Florida Statutes 1979, Volume 3 · corporations. Certificate of authority. Required deposit or...

F.S.1979 LEGAL EXPENSE INSURANCE Ch. 642

CHAPTER 642

LEGAL EXPENSE INSURANCE

642.011 642.013 642.015 642.017 642.019

642.021 642.023 642.025 642.027 642.029 642.032

642.034 642.036 642.038 642.041

642.043

642.045

642.047

642.049

Short title. Purpose. Definitions. Exemptions. Organization of legal service insurance

corporations. Certificate of authority. Required deposit or bond. Policy and certificate forms. Premium rates. Contracts by insurers. Provisions of general insurance law appli

cable to legal service insurance corporations.

Registration required. Sales agents to be registered. Reporting and accounting for funds. Grounds for compulsory refusal, suspen-

sion, or revocation of registration of contracting sales agents.

Grounds for discretionary refusal, suspension, or revocation of registration of sales agents.

Procedure for refusal, suspension, or revocation of registration of sales agent.

Administrative fine in lieu of suspension or revocation of registration.

Construction.

642.011 Short title.-Sections 642.011-642.049 may be cited as the "Legal Expense Insurance Act."

History.-s. 1. ch. 79-103.

642.013 Purpose.-The purpose of ss. 642.011-642.049 is to authorize certification and regulation of certain organizations which provide programs for the payment of the costs oflegal services or provide legal services.

History.-s. 1, ch. 79-103.

642.015 Definitions.-As used in ss. 642.011-642.049:

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

(2) "Insurer" means any person authorized to conduct a casualty insurance business in this state or a legal service insurance corporation authorized under ss. 642.011-642.049.

(3) "Legal expense insurance" means a contractual obligation to provide specific legal services, or to reimburse for specific legal expenses, in consideration of a specified payment for an interval of time, regardless of whether the payment is made by the beneficiaries individually or by a third person for them, but does not include the provision of, or reimbursement for, legal services incidental to other insurance coverages.

History.-s. 1, ch. 79-103.

642.017 Exemptions.-The insurance laws of this state, including ss. 642.011-642.049, shall not apply to:

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

with individual clients with fees based on estimates ofthe nature and amount of services to be provided to the specific client and similar contracts made with a group of clients involved in the same or closely related legal matters.

(2) Any lawyer referral service authorized by The Florida Bar.

(3) The furnishing of legal assistance by labor unions or other employee organizations to their members in matters relating to employment or occupation.

(4) The furnishing of legal assistance to members, or their dependents, by a church, cooperative, educational institution, credit union, or organization of employees, in which the organization contracts directly with a lawyer or law firm for the provision oflegal services and the administration and marketing of such legal services is conducted wholly by the organization.

(5) Employee welfare benefit plans to the extent that state laws are superseded by the Employee Retirement Income Security Act of 1974, 29 U.S.C. s. 1144, provided evidence of exemption from state laws is shown to the department.

History.-s. 1, ch. 79-103.

642.019 Organization of legal service insurance corporations.-

(!) Any number of corporations or adult natural persons may organize a legal service insurance corporation under the law of this state relating to corporations generally.

(2) The articles of incorporation shall conform to the requirements applicable to corporations, and, in addition:

(a) The name of the corporation shall indicate that legal services or indemnity for legal expenses is to be provided; and

(b) The purposes of the corporation shall be limited to providing legal services or indemnity for legal expenses and business reasonably related thereto.

History.-s. 1, ch. 79-103.

642.021 Certificate of authority.-(!) It is unlawful for any person to engage in a

legal expense insurance business in this state without a valid certificate of authority issued by the department, pursuant to ss. 642.011-642.049, except that a domestic, foreign, or alien insurer authorized to transact casualty insurance in this state may transact legal expense insurance provided it complies with the applicable provisions of ss. 642.011-642.049. A certificate of authority under ss. 642.011-642.049 may be issued only to a legal service insurance corporation.

(2) The corporation shall file with the department an application for a certificate of authority upon a form to be furnished by the department, which shall include or have attached the following:

(a) The names, and for the preceding 10 years, all addresses and all occupations of all incorporators and proposed directors and officers.

(b) A certified copy of the corporate articles and

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Ch. 642 LEGAL EXPENSE INSURANCE F.S.l979

bylaws and a list of the names, addresses, and occupations of all directors and principal officers and, for the 3 most recent years, the corporation's annual statements and reports.

(c) Each agreement relating to the corporation to which any incorporator or proposed director or officer is a party.

(d) A statement of the amount and sources of the funds available for organization expenses and the proposed arrangements for reimbursement and compensation of incorporators or other persons.

(e) A statement of compensation to be provided directors and officers.

(f) The forms to be used for any proposed contracts between the corporation and participating attorneys, between the corporation and corporations which perform administration, marketing, or management services, and forms relating to the provision of services to insureds.

(g) The plan for conducting the insurance business, which plan shall include all of the following:

1. The geographical area in which business is intended to be conducted in the first 5 years.

2. The types of insurance intended to be written in the first 5 years, including specification whether and to what extent indemnity rather than service benefits are to be provided.

3. The proposed marketing methods. (h) A current statement of the assets and liabili

ties of the corporate applicant. (i) Forms of all legal service contracts the appli

cant proposes to offer showing the rates to be charged for each form of contract.

(j) Such other documents and information as the department may reasonably require.

(3) Copies of the documents filed pursuant to paragraphs (f) and (i) of subsection (2) shall be filed with The Florida Bar within 5 days after filing with the department.

(4) The department shall issue a certificate of authority only to a legal service insurance corporation, provided it is satisfied that:

(a) All requirements of law have been met; (b) All natural persons who are incorporators,

the directors and principal officers of corporate incorporators, and the proposed directors and officers of the corporation being formed are trustworthy and collectively have the competence and experience to engage in the particular insurance business proposed; and

(c) The business plan is consistent with the interests of potential insureds and of the public.

History.-s. 1, ch. 79-103.

previously been engaged in the sale of legal expense insurance under the supervision of The Florida Bar prior to October 1, 1979, shall be in the amount of $50,000 or 50 percent of its gross written premiums in force, whichever is less. The amount of the initial deposit shall be adjusted annually thereafter on October 1 as follows:

(a) Each corporation having in force less than $300,000 of gross written premiums shall deposit with the department an amount equal to 50 percent of such premiums in force or $50,000, whichever is less.

(b) Each corporation having in force more than $300,000 of gross written premiums, but less than $750,000, shall deposit with the department an amount not less than $75,000. ·

(c) Each corporation having in force more than $750,000 of gross written premiums shall deposit with the department an amount equal to $100,000.

(2) In lieu of any deposit of securities required under subsection (1) and subject to the approval of the department, a legal service insurance corporation may file with the department a surety bond issued by an authorized surety insurer. The bond shall be for the same purpose as the deposit in lieu of which it is filed. The department shall not approve any bond under the terms of which the protection afforded against insolvency is not equivalent to the protection afforded by those securities provided for in subsection (1).

(3) Securities or bonds deposited pursuant to this section shall be for the benefit of, and subject to, action thereon by any person sustaining an actionable injury due to the failure of the corporation to faithfully perform its obligations to its insureds in the event of insolvency or impairment of any legal service insurance corporation.

(4) The state shall be responsible for the safekeeping of all securities deposited with the department under ss. 642.011-642.049. Such securities shall not, on account of being in this state, be subject to taxation, but shall be held exclusively and solely to guarantee the performance by the legal service insurance corporation of its obligations to its insureds.

(5) Such deposit or bond shall be maintained unimpaired as long as the legal service insurance corporation continues to do business in this state. Whenever the corporation ceases to do business in this state and furnishes proof satisfactory to the department that it has discharged or otherwise ade- . quately provided for all its obligations to its insureds in this state, the department shall release the deposited securities to the parties entitled thereto, on pre-

642.023 Required deposit or bond.- sentation of the department's receipts for such secu(1) To assure the faithful performance of its obli- rities, or shall release the bond filed with it in lieu

gations in the event of insolvency, each legal service of such deposit. insurance corporation, prior to the issuance of its (6) The department may reduce the amount of certificate of authority, shall deposit and maintain deposit or bond required under subsections (1) and with the department securities of the type eligible (2) if it finds that the reduction is justified by: for deposit by insurers under s. 625.52, which securi- (a) The terms and number of existing contracts ties shall be held in trust and shall have at all times with subscribers; a market value in the amount specified. The initial (b) Support by financially sound public or pri-deposit for a corporation shall be in the amount of vate organizations or agencies; $50,000 for at least the first full year of operation; (c) Other reliable financial guarantees; except that the initial deposit for any organization (d) A pressing social need in the community to be applying for a certificate of authority and having served for the benefits to be provided;

702


(e) Plan attorney agreements that provide for full plan benefits to subscribers without additional payments by the subscribers if the plan terminates; or

(f) Other special circumstances. (7) The department may at any time enter an

order modifying the amount of the deposit or bond specified under subsections (1) and (2) if it finds that there has been a substantial change in the facts on which the determination was based. The department shall hold a hearing within 30 days after receiving a request from the corporation which shall be submitted within 30 days after notification of the modification order. Failure to meet the new requirements within 30 days after final decision or after the expiration of the 30-day period for submitting the hearing request constitutes a ground for rehabilitation.

History.-s. 1, ch. 79-103.

642.025 Policy and certificate forms.-(1) Legal expense insurance may be written as

individual, group, blanket, or franchise insurance. Each contractual obligation for legal expense insurance shall be evidenced by a policy. Each person insured under a group policy shall be issued a certificate of coverage.

(2) No policy or certificate oflegal expense insurance may be issued in this state unless a copy of the form has been filed with and approved by the department.

(3) The department shall not approve any policy or certificate form which does not meet the following requirements:

(a) Policies shall contain a list and description of the legal services to be supplied or the legal matters for which expenses are to be reimbursed and any limits on the amounts to be reimbursed.

(b) Policies and certificates shall indicate the name of the insurer and the full address of its principal place of business.

(c) Certificates issued under group policies shall contain a full statement of the benefits provided and exceptions thereto but may summarize the other terms of the master policy.

(d) Policies providing for legal services to be supplied by a limited number of attorneys who have executed provider contracts with the insurer, whether the attorney in an individual case is to be selected by the insured or by the insurer, shall provide for alternative benefits if the insured is unable to find a participating attorney willing to perform the services or the attorney selected by the insurer is disqualified or otherwise unable to perform the services. The alternative benefit may consist of furnishing the services of an attorney selected and paid by the insurer or paying the fee of an attorney selected by the insured. The policy shall also provide a procedure that includes impartial review for settling disagreements concerning the grounds for demanding an alternative benefit.

(e) No policy, except one issued by a mutual or reciprocal insurance company, may provide for assessments on policyholders or for reduction of benefits for the purpose of maintaining the insurer's solvency.

(f) Policies shall contain a statement that the subscriber has a right to file a complaint with The

Florida Bar concerning attorney conduct pursuant to the plan.

(g) Policies shall contain a statement that the individual beneficiary has the right to retain, at his own expense, except when the policy provides otherwise, any attorney authorized to practice law in this state.

(4) The department may disapprove a policy or certificate form if it finds that the form:

(a) Is unfair, unfairly discriminatory, misleading, ambiguous, or encourages misrepresentation or misunderstanding of the contract;

(b) Provides coverage or benefits or contains other provisions that would endanger the solvency of the insurer; or

(c) · Is contrary to law. History.-s. 1, ch. 79-103.

642.027 Premium rates.-No policy of legal expense insurance may be issued in this state unless the premium rates for the insurance have been filed with and approved by the department. Premium rates shall be established and justified in accordance with generally accepted insurance principles, including, but not limited to, the experience or judgment of the insurer making the rate filing or actuarial computations. The department may disapprove rates that are excessive, inadequate, or unfairly discriminatory. Rates are not unfairly discriminatory because they are averaged broadly among persons insured under group, blanket, or franchise policies. The department may require the submission of any other information reasonably necessary in determining whether to approve or disapprove a filing made under this section or s. 642.025.

History.-s. 1, ch. 79-103.

642.029 Contracts by insurers.-(1) Contracts made between the insurer and par

ticipating attorneys, management contracts, or contracts with providers of other services by the legal expense insurance policy shall be filed with and approved by the department.

(2) Insurers shall annually report to the department, in such detail as is reasonably required, the number and geographical distribution of attorneys and providers of other services covered by the legal expense insurance policy with whom it maintains contractual relations and the nature of the relations. The department may require more frequent reports from an insurer or group of insurers.

History.-a. 1, ch. 79-103.

642.032 Provisions of general insurance law applicable to legal service insurance corporations.-

(1) The following provisions of the insurance laws of this state shall apply to legal service insurance corporations, to the extent that they are not inconsistent with the provisions of ss. 642.011-642.049:

(a) Chapter 624, Administration and General Provisions.

(b) Chapter 625, Accounting, Investments, and Deposits.

(c) Chapter 626, part VII, Unfair Insurance Trade Practices.

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Ch. 642 LEGAL EXPENSE INSURANCE F.S.1979

(d) Chapter 627, part I, Rates and Rating Organizations, and part II, The Insurance Contract.

(e) Chapter 631, Insurer Insolvency; Guaranty of Payment.

(2) The department may, by rule, modify or waive any requirement of the law referred to in subsection (1) to avoid unreasonable hardship, expense, or inconvenience to a legal service insurance corporation if the interests of policyholders continue to be adequately protected.

History.-s. 1, ch. 79-103.

642.034 Registration required.-No person shall solicit, negotiate, advertise, or execute legal expense insurance contracts in this state unless such person is registered as a sales agent or is commissioned for that purpose by a sales agent, except a person who is licensed as a general lines agent or solicitor.

History.-s. 1, ch. 79-103.

642.036 Sales agents to be registered.-Each legal service insurance corporation shall, on forms prescribed by the department, register, on or before October 1 of each year, the name and business address of each sales agent under contract with it in this state and shall, within 30 days after termination of the contract, notify the department of such termination. At the time of the annual registration, a $10 filing fee for each sales agent shall be paid by the legal service insurance corporation to the department. Any sales agent employed after the October 1 filing date shall be registered with the department within 10 days after such employment. No employee or sales agent of a legal service insurance corporation shall directly or indirectly solicit or negotiate insurance contracts, or hold himself out in any manner to be an insurance agent or solicitor, unless so qualified and licensed therefor under the Insurance Code.

History.-s. 1, ch. 79-103.

642.038 Reporting and accounting for funds.-

(1) All funds belonging to legal service insurance corporations or others received by a sales agent in transactions under his registration shall be trust funds so received by such agent in a fiduciary capacity, and the agent, in the applicable regular course of business, shall account for and pay the same to the legal service insurance corporation or other person entitled thereto.

(2) Any sales agent who, not being entitled thereto, diverts or appropriates such funds or any portion thereof to his own use is guilty oflarceny as provided in s. 812.021.

History.-s. 1, ch. 79-103.

642.041 Grounds for compulsory refusal, suspension, or revocation of registration of contracting sales agents.-The department shall deny, suspend, revoke, or refuse to renew or continue the registration of any sales agent ifit finds that, as to the agent, any one or more of the following applicable grounds exist:

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

(2) The registration is willfully used, or to be used, to circumvent any of the requirements or prohibitions of ss. 642.011-642.049.

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

(4) In the adjustment of claims, material misrepresention to a contract holder or other interested party of the terms and coverage of a contract, with the intent and for the purpose of settling such claim on less favorable terms than those provided in and contemplated by the contract.

(5) Demonstrated lack of fitness or trustworthiness to engage in the business oflegal expense insurance.

(6) Demonstrated lack of adequate knowledge and technical competence to engage in the transactions authorized by the registration.

(7) Fraudulent or dishonest practices in the conduct of business under the registration.

(8) Misappropriation, conversion, or unlawful withholding of moneys belonging to a legal service insurance corporation or to others and received in the conduct of business under the registration.

(9) Rebating, or attempting to rebate, or unlawfully dividing, or offering to divide, his commission with another.

(10) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of ss. 642.011-642.049.

History.-s. 1, ch. 79-103.

642.043 Grounds for discretionary refusal, suspension, or revocation of registration of sales agents.-The department may, in its discretion, deny, suspend, revoke, or refuse to renew or continue the registration of any sales agent if it finds, after notice and hearing thereon as provided in s. 642.045, that, as to the agent, any one or more of the following applicable grounds exist under circumstances for which such denial, suspension, revocation, or refusal is not mandatory under s. 642.041:

(1) Any cause for which granting of the registration could have been refused had it been known to the department at the time of application.

(2) Violation of any provision of ss. 642.011-642.049, or of any other law applicable to the business oflegal expense insurance in the course of dealings under the registration.

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

(4) Failure or refusal to pay over, upon demand, to any legal service insurer he represents, or has represented, any money coming into his hands which belongs to the legal service insurance corporation.

(5) 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 defined under part VII of chapter 626, or has otherwise shown himself to be a source of injury or loss to the public or

704


detrimental to the public interest. (6) Conviction of a felony.

History.-s. 1, ch. 79·103.

642.045 Procedure for refusal, suspension, or revocation of registration of sales agent.-

(1) If any sales agent is convicted by a court of a violation of any provision ofss. 642.011-642.049, the registration of such individual shall thereby be deemed to be immediately revoked without any further procedure relative thereto by the department.

(2) As to a registration denied, suspended, or revoked by the department, the person aggrieved thereby shall have the right to a hearing thereon.

(3) If, after an investigation or upon other evidence, the department has reason to believe that grounds may exist for the suspension or revocation of, or refusal to renew or continue, the registration of any sales agent, as such grounds are specified in ss. 642.041 and 642.043, the department may proceed to suspend, revoke, or refuse to renew or continue the registration.

(4) Whenever it appears that any licensed insurance agent has violated the provisions ofss. 642.011-642.049, the department may take such action relative thereto as is authorized by the Insurance Code for a violation of the Insurance Code by such agent.

History.-s. 1, ch. 79·103.

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

(!) If, pursuant to procedures provided for in ss. 642.011-642.049, it is found that one or more grounds exist for the suspension or revocation of, or refusal

to renew or continue, any registration issued under ss. 642.011-642.049, and except when such suspension, revocation, or refusal is mandatory, an order may be entered imposing upon the registrant, in lieu of such suspension, revocation, or refusal, an administrative penalty for each violation in the amount of $100 or, in the event of willful misconduct or willful violation on the part of the registrant, an administrative fine of$500. The administrative penalty may be augmented in amount by an amount equal to any commissions received by or accruing to the credit of the registrant in connection with any transaction to which the grounds for suspension, revocation, or refusal related.

(2) The order may allow the registrant a reasonable period not to exceed 30 days, within which to pay to the department the amount of the penalty so imposed. If the registrant fails to pay the penalty in its entirety to the department at its office in Tallahassee within the period so allowed, the registration of the registrant shall stand suspended or revoked, or renewal or continuation may be refused, as the case may be, upon expiration of such period and without any further proceedings.

History.-s. 1, ch. 79·103.

642.049 Construction.-Nothing contained in ss. 642.011-642.049 shall be construed to regulate the practice oflaw or limit the powers or authority of the Supreme Court of Florida in the regulation of the conduct of attorneys.

History.-s. 1, ch. 79·103.

705

Ch. 648 BAIL BONDSMEN AND RUNNERS F.S.1979

CHAPTER 648

BAIL BONDSMEN AND RUNNERS

648.25 Definitions for ss. 648.25-648.57. 648.26 Department of Insurance; administration. 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; termina

tion. 648.42 Registration of bail bondsmen. 648.43 Power of attorney; to be approved by depart

ment; filing of copies. 648.44 Prohibitions. 648.45 Denial, suspension, refusal to renew, or rev

ocation 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.

648.48 Witnesses and evidence. 648.49 Duration of suspension or revocation. 648.50 Effect of suspension, revocation upon asso-

ciated licenses and licensees. 648.51 Surrender of license or permit. 648.52 Administrative fine in lieu of suspension,

revocation, or refusal to renew. 648.53 Probation. 648.55 All bondsmen of same agency; licensed by

same companies. 648.56 Exemption. 648.57 Penalty.

