its order thereon and mail a copy thereof by registered or certified mail to the address last of record in its office of each party to the hearing. If by its findings made upon the hearing the department finds that one or more of the grounds therefor exist as specified in §§638.191 and 638.201, its order shall incorporate the taking of action relative to suspension, revocation, or refusal to renew or continue the registration as required under §638.191 or as authorized under §638.201.

(10) Whenever it appears that any licensed insurance agent has violated the provisions of this act, the department may take such action relative thereto as is authorized by the insurance code as for a violation of the insurance code by such agent.

Blstory.-121, ch. 61-387; 128, ch. 63-512: 1§13, 35, ch . 88-106.

638.221 Administrative fine in lieu of suspension or revocation of registration.-

(!) If, upon procedures provided for in this act, the department finds that one or more grounds exist for the suspension, revocation, or refusal to renew or continue any registration issued under this act, the department may, in its discretion, in lieu of such suspension, revocation or refusal, on a first offense and except where such suspension, revocation, or refusal is mandatory, impose upon the registrant an administrative penalty in the amount of $100.00, or if the department has found willful misconduct or willful violation on the part of the registrant, an administrative fine of $500.00. The administrative penalty may, in the department's discretion, 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 as to which the grounds for suspension, revocation or refusal related.

(2) The department may allow the registrant a reasonable period, not to exceed thirty 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 at Tallahassee within the period so allowed, the registration of the registrant shall stand suspended, revoked, or renewal or continuation refused, as the case may be, upon expiration of such period and without any further proceedings.

Hlslory.-122, ch. 61-387; 12, ch. 61-118; 130, ch . 65-268; 1113, 35, ch. 68-106.

638.231 Disposition of taxes and fees.-All license fees, taxes on premiums and assessments, registration fees, and administrative fines and penalties collected under this act from ambulance service associations shall be deposited to the credit of the insurance commissioner's regulatory trust fund.

Hlslory.-§23, ch. 61-387; 121, ch. 65-268.

638.241 Insurance business not authorized. -Nothing in this act shall be deemed to authorize any ambulance service association to transact any business other than that of ambulance service contracts as herein defined; or otherwise to engage in the business of insurance unless such association is authorized therefor as an insurer under a certificate of authority issued by the department under the insurance code of this state.

Hlslory.-124, ch. 61-387; 1113, 35, ch. 68-106.

638.251 Fronting not permitted.-No authorized insurer or ambulance service association shall act as a fronting company for any unauthorized insurer or ambulance service association. A fronting company is an authorized insurer or ambulance service association which by reinsurance or otherwise generally transfers to one or more unauthorized insurer or ambulance service associations substantially all of the risk of loss under contracts written by it in this state.

Blatory.-§25, cb. 111-387.

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638.261 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 its representative, adjuster, claim agent, special claim agent, salesman, 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 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.

BldorJ.-128. ch. 81-31T.

638.271 Penalty for violation.-Any person who knowingly makes a false or otherwise fraudulent application for certificate of authority or registration under this act, or who knowingly violates any provision of this act, shall, in addition to any applicable denial, suspension, revocation, or refusal to renew or continue any certificate or registration, be guilty of a misdemeanor of the second degree, punishable as provided in §775.082 or §775.083. Each instance of violation shall be considered a separate offense.

History.-§27, ch . 61-387; §663, ch . 71-136.

1586

Ch. 639 BURIAL INSURANCE AND CONTRACTS Ch. 639

CHAPTER 639

BURIAL INSURANCE AND CONTRACTS

639.06 639.07 639.08 639.09 639.10

639.11

639.12 639.13 639.14

Declaration of policy. Definitions. Forms and regulations. Certificate of authority required. Certificate of authority; annual state-

ment; renewal. Disposition of proceeds received on con-

tracts. Deposit. Cancellation of contracts. Payment of funds upon death of named

beneficiary.

639.06 Declaration of policy.-It shall be deemed contrary to public policy if any person receives, holds, controls, or manages funds or proceeds received from the sale of or from a contract to sell, burial supplies and equipment and funeral services, or any one or combination of them, where payments for same are made either outright or on an installment basis, prior to the demise of the person or persons so purchasing them, or for whom they are purchased, unless such person holds, controls or manages such funds, subject to the limitations and regulations prescribed by this chapter.

Blator:r.-12. cb. 28211, 1853 ; 11. ch. 65-383.

639.07 Definitions.-As used in this chapter:

(1) "Persons" means and shall include natural persons, partnerships, firms, associations and corporations, including agents and employees thereof, residing in or doing business in the state, which persons must be authorized and licensed by the laws of this state to engage in the profession of funeral directing where such person holds a license to operate a funeral home, chapel, mortuary, or funeral establishment.

(2) "Pre-need funeral service contract" means any contract, other than a contract of insurance, under which, for a specified consideration paid in advance in a lump sum or by installments, a person promises, upon the death of a beneficiary named or implied in the contract, to furnish funeral services or burial supplies and equipment.

(3) "Funeral service or services" as used in this chapter shall mean those services normally performed by funeral directors including the sale of burial supplies and equipment, but shall not include those services normally performed by a cemetery, including the sale by the cemetery of lands or interests therein, services incidental thereto, markers, memorials, monuments, equipment, crypts or vaults constructed or to be constructed in a mausoleum or columbarium or affixed to the real property.

( 4) "Department" means the department of insurance.

History.-§!, ch. 28211, 1953; §§2, 3, ch. 65-393; §§13, 35, ch . 69-!06; ~271. ch . 71-377.