1648.25 Definitions for ss. 648.25-648.57.-The following words when used in ss. 648.25-648.57 shall have the meanings respectively ascribed to them in this section:

(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 per-

son who pledges United States currency, United States postal money orders, or cashier's checks or other property as security for a bail bond in connection with a judicial proceeding and receives or is promised therefor money or other things of value.

(6) "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 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.

Hlstory.-s. 1, ch. 29621, 1955; s. 2, ch. 57-63; s. 6, ch. 65-492; ss. 13, 35, ch. 69·106; s. 177, ch. 70.339; s. 272, ch. 71-377; s. 3, ch. 76-168; s. 1, ch. 77.457.

'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 774.57, effective July 1, 1982, except for the possible effect of laws affecting this section prior to that date.

Note.-Former s. 903.37.

1648.26 Department of Insurance; administration.-

(1) The department shall have full power and authority to administer the provisions of ss. 648.25-648.57, which regulate bail bondsmen and runners, and to that end, to adopt and promulgate rules and regulations pursuant to s. 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 accepted by all the courts of this state as prima facie evidence of the contents thereof.

(3) The department's papers, documents, reports or evidence shall not be subject to subpoena without its consent until after the same shall have been published at a hearing held under said sections, unless after notice to the department and hearing, the court shall determine that the department shall not be unnecessarily hindered or embarrassed.

Hlstory.--s. 2, ch. 29621, 1955; s. 7, ch. 614.06; ss. 13, 35, ch. 69·106; s. 177, ch. 70.339; s. 3, ch. 76-168; s. 1, ch. 774.57.

'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 774.57, effective July 1, 1982, except for the possible effect of laws affecting this section prior to that date.


1648.27 Licenses; general.-(1) No license shall be issued except in compli

ance with this chapter and none shall be issued except to an individual. A firm, partnership, associa-

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F.S.1979 BAIL BONDSMEN AND RUNNERS Ch. 648

tion, or corporation, as such, shall not be licensed. (2) For the protection of the people of this state,

the department shall not issue, renew, or permit to exist any license except in compliance with this chapter. The department shall not issue, renew, or permit to exist a license for any individual found to be untrustworthy or incompetent who has had his eligibility to hold a license revoked, or who has not established to the satisfaction of the department that he is qualified therefor in accordance with this chapter. ·

(3) The department may propound any reasonable interrogatories to an applicant for a license under this chapter or on any renewal thereof, relating to his qualifications, residence, prospective place of business, and any other matters which are deemed necessary or expedient in order to protect the public and ascertain the qualifications of the applicant. The department may also conduct any reasonable inquiry or investigation it sees fit, relative to the determination of the applicant's fitness to be licensed or to continue to be licensed. Upon the request of the department, a law enforcement agency shall inform the department of any specific criminal charge filed against any applicant and the final disposition of such charge,

(4) If upon the basis of the completed application for a license and such further inquiry or investigation the department deems the applicant to be unfit as to character and background or lacking in one or more of the required qualifications for the license, the department shall disapprove the application.

(5)(a) The license of a limited surety agent and a professional bail bondsman shall continue in force, without further examination unless deemed necessary by the department, until suspended, revoked or otherwise terminated but subject to annual continuation by the insurer or professional bondsman named therein on or before September 1 by payment of the fee and license taxes for renewal or continuation of the license as prescribed ins. 648.31 and miscellaneous fees as prescribed in s. 624.501 of the insurance code.

(b) The license of a bail bond runner shall continue in force until expired, suspended, revoked or otherwise terminated but subject to annual continuation by the appointing limited surety agent or professional bondsman named therein on or before September 1 by payment of the fee and license taxes for renewal or continuation of the license as prescribed ins. 648.31 and miscellaneous fees as prescribed in s. 624.501 of the insurance code.

(6) Any such license as to which request for renewal or continuation is not received by the department at its offices at Tallahassee as required by subsection (5), shall be deemed to have expired as at midnight on September 30 next following such failure. Request for renewal or continuation of any such license or payment of fee and license taxes therefor which is received by the department after such September 1 but on or before the next following October 15 may be accepted and effectuated by the department, in its discretion, and any such request and payment received by the department after such October 15 and on or before the next following November 15, may be accepted and effectuated by the de-

partment, in its discretion, only if accompanied by an additional license continuation fee in the amount of $5. Such continuation fees to be deposited to the credit of the Insurance Commissioner's Regulatory Trust Fund.

(7) The original license certificate issued to any such licensee shall remain outstanding and in effect for so long as the license represented thereby continues in force as hereinabove provided.

(8) Any person who represents a surety company and whose duties are restricted to bail bonds only but who comes under the definition of service representative as provided in s. 626.081 of the insurance code may be licensed as a bail bondsman provided such person meets the qualification requirements of this chapter. Provided further, such person must either be licensed as a bail bondsman or qualify as a service representative and shall engage in such activities as provided in ss. 626.081, 626.744 and 626.745.

History.-<!. 3, ch. 29621, 1955; s. 1, ch. 59-326; s. 8, ch. 61-406; s. 23, ch. 65-269; ss. 13, 35, ch. 69-106; s. 177, ch. 70.339; s. 24, ch. 71-86; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 1, ch. 78-29; s. 21, ch. 78-95.

'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective July 1, 1982, except for the possible effect of laws affecting this section prior to that date.

Note.-Former s. 903.39. cf.-s. 624.523 Insurance Commissioner's Regulatory Trust Fund.

1648.28 Bondsman and general agent deposit or bond.-

(1) When the department shall be satisfied that the applicant for a bail bondsman's license had qualified for such a license and met the requirements provided in ss. 648.27, 648.34, 648.35, and 648.38, it shall notify the applicant that a license will be issued upon the applicant's posting a deposit or bond.

(2) Prior to the issuance of a license or continuation of an existing license the applicant or licensee shall deposit with the department securities of the type eligible for deposit by insurers under s. 625.52, and having at all times a market value of not less than $5,000; except that a general lines agent as defined in s. 626.041, shall not make such deposit unless the majority of his premium volume is derived from the bail bond business.

(3) No insurer shall appoint or allow to be represented in this state by a general agent unless first the general agent shall have deposited with the department securities of the type eligible for deposit by insurers under s. 625.52, and having at all times a market value of not less than $25,000.

(4) In lieu of any deposit of securities the bail bondsman or general agent may file with the department a surety bond in the penal sum oflike amount. The bond shall be issued and continued by an authorized surety insurer not represented by said bail bondsman or general agent. The bond shall be for the same purpose as the deposit in lieu of which it is filed, shall be in favor of the department and shall specifically authorize recovery by the department of the damages obtained in case the bail bondsman or general agent fails to faithfully perform his obligations in the conduct of the bail bond business. No such bond shall be canceled or subject to cancellation unless at least 60 days advance notice thereof in writing is filed with the department.

(5) The state shall be responsible for the safekeeping of all securities deposited with the depart-

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ment under this chapter. 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 bail bondsman's or general agent's faithful performance of his obligations in the conduct of the bail bond business.

(6) The depositing bail bondsman or general agent shall, during his 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.

(7) Such deposit or bond shall be_maintained unimpaired as long as the bail bondsman or general agent continues in business in this state. Whenever the bail bondsman or general agent ceases to do business in this state and furnishes to the department proof satisfactory to it that such bail bondsman or general agent has discharged or otherwise adequately provided for all his obligations in this state in the conduct of his business, the department shall release the deposited securities to the bail bondsman or general agent entitled thereto, on presentation of the department's receipts for such securities, or release any bond filed with it in lieu of such deposit.

History.-s. 7, ch. 65-492; ss. 13, 35, ch. 69-106; s. 177, ch. 70.339; s. 3, ch. 76-168; s. 1, ch. 77-457.



1648.29 Bondsman, build-up funds.-All deposits or build-up funds posted by a bail bondsman or general agent, either with the insurer or general agent representing such insurer, must be maintained by the insurer or the general agent in a bank or savings and loan association in this state.

History.-s. 8, ch. 65-492; s . 177, ch. 70-339; s. 3, ch. 76-168; s . 1, ch. 77-457. 'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective

July 1, 1982, except for the possible effect of laws affecting this section prior to that date.


1648.30 License required.-No person shall act in the capacity of a professional bail bondsman, limited surety agent, or runner, or perform any of the functions, duties or powers prescribed for bail bondsmen or runners under the provisions of this chapter unless that person shall be qualified and licensed as provided in this chapter.

History.-s. 4, ch. 29621, 1955; s. 177, ch. 70.339; s. 3, ch. 76-168; s. 1, ch. 77-457.



1648.31 License tax and fee.-(1) The department shall collect in advance all

license taxes and fees for the issuance of any license to a bail bondsman, limited surety agent, or runner, as follows:

(a) Original license: Appointment fee ----------------------- $1.00 State license tax ---------- -- ----------- $6.00 County license tax ----- --- ---------- --$3.00 Total ------ ----- ------- -------------------------- $10.00 (b) Annual renewal or continuation of li-

cense:

Appointment fee ----------------··----- $1.00 State license tax ------- --------------- .. $6.00 County license tax -------------------$3.00 Total -------------------------------------------- $10.00

(2) The department shall deposit all license taxes and fees in such funds and for such uses as is provided by laws applicable to like license taxes and like fees in the case of general lines agents.

History.-s. 5, ch. 29621, 1955; s. 2, ch. 59-326; ss. 13, 35, ch. 69-106; s. 177, ch. 70-339; s. 3, ch. 76-168; s. 1, ch. 77-457.



1648.32 Effective date and initial period of li-cense.-

(1) All licenses as to which all requisite applications, payment of fees and taxes, passing of examinations, and waiting periods have been completed and evidence thereof in the customary form received by the department at its office in Tallahassee within 1 calendar month prior to the expiration of the applicable license year then current or within 1 calendar month after the commencement of the next following new license year, shall be dated and be effective as of the first day of such new license year and shall be as for the entire such license year (subject to suspension, revocation, renewal, continuation, or termination as otherwise provided for in this chapter); but such a license, if issued pursuant to qualification therefor during the last calendar month of the preceding license year as hereinabove provided, shall be deemed to relate back in effectiveness to the date within such calendar month on which the last of such qualifying requirements was received by the department at its offices in Tallahassee.

(2) All other licenses shall be dated and become effective as of the date of issue.




1648.33 Bail bond rates.-Bail bond rates shall be subject to the provisions of part I of chapter 627 of the insurance code. It shall be unlawful for a bail bondsman to execute a bail bond without charging a premium therefor and the premium rate shall not exceed nor be less than the premium rate as filed with and approved by the department.

History.-s. 6, ch. 29621, 1955; s. 4, ch. 59-326; as. 13, 35, ch. 69-106; s. 177, ch. 70.339; s. 3, ch. 76-168; s. 1, ch. 77-457.



1648.34 Bail bondsmen; qualifications.-(!) Application for filing for examination for bail

bondsmen shall be submitted on forms furnished by the department.

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

(a) That the applicant is a natural person who has reached the age of 18 years.

(b) That the applicant has been a bona fide resident of the state for 1 year last past and will actually

708


reside in this state at least 6 months out of each year. (c) That the place of business of the applicant

will be located in this state and that such applicant will be actively engaged in the bail bond business and maintain a place of business accessible to the public.

(d) That no applicant for a license as a limited surety agent or professional bondsman shall be qualified therefor or be so licensed unless, within the 2 years immediately preceding the date his application for license is filed with the department, he has:

1. Successfully completed a basic certification course in the criminal justice system, consisting of not less than 80 hours, approved by the department; and

2.a. Successfully completed a correspondence course for bail bondsmen approved by the department;

b. Been engaged as a licensed runner for a period of 1 year;

c. Held a valid general lines agent's license for 1 year; or

d. Had at least 1 year with responsible duties as a substantially full-time bona fide employee of a licensed agent or professional bondsman or an insurer engaged in writing bail bonds in which field he has specialized.

(e) That the applicant is vouched for and recommended upon sworn statements by at least three bail bondsmen licensed by the department, or three other reputable citizens who are residents of the same counties in which applicant proposes to engage in the bail bond business.

(f) That the applicant is a person of high character and approved integrity.

(3) A fee of$10 shall be submitted to the department with each application, such fee to be deposited to the credit of the Insurance Commissioner's Regulatory Trust Fund.

(4) Applicant shall furnish with his application, a complete set of his fingerprints and a recent credential-size fullface photograph of himself. The applicant's fingerprints shall be certified by an authorized law enforcement officer.

(5) Any limited surety agent or professional bondsman who holds a license on October 1, 1977, issued under the provisions of this chapter shall be exempt from the provisions of this section.

History.-s. 7, ch. 29621, 1955; s. 5, ch. 59-326; s. 9, ch. 61-406; s. 2, ch. 61-119; s. 24, ch. 65-269; ss. 13, 35, ch. 69-106; s. 177, ch. 70.339; s. 3, ch. 76-168; s. 1, ch. 77-96; s. 1, ch. 77-116; s. 61, ch. 77-121, s. 1, ch. 77-457.



1648.35 Professional bondsmen; qualifications.-In addition to the qualifications prescribed in s. 648.34, to qualify as a professional bondsman an applicant shall:

(1) File with his application for filing for examination and with each application for renewal or continuation of his license a detailed financial statement under oath; and

(2) File with his application for filing for examination the rating plan he proposes to use in writing

bail bonds; such rating plan must be approved prior to issuance of the license.

History.-s. 8, ch. 29621, 1955; s. 10, ch. 61-406; s. 177, ch. 70.339; s. 3, ch. 76-168; s. 1, ch. 77-457.



1648.36 Bail bondsman's records.-(1) Every bail bondsman must maintain in his

office such records of bail bonds executed or countersigned by him to enable the public to obtain all necessary information concerning such bail bonds for at least 1 year after the liability of the surety has been terminated.

(2) On or before August 15 of each year, a sworn statement on a form furnished by the department shall be filed with the department by:

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

(b) Every bail bondsman or every firm or agency if the bail bondsman is employed by, associated with or is a member of such firm or agency, listing every outstanding or unpaid forfeiture, estreature and judgment, together with the name of the court in which such forfeiture, estreature and judgment is recorded, and submitting all other pertinent information requested by the department.


'Note.-Repealed by s. 3, ch. 76-168. as amended by s. 1, ch. 77-457, effective July 1, 1982, except for the possible effect of laws affecting this section prior to that date.


1648.37 Runners; qualifications.-To qualify as a runner:

(1) It must affirmatively appear from the application:

(a) That the applicant is a natural person who has reached the age of 18 years.

(b) That the applicant has been a bona fide resident of this state for more than 6 months last past.

(c) That the applicant will be employed by only one bail bondsman, who will supervise the work of the applicant, and be responsible for the runner's conduct in the bail bond business.

(d) The application must be endorsed by the appointing bail bondsman, who shall obligate himself to supervise the runner's activities in his behalf.

(2) A fee of $10 shall be submitted to the department with each application, such fee to be deposited to the credit of the Insurance Commissioner's Regulatory Trust Fund.

(3) Applicant shall furnish with his application, a complete set of his fingerprints and a recent credential-size fullface photograph of himself The applicant's fingerprints shall be certified by an authorized law enforcement officer.

History.-s. 9, ch. 29621, 1955; s. 6, ch. 59-326; s. 2, ch. 61-119; s. 12, ch. 61-406; s. 25, ch. 65-269; ss. 13, 35, ch. 69-106; s. 177, ch. 70-339; s. 3, ch. 76-168; s. 1, ch. 77-116; s. 62, ch. 77-121; s. 1, ch. 77-457.



1648.38 Examination; time; place; fee; scope.(1)(a) If upon the basis of the completed applica

tion for examination and such further inquiry or investigation as the department may make concern-

709


ing the fitness and qualifications of the applicant, the department is satisfied that, subject to any examination required to be taken and passed by the applicant for a license, the applicant is qualified to take the examination applied for and that all pertinent taxes and fees have been paid, it shall approve the application.

(b) If upon the basis of the completed application for examination and such further inquiry or investigation as to the fitness and qualifications of the applicant, the department deems the applicant -to be unfit or lacking in any one or more of the required qualifications as specified in s. 648.34 as to limited surety agent, and ss. 648.34 and 648.35 as to professional bondsmen, the department shall disapprove the application.

(2) Upon approval by the department the applicant shall be required to appear in person at a place hereinafter designated to take a written examination prepared by the department, testing his ability and qualifications to be a bail bondsman.

(3) Each applicant shall become eligible for examination 60 days after the date the application is received by the department in Tallahassee provided the department is satisfied as to the applicant's fitness to take the examination. Examinations shall be held in the department's offices where an adequate and designated examination room is available. Each applicant shall be entitled to take the examination at such of the said offices which is located closest to his place of residence, and he shall be entitled to notice of the time and place not less than 15 days prior to taking the examination.

(4) A fee of $10 shall be submitted to the department with each application, such fee to be deposited to the credit ofthe Insurance Commissioner's Regulatory Trust Fund. The fee for filing application for examination shall not be subject to refund.

(5) The failure of the applicant to secure approval of the department shall not preclude him from applying as many times as he desires, but no application will be considered by the department within 60 days subsequent to the date upon which the department denied the last application.

(6) The failure of an applicant to pass an examination, after having been approved by the department to take the examination, shall not preclude him from taking subsequent examinations. A separate and additional application and fee for filing application for examination shall be filed with the department for each subsequent examination; provided, however, that at least 60 days must intervene between examinations.

(7) The $10 fee for filing application for examination shall apply to each examination, but once an applicant has been approved by the department he will not have to file another application as set forth in ss. 648.34 and 648.35 unless specifically so ordered by the department. Any bail bondsman who successfully passes an examination must be licensed within 24 months from date of examination or be subject to another examination unless failure to be so licensed was due to military service, in which event the period within which another examination is not required may, in the department's discretion, be extended to 12 months following the date of discharge

from military service, ifthe military service does not exceed 3 years, but in no event to extend under this clause for a period of more than 4 years.

(8) The scope of the examination shall be as broad as the bail bond business.

History.-s. 10, ch. 29621, 1955; s. 7, ch. 59-326; s. 13, ch. 61-406; s. 2, ch. 61-119; s. 26, ch. 65-269; ss. 13, 35, ch. 69-106; s. 177, ch. 70.339, s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95.


Note.--;-Former s. 903.46.

1648.39 Notice of appointment of limited surety agents; termination.-

(!) The insurer shall annually prior to September 1 file with the department an alphabetical list of all limited surety agents appointed, giving the type and class of license, names and addresses of each licensee whose appointment and license in this state is being renewed or is to be continued in effect, accompanied by payment of the applicable renewal or continuation fees and taxes. Every such insurer who shall, subsequent to the filing of this list expect to appoint a limited surety agent in this state, shall give notice thereof to the department along with a written application for license for said agents. All such appointments shall be subject to the issuance of a license to such agents.

(2) The department shall promptly notify any applicant who has passed the limited surety agent's examination. Upon receipt of application for license and proper taxes and fees, the department shall issue a license in the name of the individual to the insurer.

(3) An insurer terminating the appointment of a limited surety agent shall, within 30 days after such termination, file written notice thereof with the department, together with a statement that it has given or mailed notice to the limited surety agent. Such notice filed with the department shall state the reasons, if any, for such termination. Information so furnished the department shall be privileged and shall not be used as evidence in or basis for any action against the insurer or any of its representatives.

(4) Every insurer shall within 5 days after terminating appointment of any limited surety agent give written notice thereof to any clerk of the circuit court and sheriff with which the agent is registered.

History.-s. 11, ch. 29621, 1955; s. 8, ch. 59-326; ss. 13, 35, ch. 69-106; s. 177, ch. 70.339; s. 3, ch. 76-168; s. 1, ch . 77-457.



1648.40 Notice of appointment of professional bondsmen; termination.-

(!) Any person applying to qualify as a professional bondsman shall at the time of filing his application for examination also file with the department an application for license and upon the applicant's passing the examination for bail bondsmen the department shall promptly issue proper license.