639.08 Forms and regulations.-The admin-

639.15 Examinations and investigations. 639.16 Revocation of certificate and liqui

dation proceedings. 639.17 Penalty. 639.18 False, fraudulent and deceptive adver

tising and selling practices. 639.19 Legislative intent. 639.20 Provisions not applicable to cemeteries

holding certificate of authority under Florida cemetery act.

istration and enforcement of the provisions of this act are vested in the department which is hereby directed to prepare and furnish all forms necessary under this chapter including forms for applications for certificates of authority, for renewals thereof, for annual statements, for other required reports, and for preneed funeral service contracts. It is directed to promulgate such regulations, within the standards of this act, considered by it to be necessary to effectuate the purposes of this chapter.

Blstorr.-13. cb. 28211, 1853; 124, ch. 57-1; 14, cb. 65-383; 1113, 35, cb. 68-106.

639.09 Certificate of authority required.No person shall receive, hold, control, or manage any funds tendered as payment on any preneed funeral service contract until such person is possessed of a certificate of authority, or renewal thereof, issued by the department under the circumstances hereinafter stated. An original certificate of authority shall expire on March 1 succeeding its issuance, and annually thereafter, on or before March 1, a renewal thereof shall be issued under conditions herein set forth.

Blator:r.-14, cb. 28211, 1853; 124, ch. 57-1; 15, ch. 65-383; 1113, 35, ch. 68-106.

639.10 Certificate of authority; annual statement; renewal.-

(!) An application to the department for a certificate of authority shall be accompanied by the statement and other matters described below and by the deposit required by §639.12. Annually thereafter on or before March 1st, such person shall file said statement, as of January 1st of the calendar year in which it is filed, and such other information and data which may be required by the department.

(2) Such statement shall be in such form as shall evidence to the department the following:

(a) The types of pre-need funeral service contracts proposed to be written; and, if a person is bound upon the effective date of this act by any pre-need funeral service contract, or if the statement accompanies an application for a renewal of a certificate of authority, an itemization of all outstanding pre-need funeral service contracts, the dates upon which such con-

1587


tracts were entered, the names of all parties involved in such contracts or having any right thereunder, the amount paid in on each contract, and if payments are not completed, the amounts intended to be paid on each contract.

(b) Name and address of place of business of person offering to write pre-need funeral service contracts.

(c) Person offering statement had sufficient funds available during the calendar year to perform his obligations under his contract; and that he has maintained one hundred per cent of the funds received under contracts issued by himself as hereinafter described together with all interest, dividends or accretions thereto which have been earned by said funds ; and that he has complied with this act and any rules or regulations of the department.

(d) Such other information as may be considered necessary by the department in order for it to meet its responsibilities under this act.

(3) If such person is an individual, said statement shall be sworn by him; if a finn or association, by all members thereof; and if a corporation by the president and secretary thereof.

(4) The fee payable to the department for issuance of the original certificate and each annual renewal thereof shall be twentyfive dollars, which sum shall accompany each application for original certificate and thereafter each annual statement.

(5) Upon the department's being satisfied that the statement and matters which may accompany it meet the requirements of this act and of its rules and regulations and 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 a reputation for fair dealing in business matters, it shall issue to such person said certificate of authority or renewal thereof.

Blotor7.-15. ch. 28211, 1953; 116, 7, ch. 65-393; 1113. 35, ch. eD-106.

639.11 Disposition of proceeds received on contracts.-

(!) All of the funds received by any person offering and writing pre-need funeral service contracts shall be maintained unimpaired and shall be deposited in this state in a state bank, savings bank, trust company, national bank, state savings and loan association, or a federal savings and loan association, or shall be invested in bonds of the United States, of Florida, or of the cities or counties of Florida; provided, however, that at all times the aforementioned bonds in which said funds may be invested must have a market value of no less than ninety-five per cent of face value in accordance with a standard and reputable bond price manual. Such bond shall be maintained in escrow with a bank or savings and loan association in this state subject to the provisions of this chapter.

(2) All of the interest, dividends, increases or accretions of whatever nature earned by the funds required to be kept unimpaired by subsection (1) shall remain with such funds and shall become a part thereof and not be subject to withdrawal for any reason whatever except in accordance with the provisions of this chapter.

(3) The funds referred to in subsections ( 1) and (2) of this section shall only be withdrawn when necessary to satisfy the terms of a pre-need funeral service contract, the requirements of this act or the order of a court of competent jurisdiction.

History.- §6, ch . 28211, 1953 ; §8, ch . 65-393.

639.12 Deposit.-Any application for an original certificate of authority shall be accompanied by a deposit with the department by the person making such application, of bonds of the United States, of any of the states of the United States, of the District of Columbia, or of the cities or counties of Florida, in the aggregate market value of fifty thousand dolJars, which securities, if such certificate of authority is issued, shall be receipted for by the department and held by it in the manner and for the purposes hereinafter mentioned. Such deposit, in said aggregate value, shall be maintained by any such person entering into pre-need funeral service contracts. Whenever such person ceases to engage in such business in this state, and has settled all claims arising in connection with such contracts, and has discharged all his obligations under any such contracts, upon proof of such facts to the department, and delivery to the department of the latter's receipt for such securities, the department shall deliver said securities to such person or his assignee. During the period said securities are deposited with the department, the owner of the same shall be entitled to the interest collected thereon. Su~h bonds so deposited shall be held by the department solely for the purpose of satisfying judgments obtained against the person making the deposit for his failure to perform a pre-need funeral service contract, or any other contract into which such person may have entered for tb.e furnishing of funeral services and equipment to holders of pre-need funeral service contracts. When such a final judgment has been rendered against any person having made the deposit, he shall pay same within sixty days thereafter, provided he does not prosecute or appeal from said judgment within said period; and if an appeal is so prosecuted and on appeal the judgment is affirmed, such person shall pay same within fifteen days from the date mandate from the appellate court is filed in the cause in the trial court. Should any such person fail to pay such a judgment within the time contemplated by the immediately preceding sentence, the department shall, in pursuance of order entered in the cause in the trial court, sell sufficient of the securities of such person so deposited with it to satisfy said judgment and costs, and shall pay to the person recovering

1588


such judgment the amount thereof and costs. In the event that the deposit is not promptly restored in full following a payment made from it by the department, it may follow the procedure outlined in §639.16 for causing the liquidation of the business of the person failing to replenish his deposit.

History.-§7, ch . 28211, 1953; §9, ch. 65-393; §§13, 35, ch. 69-106.

639.13 Cancellation of contracts.-Upon the giving of five days notice any person who has procured a pre-need funeral service contract from a person . certified under this chapter to have the authority to issue or write such contract may demand a refund of the entire amount actually paid on such contract, together with all interest, dividends, increases or accretions of any kind whatsoever, which have been earned by such funds.

History.-§8, ch. 28211, 1953; 110, ch. 65-393.

639.14 Payment of funds upon death of named beneficiary.-Upon the death of a beneficiary named in a pre-need funeral service contract, the person issuing such contract shall immediately release to the person who made the payments on the contract, or to the legal representative of the beneficiary under such contract, the entire amount, in cash, of the funds actually paid on the contract, together with all interest, dividends, increases or accretions of any kind whatsoever, which have been earned by such funds.

Hlstory.-§9, ch . 28211, 1953; §11, ch. 65-393.

639.15 Examinations and investigations.The department shall have the power and is required from time to time as it may deem necessary, but at least once every three years, to examine the business of any person writing pre-need funeral service contracts in the same manner as is provided for examination of insurance companies. Such examinations, shall be at the expense of the person examined and shall be made by the department's designated representative or examiner. The written report of all such examinations, when completed, shall be filed in the office of the department, and when so filed shall constitute public records. Any such person being examined shall produce, upon request, all records of the company. The department's designated representative, may at any time examine into the records and affairs of any such person, whether in connection with a formal examination or not.

Hlstory .-§10, ch . 28211, 1953; §12, ch. 65-393; §§13, 35, ch. 69-106.

639.16 Revocation of certificate and liquida-tion proceedings.- ·

(1) Whenever the department shall determine that a person holding a certificate of authority to issue pre-need funeral service contracts:

(a) Has not maintained the funds received from contracts together with interest, dividends or accretions thereto, in the unimpaired state described in §639.11, or

(b) Has failed to cancel a contract upon

proper request and refund the entire amount paid on the contract as required by §639.13, or

(c) Has not released upon the death of a beneficiary the entire amount received on a contract as required by §639.14, or

(d) Has refused to produce records in connection with his business, or

(e) Has otherwise failed to comply with the provisions of this chapter or any rule or regulation promulgated by the department in pursuance of this chapter,

if such person shall omit to correct any such failure, refusal, or violation within thirty days after written notice from the department to effect such correction, the department may, the department of legal affairs representing it, file complaint setting forth the relevant facts in the circuit court of Leon County praying for issuance of an order to show cause why the business and affairs of such person should not be liquidated and a receiver appointed by the court to accomplish such purpose.

(2) Upon application for such rule to show cau!le, the court may, in its discretion, issue an injunction restraining defendant from transacting further business until further order of the court.

(3) Upon return of such order to show cause, the court shall hear and try the issues forthwith. If the court shall determine that the person so charged as defendant in such proceeding has not been guilty of the omission, failure or violation alleged in the complaint by the department, the court shall dismiss such complaint. On the other hand, if the court shall determine that the charges of the department are supported by the evidence, it may enter an order directing the liquidation of such business of said person and shall appoint a receiver who shall, under such conditions as may be prescribed by the court, take into his possession the assets of said person for the purpose of liquidation.

( 4) In any such order of liquidation, or in any order or orders thereafter entered, the court shall provide for notice to creditors, filing of claims, and all other details necessary and essential to an estate in receivership. ch~·~~~~~s-:-§11, ch. 28211 , 1953; §13. ch. 65-393; !§11, 13, 35,

639.17 Penalty.-Any person, as defined herein, who shall receive, hold, manage, or control any funds or proceeds realized from the writing and issuing of a pre-need funeral service contract, as defined herein, or any person who shall disburse such funds or proceeds in any manner other than as required by this act, or any person who has violated any of the provisions of this chapter or the rules and regulations promulgated hereunder shall be guilty of a felony of the third degree, punishable as provided in §775.082, §775.083, or §775.084.

History.-&12. ch. 28211, 195~; §14, ch. 65-39:1; ~64. ch. 71·136.

639.18 False, fraudulent and deceptive advertising and selling practices.-N o person or

1589


his agent or employees holding a certificate of authority under the provisions of this chapter may make any false or misleading representation with respect to the nature, quality, value or cost of a funeral service which is the subject matter of a pre-need funeral service contract. For the purpose of this chapter a false, fraudulent or deceptive practice shall include, but not be limited to a representation that the funeral services or supplies being offered have a value in excess of that price at which such funeral services or supplies are being offered to the public at large or any substantial group thereof.

Hlstor,..-115. ch. 65-393.

639.19 Legislative intent.-It is the legislative intent that the provisions of this chapter shall be construed as a limitation upon the manner in which a licensed funeral director holding a license to operate a funeral establishment under the provisions of chapter 470, is permitted to accept funds in prepayment of funeral services to be performed in the future to the end that at all times members of the public may have an opportunity to arrange and pay for funerals for themselves and their families in advance of need while at the same time providing all possible safeguards whereunder such prepaid funds cannot be dissipated, whether

intentionally or not so as to be available for the payment of funeral services arranged for. Further, it is the legislative intent that no person may offer, sell or negotiate for sale of a pre-need funeral service contract through anyone who is not licensed to make funeral arrangements or plan details of funeral services in accordance with the provisions of chapter 470, as well as the provisions of this chapter. Further, it is the legislative intent that persons offering, selling or negotiating for the sale of a pre-need funeral service contract shall be subject to all of the provisions of chapter 470, regulating the ethics and conduct of funeral directors and funeral establishments in this state, including but not limited to the provisions in chapter 470, which prohibit the solicitation of funeral services by any person.