(2) Any professional bail bondsman who discontinues writing bail bonds during the period for which

710


he is licensed shall notify the clerks of the circuit court and the sheriffs with whom he is registered and return his license to the department for cancellation within 30 days from such discontinuance.

History.-s. 12, ch. 29621, 1955; s. 9, ch. 59·326; ss. 13, 35, ch. 69-106; s. 177, ch. 70-339; s. 3, ch. 76-168; s. 1, ch. 77-457.



1648.41 Notice of appointment of runners; termination.-

(1) Every person duly licensed as a bail bondsman may appoint as runner any person who holds or has qualified for a runner's license. Each bail bondsman shall annually prior to September 1 file with the department an alphabetical list of all runners appointed, giving the type and class of license, names and addresses of each licensee whose appointment and license in this state is being renewed or is to be continued in effect, accompanied by payment of the applicable renewal or continuation fees and taxes. Each such bail bondsman who shall, subsequent to the filing of this list, expect to appoint additional persons as runners shall file written notice with the department and request a license for the said runner.

(2) A bail bondsman terminating the appointment of a runner shall within 30 days file written notice thereof with the department, together with a statement that he has given or mailed notice to the runner. Such notice filed with the department shall state the reasons, if any, for such termination. Information so furnished the department shall be privileged and shall not be used as evidence in any action against the bail bondsman.

History.-s. 13, ch. 29621, 1955; s. 10, ch. 59-326; ss. 13, 35, ch. 69-106; s. 177, ch. 70-339; s. 3, ch. 76-168; s. 1, ch. 77-457.

'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective July 1, 1982, except for the possible effect oflaws affecting this section prior to that date.

Note.-Formers. 903.49.

1648.42 Registration of bail bondsmen.-No bail bondsman shall become a surety on an undertaking unless he has registered in the office of the sheriff and with the clerk of the circuit court in the county in which the bondsman resides and he may register in a like manner in any other county and any limited surety agent shall file a certified copy of his appointment by power of attorney from each insurer which he represents as agent with each of said officers. Registration and filing of certified copy of renewed power of attorney shall be performed annually on October 1. The clerk of the circuit court and the sheriff shall not permit the registration of a bail bondsman unless such bondsman is currently licensed by the department.

History.-s. 14, ch. 29621, 1955; ss. 13, 35, ch. 69-106; s. 177, ch. 70-339, s. 3, ch. 76-168; s. 1, ch. 77-457.



1648.43 Power of attorney; to be approved by department; filing of copies.-

(1) Every insurer engaged in the writing of bail bonds through limited surety agents in this state shall submit and have approved by the department a sample power of attorney which will be the only

form of power of attorney the insurer will issue to limited surety agents in Florida.

(2) Every professional bondsman who authorizes a licensed professional bondsman directly employed by him to sign his name to bonds must file copy of the power of attorney given to such licensed bondsman with the sheriff and the clerk of the circuit court in the county in which he resides and with the department. Such power of attorney shall remain in full force and effect until written notice revoking the power of attorney has been received by the abovenamed officials.

History.-s.15, ch. 29621, 1955; s. 14, ch. 61-406; ss. 13, 35, ch. 69-106; s. 177, ch. 70-339; s. 3, ch. 76-168; s. 1, ch. 77-457.



1648.44 Prohibitions.-(!) No bail bondsman or runner shall: (a) Suggest or advise the employment of or name

for employment any particular attorney to represent his principal.

(b) Solicit business in or about any place where prisoners are confined or in or about any court.

(c) Pay a fee or rebate or give or promise anything of value to a jailer, policeman, peace officer, committing magistrate, or any other person who has power to arrest or to hold in custody; or to any public official or public employee in order to secure a settlement, compromise, remission or reduction of the amount of any bail bond or estreatment thereof.

(d) Pay a fee or rebate or give anything of value to an attorney in bail bond matters, except in defense of any action on a bond.

(e) Pay a fee or rebate or give or promise anything of value to the principal or anyone in his behalf.

(f) Participate in the capacity of an attorney at a trial or hearing of one on whose bond he is surety.

(g) Accept anything of value from a principal except the premium, provided that the bondsman shall be permitted to accept collateral security or other indemnity from the principal which shall be returned upon final termination of liability on the bond. Such collateral security or other indemnity required by the bondsman must be reasonable in relation to the amount of the bond.

(2) When a bail bondsman accepts collateral he shall give a written receipt for same, and this receipt shall give in detail a full account of the collateral received.

(3) The following persons or classes shall not be bail bondsmen or runners and shall not directly or indirectly receive any benefits from the execution of any bail bond:

(a) Jailers. (b) Police officers. (c) Committing magistrates. (d) Sheriffs and deputy sheriffs. (e) Any person having the power to arrest or

having anything to do with the control of federal, state, county or municipal prisoners.

(4) A bail bondsman shall not sign nor countersign in blank any bond, nor shall he give a power of attorney to, or otherwise authorize, anyone to countersign his name to bonds unless the person so au-

711


thorized is a licensed bondsman directly employed by the bondsman giving such power of attorney.

(5) No bail bond agency shall advertise as or hold itself out to be a bail bond or surety company.

History.-s. 16, ch. 29621, 1955; s. 177, ch. 70-339; s. 26, ch. 73-334; s. 3, ch. 76-168; s. 1, ch. 77-119; s. 1, ch. 77-457.



1648.45 Denial, suspension, refusal to renew, or revocation of license or eligibility to hold same.-

(1) The department may deny, suspend, revoke or refuse to renew any license issued under this law, or it may suspend or revoke the eligibility of any person to hold a license under this law, for any of the following causes or for any violation of the laws of this state relating to bail:

(a) For any cause for which issuance of the license could have been refused had it then existed and been known to the department.

(b) Violation of any law relating to the business of bail bond insurance in the course of dealings under the license issued him by the department.

(c) Material misstatement, misrepresentation or fraud in obtaining the license, or failure to pass any examination required under this chapter.

(d) Misappropriation, conversion or unlawful withholding of moneys belonging to insurers or others and received in the conduct ofbusiness under the license.

(e) Conviction of a felony. (f) Fraudulent or dishonest practices in the con

duct of business under the license. (g) Willful failure to comply with, or willful vio

lation of any proper order, rule or regulation of the department.

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

(i) Willful failure to return collateral security to the principal when the principal is entitled thereto.

(j) When, in the judgment of the department, the licensee has, in the conduct of affairs under the license, demonstrated incompetency, or untrustworthiness, or conduct or practices rendering him unfit to carry on the bail bond business, or making his continuance in such business detrimental to the public interest, or when the department finds that he is no longer in good faith carrying on the bail bond business, or that he is guilty of rebating, or offering to rebate, or unlawfully dividing, or offering to divide his commissions in the case of limited surety agents, or premiums in the case of professional bondsmen, and for such reasons is found by the department to be a source of detriment, injury or loss to the public.

(2) In case of the suspension or revocation of license or the eligibility to hold such license of any bail bondsman, the license or eligibility to hold same of any or all other bail bondsmen who are members of the same agency, whether incorporated or unincorporated, any or all runners employed by such agency who knowingly were parties to the act which formed the ground for the suspension or revocation shall

likewise be suspended or revoked for the same period as that of the offending bail bondsman, but this shall not prevent the licensing or reinstatement of eligibility of any bail bondsman or runner except the one whose license was first suspended or revoked and those persons who knowingly were parties to the act, from being licensed as a member of, or bail bondsman or runner for some other agency.

(3) No license under this chapter shall be issued, renewed, or permitted to exist when the same is used directly or indirectly to circumvent any of the provisions of this law.

History.-s. 17, ch. 29621, 1955; s. 3, ch. 57-63; s. 15, ch. 61-406; ss. 13, 35, ch. 69-106; s. 177, ch. 70-339; s. 25, ch. 71-86; s. 167, ch. 73-333; s. 3, ch. 76-168; s. 1, ch. 77-457.


Note.-Formers. 903.53. cf.-s. 112.011 Felons; removal of disqualifications for employment, excep

tions.

1648.46 Procedure for suspension or revocation of eligibility or for denial, revocation, suspension, or refusal to renew license.-

(1) If any bail bondsman or runner is convicted by a court of a violation of any of the provisions of this chapter, the license or eligibility to hold a license of such individual shall thereby be deemed to be immediately revoked.

(2) If after an investigation or upon other evidence the department has reason to believe that there may exist any one or more causes for suspension of, revocation of, or refusal to renew or continue the license of any bail bondsman or runner as such causes are specified in s. 648.45 or that a bail bondsman or runner has been guilty of violating any of the laws of this state relating to bail bonds, or that any licensee is no longer eligible to hold a license, the department may suspend, revoke, or refuse to renew or continue such license.

History.-s. 18, ch. 29621, 1955; s. 16, ch. 61-406; ss. 13, 35, ch. 69-106; s. 177, ch. 70-339; s. 26, ch. 71-86; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95.

'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective July 1, 1982, except for the possible effect of Jaws affecting this section prior to that date.


1648.48 Witnesses and evidence.-(1) As to the subject of any examination or inves

tigation being conducted by him, the agent or examiner appointed by the department may administer oaths, examine and cross-examine witnesses, receive oral and documentary evidence, and shall have the power to subpoena witnesses, compel their attendance and testimony, and require by subpoena the production of books, papers, records, files, correspondence, documents, or other evidence which he deems relevant to the inquiry.

(2) If any person refuses to comply with any such subpoena or to testify as to any matter concerning which he may be lawfully interrogated, the Circuit Court of Leon County or of the county wherein such examination or investigation is being conducted, or of the county wherein such person resides, on the department's aJlplication may issue an order requiring such person to comply with the subpoena and to testify; and any failure to obey such an order of the court may be punished by the court as a contempt thereof.

(3) Subpoenas shall be served and proof of such

712


service made in the same manner as if issued by a circuit court. Witness fees and mileage, if claimed, shall be allowed the same as for testimony in a circuit court.

(4) Any person willfully testifying falsely under oath as to any matter material to any such examination, investigation or hearing shall upon conviction thereof be guilty of perjury and shall be punished accordingly.

(5) If any person asks to be excused from attending or testifying or from producing any books, papers, records, contracts, documents, or other evidence in connection with any examination, hearing or investigation being conducted by the department or its examiner, on the ground that the testimony or evidence required of him may tend to incriminate him or subject him to a penalty or forfeiture, and shall notwithstanding be directed to give such testimony or produce such evidence, he must, if so directed by the department and the Department of Legal Affairs, nonetheless comply with such direction, but he shall not thereafter be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter or thing concerning which he may have so testified or produced evidence, and no testimony so given or evidence produced shall be received against him upon any criminal action, investigation or proceeding; except, however, that no such person so testifying shall be exempt from prosecution or punishment for any perjury committed by him in such testimony, and the testimony or evidence so given or produced shall be admissible against him upon any criminal action, investigation or proceeding concerning such perjury; nor shall he be exempt from the refusal, suspension, or revocation of any license, permission, or authority conferred, or to be conferred, pursuant to this chapter.

(6) Any such individual may execute, acknowledge and file in the office of the department a statement expressly waiving such immunity or privilege in respect to any transaction, matter or thing specified in such statement, and thereupon the testimony of such individual or such evidence in relation to such transaction, matter or thing may be received or produced before any judge or justice, court, tribunal, grand jury or otherwise, and if so received or produced such individual shall not be entitled to any immunity or privileges on account of any testimony he may so give or evidence so produced.

(7) Any person who refuses or fails, without lawful cause, to testify relative to the affairs of any person when subpoenaed and requested by the department to so testify shall be guilty of a misdemeanor of the second degree, punishable as provided ins. 775.082 or s. 775.083.

Hlstory.-s. 18, ch. 61-406; ss. 11, 13, 35, ch. 69-106; s. 177, ch. 70-339; s. 666, ch. 71-136, s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95.



1648.49 Duration of suspension or revocation.-

(1) The department shall, in its order suspending a license or the eligibility to hold same, specify the period during which the suspension is to be in effect, but such period shall not exceed 1 year. The license

and eligibility to hold same shall remain suspended during the period so specified, subject, however, to any rescission or modification of the order by the department, or modification or reversal thereof by the court, prior to expiration of the suspension period. A license which has been suspended shall not be reinstated, nor shall the eligibility to hold such license be reinstated, except upon request for such reinstatement, but the department shall not grant such reinstatement if it finds that the circumstances for which the license was suspended still exist or are likely to recur.

(2) No individual licensed under any license which has been revoked or who has had his eligibility to hold same revoked by the department, shall have the right to apply for another license under this chapter within 2 years from the effective date of such revocation, or, if judicial review of such revocation is sought, within two years from the date of final court order or decree affirming the revocation. The department shall not, however, grant a new license to any individual if it finds that the circumstances for which the previous license was revoked still exist or are likely to recur.

(3) If licenses or the eligibility to hold licenses as bail bondsman or runner as to the same individual have been revoked at two separate times, the department shall not thereafter grant or issue any license under this chapter as to such individual.

( 4) During the period of suspension, or after revocation of the license, the former licensee shall not engage in or attempt to profess to engage in any transaction or business for which a license is required under this chapter.

Hlstory.-s. 19, ch. 61-406; ss. 13, 35, ch. 69-106; s. 177, ch. 70-339; s. 27, ch. 71-86; s. 3, ch. 76-168; s. 1, ch. 77-457.



1648.50 Effect of suspension, revocation upon associated licenses and licensees.-

(!) Upon suspension, revocation or refusal torenew or continue any license or the eligibility to hold same of a bail bondsman or runner the department shall at the same time likewise suspend or revoke all other licenses and the eligibility to hold any other such licenses which may be held by the licensee under the Florida Insurance Code.

(2) In case of the suspension or revocation of license or eligibility to hold same of any bail bondsman, the license or eligibility of any and all bail bondsmen who are members of a bail bond agency, whether incorporated or unincorporated, and any and all runners employed by such bail bond agency, who knowingly are parties to the act which formed the ground for the suspension or revocation may likewise be suspended or revoked for the same period as that of the offending bail bondsman; but this shall not prevent any bail bondsman or runner, except the one whose license was first suspended or revoked, from being licensed as a member of or a runner for some other bail bond agency.

Hlstory.-s. 20, ch. 61-406; ss. 13, 35, ch. 69-106; s. 177, ch. 70-339; s. 28, ch. 71-86; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95.

'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective

713




1648.51 Surrender of license or permit.-(1) Though issued to a licensee all certificates of

licenses issued under this chapter are at all times the property of the state, and upon notice of any suspension, revocation, refusal to renew, expiration or other termination of the license, the licensee or other person having either the original or copy of the license shall promptly deliver the certificate of license or copy thereof to the department for cancellation.

(2) As to any certificate of license lost, stolen or destroyed while in the possession of any such licensee or person, the department may accept in lieu of return of the certificate the affidavit of the licensee or other person responsible for or involved in the safekeeping of such certificate, concerning the facts of such loss, theft, or destruction. Willful falsification of any such affidavit shall, upon conviction, be subject to punishment as for perjury.

(3) This section shall not be deemed to require the delivery to the department of any certificate of license which, as shown by specific date of expiration on the face of the license, has already expired, unless such delivery has been requested by the department.

History.-s. 21, ch. 61-406; ss. 13, 35, ch. 69-106; s. 177, ch. 70-339; s. 3, ch. 76-168; s. 1, ch. 77-457.



1648.52 Administrative f"me in lieu of suspen· sion, revocation, or refusal to renew.-

(1) If the department finds that one or more causes exist for the suspension of, revocation of, or refusal to renew or continue any license issued under this chapter, the department may, in its discretion, in lieu of such suspension, revocation, or refusal, and except on a second offense, impose upon the licensee an administrative penalty in the amount of $100, or if the department has found willful misconduct or willful violation on the part of the licensee, $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 licensee in connection with any transaction as to which the grounds for suspension, revocation, or refusal related.

(2) The department may allow the licensee a reasonable period, not to exceed 30 days, within which to pay to the department the amount of the penalty so imposed. If the licensee fails to pay the penalty in its entirety to the department at its office at Tallahassee within the period so allowed, the licenses of the licensee shall stand suspended, revoked, or renewal or continuation refused, as the case may be, upon expiration of such period.

History.--s. 22, ch. 61-406; s. 2, ch. 61-119; s. 30, ch. 65-269; ss. 13, 35, ch. 69-106; s. 177, ch. 70-339; 8. 3, ch. 76-168; 8. 1, ch. 77-457; s. 21, ch. 78-95.

'Note.-Repealed by 8. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective July 1, 1982, except for the possible effect of laws affecting this section prior to that date.


1648.53 Probation.-

(1) If the department finds that one or more causes exist for the suspension of, revocation of, or refusal to renew or continue any license issued under this chapter, the department may, in its discretion, in lieu of such suspension, revocation, or refusal, or in connection with any administrative monetary penalty imposed under s. 648.52, place the offending licensee on probation for a period, not to exceed 2 years, as specified by the department in its order.

(2) As a condition to such probation or in connection therewith, the department may specify in its order reasonable terms and conditions to be fulfilled by the probationer during the probation period. If during the probation period the department has good cause to believe that the probationer has violated such terms and conditions or any of them, it shall forthwith suspend, revoke, or refuse to renew or continue the license of the probationer, as upon the original causes referred to in subsection (1).

History.-s. 23, ch. 61-406; ss. 13, 35, ch. 69-106; s. 177, ch. 70-339; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95.



1648.55 All bondsmen of same agency; licensed by same companies.-All bail bondsmen who are members of the same agency, partnership, corporation or association shall be licensed for the same companies. If any member of such agency, partnership, corporation or association is licensed as a professional bondsman, all members thereof shall be so licensed. It shall be the responsibility of each company to see that each agent in an agency is licensed to represent that particular company.

History.-s. 20, ch. 29621, 1955; s. 4, ch. 57-63; s. 177, ch. 70-339; s. 3, ch. 76-168; s. 1, ch. 77-457. 'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective



1648.56 Exemption.-Nothing in ss. 648.25-648.57 shall be construed as to prevent any duly licensed general lines agent as defined in s. 626.041 of the Insurance Code, from writing bail bonds for any company authorized to write fidelity and surety bonds which he represents as agent, provided such agent shall be subject to and governed by all laws, rules, and regulations relating to bail bondsmen when engaged in the activities thereof.

History.--s. 21, ch. 29621, 1955; s. 12, ch. 59-326; s. 177, ch. 70-339; s. 3, ch. 76-168; s. 1, ch. 77-457. .

'Note.-Repealed by s. 3, ch. 76-168, as amended by s.1, ch. 77-457, effective July 1, 1982, except for the possible effect of laws affecting this section prior to that date.


1648.57 Penalty.-Any person or corporation, who is found guilty of violating any of the provisions of this chapter shall be guilty of a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083.

History.-s. 22, ch. 29621, 1955; s. 177, ch. 70-339; s. 667, ch. 71-136; s. 3, ch. 76-168; s. 1, ch. 77-457.



714

F.S.1979 AUTOMOBILE CLUBS Ch. 649

CHAPTER 649

AUTOMOBILE CLUBS

649.011 Definitions. 649.021 License required. 649.031 Evidence of qualification for licensing. 649.041 Deposit required or surety bond. 649.051 Salesmen to be registered. 649.061 Powers of department; rules. 649.071 Penalty.

1649.011 Definitions.-(!) "Automobile club" shall mean a legal entity

which, in consideration of dues, assessments, or periodic payments of money, promises its members or subscribers to assist them in matters relating to the ownership, operation, use or maintenance of a motor vehicle; provided, however, that the definition of automobile clubs shall not include persons, associations, or corporations which are organized and operated solely for the purpose of conducting, sponsoring or sanctioning motor vehicle races, exhibitions or contests upon race tracks, or upon race courses established and marked as such for the duration of such particular event. The words "motor vehicles" used herein shall be the same as defined in chapter 320.

(2) "Department" shall mean the Department of Insurance.