Hlstory.-§16. ch. 65-393 .

639.20 Provisions not applicable to cemeteries holding certificate of authority under Florida cemetery act.-The provisions of this chapter shall not be applicable to persons holding a certificate of authority to operate a cemetery under the provisions of part IV, chapter 559, as pertains to any transaction coming within the purview of said cemetery act.

Hlstory.-117, ch. 65-393.

1590

Ch. 641 HEALTH CARE SERVICE PROGRAMS Ch. 641

CHAPTER641

HEALTH CARE SERVICE PROGRAMS

PART I HOSPITAL AND MEDICAL SERVICE PLANS (§§641.01-641.16)

PART II HEALTH MAINTENANCE ORGANIZATIONS (§§641.17-641.38)

PART I

- HOSPITAL AND MEDICAL SERVICE PLANS - .

641.01 641.02 641.03 641.04 641.05

641.06 641.07 641.08

Definition or scope. Incorporation. Contracts. License. Charter, by-laws, contracts, rates;


Annual reports or statements. Examination. Acquisition costs.

641.01 Deimition or scope.-Any five or more persons wishing to form a corporation for the purpose of establishing, maintainjng, and operating a nonprofit medical, surgical or hospital service plan or plans in the state, whereby medical, surgical or hospital service or care may be provided in whole or in part by the said corporation, or by physicians, surgeons or hospitals participating in such service plan or plans, to such of the public as become subscribers to said plan or plans under a contract or contracts with such corporation, may become incorporated under laws of Florida governing the incorporation of benevolent or charitable associations and similar corporations not for profit. Any such corporation heretofore or hereafter incorporated, the charter or certificate of incorporation of which has or shall have the consent or approval of the department of insurance, shall be governed by this law and subject to regulation and supervision by the department of insurance and all provisions of the laws of Florida applicable to health, sick, or accident insurance, except as otherwise provided by this chapter. The term "medical or surgical service plan" as used in this law includes the contracting for the payment of fees toward, or furnishing of, professional services authorized or permitted to be furnished by a duly licensed doctor of medicine. Health maintenance organizations as defined in part II of this chapter shall organize under and be subject to part II of this chapter.

History.-§!, ch. 22826, 1945; §I , ch. 25394, 1949; §1, ch . 69-92; §§13, 35, 69-106; "§24, ch. 72-264.

641.02 Incorporation.-(1) Any nonprofit medical andjor surgical

andjor hospital service plan corporation shall be incorporated under the provisions of the laws of the state governing the incorporation of benevolent or charitable associations and similar

641.09 641.10 641.11 641.12 641.13 641.14

641.15 641.16

Investments and funds. Review of dispute. Dissolution or liquidation. Revocation of license. Licenses and taxes. Regulation of employees or represent

atives. Pre-existing service plan corporations. Penalties.

corporations not for profit, except when in conflict with the provisions of this law, and every charter or certificate of such corporation shall have endorsed thereon or annexed thereto the consent of the department of insurance.

(2) The directors of every such medical and surgical service and hospital service plan corporation and of every such hospital service plan corporation must at all times include representatives of the following groups: Licensed physicians participating in s·uch medical and/ or surgical service plan, directors, trustees, administrators or superintendents · of established hospitals or corporations operating hospitals designated in §641.01; the general public, exclusive of physicians and hospital representatives.

(3) At least a majority of the directors of every such medical and surgical service plan corporation must at all times be licensed physicians and/or surgeons.

Hlstory.-§2, ch. 22826, 19,5 ; 1113, 35. ch. 69-106.

641.03 Contracts.-(1) Any corporation subject to the provisions

of the law may contract for or secure the rendering of service to any of its subscribers only by hospitals maintained by the state or any of its political subdivisions or by any other regularly operated and recognized hospital or by any hospital approved by the department of insurance and/ or by licensed physicians and surgeons.

(2) The rates charged by such corporation to the subscribers for medical andjor surgical and/or hospital care shall at all times be subject to the approval of the department of insurance.

(3) All rates of payments made by such corporation pursuant to the contracts provided for in subsection (1) of this section shall be approved by the department of insurance.

Hlstory.-13, ch. 22826, 19,5; 1113, 35, ch. 69- 106.

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Ch.641 HEALTH CARE SERVICE PROGRAMS Ch.641

641.04 License.-(1) No corporation subject to the provisions

of this law shall issue contracts to subscribers until the department of insurance has, by formal certificate or license, authorized i-t to do so. Application for such certificate of authority or license shall be made on forms to be supplied by the department of insurance, containing such information as it shall deem necessary.

(2) Each application for such certificate of authority or license, as a part thereof, shall be accompanied by copies of the following documents, duly certified to by at least two of the executive officers of such corporation:


(b) Bylaws with all amendments thereto.

(c) Proposed contracts between the corporation and any party for the furnishing of or the payment in whole or in part for medical and/or surgical services furnished the subscribers by duly licensed physicians and/or surgeons and for the furnishing of hospital service to 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 charged, or proposed to be charged, to subscribers for each form of such contract.

(e) Financial statement of the corporation which shall include the amounts of each contribution paid or agreed to be paid to the corporation having working capital, the name or names of each contributor and the terms of each contribution.

(3) The department of insurance shall issue a certificate of authority or license to each applicant upon the payment of the fees provided for in §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 medical and/ or surgical and/or hospital service plan.

(b) That each contract executed or proposed to be executed by the applicant and the physician andjor surgeon andjor hospital obligates, or will when executed, obligate each physician andjor surgeon andjor hospital thereto, to render the service andjor 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 to the plan, is in a form approved by the department of insuranc.e, and that the rates charged or proposed to be charged for each form of such contract and benefits to be · provided, are fair and reasonable.

(d) That no contributions to the funds of the corporation for working capital are repayable by the corporation except out of earned income over and above operating expenses and medical andjor surgical andjor hospital expenses and such re-

serve as the department of insurance may deem adequate.

(e) That the amount of money actually received by the applicant upon the terms specified in paragraph (d) hereof, for working capital, is sufficient to carry all acquisition costs and operating expenses for a period of at least three months from the date of the issuance of the certificate of authority or license.

( 4) Such certificate of authority or license shall be effective until revoked by the department of insurance as hereinafter provided, and any corporation to which such certificate of authority or license has been issued, until revocation thereof, shall be authorized to issue contracts, in the form or forms filed with the department of insurance, to the persons who may become subscribers.

Blslory.-14, ch. 22828, 1845; 122, ch. 65-268; 1113, 35, ch. 88-106.

641.05 Charter, by-laws, contracts, rates; amendments, approval by department of insurance.-No corporation subject to the provisions of this law shall amend its charter or certificate of incorporation, its bylaws, the terms and provisions of contracts executed or to be executed with hospitals and/or physicians and/or surgeons, 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 of insurance ; 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.

History.-§5, ch . 22826, 1945 ; 1113, 35, ch. 69-106.

641.06 Annual reports or statements.Every corporation subject to the provisions of this law shall annually on or before the first day of March, file in the office of the department of insurance a statement verified by at least two of the principal officers of said corporation showing its condition on the 31st day of December then next preceding, which shall be in such form and shall contain such matters as the department of insurance shall prescribe.

Hlstory.-§6, ch . 22826, 1945 ; 1113, 35, ch. 68-106.

641.07 Examination.-The department of insurance, any examiner of the department or any other person whom the department of insurance shall appoint shall have the power of visitation and examination into the affairs of any such corporation and free access to all of the books, papers and documents that relate to the business of the corporation, and may summon and qualify witnesses under oath and to examine its officers, agents and employees or other persons in relation

1592

Ch.641 HEALTH CARE SERVICE PROGRAMS Ch. 641

to the affairs, transactions and condition of the corporation. The corporation whose affairs are examined shall pay to the department of insurance the traveling and other expenses of examination pursuant to §624.320.

Hlstory.-f7, ch. 22826, 1D45; 118. ch. 63-400; ffl3, 35, ch. 6D-106.


Hlstory.-18. ch. 22826, 1D45; Ul3 , 35, ch. 6D-106.

641.09 Investments and funds.-The funds of any corporation subject to the provisions of this law shall be invested only in securities permitted by the laws of the state for the investment of assets of life insurance companies.

Hlstory.-§D. ch . 22526. 1D45. cf .-§340.21 , Relating to Investments .

641.10 Review of dispute.-(1) Any dispute arising between a corporation

subject to the provisions of this law and any hospital andjor physician andjor surgeon with whom such corporation has a contract as provided herein, may be submitted to the department of insurance of the state for its decision with respect thereto.

(2) All final orders of the department of insurance made under the provisions of this law may be appealed to the district court of appeal, first district, in and for Leon county in the manner and within the time provided by the Florida appellate rules.

History.-§10. ch. 22826, 1945 ; §29. ch . 63-512 ; §§13. 35, ch. 69-106.

641.11 Dissolution or liquidation.-Any dissolution or liquidation of a corporation subject to the provisions of this law shall be under the supervision of the department of insurance, which shall have all powers with respect thereto granted to it under the Jaws of the state with respect to the dissolution and liquidation of life insurance companies.

Hlstory.-§11 , ch. 22826, 1945; §§13, 35. ch . 69-106 .

641.12 Revocation of license.-Whenever the department of insurance shall have reason to believe that any corporation subject to the provisions of this law is being operated for profit or fraudulently conducted, or is not complying with the provisions of this law, it shall be authorized to suspend or revoke the certificate of authority or license theretofore granted, and may at any time thereafter institute or cause to be instituted, after due notice to the corporation, and an opportunity given to the corporation to be heard, the necessary proceedings under the laws of the state, looking to the dissolution of insurance companies, and any dissolution or liquidation of a corporation subject to the provisions of this law shall be under the supervision of the department of insurance.

Hlstory.-§12. ch . 22826, 1945; §§13. 35, ch . 69-106 .

641.13 Licenses and taxes.-(1) No corporation licensed under this law,

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."

(2) If the charter or certificate of incorporation specifies among its purposes the establishment, maintenance and operation of a medical and/ or surgical and/ or hospital service plan, it shall be referred to the department of insurance and such charter or certificate shall not be filed until the consent of the department of insurance shall be endorsed thereon and annexed thereto.

69~•~;~ry.-§13 . c h . 22826, 1945 ; i 2. ch . 69-92 ; §§13. 35 , ch .

641.14 Regulation of employees or representatives.-Every representative or employee of any corporation subject to the provisions of this law, who sells or writes certificates for hospital service or contract s with hospitals for said corporation shall be registered by said corporation with the department of insurance of the state. Said registration shall be on forms prescribed by the department of insurance and shall show such information as may be requested by the department. Said registration shall be made on or before the date of employment by said corporation of said representative or employee. In addition to the foregoing described registration, the corporation shall pay to the department of insurance a permit fee of six dollars for each such representative or employee and a like amount October 1 of each year thereafter; provided, that said permit fee shall be only three dollars in case the said representative or employee is not employed prior to April 1 of the then current year. No such permit shall be transferrable from one person or corporation to another and shall be revocable by the department of insurance for cause, after due notice to employee or representative and corporation, followed by a hearing before the department of insurance.