1649.021 License required.-No automobile club shall do, or offer to do, business in the state unless the same shall be organized as a domestic or foreign corporation and shall be licensed by the Department of Insurance.

History.-s. 2, ch. 57-65; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457. 'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective


1649.031 Evidence of qualification for licens· ing.-

(1) An applicant seeking to do business as or engage in the operation of an automobile club shall be required to furnish the department with evidence of the competency and trustworthiness of its management and their professional ability to perform the services to be offered. The applicant shall pay a license fee of $100 annually. All licenses shall expire on September 30 of each year and may be renewed on application and payment of the same fee. Nothing in this act shall be construed as authorizing a licensed automobile club to provide or furnish insurance coverage unless such club shall have complied with all the laws and regulations required of insurance companies authorized to do business in this state.

(2) The actual or proposed name by which the automobile club is, or will be known, and the trademark and emblem which it is using, or proposed to use, shall be submitted to the department for its approval, providing such name, emblem or trademark is distinctive and not likely to mislead the pub-

lie as to the nature or identity of the corporation using it, or interfere with the transactions of any other automobile club already doing business in the state, it shall be entitled to be approved.

History.-s. 3, ch. 57-65; lis. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457. 'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective

July 1, 1982, except for the possible effect of laws affecting this section prior to that date. cf.-s. 624.523 Insurance Commissioner's Regulatory Trust Fund.

1649.041 Deposit required or surety bond.-(1) Except as provided by this act, every automo

bile club, to assure the faithful performance of its obligations to its members or subscribers, shall .deposit with the department securities of the type, in which by the laws of this state an insurance company may invest its funds, the sum of $50,000 before the department may issue it a license to do business; or in lieu thereof such clubs may file with the department a surety bond in the amount of $50,000 of a surety company authorized to do business in this state. The bond shall be approved by the department and shall not be canceled without a 30-day notice to the department.

(2) Any automobile club doing business in this state on April1, 1957, shall, on or before October 1, 1957, deposit $25,000 in securities with the commissioner, as set forth in subsection (1), and on or before October 1, 1958, deposit with the commissioner an additional $25,000 in such securities, or in lieu thereof such clubs may file with the commissioner a surety bond in the same amounts, of a surety company authorized to do business in this state. The bond shall be approved by the commissioner and shall not be canceled without 30 days' notice to the commissioner.

(3) The state shall be responsible for the safekeeping of all securities deposited with the department under this act. Securities deposited with the department under this act shall not, on account of such securities being in the state, be subject to taxation but shall be held exclusively and solely to insure the automobile club's faithful performance of its obligations to its members or subscribers.

(4) Automobile clubs depositing securities as required in this act shall have the right to draw the interest on such securities as the same accrues; and should coupon bonds be deposited under this act, the department, upon demand of the automobile club shall surrender the coupons as the same shall become due from any or all such bonds deposited by the said automobile clubs.

(5) Whenever an automobile club ceases to do business in this state and has satisfactorily satisfied its obligations to its members or subscribers, securities so deposited under this act shall be delivered up to the proper parties on presentation of the department's receipt for said securities.


July 1, 1982, except for the possible effect of laws affecting this section prior

715

Ch. 649 AUTOMOBILE CLUBS F.S.1979

to that date.

1649.051 Salesmen to be registered.-Every automobile club shall on forms prescribed by the department register, on or before October 1 of each year, the names of, and home office address of each salesman, and shall within 30 days of termination of employment notify the department of such termination. Any salesman employed subsequent to the October 1 filing shall be registered with the department within 10 days of such employment. No employee or salesman of an automobile club shall directly or indirectly be licensed to solicit, negotiate, or hold himself out in any manner to be an insurance agent or solicitor, to effect insurance contracts unless it is in accordance with the provisions of the insurance laws.



1649.061 Powers of department; rules.-The department shall have full power and authority to administer the provisions ofthis act and, to that end, it may adopt, promulgate and enforce rules and regulations necessary and proper to effectuate the purpose and provisions of this act.



1649.071 Penalty.-Any person violating the provisions of this act shall be guilty of a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083.

History.-s. 7, ch. 57-65; s. 668, ch. 71-136; s. 3, ch. 76-168; s. 1, ch. 77-457. 'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective


716

F.S.1979 SOCIAL SECURITY FOR PUBLIC EMPLOYEES Ch. 650

CHAPTER 650

SOCIAL SECURITY FOR PUBLIC EMPLOYEES

650.01 650.02 650.03

650.04 650.05

650.06 650.07 650.08 650.09 650.10

Declaration of policy. Definitions. Federal-state agreement; interstate instru

mentalities. Contributions by state employees. Plans for coverage of employees of political

subdivisions. Social Security Contribution Trust Fund. Rules and regulations. Studies and reports. Liberal construction. Referenda and certification.

650.01 Declaration of policy.-In order to extend to employees of the state and its political subdivisions and to the dependents and survivors of such employees, the basic protection accorded to others by the Old-age and Survivors Insurance System embodied in the Social Security Act, it is hereby declared to be the policy of the Legislature, subject to the limitations of this chapter, that such steps as are necessary be taken to provide such protection to employees of the state and its political subdivisions on as broad a basis as is permitted under the Social Security Act. It is also the policy of the Legislature that the protection afforded employees in positions covered by a retirement system on the date an agreement under this act is made applicable to service performed in such positions, or receiving periodic benefits under such retirement system at such time, will not be impaired as a result of making the agreement so applicable or as a result oflegislative enactment in anticipation thereof.

History.-s. 1, ch. 26841, 1951; s. 2, ch. 29824, 1955.

and Welfare, pursuant to said section. (c) At the option of the employer, and when so

provided in its agreement, any one or more of the following:

1. Service in any class or classes of elective positions.

2. Service in any class or classes of part-time positions.

3. Service in any class or classes of positions the compensation for which is on a fee basis.

4. Service performed by individuals as members of a coverage group (as defined in s. 218(b) of the Social Security Act, as amended) in positions covered by a retirement system on the date the federal-state agreement is made applicable to such coverage group, but only in the case of individuals who, on such date (or, if later, the date on which they first occupy such positions), are not eligible to become members of such system and whose services in such positions have not already been included under such agreement.

5. Agricultural labor, as defined ins. 210 of the Social Security Act, as amended.

6. Service performed by a student for the school in which he is enrolled.

(3) The term "employee" includes an officer of the state or political subdivision thereof;

(4) The term "state agency" means the Division of Retirement of the Department of Administration.

(5) The term "Secretary of Health, Education, and Welfare" includes any individual to whom the Secretary of Health, Education, and Welfare has delegated any of the secretary's functions under the Social Security Act with respect to coverage under

650.02 Definitions.-For the purpose of this such act of employees of states and their political chapter: subdivisions, and with respect to any action taken

(1) The term "wages" means all remuneration prior to Aprilll, 1953, includes the Federal Security for employment as defined herein, including the Administrator and any individual to whom such adcash value of all remuneration paid in any medium ministrator had delegated any such function. other than cash, except that such term shall not (6) The term "political subdivision" includes an include that part of such remuneration which, even instrumentality of the state, or of one or more of its if it were for "employment" within the meaning of political subdivisions, but only if such instrumentalthe Federal Insurance Contributions Act, would not ity is a juristic entity which is legally separate and constitute "wages" within the meaning of that act; distinct from the state or subdivision and only if its

(2) The term "employment" means any services employees are not by virtue of their relation to such performed by an employee in the employ of the state, juristic entity employees of the state or subdivision; or any political subdivision thereof, including hospi- (7) The term "Social Security Act" means the tal or drainage taxing districts, for such employer, Act of Congress approved August 14, 1935, Chapter except: 531, 49 Stat. 620, officially cited as the "Social Secu-

(a) Service which in the absence of an agreement rity Act," (including regulations and requirements entered into under this chapter would constitute issued pursuant thereto), as such act has been and "employment" as defined in the Social Security Act. may from time to time be amended; and

(b) Service which under the Social Security Act (8) The term "Federal Insurance Contributions may not be included in an agreement between this Act" means subchapter A of chapter 9 of the Federal state and the Secretary of Health, Education, and Internal Revenue Code of 1939 and subchapters A Welfare entered into under this chapter. Service and B of chapter 21 ofthe Federal Internal Revenue which under the Social Security Act may be included Code of 1954, as such codes have been and may from in an agreement only upon certification by the Gov- time to time be amended; and the term "employee ernor in accordance with s. 218(d)(3) of that act shall tax" means the tax imposed by s. 1400 of such code be included in the term "employment" if and when of 1939 and s. 3101 of such code of 1954. the Governor issues, with respect to such services, a History.--s. 2, ch. 26841, 1951; ss. 1-3, ch. 28246, 1953; ss. 1, 3-5, ch. 29824, certificate to the Secretary of Health, Education, 1955; s. 1, ch. 65-151; ss. 31, 35, ch. 69-106; s. 1, ch. 70-127; s. 1, ch. 73-326.

717

Ch. 650 SOCIAL SECURITY FOR PUBLIC EMPLOYEES F.S.1979

650.03 Federal-state agreement; interstate instrumentalities.-

(!) The state agency with the approval of the Governor, is hereby authorized to enter on behalf of the state into an agreement with the Federal Security Administrator, consistent with the terms and provisions of this chapter, for the purpose of extending the benefits of the Federal Old-age and Survivors Insurance System to employees of the state or any political subdivision thereof with respect to services specified in such agreement which constitutes "employment" as defined in s. 650.02. Such agreement may contain such provisions relating to coverage, benefits, contributions, effective date, modification and termination of the agreement, administration, and other appropriate provisions as the state agency and the Secretary ofHealth, Education and Welfare shall agree upon, but, except as may be otherwise required by or under the Social Security Act as to the services to be covered, such agreement shall provide in effect that:

(a) Benefits will be provided for employees whose services are covered by the agreement (and their dependents and survivors) on the same basis as though such services constituted employment within the meaning of Title II of the Social Security Act;

(b) The state will pay to the Secretary of the Treasury, at such time or times as may be prescribed under the Social Security Act, contributions with respect to wages (as defined in s. 650.02), equal to the sum of the taxes which would be imposed by the Federal Insurance Contributions Act if the services covered by the agreement constituted employment within the meaning of that act.

(c) Such agreement shall be effective with respect to services in employment covered by the agreement performed after January 1, 1951;

(d) All services which constitute employment as defined ins. 650.02 and are performed in the employ of the state by employees of the state, shall be covered by the agreement.

(e) All services which: 1. Constitute employment as defined ins. 650.02; 2. Are performed in the employ of a political sub

division of the state; and 3. Are covered by a plan which is in conformity

with the terms of the agreement and has been approved by the state agency under s. 650.05, shall be covered by the agreement.

(f) As modified, the agreement shall include all services described in either paragraph (d) or paragraph (e) of this subsection and performed by individuals to whom s. 218(c)(3)(C) of the Social Security Act is applicable, and shall provide for election by the employer as to whether the service of any such individual shall continue to be covered by the agreement in case he thereafter becomes eligible to be a member of a retirement system.

(g) As modified, the agreement shall include all services described in either paragraph (d) or paragraph (e) of this subsection and performed by individuals in positions covered by a retirement system with respect to which the Governor has issued a certificate to the Secretary of Health, Education, and Welfare pursuant to s. 218(d)(3) of the Social Security Act, as amended.

(2) Any instrumentality jointly created by this state and any other state or states is hereby authorized, upon the granting of like authority by such other state or states,

(a) To enter into an agreement with the Secretary of Health, Education, and Welfare whereby the benefits of the Federal Old-age and Survivors Insurance System shall be extended to employees of such instrumentality.

(b) To require its employees to pay (and for that purpose to deduct from their wages) contributions equal to the amounts which they would be required to pay under s. 650.04(1) if they were covered by an agreement made pursuant to subsection (1) of this section, and

(c) To make payments to the Secretary of the Treasury in accordance with such agreement, including payments from its own funds, and otherwise to comply with such agreements. Such agreement shall, to the extent practicable, be consistent with the terms and provisions of subsection (1) and other provisions of this chapter.

(3) Where a retirement system established by the state or any political subdivision thereof covers po.sitions of policemen or firemen, or both, and whether or not other positions are covered by such system, there shall, for the purposes of this chapter, be deemed to be a separate retirement system with respect to the positions of policemen and a separate retirement system with respect to the positions of firemen.

(4) For the purposes of this chapter any retirement system established by the state or any political subdivision thereof, which, on, before, or after the date of enactment of this subsection is divided into two divisions or parts, one of which is composed of positions of members of such system who desire coverage under an agreement under this chapter and the other of which is composed of positions of members of such system who do not desire such coverage, shall, upon the governor's authorization of a referendum for either division or part, be deemed to be a separate retirement system with respect to each such division or part. The positions of individuals who become members of such system after such coverage is extended shall be included in such division or part composed of members desiring such coverage. The position of any individual which is covered by any retirement system to which the preceding two sentences are applicable shall, if such individual is ineligible to become a member of such system on the date of enactment of this subsection or, if later, the day he first occupies such position, be deemed to be covered by the separate retirement system consisting of the positions of members of the division or part who do not desire coverage under this chapter.

(5) For purposes ofthis chapter employees of the institutions of higher learning under the Board of Regents who are covered by the Teachers' Retirement System shall be deemed to be covered by a separate retirement system for each institution.

(6) If a retirement system covers positions of employees of a hospital which is an integral part of a

718

F.S.l979 SOCIAL SECURITY FOR PUBLIC EMPLOYEES Ch. 650

municipal political subdivision, then, for the purposes of this chapter, there shall be deemed to be a separate retirement system for the employees of such hospital.

History.-s. 3, ch. 26841, 1951; s. 4, ch. 28246, 1953; ss. 6-9, ch. 29824, 1955; s. 1, ch. 57-226; s. 1, ch. 57-780; s. 1, ch. 61-138; s. 2, ch. 63-204.

650.04 Contributions by state employees.(!) Every employee of the state whose services

are covered by an agreement entered into under s. 650.03 shall be required to pay for the period of such coverage, into the Social Security Contribution Trust Fund established by s. 650.06, contributions, with respect to wages as defined in s. 650.02, equal to the amount of the employee tax which would be imposed by the Federal Insurance Contributions Act if such services constituted employment within the meaning of that act. Such liability shall arise in consideration of the employee's retention in the service of the state, or his entry upon such service, after the enactment of this chapter.

(2) The contribution imposed by this section shall be collected by deducting the amount of the contribution from wages as and when paid, but failure to make such deduction shall not relieve the employee from liability for such contribution.

(3) If more or less than the correct amount of the contribution imposed by this section is paid or deducted with respect to any remuneration, proper adjustments, or refund if adjustment is impracticable, shall be made, without interest, in such manner and at such times as the state agency shall prescribe.

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

650.05 Plans for coverage of employees of political subdivisions.-

(!) Each political subdivision of the state is hereby authorized to submit for approval by the state agency a plan for extending the benefits of Title II of the Social Security Act, in conformity with the applicable provisions of such act, to employees of such political subdivisions. Each such plan and any amendment thereof shall be approved by the state agency if it is found that such plan, or such plan as amended, is in conformity with such requirements as are provided in regulations of the state agency, except that no such plan shall be approved unless:

(a) It is in conformity with the requirements of the Social Security Act and with the agreement entered into under s. 650.03;

(b) It provides that all services which constitute employment as defined ins. 650.02 are performed in the employ of the political subdivisions by employees thereof, shall be covered by the plan, except such of those services set forth ins. 650.02(2)(c) as the political subdivision specifically elects to exclude.

(c) It specifies the source or sources from which the funds necessary to make the payments required by paragraph (a) of subsection (3) and by subsection (4) are expected to be derived and contains reasonable assurance that such sources will be adequate for such purpose;

(d) It provides for such methods of administration of the plan by the political subdivision as are found by the state agency to be necessary for the proper and efficient administration of the plan;

(e) It provides that the political subdivisionwill

make such reports, in such form and containing such information, as the state agency may from time to time require, and comply with such provisions as the state agency or the Secretary of Health, Education, and Welfare may from time to time find necessary to assure the correctness and verification of such reports; and

(f) It authorizes the state agency to terminate the plan in its entirety, in the discretion of the state agency, if it finds that there has been a failure to comply substantially with any provisions contained in such plan, such termination to take effect at the expiration of such notice and on such conditions as may be provided by regulations of the state agency and may be consistent with the provisions of the Social Security Act.

(2) The state agency shall not finally refuse to approve a plan submitted by a political subdivision under subsection (1), and shall not terminate an approved plan, without reasonable notice and opportunity for hearing to the political subdivision affected thereby. Any final decision of the state agency shall be subject to proper judicial review.

(3)(a) Each political subdivision as to which a plan has been approved under this section shall pay into the Social Security Contribution Trust Fund, with respect to wages (as defined in s. 650.02), at such time or times as the state agency may by regulation prescribe, contributions in the amounts and at the rates specified in the applicable agreement entered into by the state agency under s. 650.03.

(b) Each political subdivision required to make payments under paragraph (a) is authorized, in consideration of the employee's retention in, or entry upon, employment after enactment of this chapter, to impose upon each of its employees, as to services which are covered by an approved plan, a contribution with respect to his wages as defined in s. 650.02 not exceeding the amount of the employee tax which would be imposed by the Federal Insurance Contributions Act if such services constituted employment within the meaning of that act, and to deduct the amount of such contribution from his wages as and when paid. Contributions so collected shall be paid into the Social Security Contribution Trust Fund in partial discharge of the liability of such political subdivision or instrumentality under paragraph (a). Failure to deduct such contribution shall not relieve the employee or employer of liability therefor.

(4) Delinquent payments due under subsection (3)(a) may, with interest of one-half of 1 percent for each calendar month or part thereof past the due date, be recovered by action in a court of competent jurisdiction against the political subdivision liable therefor or shall, at the request of the state agency, be deducted from any other moneys payable to such subdivision by any department or agency of the state.

(5) Each political subdivision as to which a plan has been approved shall be liable to the state agency for a proportionate part of the cost of administering this chapter. Such proportionate cost shall be computed and paid in accordance with such regulations relating thereto as may be adopted by the state agency, and shall be deposited in the Social Security Administration Trust Fund, and if any such payment

719

Ch. 650 SOCIAL SECURITY FOR PUBLIC EMPLOYEES F.S.1979

be not made when due, the amount thereof, with interest of one-half of 1 percent for each calendar month or part thereof past the due date, shall, upon request of the state agency, be deducted from any: other moneys payable to such political subdivision by any officer, department, or agency of the state, and forthwith paid to the state agency. Withdrawals from the Social Security Administration Trust Fund shall be made solely for the payment of costs of administering this chapter, and any balance in _excess of the amount necessary for administering this chapter shall be transferred to the State Retirement System Trust Funds established pursuant to chapter 121 to make up the actuarial deficit in any of the state retirement systems consolidated thereunder, and the necessary amounts are hereby appropriated from said funds for these purposes.

(6)(a) Notwithstanding any other provision of this chapter, effective January 1, 1972, all state political subdivisions receiving financial aid, that provide social security coverage for their employees pursuant to the provisions of this chapter and the provisions of the various retirement systems as authorized by law, shall, in addition to other purposes, utilize all grants-in-aid and other revenue received from the state to pay the employer's share of social security cost.

(b) The grants-in-aid and other revenue referred to in paragraph (a) specifically include, but are not limited to, minimum foundation program grants to public school districts and community colleges; gasoline, motor fuel, intangible, cigarette, racing, and insurance premium taxes distributed to political subdivisions; and amounts specifically appropriated as grants-in-aid for mental health, mental retardation, and mosquito control programs.

History.-s. 5, ch. 26841, 1951; ss. 5-7, ch. 28246, 1953; s. 11, ch. 29824, 1955; s. 2, ch. 61-119; s. 1, ch. 72-109; s. 70, ch. 72-221; s. 1, ch. 72-342.

650.06 Social Security Contribution Trust Fund.-

(1) There is hereby established a special fund to be known as the "Social Security Contribution Trust Fund." Such fund shall consist of and there shall be deposited in such fund:

(a) All contributions, interest, and penalties collected under ss. 650.04 and 650.05;

(b) All moneys appropriated thereto under this chapter;

(c) Any property or securities and earnings thereof acquired through the use of moneys belonging to the fund;

(d) Interest earned upon any moneys in the fund, and

(e) All sums recovered upon the bond of the custodian or otherwise for losses sustained by the fund and all other moneys received for the fund from any other source. All moneys in the fund shall be mingled and undivided. Subject to the provisions of this chapter, the state agency is vested with full power, authority and jurisdiction over the fund, including all · moneys and property or securities belonging thereto, and may perform any and all acts whether or not specifically designated, which are necessary to the administration thereof and are consistent with the provisions of this chapter.

(2) The Social Security Contribution Trust Fund

shall be established and held separate and apart from any other funds or moneys of the state and shall be used and administered exclusively for the purpose of this chapter. Withdrawals from such fund shall be made for, and solely for:

(a) Payments of amounts required to be paid to the Secretary of the Treasury pursuant to an agreement entered into under s. 650.03;

(b) Payments of refunds provided for in s. 650.04(3);

(c) Refunds of overpayments, not otherwise adjustable, made by a political subdivision or instrumentality; and

(d) Investments of idle funds and the transfer of interest earned on such investments to the Social Security Administration Trust Fund.

(3) From the Social Security Contribution Trust Fund the custodian of the fund shall pay to the Secretary of the Treasury such amounts and at such time or times as may be directed by the state agency in accordance with any agreement entered into under s. 650.03 and the Social Security Act.

(4) The Treasurer of the state shall be ex officio treasurer and custodian of the Social Security Contribution Trust Fund and shall administer such fund in accordance with the provisions of this chapter and the directions of the state agency. The Treasurer shall pay all warrants drawn by the Comptroller and countersigned by the Governor upon the fund in accordance with the provisions of this section and with such regulations as the state agency may prescribe pursuant thereto.

(5) There are hereby authorized to be appropriated to the Social Security Contribution Trust Fund, out of the general funds of this state not otherwise appropriated, such additional sums as are found to be necessary to make the payments to the Secretary of the Treasury which the state is required to make pursuant to an agreement entered into under s. 650.03.

History.-s. 6, ch. 26841, 1951; s. 2, ch. 61-119; s. 2, ch. 72-342.

650.07 Rules and regulations.-The state agency shall make and publish such rules and regulations, not inconsistent with the provisions of this chapter, as it finds necessary or appropriate to the efficient administration of the functions with which it is charged under this chapter.

History.-s. 7, ch. 26841, 1951.

650.08 Studies and reports.-The state agency shall make studies concerning the problem of old-age and survivors insurance protection for employees of the state and local governments and their instrumentalities and concerning the operation of agreements made and plans approved under this chapter and shall submit a report to the legislature at the beginning of each regular session, covering the administration and operation of this chapter during the preceding calendar year, including such recommendations for amendments to this chapter as it considers proper.

History.-s. 8, ch. 26841, 1951.

720

F.S.1979 SOCIAL SECURITY FOR PUBLIC EMPLOYEES Ch. 650

650.09 Liberal construction.-The provisions of this chapter shall be liberally construed in order to effectively carry out the purposes of the chapter as set forth in the declaration of public policy.

History.-s. 9, ch. 26841, 1951.

650.10 Referenda and certification.-(!) The governor, or an official of the state desig

nated by him for the purpose, is empowered to authorize and supervise the conduct of employee referenda prescribed by s. 213(d)(3) of the Social Security Act, on the question of whether service in positions covered by a retirement system established by the state or by a political subdivision thereof should be excluded from or included under an agreement under this chapter. The notice of referendum required b~ s. 218(d)(3)(C) of the Social Security Act to be g1ven to employees shall contain or shall be accom-

721

panied by a statement, in such form and such detail as the agency or individual designated to supervise the referendum shall deem necessary and sufficient, to inform the employees of the rights which will accrue to them and their dependents and survivors, and the liabilities to which they will be subject, if their services are included under an agreement under this chapter.

(2) Upon receiving evidence satisfactory to him that with respect to any such referendum the conditions specified in s. 218(d)(3) of the Social Security Act have been met, the governor, or an official of the state designated by him for the purpose, shall so certify to the Secretary of Health, Education and Welfare.

History.-s. 12, ch. 29824, 1955; s. 2, ch. 61-138.

Ch. 651 LIFE CARE CONTRACTS F.S.1979

CHAPTER 651

LIFE CARE CONTRACTS

651.011 651.015 651.021

651.026

651.031

651.035 651.041 651.045 651.051 651.055 651.061 651.065 651.071

651.081

651.085

651.091

651.095 651.101

651.105 651.111 651.114 651.121 651.125 651.13 651.131 651.132

Definitions. Administration; forms; fees; rules; fines. Certificate of authority required; designa-

tion of net worth. Certificate of authority; application; annu

al statements; renewals. Provisional certificate of authority; feasi-

bility study. Reserve requirements. Use of reserves; investment purposes. Conversion of property. Maintenance of assets and records in state. Agreements; right to rescind. Dismissal or discharge of member; refund. Waiver of statutory protection. Agreements as preferred claims on liqui-

dation. Continuing care facilities members' organ

izations. Quarterly meetings between members and

the governing body of the facility. Availability, distribution, and posting of

reports and records; requirement of full disclosure.

Advertisements; requirements; penalties. Reasonable time to comply with rules and

standards. Examination and inspections; fines. Requests for inspections. Delinquency proceedings. Advisory council. Criminal penalties; injunctive relief. Civil action. Actions under prior law. Amendment or renewal of existing con

tracts.

651.011 Def"mitions.-For the purposes of this chapter:

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

(2) "Continuing care" or "care" means furnishing shelter, food, and nursing care, whether the nursing care is provided in the facility or in another setting designated by the agreement for continuing care, to an individual not related by consanguinity or affinity to the provider furnishing such care. Other personal services provided shall be designated in the continuing care agreement. "Continuing care" shall include only life care, care for life, or care for a term of years.

(3) "Facility" means a place in which it is undertaken to provide continuing care to an individual for a term of years or for life.

(4) "Provider" means the owner or operator, whether a natural person, partnership or other unincorporated association, however organized, trust, or corporation, of an institution, building, residence, or other place, whether operated for profit or not, which owner or operator undertakes to provide continuing care for a fixed or variable fee, or for any other remuneration of any type, whether fixed or

variable, for the period of care, payable in a lump sum or lump sum and monthly maintenance charges or in installments.

(5) "Member" means a purchaser of, nominee of, or a subscriber to, a continuing care agreement. Such an agreement shall not be construed to give the member a part ownership of the facility in which the member is to reside or voting rights in the operation of the facility.

(6) "Life care" or "care for life" means a life lease, life membership, life estate, or similar agreement between a member and a provider by which the member pays a fee for the right to occupy a space in a designated facility and to receive continuing care for life.

(7) "Care for a term of years" means an agreement between a member and a provider whereby the member pays a fee for the right to occupy space in a designated facility, and to receive continuing care, for at least 1 year, but for less than the life of the member. "Care for a term of years" also refers to a contract or agreement for continuing care for an indefinite term.

(8) "Entrance fee" means an initial or deferred payment of a sum of money or property which assures the member a place in a facility for a term of years or for life. An accommodation fee, admission fee, or other fee of similar form and application shall be considered to be an entrance fee.

(9) "Records" means the permanent financial, directory, and personnel information and data maintained by a provider pursuant to this chapter.

(10) "Personnel records" means information pertaining to an employee's employment, including education, training, experience, salary or wages, and performance of duties of employment.

Hlstory.-s. 1, ch. 77-323; s. 170, ch. 79-164.

651.015 Administration; forms; fees; rules; fines.-The administration of this chapter is vested in the Department of Insurance, which shall:

(1) Prepare and furnish all forms necessary under the provisions of this chapter in relation to applications for certificates of authority or renewals thereof, statements, examinations, and other required reports.

(2) Collect in advance, and the applicant so served shall pay to it in advance, the following fees:

(a) At the time of filing an application for a certificate of authority, an application fee in the amount of $75 for each facility.

(b) At the time of renewal of a certificate of authority, a renewal fee in the amount of $75 for each year or part thereof for each facility where continuing care is provided.

(c) A late fee in an amount equal to 50 percent of the renewal fee in effect on the last preceding regular renewal date.

(d) An investigation fee, to be paid upon original application, in the amount of $100 for each facility where continuing care is provided. Upon application subsequent to the denial of an earlier application or to the revocation, suspension, or surrender of a cer-

722

F.S.1979 LIFE CARE CONTRACTS Ch. 651

tificate of authority, a second investigation fee in the amount of $100.

(e) For the issuance of the provisional certificate of authority, a fee in the amount of $50.

(3) Adopt rules, within the standards of this chapter, necessary to effect the purposes of this chapter. Specific provisions in this chapter relating to any subject shall not preclude the department from adopting rules concerning such subject if such rules are within the standards and purposes of this chapter.

(4) Impose administrative fines pursuant to this chapter.

History.-s. 1, ch. 77-323; s. 249, ch. 79-400.

651.021 Certificate of authority required; designation of net worth.-

(1) No provider shall engage in the business of providing continuing care in this state without a certificate of authority therefor obtained from the Department of Insurance as provided in this chapter. Every provider holding a certificate of authority under the provisions of this chapter shall maintain at all times a net worth in an amount to be determined by the department, based upon the number of continuing care agreements entered into by the provider and the types and levels of services provided by the provider under the agreements. Any provider in the business of offering continuing care within 1 year from the date of the adoption of the rules under this chapter and not having a net worth as determined necessary by the department shall have 3 years from such date to attain the required net worth. The increase in net worth during each year of such 3-year period shall not be less than one-third of the total required to meet the designated amount of net worth. However, in lieu of having a net worth in the amount designated by the department, a provider shall file a surety bond, letters of credit, surplus debentures as provided for ins. 628.401, or any other acceptable collateral with the department, as approved by it, in the amount of the designated net worth.

(2) Every applicant shall provide proof, on a form prescribed by the department, of a net worth as provided in subsection (1). Assets to be used in computing the required net worth shall be determined by rules adopted by the department.

History.-s. 1, ch. 77·323.

651.026 Certificate of authority; application; annual statements; renewals.-

(!) A provider shall file an application for a certificate of authority on a form prescribed by the Department of Insurance, and the application shall be accompanied by the annual statement and other matters as provided in this section and ins. 651.021. Annually thereafter, on or before July 1, such provider shall file the annual statement and such other information and data, showing its condition on the last day of the preceding calendar year, as may be required by the department. If the department does not receive the required information on or before July 1, a late fee shall be charged in an amount equal to 50 percent of the renewal fee in effect on the last preceding regular renewal date.

(2) When an applicant has more than one facility

offering continuing care, a separate application for a certificate of authority shall be made for each facility.

(3) If the provider is a corporation, the original application for the certificate of authority shall be accompanied by a copy of the charter; if the provider is a partnership or other unincorporated association, the original application shall be accompanied by a copy of the partnership agreement, articles of association, or other membership agreement; and if the provider is a trust, the original application shall be accompanied by a copy of the trust agreement or instrument.

(4) The annual statement shall be in such form as the department shall elect and shall contain at least the following:

(a) The name and address of the facility in which the continuing care is to be offered and the name and address of any affiliated parent or subsidiary corporation or partnership.

(b) The full name, residence, and business address of:

1. The proprietor, if the provider is an individual.

2. Every partner or member, if the provider is a partnership or other unincorporated association, however organized, having less than 50 partners or members, together with the business name and address of the partnership or other organization.

3. The principal partners or members, if the provider is a partnership or an unincorporated organization, however organized, having 50 or more partners or members, together with the business name and business address of the partnership or other organization. If such unincorporated organization has officers and a board of directors, the full name and business address of each officer and director may be set forth in lieu of the full name and business address of its principal members.

4. The corporation and each officer and director thereof, if the provider is a corporation.

5. Every trustee and officer, if the provider is a trust.

6. Any stockholder holding at least a 10 percent interest in the operations of the facility in which the care is to be offered.

7. Any person whose name is required to be provided in the application under the provisions of this paragraph and who owns at least a 10 percent interest in any professional service firm, association, trust, partnership, or corporation providing goods, leases, or services to the facility for which the application is made, and the name and address of the professional service firm, association, trust, partnership, or corporation in which such interest is held.

(c) A statement of whether or not the facility of an affiliate, parent, or subsidiary is a religious, nonprofit, or proprietary organization.

(d) Personnel records. (e) The types of agreements for continuing care

to be entered into by the provider and, if such provider is engaged in the business of furnishing care on July 1, 1977, a listing of each member for each type of agreement.

(f) For annual statements submitted after the issuance of an original certificate, a listing of each

723


member for each type of agreement. (g) Financialinformation, updated at least annu

ally, including the following, as certified by an independent auditor who is at least a certified public accountant:

1. A balance sheet; 2. A narrative explaining material facts relating

to the balance sheet; 3. An income statement and a pro forma income

statement; 4. A statement of use of proceeds; 5. A pro forma balance sheet; 6. The level of participation in Medicare or Medi

caid programs, or both; . 7. A statement of all fees required of members, including, but not limited to, a statement of the entrance fee charged, the monthly service charges, the proposed application of the proceeds of the entrance fee by the provider, and the plan by which the amount of the entrance fee is determined if the entrance fee is not the same in all cases; and

8. Changes or increases in fees when the provider changes either the scope of, or the rates for, care or services, regardless of whether the change involves the basic rate or only those services available at additional costs to the member, except those changes required by state or federal assistance programs~

(h) Location and description of physical property or properties essential for, and proposed to be used, or being used, in connection with, the agreements of the provider to furnish continuing care.

(i) Such other reasonable data, financial statements, and pertinent information as the department may require with respect to the provider or the facility; its directors, trustees, members, branches, subsidiaries, or affiliates.

(5) The application for original certificate of authority shall be accompanied by forms of agreements proposed to be used by the provider in the furnishing of care. Ifthe department finds that the agreements comply with s. 651.055, it shall approve them. Thereafter, no other form of agreement shall be used by the provider until it has been submitted to, and approved by, the department.

(6) In addition to any other information which is required with respect to an application for a certificate of authority, the application shall require:

(a) Evidence that the provider is of reputable and responsible character. If the provider is a firm, association, organization, partnership, business trust, corporation, or company, the form shall require evidence that the members or shareholders are reputable and of responsible character, and the person in charge of providing care }lnder a certificate of authority shall likewise be required to produce evidence of reputable and responsible character.

(b) Evidence satisfactory to the department of the ability of the provider to comply with the provisions of this chapter and with rules adopted by the department pursuant to this chapter.

(c) A statement of whether a person identified in the application for a certificate of authority or the administrator or manager of the facility, if such person has been designated, or any such person living in the same location:

1. Has been convicted of a felony or has pleaded nolo contendere to a felony charge, or has been held liable or enjoined in a civil action by final judgment, if the felony or civil action involved fraud, embezzlement, fraudulent conversion, or misappropriation of property.

2. Is subject to a currently effective injunctive or restrictive order or federal or state administrative order relating to business activity or health care as a result of an action brought by a public agency or department, including, without limitation, an action affecting a license under chapter 400.

The statement shall set forth the court or agency, date of conviction or judgment, the penalty imposed or damages assessed, or the date, nature, and issuer ofthe order. Prior to issuing a certificate of authority, the department shall verify such statement with the assistance of local law enforcement agencies.

(7) Upon the department being satisfied that such statement and other accompanying materials meet the requirements of this chapter; that there has been evidenced the information required; that the net worth requirement or requirement for the purchase of a sufficient surety bond or for provision ofletters of credit, surplus debentures as provided in s. 628.401, or any other acceptable collateral has been met in accordance with s. 651.021; and that the fees as set forth in s. 651.015(2) have been paid, the certificate of authority shall be issued. Ifthe annual statement of each subsequent year meets the requirements as set forth in this chapter; if the sufficient net worth or a sufficient surety bond, letters of credit, surplus debentures as provided in s. 628.401, or any other acceptable collateral is maintained; and if the fee is paid, a renewal certificate shall be issued. If the annual statement fails to meet the requirements as set forth in this chapter or to demonstrate sufficient net worth or maintenance of a sufficient surety bond, letters of credit, surplus debentures as provided ins. 628.401, or any other acceptable collateral, the department may issue a renewal certificate upon payment of the renewal fee, but shall advise the provider of the noted deficiencies, and shall require the provider to correct such deficiencies within a period to be determined by the department. Such period may be extended. If such deficiencies have not been cleared by the expiration of such time period, as extended, then the department shall petition for delinquency proceedings or pursue such other relief as is provided for under s. 651.114, as the circumstances may require.

(8) If the provider is an individual, the annual statement shall be sworn to by him; if a partnership or other unincorporated association having less than 50 partners or members, by all members thereof; if a partnership or other unincorporated association having 50 or more partners or members, by all its principal partners or members or by all its officers and directors; if a trust, by all its trustees and officers; and if a corporation, by the president and secretary thereof.

(9) All certificates of authority and renewals thereof shall expire on September 30 of each year.

Hlstory.-s. 1, ch. 77·323; s. 250, ch. 79-400.

724


651.031 Provisional certificate of authority; feasibility study.-

(1) All persons intending to enter into the offering of continuing care agreements who have not acquired the necessary facilities for providing such care or have not acquired land or begun preliminary construction of the necessary facilities by the date of the adoption of the rules under this chapter shall apply to the Department of Insurance for a provisional certificate of authority before proceeding.

(2) Such persons shall file with the department a statement of intent to provide continuing care arid shall provide the following information to the department:

(a) The same information as required under s. 651.026(4)(b) for application for a certificate of au-thority. ·

(b) A statement as to the proposed location and size of the facility.

(c) Submission of any advertisement to be used. (3) Upon receipt of such information, the depart

ment shall, if satisfied with the information submitted, issue a provisional certificate of authority which shall entitle the person to engage in a feasibility study which shall be submitted to the department prior to a request for an application for a certificate of authority. The feasibility study shall include at least the following information:

(a) A statement of the purpose and need for the project and the reasons for the proposed construction, expansion, or renovation.

(b) A statement of the financial resources of the provider.

(c) A statement of the capital expenditures necessary to accomplish the project.

(d) A statement of financial feasibility for the proposed project, which shall include a statement of future funding sources.

(e) A statement of manpower requirements and availability to support' the proposed project.

(4) Such person may collect deposits from prospective members, provided the funds collected are maintained in an escrow account.

(5) Upon submission of the feasibility study, the department shall determine whether such operation will be able to provide continuing care as proposed and whether the proposed operation appears to be financially solvent. If the decision of the department is favorable, the department shall permit the person to apply for a certificate of authority to begin its operation. Once the certificate of authority has been issued, the provider may use the funds held in escrow, unless otherwise prohibited by this chapter. If the decision of the department is not favorable, the department shall require the person to refund all deposits and to cease in its attempts to offer continuing care at the location specified in the feasibility study.

HIStory.-s. 1, ch. 77-323:

651.035 Reserve requirements.(!) A provider shall maintain reserves covering

obligations assumed under all agreements entered into and maintained. Reserves shall be in an amount not less than the sum computed in accordance with the standard of valuation based upon a modern and up-to-date table of mortality selected by the depart-

ment. The interest assumption for that computation shall be determined by the department.

(2) Failure to maintain reserves as provided in this chapter shall be deemed a breach of all agreements to furnish care.

Hlstory.-s. 1, ch. 77-323.

651.041 Use of reserves; investment purposes.-Reserves may be used for investment purposes. Such investments shall !:>e maintained in forms as prescribed in chapter 625, where applicable, with the following exceptions:

(1) A percentage of the investments, to be determined by the Department of Insurance, shall be in bonds, stocks, commerc~al and savings accounts, or building and loan certificates.

(2) A percentage of the investments, to be determined by the department, may be in real property used to provide care and housing for persons under continuing care agreements, or equities therein, owned by the provider. Valuation shall be based on the net equity, which shall be the appraised value less any depreciation and encumbrances.