Hlstory.-§14, ch. 22826. 1945; 1§13, 35 , ch. 69-106.

641.15 Pre-existing service plan corporations.-No nonprofit corporation organized under the laws of this state prior to the effective date of this law, to operate a medical and/ or surgical and/ or hospital plan or plans in the state or any of the counties thereof, whose charter or certificate of incorporation has, prior to the effective date of this law, been approved or consented to by the insurance commissioner of the state, shall be required to incorporate or reincorporate as provided herein, but every such corporation desiring to operate such a plan or plans state-wide, shall file with the insurance commissioner its acceptance of this law within six months from June 11, 1945, and every such corporation so accepting this law shall continue and shall have all the powers, authority and exemptions of

1593

Ch. 641 HEALTH CARE SERVICE PROGRAMS Ch.641

this law, and be subject to all the provisions thereof; provided, however, the provisions of this law shall not apply to organized nonprofit corporations herein defined and heretofore existing whose charter and bylaws have not been filed with, or has not received a certificate of authority or license from the insurance commissioner of the state prior to the effective date of this law, nor to such corporations which are now in operation and have heretofore operated within the confines of a single county.

History.-§15, ch . 22826, 1845.

641.16 Penalties.-(1) Any person or corporation engaging in

the business of operating nonprofit medical and/ or

surgical and/ or hospital service pl~n without first having procured a license from the department of insurance, as required by this law, and any person or corporation violating any of the provisions of this law, shall be guilty of a misdemeanor of the first degree, punishable as provided in §775.082 or §775.083.

(2) Any person making any willfully false statements in any written documents required by any section of this law to be filed with the department of insurance or any examiner at any investigation or hearing conducted by said department of insurance or examiner shall be guilty of perjury.

Hist.ory.- §!6, ch. 22826, ! 945; §§13, 35, ch. 69·106; §665. ch . 71·136. cf.- §837.0! , Perjury, punishm ent.

PART II

HEALTH MAINTENANCE ORGANIZATIONS

641.17 Short title. 641.18 Declaration of legislative intent, findings

and purposes. 641.19 Definitions; 641.20 Health maintenance organizations au-

thorized. 641.21 Application for certificate. 641.22 Issuance of certificate of authority. 641.23 Revocation of certificate of authority. 641.24 Notice, hearing and review. 641.25 Administrative fine in lieu of revocation. 641.26 Annual report. 641.27 Examination by the department. 641.28 Liability of officers.

641.17 Short title.-This part shall be known and may be cited as the Health Maintenance Organization Act.

History .-§1, ch . 72·264.

641.18 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, 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. At the present time, there is no effective way to evaluate or control the quality of health care services provided by these organizations in Florida, or to determine their financial or actuarial stability.

641.29 Fees. 641.30 Construction and relationship to other

laws. 641.31 Health maintenance contracts. 641.32 Acceptable payments. 641.33 Certain words prohibited in name of

organization. 641.34 Open enrollment. 641.35 Investment of funds. 641.36 Promulgation of rules and regulations. 641.37 Penalty. 641.38 Operational health maintenance organi

zations; issuance of certificate.

(4) It shall be the policy of this state to: (a) Eliminate legal barriers to the orga

nization, promotion, and expansion of comprehensive prepaid health care plans;

(b) Prescribe regulations for the fiscal aspects of such health care plans by the department of insurance and for the quality of health care by the department of health and rehabilitative services; and

(c) 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 .-§2, ch. 72·264.

641.19 Definitions.-As used in this part: (1) "Department" means the department of

insurance or a person properly designated to act in its place.

(2) "Health maintenance organization" means any organization authorized under this part which:

(a) Provides, either directly or through

1594


arrangements with others, 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, corporations, institutions, associations, or entities, those health care services which subscribers might reasonably require in order to be maintained in 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.

(3) "Minimum services" shall include, but not be limited to, emergency care, inpatient hospital and physician care, ambulatory diagnostic treatment, and preventive health care services.

(4) "Comprehensive health care services" means services, medical equipment, and supplies furnished by a provider which may include, but are not limited to, medical, surgical, and dental care; psychological, optometric, optic, podiatric, nursing, physical therapy and pharmaceutical services; health education, preventive medical, rehabilitative, and home health services; inpatient and outp_atient hospit_!il 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.

(5) "Health maintenance contract" means any contract entered into by a health maintenance organization authorized under this part 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) "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.

(7) "Entity" means any legal entity with continuing existence, including but not limited to, corporations, associations, trusts, and partnerships.

(8) "Provider" means any physician, hospital, or other institution, organization, or person that furnishes health care services and who is licensed or otherwise authorized to practice in the state.

History.-§3, ch. 72-264.

641.20 Health maintenance organizations authorized.-Any entity qualified under the provisions of this part, upon obtaining a certificate of authority as required in this part, may operate a health maintenance organization.

History.-§4, ch. 72-264.

641.21 Application for certificate.- Before any entity may operate a health maintenance organization, it must obtain a certificate of authority from the department. Each application to the department for such certificate shall be on such form as the department shall prescribe and shall set forth or 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 capacity with the organization of the persons who are to be responsible for the conduct of the health maintenance organization's affairs, 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 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;

(7) A statement of the assets and liabilities of the entity.

History.-§5, ch. 72-264.