(3) Investments may be in equipment situated in property used to provide care and housing for members, to the extent of the percentage of net value to be determined by the department. The types of equipment and amortization rate for such equipment to be used for this determination shall be determined by the department.

History.-s. 1, ch. 77-323.

651.045 Conversion of property.-When the consideration received by any provider to furnish care in pursuance of an agreement is in a form other than money or securities, the provider shall convert the property into money within 1 year of the date of the agreement, unless an extension is granted by the Department of Insurance; however, an extension shall be granted whenever such a conversion would result in a financial loss. During the 1-year period and any extension prior to conversion of the property into money, the value thereof as set forth in the agreement is an admissible asset of the provider for the purpose of available funds or reserve in relation to the agreement. The requirement for conversion of property shall not apply when proof satisfactory to the department is submitted indicating that such property is to be utilized for the future expansion of the continuing care operation.

Hlstory.-s. 1, ch. 77-323.

651.051 Maintenance of assets and records in state.-No records or assets shall be 'removed from this state by a provider unless the Department of Insurance consents in writing to such removal. Such consent shall be based upon the provider's submitting satisfactory evidence that the removal will facilitate and make more economical the operations of the provider and will not diminish the service or protection thereafter to be given the provider's members in this state.

Hlstory.-s. 1, ch. 77-323. ..· 725


651.055 Agreements; right to rescind.-(1) In addition to such other provisions as may be

considered proper to effectuate the purpose of any continuing care agreement, each agreement executed on and after the date of the adoption of the rules under this chapter shall:

(a) Provide for the continuing care of only one member, or for two persons occupying space designed for double occupancy, under appropriate regulations established by the provider and shall show the value of all property transferred, including donations, subscriptions, fees, and any other amounts paid or payable by, or on behalf of, the member or members.

(b) Specify all services which are to be provided by the provider to each member, including, in detail, all items which each member will receive and whether the items will be provided for a designated time period or for life, and the estimated monthly cost to the provider of providing the care. Such items shall include, but not be limited to, food, shelter, nursing care, drugs, burial, and incidentals.

(c) Describe the health and financial conditions upon which the provider may have the member relinquish his space in the designated facility.

(d) Describe the health and fmancial conditions required for a person to continue as a member.

(e) Describe the circumstances under which the member will be permitted to remain in the facility in the event of financial difficulties of the member.

(f) State the fees that will be charged if the member marries while at the designated facility, the terms concerning the entry of a spouse to the facility, and the consequences if the spouse does not meet the requirements for entry.

(g) Provide that the agreement may be canceled upon the giving of notice of cancellation of at least 30 days by the provider, the member, or the person who provided the transfer of property or funds for the care of such member; however, if an agreement is canceled because there has been a good faith determination that a member is a danger to himself or others, only such notice as is reasonable under the circumstances shall be required. The agreement shall further provide in clear and understandable language, in print no smaller than the largest type used in the body of said agreement, the terms governing the refund of any portion of the entrance fee.

(h) State the terms under which an agreement is canceled by the death of the member. The agreement may contain a provision to the effect that, upon the death of the member, the moneys paid for the continuing care of such member shall be considered earned, and become the property of the provider.

(i) Provide for advance notice to the member, of not less than 60 days, before any change in fees or charges or the scope of care or services may be effective, except for changes required by state or federal assistance programs.

(j) Provide that charges for care paid in one lump sum shall not be increased or changed during the duration of the agreed upon care, except for changes required by state or federal assistance programs.

(2) A member shall have the right to rescind a continuing care agreement, without penalty or forfeiture, within 7 days after making an initial deposit

or executing the agreement. During the 7-day period, the member's funds shall be retained in a separate escrow account under terms approved by the Department of Insurance. A member shall not be required to move into the facility designated in the agreement before the expiration of the 7-day period.

(3) If a member dies before occupying the facility, or through illness, injury, or incapacity would be precluded from becoming a resident under the terms of the continuing care agreement, the agreement is automatically canceled, and the member or his legal representative shall receive a full refund of all moneys paid to the facility, except those costs specifically incurred by the facility at the request of the member and set forth in writing in a separate addendum, signed by both parties, to the agreement.

(4) Those agreements entered into subsequent to July 1, 1977, and prior to the issuance of a certificate of authority to the provider shall be valid and binding upon both parties in accordance with their terms.

History.-s. 1, ch. 77·323.

651.061 Dismissal or discharge of member; refund.-No agreement for care shall permit dismissal or discharge of the member from the facility providing care prior to the expiration of the agreement, without just cause for such a removal. "Just cause" shall include, but not be limited to, a good faith determination that a member is a danger to himself or others while remaining in the facility. If a facility terminates a member for just cause, the facility shall pay to the member any refund due in the same manner as if the member had provided notice pursuant to s. 651.055(1)(g).

History.-s. 1, ch. 77-323.

651.065 Waiver of statutory protection.-No act, agreement, or statement of any member, or of an individual purchasing care for a member, under any agreement to furnish care to the member shall constitute a valid waiver of any provision ofthis chapter intended for the benefit or protection of the member or the individual purchasing care for the member.

History.-s. 1, ch. 77·323.

651.071 Agreements as preferred claims on liquidation.-

( I) In the event ofliquidation of the provider, all care agreements executed by a provider shall be deemed preferred claims against all assets owned by the provider; however, such claims shall be subordinate to those priority claims set forth in s. 631.271 and any secured claim as defined in s. 631.011(16).

(2) Any other claims not set forth in subsection (1) above shall be considered as general creditors' claims.

(3) Nothing in this section shall be construed to impair the priority of mortgages and security agreements, with respect to the lien property, duly recorded at least 4 months prior to the institution of liqui-dation proceedings. ·

Hlstory.-s. 1, ch. 77·323.

726


651.081 Continuing care facilities members' organizations.-Members living in a facility holding a valid certificate of authority under this chapter shall have the right of self-organization, the right to be represented by an individual of their own choosing, and the right to engage in concerted activities for the purpose of keeping informed on the operation of the facility which is caring for them or for the purpose of other mutual aid or protection.

History.-s. 1, ch. 77-323; s. 251, ch. 79-400.

651.085 Quarterly meetings between members and the governing body of the facility.The board of directors or other such governing body of a continuing care facility shall hold quarterly meetings with the members of the continuing care facility for the purpose of free discussion of subjects including, but not limited to, income, expenditures, and financial trends and problems as they apply to the facility, as well as a discussion on proposed changes in policies, programs, and services.

History.-s. 1, ch. 77-323; s. 252, ch. 79-400.

651.091 Availability, distribution, and posting of reports and records; requirement of full disclosure.-

(!) Each continuing care facility shall maintain as public information, available upon request, records of all cost and inspection reports pertaining to that facility that have been filed with or issued by any governmental agency. A copy of each such report shall be retained in said records for not less than 5 years from the date said report is filed or issued. Each facility shall also maintain as public information, available upon request, all annual statements that have been filed with the Department of Insurance.

(2) Any records, reports, or documents which by state or federal law or regulation are deemed confidential shall not be distributed or made available for purposes of compliance with this section unless and until such confidential status has expired.

(3) Every continuing care facility shall: (a) Display the certificate of authority in a con

spicuous place inside the facility. (b) Post in a sufficient number of prominent posi

tions in the facility so as to be accessible to all members and to the general public a concise summary of the last inspection report issued by the department, with references to the page numbers of the full report noting any deficiencies found by the department, and the actions taken by the provider to rectify such deficiencies, indicating in such summaries where the full report may be inspected in the facility.

(c) Post in a sufficient number of prominent positions in the facility so as to be accessible to all members and to the general public a summary by the department of the latest annual statement, indicating in the summary where the full annual statement may be inspected in the facility. A listing of any proposed changes in policies, programs, and services shall also be posted.

(4) Prior to entering into an agreement to furnish continuing care, the provider undertaking to furnish the care, or the agent of the provider, shall make full disclosure, and provide copies to the pro-

spective member or his legal representative, of the following information relative to the undertaking:

(a) The agreement to furnish continuing care. (b) A copy of the summaries listed in paragraphs

(b) and (c) of subsection (3).

The prospective member or his legal representative shall be permitted to inspect the full reports referenced in paragraphs (b) and (c) of subsection (3); the charter or other agreement or instrument required to be filed with the department pursuant to s. 651.026(3), together with all amendments thereto; and the bylaws of the corporation or association, if any. Upon request, copies of the reports and information shall be provided to the individual requesting them if the individual agrees to pay a reasonable charge to cover copying costs.

History.-s. 1, ch. 77-323.

651.095 Advertisements; requirements; penalties.-

(1) The Department of Insurance shall require each provider to submit for approval each financial statement, pamphlet, circular, form letter, advertisement, or other sales literature or advertising communication addressed or intended for distribution to prospective members. Within 15 business days after the date of receipt of the documents listed in this section, the department shall enter an order approving or rejecting the documents. If an order of rejection is not entered within 15 business days after the date of receipt, the documents shall be deemed approved, unless the applicant has consented in writing to a further delay.

(2) A provider shall not have published, and a person shall not publish, an advertisement offering continuing care agreements subject to the registration requirements of this chapter unless a true copy of the advertisement has been filed with the department at least 15 business days before the first publication, or a shorter period as the department may allow, or unless the advertisement has been exempted by rule of the department. The department may require that the advertising be registered and that the advertising display a registration number.

(3) Any report, circular, public announcement, certificate, financial statement, or other printed matter or advertising material which is designed or used to solicit or induce persons to enter into any agreement providing for the transfer of property, conditioned upon an agreement to furnish continuing care for life or for a term of years, and which lists or refers to the name of any individual or organization as being interested in, or connected with, the person, association, or corporation that is to perform the contract, shall clearly state the extent of financial responsibility assumed by that individual or organization for the person, association, or corporation and the fulfillment of its agreements.

(4) This chapter does not impose liability, civil or criminal, upon a person or publisher who is regularly engaged in the business of publishing a bona fide newspaper or operating a radio or television station and who, acting solely in his official capacity, publishes an advertisement in good faith and without knowledge that the advertisement or publication constitutes a violation of this chapter.

727


(5) Any violation of this section is subject to the provisions of the Florida Deceptive and Unfair Trade Practices Act.

History.-s. 1, ch. 77-323; s. 253, ch. 79-400.

651.101 Reasonable time to comply with rules and standards.-Any provider who is offering continuing care may be given a reasonable time, not to exceed 1 year from the date of publication of any applicable rules or standards adopted pursuant to this chapter, within which to comply with the rules and standards and to obtain a certificate of authority.

History.-s. 1, ch. 77-323.

651.105 Examination fines.-

and inspections;

( I) The Department oflnsurance shall have power, and is required from time to time as it may deem necessary, to examine the business of any provider engaged in the execution of care agreements or engaged in the performance of obligations under such agreements, in the same manner as is provided for examination of insurance companies. Such examinations shall be made by a representative or examiner designated by the department, whose compensation shall be fixed by the department. Routine examinations may be made by having the necessary documents submitted to the department, and, for this purpose, financial documents and records conforming to commonly accepted accounting principles and practices, as required under s. 651.026, shall be deemed adequate. The final written report of each such examination shall be filed in the office of the department and, when so filed, shall constitute a public record. Any provider being examined shall, upon request, give reasonable and timely access to all of its records. The representative or examiner designated by the department may at any time examine the records and affairs and inspect the physical property of any provider, whether in connection with a formal examination or not.

(2) Any duly authorized officer, employee, or agent of the department may, upon presentation of proper identification, have access to, and inspect, any records, with or without advance notice, to secure compliance with, or to prevent a violation of, any provision of this chapter.

length of time for compliance by the provider. Upon a finding of noncompliance, the department may levy an administrative fine, not to exceed $50 per day, which shall be paid to the department each day until the department finds the provider in compliance. If the provider fails to comply within the established length of time, then the amount collected from the provider shall be forfeited to the department. In such case, the department may also initiate action against the provider in accordance with the provisions of s. 651.125.

History.-s. 1, ch. 77-323.

651.111 Requests for inspections.-(!) Any interested party may request an inspec

tion of the records and related financial affairs of a provider providing care in accordance with the provisions of this chapter by transmitting to the Department of Insurance notice of an alleged violation of applicable requir!')ments prescribed by statute or by rule, specifying to a reasonable extent the details of the alleged violation, which shall be signed by the complainant.

(2) The substance of the complaint shall be given to the provider no earlier than at the time of the inspection. Unless the complainant specifically requests otherwise, neither the substance of the complaint provided the provider nor any copy of the complaint or any record published, released, or otherwise made available to the provider shall disclose the name of any person mentioned in the complaint except the name of any duly authorized officer, employee, or agent of the department conducting the investigation or inspection pursuant to this chapter.

(3) Upon receipt of a complaint, the department shall make a preliminary review, and, unless the department determines that the complaint is willfully intended to harass a provider or is without any reasonable basis, the department shall make an onsite inspection within 10 business days after receiving the complaint. In either event, the complainant shall be informed, within 30 days of the receipt of the complaint by the department, what the proposed course of action of the department is.

(4) No provider operating under a certificate of authority under this chapter shall discriminate or retaliate in any manner against a member or an employee of a facility providing care because such member or employee or any other person has initiated a complaint pursuant to this section.

History.-s. 1, ch. 77-323.

(3) . Every provider operating under a valid certificate of authority shall be examined periodiCally and evaluated as to its financial condition by a representative or represep.tatives designated by the department. Such examinations and evaluations shall be conducted as often as necessary to ensure the finan-cial stability of the facility. Reports of the results of 651.114 Delinquency proceedings.-such financial examinations and evaluations· shall (1) If any ofthe grounds for rehabilitation, liqui-be kept on file by the department and shall be open dation, conservation, reorganization, seizure, or to public inspection in the facility providing care. summary proceedings of an insurer as set forth in ss. Any records, reports, or documents which by state or 631.051, 631.061, and 631.071 exist as to a provider, federal law or regulation are deemed confidential the Department of Insurance may petition for an shall not be distributed or made available for pur- appropriate court order or may pursu!') such other poses of compliance with this subsection unless and relief as is afforded in part I of chapter 631. until such confidential status has expired. (2) In the the event an order of rehabilitation,

(4) The department shall notify the provider in liquidation, conservation, reorganization, seizure, or writing of all deficiencies in its compliance with the summary proceeding has been entered against a provisions of this chapter and the rules adopted pur- provider, the department shall be vested with all of suant to this chapter and shall set a reasonable the powers and duties it has under the provisions of

728


part I of chapter 631 in regard to delinquency proceedings of insurance companies.

History.-s. 1, ch. 77-323.

651.121 Advisory council.-(1) An advisory council to the Department of In

surance is created to consist of seven members appointed by the Governor, each of whom shall be a resident of, and geographically representative of, this state. Three members shall be holders of certificates of authority under this chapter, except that with respect to the initial appointments, these three members are required only to have been actively engaged in the offering of continuing care agreements in this state for 5 years prior to appointment. The remaining members shall include:

(a) A representative of the business community whose expertise is in the area of management.

(b) A certified public accountant. (c) A representative of the field of insurance. (d) A consumer representative. (2) The term of office for each member shall be 3

years, or until his successor has been appointed and qualifies, except that of the members first appointed, two shall be appointed for terms of 1 year each, two for terms of 2 years each, and three for terms of 3 years each.

(3) The council members shall serve without pay. ( 4) The council shall: (a) Meet within 30 days after the members' ap

pointment and elect a chairman from their number and elect or appoint a secretary, each of whom shall hold office for 1 year and thereafter until his successor is elected and qualified.

(b) Hold an annual meeting each year and hold other meetings at such times and places as the department or the chairman of the council may direct.

(c) Keep a record of its proceedings. The books and records of the council shall be prima facie evidence of all matters reported therein and shall be open to inspection by the department at all times.

(d) Act in an advisory capacity to the department.

(e) Recommend to the department needed changes in rules.

(0 Upon the request of the department, assist in the rehabilitation of continuing care operations.

Hlstory.-s. 1, ch. 77-323; s. 171, ch. 79--164.

651.125 Criminal penalties; injunctive relief.-

(1) Any person who maintains, enters into, or, as manager, officer, or in any other administrative capacity, assists in entering into, maintaining, or per-

forming any continuing care agreement subject to this chapter without doing so in pursuance of a valid certificate of authority or renewal thereof, as contemplated by or provided in this chapter, or who otherwise violates any provision of this chapter or rule adopted in pursuance of this chapter, is guilty of a felony ofthe third degree, punishable as provided in s. 775.082 or s. 775.083. Each violation of this chapter constitutes a separate offense.

(2) The State Attorney for a circuit shall, upon application of the Department of Insurance or its authorized representative, institute and conduct the prosecution of an action for violation, within such circuit, of any provision of this chapter.

(3) The department may bring an action to enjoin a violation, threatened violation, or continued violation of this chapter in the circuit court in and for the county in which the violation occurred, is occurring, or is about to occur.

(4) Any action brought by the department against a provider shall not abate by reason of a sale or other transfer of ownership ofthe facility used to provide care, which provider is a party to the action, except with the express written consent of the Treasurer and Insurance Commissioner.

History.-s. 1, ch. 77-323.

651.13 Civil action.-Any member injured by a violation of this chapter may bring an action for the recovery of damages plus reasonable attorney's fees.

Hlstory.-s. 1, ch. 77-323.

651.131 Actions under prior law.-(1) With respect to any proceedings hereafter in

stituted by any person believing himself to be aggrieved by a violation of any of the provisions of former s. 651.01, s. 651.02, s. 651.03, s. 651.04, s. 651.05, s. 651.06, s. 651.07, s. 651.072, s. 651.074, s. 651.076, s. 651.08, s. 651.09, s. 651.10, s. 651.11, s. 651.115, or s. 651.12, any resulting judgment shall be limited to the actual monetary loss suffered by such person plus reasonable attorney's fees.

(2) with respect to the provisions of former s. 651.12, any prosecution hereafter instituted under the provisions of said section shall require an affirmative finding of intent to defraud.

History.-s. 4(3), (4), ch. 77-323.

651.132 Amendment or renewal of existing contracts.-Any contract or agreement executed prior to July 1, 1977, which is amended or renewed, subsequent to July 1, 1977, shall be subject to this act.

History.-s. 6, ch. 77-323.

729

TITLE XXXVII BANKS AND BANKING

CHAPTER 654

SAVINGS BANKS

654.001

654.01 654.02 654.03

654.04 654.05 654.06 654.07

654.08

654.09

Incorporation under general banking laws.

Limitation of deposits by one individual. Notice of withdrawal of deposits. Withdrawal of deposit by married woman

or infant. Withdrawal of deposit of deceased person. Investment of funds . Application for loan. Certain officers prohibited from borrow

ing, etc. Company or agent not to receive commis

sion for loan; penalty. Department's supervision and control.

1654.001 Incorporation under general banking laws.-Savings banks shall be incorporated in accordance with the general laws of this state prescribing the manner and regulating the incorporation of banks and trust companies.

Hlstory.-s. I, ch. 28012, 1953; s. 3, ch. 76-168; s. I, ch. 77-457. 'Note.-Repealed by s. 3, ch. 76-168, as amended by s. I , ch. 77-457, effective

July I, 1980, except for the possible effect of laws affecting this section prior to that date. cf.-s. 659.01 Creation of banking or trust corporation.

1654.01 Limitation of deposits by one individual.-Every savings bank may receive deposits from any person until the same amounts to $2,000, and may allow interest upon such deposits, and upon the interest accumulated thereon, until the principal with accrued interest amounts to $3,000, but the limitation contained in this section shall not apply to deposits by religious and charitable associations or corporations.

History.-s. 40, ch. 3864, 1889; RS 2197; s. I , ch. 4427, 1895; GS 2729; RGS 4175; CGL 6116; s. 3, ch. 76-168; s. I, ch. 77-457.