641.22 Issuance of certificate of authority. -The department shall issue a certificate of authority within sixty days of the filing of the application to any entity filing an application in conformity with §641.21, upon payment of the prescribed fees and upon being satisfied that:

(1) Such 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. In this connection, the depart-

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ment shall receive, as a condition precedent to the issuance of any certificate of authority, a report from the department of health and rehabilitative services favorably recommending the establishment of the health maintenance organization, with sufficient documentary evidence to establish the need for the health maintenance organization's services in the area proposed.

(2) Based upon accounting procedures acceptable to it, the proposed health care delivery plan is actuarially sound and the health maintenance organization ·has adequate working capital. These requirements may be satisfied by a finding of the department that the health maintenance orgainzation has made acceptable arrangements to provide all health care services offered.

(3) 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.

(4) 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.

(5) 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.

(6) The entity has provided, through contract or otherwise, for periodic review of its medical facilities and services.

History.-§6. ch . 72-264.

641.23 Revocation of certificate of authority.-The department may revoke any certificate issued pursuant to this part if it finds that any one of the following conditions exists:

(1) A health maintenance organization is not operating in compliance with this part or is in substantial violation of its health maintenance contracts as certified by the department of health and rehabilitative services;

(2) Such 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;

(3) Based upon accounting procedures acceptable to the department, the plan is no longer actuarially sound or the health maintenance organization does not have adequate working capital;

(4) The existing contract rates are excessive, inadequate, or unfairly discriminatory; or

(5) The health maintenance 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.

History .-§7, ch. 72-264.

641.24 Notice, hearing and review.When the department has reasonable cause to believe that grounds for the denial or revocation of a certificate exists, it shall notify the health maintenance organization and the department of health and rehabilitative services in writing, stating the grounds upon which the department believes the certificate should be denied or revoked. The applicant may, within fifteen days from receipt of such notice, request a hearing. The hearing procedures shall be in conformance with chapter 120. Appellate review may be had by either a trial de novo in the circuit court of the circuit where the principal office of the applicant is located or by certiorari pursuant to the provisions of chapter 120. A representative of the department of health and rehabilitative services shall be in attendance at the hearing and shall participate in the proceedings. In connection with any decision regarding denial or revocation of a charter, 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.

History.-§8, ch . 72-264 .

641.25 Administrative fine 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, provided reasonable notice in writing is given of the intent to levy the fine and the organization has a reasonable time within which to remedy the defect in its operations which gav.~ rise to the penalty citation. The department may augment this penalty by an amount equal to the sum that the department calculates to be the damages suffered by subscribers or other members of the public.

History.-§9, ch. 72-264.

641.26 Annual report.- Every health maintenance organization authorized under this part shall, annually on or before March 1, on forms prescribed by the department, file a verified report with the department, with a copy to the department of health and rehabilitative services, showing its condition on the last day of the preceding calendar year. Such report shall include:

(1) A financial statement of the organization, including its balance sheet and receipts

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and disbursements for the preceding year; (2) A list of the names and residence ad

dresses 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;

(3) 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 in each case;

(4) A description by location and specialty of the providers retained or otherwise engaged by the organization to satisfy its contractual obligations with its subscribers;

(5) Such statistical information as shall be requested by the department reflecting the health maintenance organization's rates for all comprehensive health care services provided under health maintenance contracts;

(6) 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; and

(7) Such other information relating to the performance of health maintenance organizations as shall be required by the department.

History.-§10, ch. 72-264.

641.27 Examination by the department.The department may make an examination of the fiscal affairs of any health maintenance organization subject to this part as often as it deems it expedient for the protection of the interests of the people of this state, but not less frequently than once every three 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, its officers, and its agents shall submit their books and records relating to the health maintenance organization to such examinations and in every way facilitate them. 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 or by the department of health and rehabilitative services shall be paid by the organization. In no event shall expenses of examination exceed a maximum of ten thousand dollars per year. Any rehabilitation, liquida-

tion, 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.

History.-§11, ch. 72-264.

641.28 Liability of officers.-Any person who is an officer or principal managing director of the affairs of a health maintenance organization shall be fully and personally liable and accountable for any violations of the provisions of this part by himself or by persons under his control. However, it is not intended through this legislation to modify the existing law of Florida regarding personal or corporate liability for negligence or medical malpractice.

History.-§12, ch. 72-264.

641.29 Fees.- Every organization subject to the provisions of this part shall pay to the department the following fees:

(1) For filing a copy of its application for a certificate of authority or amendment thereto, $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.-§13, ch. 72-264.

641.30 Construction and relationship to other laws.-

(1) Except as otherwise provided in this part, the Florida Insurance Code shall not apply to health maintenance organizations, and health maintenance organizations certificated under the provisions of this part shall not be subject to part I of this chapter.

(2) Solicitation of subscribers by a duly certificated 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.-§14, ch. 72-264.

641.31 Health maintenance contracts.-(!) 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 or groups of subscribers in exchange for a prepaid per capita, or 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 and regulation what constitutes excessive, inadequate, or unfairly discriminatory rates and may

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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 such proposed amendments or change in rates. Any such proposed change shall be effective immediately, subject to disapproval by the department within thirty days from the date of filing. 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 health maintenance organization's method 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.

History.-§15, ch. 72-264.

641.32 Acceptable payments.- Each health maintenance organization subject to this part may accept frof!l ~overnmental ag~nc~e~, corporations, assoc1atwns, groups, or md1V1duals payments covering all or part of the cost of contracts entered into between the health maintenance organization and its subscribers.

History.-§16, ch. 72-264.

641.33 Certain words prohibited in name of organization.-

(!) 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."

History.-§ 17, ch. 72-264.

641.34 Open enrollment.-(!) The requirement of an open enrollment

period is intended to provide the benefits of health maintenance organizations to the general public or to all mem hers of the class of persons the organization serves; such requirement is not intended to restrict a health maintenance organization from establishing administrative procedures that protect the quality of service to its subscribers or the financial condition of such an organization. However, during periods of open enrollment, the organization shall not establish any administrative procedure that arbitrarily restricts enrollment.

(2) Mter the initial twenty-four months of operation a health maintenance organization shall have an annual open enrollment period of at least one month during which it accepts up to the limits of its capacity and without restrictions, individuals in the order in which they apply for enrollment. Health maintenance organizations organized to provide services to a specified group of individuals may limit such open enrollment to all -members of said group.

(3) During annual periods of open enrollment the health maintenance organization shall afford the opportunity of membership to new subscribers in an amount up to a maximum of 10 percent of the total number of subscribers as at the end of the previous calendar year.

History.-§18, ch. 72-264.

641.35 Investment of funds.- The funds of any health maintenance organization subject to the provisions of this part shall be invested only in securities permitted by the laws of this state for the investment of assets of life insurance companies.

History.-§19, ch. 72-264.

641.36 Promulgation of rules and regulytions.-The department of insurance, together with the department of health and rehabilitative services, on a joint basis, shall promulgate rules and regulations necessary to carry out the provisions of this part. The approval of both said departments is required as a condition to the implementation of any rule or regulation governing health maintenance organizations. The department of insurance shall collect and make available in a single volume all health maintenance organization rules and regulations promulgated by the departments.

History.-§20, ch. 72-264.

641.37 Penalty.- Any person who violates the provisions of this part shall be 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 exceeding 1 year, or by both such fine and imprisonment.

History .-§21, ch. 72-264.

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641.38 Operational health maintenance organizations; issuance of certificate.-

(!) Any health maintenance organization in existence and operating as of January 1, 1972 in the state shall apply for, and be entitled as of right to, the issuance of a certificate. Such organization shall apply for said certificate within one hundred twenty days after the effective date of this part, submitting with such application the information required under

§641.21, together with a filing fee in the amount of $150.

(2) The provisions of this part shall not apply to those organizations providing the services defined in this part which have been engaged in providing said services for a period of twenty-five years or more. Such exemption, however, shall terminate upon a change in controlling ownership of the organization.

History.-§23, ch. 72-264.

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Ch. 648 REGULATION OF BAIL BONDSMEN AND RUNNERS Ch. 648

CHAPI'ER 648

REGULATION OF BAIL BONDSMEN AND RUNNERS

648.25 Definitions for §648.25-648.57. 648.26 Department of insurance; administra

tion. 648.27 Licenses; general. 648.28 Bondsman and general agent deposit

or bond. 648.29 Bondsman, build-up funds . 648.30 License required. 648.31 License tax and fee. 648.32 Effective date and initial period of

license. 648.33 Bail bond rates. 648.34 Bail bondsmen; qualifications. 648.35 Professional bondsmen; qualifications. 648.36 Bail bondsman's records. 648.37 Runners; qualifications. 648.38 Examination; time; place; fee· scope. 648.39 Notice of appointment of limited surety

agents; termination. 648.40 Notice of appointment of professional

bondsmen; termination. 648.41 Notice of appointment of runners;

termination. 648.42 Registration of bail bondsmen. 648.43 Power of attorney; to be approved by

department; filing of copies.

648.25 Definitions for §§648.25-648.57.-The following words when used in §§648.25-648.57 shall have the meanings respectively ascribed to them in this section:

(1) "Department" shall mean the department of insurance.

(2) "Insurer" shall mean any domestic, foreign or alien surety company which has qualified to transact surety business in this state.

(3) "Bail bondsman" shall mean a limited surety agent or a professional bail bondsman as hereafter defined.

(4) "Limited surety agent" shall mean any individual appointed by an insurer by power of attorney to execute or countersign bail bonds in connection with judicial proceedings and receives or is promised money or other things of value therefor.

(5) "Professional bondsman" shall mean any person who pledges United States currency, United States postal m(Jney 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) "Runner" shall mean a person employed by a bail bondsman 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 defendant to the court, or keeping the defendant under necessary surveillance. This does not affect the

648.44 Prohibitions. 648.45 Denial, suspension, refusal to renew,

or revocation of license or eligibility to hold same.

648.46 Procedure for suspension or revocation of eligibility or for denial, revocation, suspension, or refusal to renew license.

648.47 Conduct of hearings. 648.48 Witnesses and evidence. 648.49 Duration of suspension or revocation. 648.50 Effect or" suspem:ion, revocation upon

associated licenses and licensees. 648.51 Surrender of license or permit. 648.52 Administrative fine in lieu of suspen

sion, revocation of license. 648.53 Probation. 648.54 Review of suspension or revocation of

eligibility or of denial, suspension, revocation or refusal to renew license.

648.55 All bondsmen of same agency; licensed by same companies.

648.56 Exemption. 648.57 Penalty.

right of a bail bondsman to hire counsel, or to ask assistance of law enforcement officers.

(7) "General agent" shall mean 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 of such insurer.

Blstor,..-u. ch. 28621, 1855 ; 12. ch. 57-63; 16, ch. 65-U2; §§13, 35, ch . 69-106; § In ch . 70.339; §272, ch . 71·377.

Note.-See former §903.37

648.26 Department of insurance; administration.-

(1) The department shall have full power and authority to administer the provisions of §§648.25-648.57, which regulate bail bondsmen and runners, and to that end, to adopt and promulgate rules and regulations pursuant to §624.308 of the insurance code, and enforce rules and regulations necessary and proper to effectuate and enforce the purposes and provisions of said sections. The department may employ and discharge such employees, examiners, counsel, and such other assistants as shall be deemed necessary, and it shall prescribe their duties, and 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

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Florida Statutes 1973, Volume 2 -...

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