1654.02 Notice of withdrawal of deposits.-No savings bank or institution for savings organized under this chapter shall be required to pay any deposit with such company until the depositor shall have first given it 60 days' notice that he intends to require payment of such deposits.

History.-s. 45, ch. 3864, 1889; RS 2198; GS 2730; RGS 4176; CGL 6117; s. 3, ch. 76-168; s. I , ch. 77-457.

'Note.-Repealed by s. 3, ch. 76-168, as amended by s. I , ch. 77-457, effective July 1, 1980, except for the possible effect of laws affecting this section prior

to that date.

'654.03 Withdrawal of deposit by married woman or infant.-Every person, not under guardianship, who may make a deposit personally in any savings bank or institution for savings may control, transfer or withdraw the money so deposited and the dividends or interest that have accrued or may accrue thereon, notwithstanding such person at the time of exercising such control or of making transfer or withdrawal may be a married woman or minor.

History.-s. 47, ch. 3864, 1889; RS 2199; GS 2731; RGS 4177; CGL 6118; s. 3, ch. 76-168; s. I, ch. 77-457.

'Note.-Repealed by s. 3, ch. 76-168, as amended by s. I, ch. 77-457, effective July 1, 1980, except for the possible effect of laws affecting this section prior to that date.

'654.04 Withdrawal of deposit of deceased person.-Every savings bank or institution for savings organized under this chapter having money on deposit belonging to the estate of any deceased person whose residence at the time of his decease was in another state shall, if a foreign personal representative of such deceased person has been appointed by a court of any other state, pay the same at any time after 3 months from the issuance to such foreign personal representative of his letters of authority, if at such time such savings bank or institution for savings organized under this chapter has not received written notice of the appointment of a personal representative in this state, and the payment to such foreign personal representative shall be a valid discharge for money so paid. Such foreign personal representative shall furnish the savings bank or institution for savings organized under this chapter with an affidavit setting forth facts showing ·the domicile of the deceased person to be other than this state, and stating that there are no unpaid creditors of the deceased person in this state, together with a certified copy of his letters of authority. Such savings bank or institution for savings organized under this chapter shall maintain in its files a receipt executed by such foreign personal representative for the money so paid to him.

Hlstory.-s. 46, ch. 3864, 1889; RS 2200; GS 2732; RGS 4178; CGL 6119; s. I, ch. 65-107; s. 3, ch. 76-168; s. I, ch. 77-457. 'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective


1654.05 Investment of funds.-The capital and deposits and the income derived therefrom shall be invested only as follows:

(1) On the first mortgages of real estate situated

730

F.S.1979 SAVINGS BANKS Ch. 654

in this state to an amount not to exceed 60 percent of the valuation of such real estate, but not exceeding 75 percent ofthe whole amount of deposits shall be so invested; and no loan on mortgage shall be made except upon the report of not less than two members of the board of investment, who shall certify to the value of the premises to be ~ortgaged, according to their best judgment, and such report shall be filed and preserved with the records of the corporation.

(2) In the public funds of the United States, or bonds of any ofthe United States, or in the bonds or notes of any city, county or town of the United States whose actual indebtedness does not exceed 5 percent ofthe last preceding valuation of the property therein for the assessment of taxes, or in the notes of any citizen of this state with a pledge of any of the aforesaid securities at no more than the par value thereof.

(3) In the first mortgage bonds of any railroad company incorporated under authority of any ofthe United States, and whose road is located wholly in the same, and which is in possession of and operating its own road, and has earned and paid regular dividends for the 2 years next preceding such investment; or in the first mortgage bonds guaranteed by any such railroad company of any railroad company so incorporated whose road is thus located; or in the bonds or notes of any railroad company incorporated under the laws of this state which is unencumbered by mortgage, and which has paid a dividend of not less than 5 percent per annum for the 2 years next preceding such investment; or in the notes of any citizen ofthis state, with a pledge as collateral of any of the aforesaid securities at no more than 80 percent of the par value thereof.

(4) In the stock of any bank incorporated under the authority of this state, or the stock of any banking association incorporated under the authority of the United States, or in the notes of any citizen of this state with a pledge as collateral of any of the aforesaid securities at no more than 80 percent of the market value and not exceeding the par value thereof. Savings banks may deposit sums not exceeding 30 percent of the amount of their deposits on call in such banks, banking associations or in any trust company incorporated under the laws of this state or the United States, and may receive interest for the same.

(5) In loans upon the personal notes of the depositors of the company, but not exceeding three-fourths of the amount of his deposit to a depositor, and in each such case the deposit and the book of the depositor shall be held by the company as collateral security for the payment of such loan.

preparation of a suitable building for the convenient transaction of its business.

History.-s. 41, ch. 3864, 1889; RS 2201; GS 2733; RGS 4179; CGL 6120; s. 3, ch. 76-168; s. 1, ch. 77-457.


1654.06 Application for loan.-All applications for loans shall be made in writing to the treasurer of the corporation, who shall keep a record thereof, showing date, name of applicant, amount asked for and the security offered, and he shall cause the same to be presented to the board of investment.



1654.07 Certain officers prohibited from borrowing, etc.-No member of a committee or board of investment, or officer of such company, charged with the duty of investing its funds, shall borrow or use any portion thereof, be surety for loans to others, or in any manner, directly or indirectly, be an obligor for money borrowed from the company, and if such member or officer becomes the owner of real estate upon which a mortgage is held by the company, his office shall become vacant at the expiration of 60 days thereafter, unless he has ceased to be the owner thereof or has caused said mortgage to be discharged. Only one of the persons holding offices of president, vice president and treasurer shall at the time be a member of the investment committee.



1654.08 Company or agent not to receive commission for loan; penalty.-No such company, nor any person acting in its behalf, shall negotiate, take or receive a fee, brokerage commission, gift or other consideration for or on account of a loan made by or on behalf of such corporation, other than appears on the face of the note or contract by which such loan purports to be made; but nothing herein contained shall apply to any reasonable charge for services in the examination of title and preparation of conveyances to such corporation as security for its loans. Whoever violates provisions of this section shall be subject to a penalty of not less than $100 nor more than $1,000, to be recovered by the state in any court of competent jurisdiction.



(6) If such deposits and income cannot be conven- 1654.09 Department's supervision and con-iently invested in the mode hereinbefore prescribed, trol.-not exceeding one-third part thereof may be invested (1) The Department of Banking and Finance in bonds or other personal security, payable at a shall make examinations at least once each year of time not exceeding one year, with at least two sure- each savings bank, at which time it will satisfy itself ties, if the principal and sureties are all citizens of that the bank is in a solvent condition and is complythis state and resident therein. ing with the requirements of this chapter. In order

(7) Ten percent ofthe deposits of any such corpo- to enforce its actions in this connection, the said ration, but not exceeding $25,000, may be invested in department is vested with the same supervision and the purchase of a suitable site and the erection or control in its examination of savings banks as it now

731

Ch. 654 SAVINGS BANKS F.S.1979

has under the statutes of this state regarding the examination and regulation of state banks, and should the department find the capital stock of any such savings bank impaired, it may give notice of such impairment to the directors of such bank, and if such impairment is not made good to the satisfaction ofthe department within a reasonable period of time, as may be determined by the department, the said department may proceed with the appointment

of a liquidator in the same manner as liquidators are provided by state banks.

(2) The cost of examination shall be borne by the bank at the rate which is now charged for the examination of state banks.

History.-s. 2, ch. 28012, 1953; ss. 12, 35, ch. 69-106; s. 3, ch. 76-168; s . 1, ch. 77-457.

'Note.-Repealed by s. 3, ch . 76-168, as amended by s. 1, ch. 77-457, effective July 1, 1980, except for the possible effect of laws affecting this section prior to that date. cf.-s. 658.08 Examination fees.

732

F.S.1979

656.011 656.021 656.031

656.041 656.051 656.061

656.071

656.081 656.091 656.101 656.111 656.121

656.131

656.141 656.15

656.16 656.17 656.18 656.19 656.20

656.21 656.211 656.22 656.23 656.24 656.25 656.26 656.27 656.28

656.29 656.32 656.33 656.34 656.35 656.36 656.37 656.38 656.39

656.40 656.41 656.42 656.43 656.44

656.45

656.46

656.47 656.48 656.49 656.50

INDUSTRIAL SAVINGS BANKS Ch. 656

CHAPTER 656

INDUSTRIAL SAVINGS BANKS

Definitions. Creation of an industrial savings bank. Application for authority to organize an

industrial savings bank. Investigation by department. Capital structure. Authorization to engage in industrial sav

ings banking business. Place of transacting business; drive-in fa-

cilities. Changes in articles of incorporation. Shares of stock. Dividends and surplus. Changes in capital. Directors, number, qualifications, oath,

officers. Deposit insurance; membership in Federal

Reserve System. Liability of stockholders. Acquisition of majority stock in existing

bank. Cash reserves. Special powers. Prohibited powers. Powers of department. Liability when acting upon department's

order or regulation. Examinations and reports. Confidentiality of records of division. Examination fees and assessments. Destruction of certain bank records. Investments. Security of deposits. Sale of assets in ordinary course. Borrowing. Depositories of public moneys and pledge

of assets. Rights of minority stockholders. Deposit of minors. Deposits in two or more names. Deposits in trust. Adverse claim to bank deposit. Death or incompetency of depositor. Powers of attorney. Definitions, ss. 656.38-656.46. Authority to engage in leasing safe-deposit

facilities. Access by fiduciaries. Effect of lessee's death or incompetence. Search procedure on death of lessee. Lease to minor. Delivery of safe-deposit box contents or

property held in safekeeping to personal representative.

Access to safe-deposit boxes leased in two or more names.

Adverse claims to contents of safe-deposit box.

Special remedies for nonpayment of rent. Miscellaneous offenses. Unlawful service as an officer. Criminal penalties.

656.51 656.52

656.53

Injunction. Fictitious or fraudulent assets; past due

paper. Applicability of chapter 661.

1656.011 Definitions.-As used in this chapter: (1) "Industrial savings bank" means an industri

al savings bank or Morris Plan bank or similar plan bank meeting all the requirements of this chapter and operating hereunder provided that the corporate name shall be so qualified and limited that such bank will be distinguished from commercial banks under Florida laws.

(2) "Department" means the Department of Banking and Finance.

(3) "Community" means a city, town or incorporated village, or, where not within any of the foregoing, a trade area.

(4) "Court" means a court of competent jurisdiction.

(5) "Item" means an instrument for the payment of money even though not negotiable, but does not include money.

(6) "Officer" when referring to a bank, means any person designated as such in the bylaws and includes, whether or not so designated, any executive officer, the chairman of the board of directors, the chairman of the executive committee, and any trust officer, assistant vice president, assistant treasurer, assistant cashier, assistant comptroller, or any person who performs the duties appropriate to those offices.

(7) "Person" means an individual, corporation, partnership, joint venture, trust estate, business trust, or unincorporated association.

History.-s. 1, ch. 57-351; ss. 12, 35, ch. 69-106; s. 275, ch. 71-377; s. 3, ch. 76-168; s. 1, ch. 77-457. 'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective


1656.021 Creation of an industrial savings bank.-When authorized by the department, as provided herein, a corporation may be formed under the laws of the state by five or more persons for the purpose of conducting an industrial savings banking business.

Hlstory.-s. 2, ch. 57-351; ss. 12, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457. 'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective


1656.031 Application for authority to organize an industrial savings bank.-

(1) A written application for authority to establish a corporation, as provided in s. 656.021, shall be filed with the department, and shall include:

(a) The name, residence and occupation of each incorporator and stock subscriber and the amount of stock subscribed for by each, together with a statement under oath of each subscriber that he subscribes in good faith in his own right and not as agent or attorney for any undisclosed person.

(b) The proposed name. (c) The total capital, the number of shares of

733

Ch. 656 INDUSTRIAL SAVINGS BANKS F.S.1979

each class, and the par value of the shares of each class.

(d) The community, including the street and number, ifknown, and if not known, the area within the community where the proposed bank is to be located.

(2) Application shall be in such form and contain such additional information as the department shall reasonably require, and shall be accompanied by the required fee.

History.-s. 3, ch. 57-351; s. 1, ch. 67-382; ss. 12, 35, ch. 69-106; s. 1, ch. 70-262; s. 3, ch. 76-168; s. 1, ch. 77-457.


1656.041 Investigation by department.-(!) Upon the filing of an application, the depart

ment shall make an investigation of (a) The character, reputation, financial standing

and motives of the organizers, incorporators and subscribers in organizing the proposed bank.

(b) The need for banking facilities or additional banking facilities, as the case may be, in the community where the proposed bank is to be located, giving particular consideration to the adequacy of existing banking facilities and the need for further banking facilities in the locality.

(c) The present and future ability of the community to support the proposed bank and all other existing banking facilities in the community.

(d) The character, financial. responsibility, banking experience and business qualifications of the proposed officers.

(e) The character, financial responsibility, business experience and standing of the proposed stockholders and directors.

(2) The department shall approve or disapprove the application, in its discretion, but it shall not approve such application until, in its opinion:

(a) Public convenience and advantage will be promoted by the establishment of the proposed bank

(b) Local conditions assure reasonable promise of successful operation for the proposed bank and those banks already established in the community.

(c) The proposed capital structure is adequate. (d) The proposed officers and directors have suffi

cient banking experience, ability and standing to assure reasonable promise of successful operation.

(e) The name of the proposed bank is not so similar as to cause confusion with the name of an existing bank.

(f) Provision has been made for suitable banking house quarters in the area specified in the application.



1656.051 Capital structure.-(!) The capital stock of an industrial savings

bank hereafter organized shall be in such amount as the department shall deem adequate, but not less than the following aggregate amounts, based upon population of the community in which the bank will be located according to the latest official census:

(a) Twenty-five thousand dollars, if the population of the community in which the bank will be

located does not exceed 5,000 and $50,000 if the population of the community in which the bank will be located does not exceed 10,000.

(b) One hundred thousand dollars if the population of the community in which the bank will be located exceeds 10,000, but does not exceed 50,000.

(c) Two hundred thousand dollars if the population of the community in which the bank will be located exceeds 50,000, but does not exceed 200,000.

(d) Three hundred thousand dollars if the popu-lation of the community in which the bank will be located exceeds 200,000.

(2) Every bank hereafter organized shall, upon its organization, establish, in addition to the capital required by subsection (1), a paid-in surplus equal in amount to not less than 20 percent of its paid-up capital, and a fund to be designated as undivided profits equal to 5 percent of its paid-up capital.

(3) Each subscriber at the time he subscribes to the stock of a proposed bank shall pay an additional sum at least equal to 5 percent of the par value of such stock into a fund to be used to defray the expenses of organization, such additional sum to be paid in cash. No organizational expense shall be paid out of any other funds of the bank. Upon the granting of a charter, any unexpended balance in such fund shall be transferred to undivided profits. If the application has been finally denied during said period, such balance shall be distributed among the contributors in proportion to their respective payments. The department may require an accounting of disbursements from the fund and may order the incorporators to restore any sum which has been expended for other than proper organizational expenses.

(4) No bank shall apply any part of the funds collected under this section for the payment of commissions or fees for obtaining subscriptions or selling shares or to the payment of compensation for services in connection with the organization of a proposed bank, or in connection with securing authority to transact business, other than the payment of fees for legal services and of other usual and ordinary expenses incidental and necessary for the organization of a bank.


July 1, 1980, except for the possible effect of laws affecting this section prior to that date. cf.-s. 11.031 Official census.

1656.061 Authorization to engage in industrial savings banking business.-

(1) Upon approval of the application for authority to organize by the department, the proposed articles of incorporation shall be submitted to the department for its written approval before filing pursuant to chapter 607. After such approval and certification by the department, the proposed bank shall:

(a) File with the department a copy of its articles of incorporation duly certified by the Department of State.

(b) File with the department a statement in such form and with such supporting data and proof as it may require, showing that the entire capital, surplus .and undivided profits have been fully paid in lawful money unconditionally and that the funds representing such capital, surplus and undivided profits, less sums spent with the approval of the department

734

F.S.1979 INDUSTRIAL SAVINGS BANKS Ch. 656

for land, building, supplies, fixtures and equipment, are on hand.

(2) If the department finds that the proposed bank has in good faith complied with all the requirements oflaw, it shall within 30 days after the filing of the statement specified in subsection (1)(b), issue, in duplicate, under its official seal, a certificate of authorization to transact an industrial banking business, transmitting one copy to the bank and placing one copy in the department file. Said certificate shall state that the corporation named therein is authorized to transact an industrial savings banking business, and the bank shall cause said certificate to be published one time in some newspaper of general circulation published in the city or county where the bank is located.

(3) No bank shall, until it has received its certificates of authorization:

(a) Transact any banking business. (b) Incur any indebtedness except that allowed

under subsection (1)(b). (4) Upon the failure to comply with subsection (1)

(a) and (b) within 6 months after the approval of the application for authority to organize, such right shall automatically terminate and the charter be revoked. The department, however, for good cause, on written application filed before the expiration of said 6-month period, may extend the time within which the bank may be organized for a period not exceeding 6 months.

(5) Upon the failure to open for business with 30 days after the issuance of the certificate of authorization, the right to transact business shall automatically terminate and the charter be revoked.

History.-s. 6, ch. 57-351; ss. 10, 12, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 14, ch. 79-9.


1656.071 Place of transacting business; drivein facilities.-

(1)(a) Any bank heretofore or hereafter incorporated pursuant to this chapter shall have one principal place of doing business, as designated in its articles of incorporation; in addition, with the approval of the department and upon such conditions as the department shall prescribe, including a satisfactory showing by the bank that public convenience and necessity will be served thereby, any bank may establish up to two branches per calendar year within the limits of the county in which the parent bank is located and, in addition, may establish branches by merger with other banks located within the county in which the parent bank is located. The location of a parent bank or of a branch bank may be moved if the department determines that public convenience and necessity will be served by such move, but the location of a parent bank or of a branch bank may not be moved beyond the limits of the county in which it is located. The term "parent bank" shall be construed to mean the bank or banking office at which the principal functions of the bank are conducted.

(b) An application for a branch bank shall be in writing in such form as the department prescribes, supported by such information, data, and records as the department may require to make findings neces-

sary for approval. The department shall not act upon a branch application until it has completed consideration of any bank application pending when the branch application was filed, if the proposed locations for such branch and bank are within 1 mile of each other. However, action upon a branch application shall not be delayed more than 6 months after its filing due to the pendency of such a prior bank application. When the department has approved an application, it shall issue a certificate authorizing the operation of the branch bank and specifying the date on which it may be opened and the place where it will be located.

(c) This subsection shall be construed to allow the merger of banks within the same county and the operation by the merged company of such banks and to allow the sale of any bank to, and the purchase thereof through merger by, any other bank in the same county and the operation of such banks by the merged bank, provided that the Department of Banking and Fmance shall be of the opinion and shall first determine that public convenience and necessity will be served by such operation.

(2) A bank may operate a drive-in facility, providing one or more tellers to serve patrons in motor vehicles in the following manner:

(a) The facility will be a part of or adjacent to the main banking room.

(b) There will be a physical connection of the main banking room and the facility.

(c) There will be a private connecting doorway or private enclosed secure passageway connecting the main banking room and the facility enabling tellers to pass between the facility and main banking room without coming in contact with the public. The operation of any drive-in facility not complying with these requirements shall constitute a violation of subsection (1).

History.-s. 7, ch. 57-351; ss. 12, 35, ch. 69-106; s.1, ch. 76-142; s. 3, ch. 76-168; s. 1, ch. 77-457.


1656.081 Changes in articles of incorporation. -A bank shall not amend its articles of incorporation without the written approval of the department, and if any amendment requests a change in name of the bank, the department shall not approve such change if the new name is so similar as to cause confusion with the name of an existing bank.

History.-s. 8, ch. 57-351; ss. 12, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457. ' Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective


1656.091 Shares of stock.-(1) A bank shall issue its capital stock with par

value of not less than $5 or more than $100 per share.

(2) No bank hereafter shall issue any shares before they are fully paid for.

(3) A bank pursuant to action taken by its board of directors, and after obtaining the written approval of the department and the approval of stockholders holding a majority ofthe voting stock of the bank evidenced either in a writing signed by the stockholders or by a vote at a stockholders' meeting called for such stated purpose after giving 10 days' notice

735


by registered mail, may issue preferred stock of one or more classes in an amount and with a par value as approved by the department and may make amendments to its articles of incorporation which may be necessary to accomplish this purpose. The holders of the preferred stock shall not be held individually responsible as such holders for any debts, contracts, or engagements of the bank and shall not be liable for assessment.

History.-s. 9, ch. 57-351; ss. 12, 35, ch. 69-106; s. 1, ch. 7().408; s. 3, ch. 76-168; s. 1, ch. 77-457.


'656.101 Dividends and surplus.-=-The directors of any bank, after charging off bad debts, depreciation and other worthless assets if any, may quarter-annually, semiannually, or annually, declare a dividend of so much of the net profits ofthe bank as they shall judge expedient, but each bank shall, before the declaration of a dividend on its common stock carry 10 percent of its net profits for such preceding period as is covered by the dividend to its surplus fund, until the same shall at least ·equal the amount of its common and preferred stock. Whenever the surplus becomes impaired or reduced below the aggregate amount of common and preferred stock, it shall be reimbursed in the manner provided for its accumulation.

History.-s. 10, ch. 57-351; s. 3, ch. 76-168; s. 1, ch. 77-457. 'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective

July 1, 1980, except for the possible effect of Jaws affecting this section prior to that date.

1656.111 Changes in capital.-. (1) No bank shall reduce its outstanding capital

stock without first obtaining the consent of the de" partment, and such consent shall be withheld if the reduction will cause the outstanding capital stock to be less than the minimum required hereunder.

(2) Any bank, may with the approval of the department, provide for an increase in its capital as may be deemed expedient.

History.-s. 11, ch. 57-351; ss. 12, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457.


'656.121 Directors, number, qualifications, oath, officers.-

(!) The board of directors of the bank shall consist of not less than five nor more than 25 directors, and shall be elected at the annual meeting of stockholders.

(2) Every director must during his whole term of service be a citizen of the United States, and at least three-fifths of the directors must have resided in this state for at least 1 year preceding their election, and must be residents therein during their continuance in office. Every director of a bank hereafter chartered must own in his own right, free of lien or pledge agreement, voting common stock of the bank of which he is a director of not less than $1,000 par value; any director who ceases to be the owner of such amount of voting common stock, or who becomes in any other manner disqualified, shall thereby vacate his place as such director; provided that as to those banks having an authorized capital of $25,-

000 or less, such director must own in his own right capital stock in such bank of not less than $500 par value in the manner above provided for other banks.

(3) Each director, upon assuming office, shall take an oath that he will, so far as the duty devolves on him, diligently and honestly administer the affairs of such bank and will not knowingly violate, or willfully permit to be violated, any of the provisions of this chapter, and that he is the owner in good faith and in his own right of shares of voting common stock in the amount required by subsection (2) subscribed by him or standing in his name on the books of the bank and that the same is not hypothecated or in any way pledged as security for any loan or debt. Such oath shall be immediately filed with the department.

( 4) The board of directors of each bank shall manage the affairs of the bank and hold a meeting at least once every 2 months at the banking house of the bank.



'656.131 Deposit insurance; membership in Federal Reserve System.-A bank is authorized to do any act necessary to obtain insurance of its deposits by the United States, or any agency thereof, and to acquire and hold membership in the Federal Reserve System.



'656.141 Liability of stockholders.-Holders of voting common stock ofbanks shall be held individually responsible equally and ratable and not for one another for all contracts, debts, and engagements of such banks to the extent of the amount of their stock therein at the par value thereof in addition to the amount invested in such shares. Persons holding stock as executors, administrators, guardians or trustees shall not be personally subject to any liability as stockholders, but the estates and funds in their hands shall be liable in like manner and to the same extent as the testator, intestate, ward or person interested in trust funds would be, ifliving and competent to hold the stock in his own name. Such stockholders who have transferred their shares or registered the transfer thereof within 6 months next before the date of the failure of such bank to meet its obligations, or with knowledge of such impending failure, shall be liable to the same extent as if they had made no such transfer, to the extent that the subsequent transferee fails to meet such liability; but this provision shall not be construed to affect in any way any recourse which such stockholders might otherwise have against those in whose names such shares are registered at the time of such failure, provided that this section shall not apply to stockholders in a bank which is a member of the Federal Deposit Insurance Corporation, a corporation under laws of the United States, or which has an unim-

736


paired surplus equalling the amount of its capital stock.



1656.15 Acquisition of majority stock in existing bank.-In any case where a person, a group of persons, or a corporation proposes to purchase or acquire the majority of the outstanding capital stock of any bank and thereby to change the control of said bank, such person, shall first make application to the department for a certificate of approval of such proposed change of control of said bank and said application shall contain the name and address of the proposed new owner or owners of the controlling stock and the said department shall issue said certificate of approval only after it has become satisfied that the proposed new owner or owners of the_ controlling stock is qualified by character, expenence and financial responsibility to control and operate the said bank in a legal and proper manner, and that the interests of the stockholders, depositors and creditors of the bank and the interest of the public generally will not be jeopardized by the proposed change in ownership and management.

History.-s. 15, ch. 57-351; ss. 12, 35, ch. 69-106; s. 3, ch. 76-168; s .. 1, ch. 77-457.

' Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective July 1, 1980, except for the possible effect of Jaws affecting this section prior to that date.

1656.16 Cash reserves.-(!) Every bank shall at all times have available

in cash an amount equal to at least 15 percent of the aggregate amount of its deposits. Such portion of said reserve as the bank may desire may be invested in bonds and securities of the United States and bonds and securities guaranteed as to principal and interest by the United States, owned and unpledged by the bank, or which are in excess of the total deposits which they are pledged to secure, and balances payable on demand, due to the company from banks with whom such company may keep in current account.

(2) Whenever the lawful reserve of any such bank as defined in subsection (1) shall be below the amount of15 percent of its deposits, such bank shall not increase its liabilities by making any new loans or discounts otherwise than by discounting or purchasing of bills of exchange payable at sight, nor making any dividends of its profits until the required proportion between its deposits and its lawful money of the United States has been restored. The department may notify any bank whose lawful money reserves shall be below the amount above required to be maintained to make good such reserve, and if such bank shall fail in 30 days thereafter so to make good its reserve oflawful money, the department may appoint a liquidator to wind up the business of the bank as provided in s. 661.10.

History.-s. 16, ch. 57-351; ss. 12, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch . 77-457.

' Note.- Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective July 1, 1980, except for the possible effect of Jaws affecting this section prior

to that date.

1656.17 Special powers.-Industrial savings banks in addition to the general and usual powers incidental to ordinary corporations for profit in this state, which are not specifically restricted in this law, shall have the following special powers, to wit:

2 (1) LOANS; SECURITY REQUIRED, INTEREST AND CHARGES.-The right to lend money, secured or unsecured, at an interest rate not to exceed the equivalent of 18 percent per annum simple interest calculated on the assumption that the loan will be paid in accordance with its agreed terms, whether or not the loan may be paid or collected prior to stated maturity, plus an additional charge not to exceed 2 percent of the principal amount of any loan or $50, whichever is less, which additional charge shall be for investigating the char~cter oft~e individual applying for the loan, the secunty submitted and all other costs in connection with the making' of such loans. No other charge of any kind or nature whatsoever, by whatsoever purpose or name designated, shall be made; however, when a loan is of such character as to necessitate the filing or recording of a legal instrument, an additional charge may be made for such filing or recording; providing such charge is actually paid to the proper public officials; also, a borrower may be required to pay abstract costs, reasonable attorney's fees, documentary stamp taxes, other taxes, premiums on insurance, and other similar charges, if the bank deems the same necessary for the protection and security of said loan.

2(2) COLLECTION OF CHARGES.-The right to require payment of the charges permitted in subsection (1) at the time the loan is made.

3(3) ACCEPT DEPOSITS AND ISSUE INVESTMENT CERTIFICATES, CONTRACTS, ETC.-The right to accept deposits and issue as evidence therefor investment certificates, contracts, or agreements, under any descriptive name which may bear such interest, if any, as their terms may provide and which may require the payment to the bank of such amounts from time to time as their terms may provide, and permit the withdrawal or cancellation of amounts paid upon the same in whole or in part from time to time and the credit of amounts thereon upon such condition as may be set forth therein.

3(4) PLANS ON WHICH LOANS MAY BE MADE.- The right to lend money on any combination of any of the foregoing plans or the elements thereof, including the right to lend money upon the collateral deposits of and the compliance of the borrowers with the terms of any deposit, investment certificate, contract or agreement issued under subsection (3).

3 (5) LATE CHARGES.-To impose a late charge not exceeding 5 percent ofthe amount of any principal payment, installment payment, or payments in default on any evidence of debt given to secure payment of a loan made pursuant to subsection (1) or at the time any periodical installment upon a certificate assigned as collateral security for the payment of a loan made pursuant to subsection (1) becomes

737


due. However, such late charges shall not be cumulative.

History.-s. 17, ch. 57-351; s. 2, ch. 70.408; s. 1, ch. 71-200; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 1, ch. 78-182; s. 7, ch. 79-274.

'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective July 1, 1980, except for the possible effect of Jaws affecting this section prior to that date. 'Note.-These subsections as amended by ch. 79-274 "apply only to loans or

advances of credit made on or subsequent to" July 1, 1979, "and shall not be construed as diminishing the force and effect of any Jaws applying to loans or advances of credit completed prior to that date."

'Note.-Section 7, ch. 79-274 purported to amend the entire section, but did not republish subsections (3)-(5). Subsections (3)-(5) are republished here, however, as the apparent legislative intent was not to repeal them.

1656.18 Prohibited powers.-No industrial savings bank may, however, do any of the following, to wit:

(1) CARRY COMMERCIAL OR DEMAND ACCOUNTS.-Carry commercial or demand banking accounts.

(2) UNSECURED LOANS, EXCESSIVE AMOUNTS.-

(a) Unsecured loans exceeding 10 percent of the aggregate unimpaired capital and surplus shall not be made to any person; however, when approved by the board of directors, or an authorized committee therefrom, said 10 percent limitation may be increased to 25 percent of the aggregate unimpaired capital and surplus when such loans are amply and entirely secured.

(b) No bank shall lend directly or indirectly an amount exceeding 10 percent of the aggregate unimpaired capital and surplus of said bank to any director or officer of said bank, individually or to any copartnership or incorporated company in which a director or officer may be directly or indirectly interested. No such loans shall be made unless the same shall be first approved by the board of directors of such bank.

(c) No loan or discount shall be made by an industrial savings bank on the security of the shares of its own capital stock.

(3) ACCEPT TRUSTS, ETC.-Accept trusts or act as guardian, administrator, or judicial trustee in any form.

(4) DEPOSIT FUNDS IN OTHER BANKS.-Deposit any of its funds in any banking corporation, unless such corporation has been designated by vote of a majority of directors or of the executive committee present at a meeting duly called, at which a quorum was in attendance.

(5) REAL ESTATE MORTGAGES.-Banks may carry in their assets first mortgages on real property and certain second mortgages on real estate as hereinafter provided. Secondary liens may be taken and carried to secure further any debt previously contracted in good faith and owing to the bank or as additional security to loans made under provisions of Title I of the Federal Housing Administration Act. Secondary liens made under the provisions of the Servicemen's Readjustment Act of 1944, as amended, when fully guaranteed under the provisions of and meeting the requirements of said act, will not be considered secondary liens subject to the prohibitions of this subsection, but as acceptable assets for the bank. Secondary liens may also be taken at any time to further secure a loan if the loan is otherwise adequately secured, and second mortgages on real estate may be taken and carried as an asset if the

principal amount secured by the first and second mortgages, in the aggregate, does not exceed 75 percent of the appraised value of the encumbered real estate.

History.-s. 18, ch. 57-351; s. 2, ch. 67-382; s. 3, ch. 7().408; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 2, ch. 78-182.


1656.19 Powers of department.-In addition to other powers conferred by this act, the department shall have power to:

(1) Implement by regulation any provision of this chapter.

(2) Restrict the withdrawal of deposits from all or one or more industrial banks where the department finds that extraordinary circumstances make such restriction necessary for the proper protection of depositors in the affected institutions.

(3) From time to time formulate and promulgate reasonable rules and regulations governing the conduct of industrial banks doing business in this state which rules and regulations shall have the force of law.

History.-s. 19, ch. 57-351; ss. 12, 35, ch. 69-106; s. 3, ch. 76-168; s. 215, ch. 77-104; s. 1, ch. 77-457; s. 7, ch. 78-95.


1656.20 Liability when acting upon department's order or regulation.-No person shall be subject to any civil or criminal liability for any act or omission to act in good faith in reliance upon a subsisting order or regulation issued by the department notwithstanding a subsequent decision by a court of competent jurisdiction invalidating the order or regulation.

History.-s. 20, ch. 57-351; ss. 12, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457.


1656.21 Examinations and reports.-The department shall:

(1) Examine the condition of each bank at least twice in each calendar year. The department may accept a Federal Deposit Insurance · Corporation or Federal Reserve examination in lieu of one of said bank examinations and may furnish a copy of all examinations made of such banks to the Federal Deposit Insurance Corporation or its representatives or the Federal Reserve Board or its representatives.

(2) Require each bank to submit a report of its condition as of such date as it may fix at least twice in each calendar year or as often as ordered by the department, verified by the oaths or affirmations of the officer or officers authorized to do so by the bylaws of such corporation. Within 10 days after such report shall have been called for, the bank shall publish in a newspaper published in the county in which said bank is located a statement of its assets and liabilities as ofthe date of said report, and copies of said publication, with an affidavit of the publication, shall be filed with the department and the county property appraiser.

(3) Require each bank to submit a report of its income and dividends on a calendar year basis on such date as it may fix at least once each year, or as

738


often as ordered by the department, verified by the oaths or affirmations of the officer or officers authorized to do so by the bylaws of such corporation. Every such bank which fails to transmit any report required under this section shall be subject to a penalty of $100 for each day of delinquency after the due date of the report.

History.-s. 21, ch. 57-351; ss. 12, 35, ch. 69-106; s. 1, ch. 70-406; s. 1, ch. 70-439; s. 3, ch. 76-168; s. 1, ch. 77-102; s. 1, ch. 77-457.


1656.211 Confidentiality of records of division.-All reports of examination and investigation conducted therewith, including any duly authorized copies in possession of any banking organization, foreign banking corporation, or any other person or agency, shall be confidential communications, other than such documents as are required by law to be published, and shall not be made public unless with the consent of the department or pursuant to a court order. All reports of examination or investigation of any bank shall be the sole property of the division of banking, Department of Banking and Finance, and under no circumstances shall the bank or any of its directors, officials, or employees disclose or otherwise make public in any manner such reports or any portion thereof, except in compliance with a court order.



1656.22 Examination fees and assessments.The amount, kind, and disposition of the fees and assessments set forth in s. 658.08 shall also apply to industrial savings banks.

History.-s. 22, ch. 57-351; s. 1, ch. 63-254; s. 3, ch. 67-382; ss. 12, 35, ch. 69-106; s. 2, ch. 70-262; s. 3, ch. 73-69; s. 3, ch. 76-168; s. 1, ch. 77-457.


1656.23 Destruction of certain bank records.-

(1) Banks shall not be required to preserve, or keep their records, or files, or photographic, or microphotographic copies thereof for a longer period than 10 years next after January 1 of the year following the time of the making or filing of such records or files, provided, however, that ledger sheets shall not be destroyed unless photographic copies of such ledger sheets are retained.

(2) No liability shall accrue against any bank destroying any such records after the expiration of the period provided in subsection (1), and any cause or proceedings in which any such records or files may be called in question or be demanded of the bank or any officer or employee thereof, a showing that such records or files have been destroyed in accordance with the terms of this section shall be a sufficient excuse for the failure to produce them.

(3) Any bank may photograph, microphotograph, or reproduce on film in such manner that each page is exposed in its entirety any or all of its journals, ledgers, statements, account books, or other books, or any or all of its internal records of every description, made or received in the regular course

of its business, and the photographs, microphotographs, or reproductions on film, or in the form of film or prints, or enlarged prints, or any duly certified or authenticated copy or reproduction thereof, duly certified or authenticated by a responsible officer of the bank under whose supervision the records are kept, shall in all cases, and in all courts and places, be admitted and received as evidence with a like force and effect as the original general ledger, voucher, statement, account book, or other record.



1656.24 Investments.-An industrial savings bank may invest its funds, subject to the following definitions, restrictions, and limitations:

(1) Bonds and securities not subject to limitation: (a) Direct obligations of the United States Gov

ernment. (b) Obligations of agencies created by act of the

United States Congress and authorized thereby to issue securities or evidences of indebtedness, regardless of guarantee ofrepayment by the United States Government.

(c) Public housing authority obligations. (d) General obligations of states of the United

States, of Puerto Rico, and of the political subdivisions and municipalities thereof.

(e) Obligations issued by the Florida State Board of Education under authority of the State Constitution or applicable statutes.

(f) Tax anticipation certificates or warrants of counties or municipalities having maturities not exceeding 1 year.

(2) Bonds and securities subject to a limitation of 25 percent of unimpaired capital and surplus of the purchasing bank. Any single issue of revenue bonds or certificates of states of the United States, ofPuerto Rico, or of the political subdivisions and municipalities thereof.

(3) Bonds and securities subject to a limitation of 10 percent of unimpaired capital and surplus of the purchasing bank:

(a) Corporate obligations of any one corporation which is not an affiliate or subsidiary of the banking corporation.

(b) Savings shares or certificates issued by any one savings and loan association having its principal office in Florida.

(c) Any single issue of industrial development bonds issued by a county or municipality for the benefit of a specified corporation.

(4) None of the bonds or securities described in this section shall be eligible for investment in any amount unless current as to all payments of principal and interest and unless rated in one of the four highest investment grades by a recognized investment rating service or otherwise supported as to investment quality and marketability by a credit rating file compiled and maintained in current status by the purchasing industrial savings bank.

(5) An industrial savings bank may invest in the stock of incorporated companies to the extent hereinafter defined:

(a) Stock of the federal reserve bank of this district may be purchased and retained as required to

739


maintain membership in the federal reserve system. (b) Stock of the Federal National Mortgage Asso

ciation may be purchased and retained as required in connection with mortgage transactions with the said association.

(c) Up to 2 percent of the unimpaired capital and surplus of the industrial savings bank may be invested in small business investment companies which are organized under the provisions of the United States Code.

(d) Up to 10 percent of the unimpaired capital and surplus of the industrial savings bank may be invested in a bank service corporation, organized and operated as defined in this chapter.

(e) With the prior written approval of the department, an industrial savings bank may invest an aggregate amount up to 20 percent of its unimpaired capital and surplus in the stock of one or more operating subsidiary corporations organized for any of the following purposes: Owning and servicing real estate mortgages, owning and leasing real and personal property, issuing credit cards, operating a credit bureau, or such other purposes as the depart-ment may authorize. ·

(6) Investment securities shall be entered on the books of the industrial savings bank at the fair market value on the date of acquisition. Premiums paid in excess of par value shall be amortized over the life of the security; discount may be accreted.

(7) An industrial savings bank may invest in real estate to the extent hereinafter defined:

(a) Up to 50 percent of the unimpaired capital and surplus of the bank may be invested in the direct ownership, or in leasehold improvements, of land and buildings utilized by the bank in the transaction of its business. In lieu thereof, with the prior written approval of the department, up to 50 percent ofthe unimpaired capital and surplus of the bank may be invested in the stock of a corporation which owns the land and buildings within which the business of the bank is transacted.

(b) An additional investment up to 10 percent of the unimpaired capital and surplus of the bank may be made for the acquisition of land or buildings for future banking use or as a protection against undesirable encroachment of the banking premises or abandonment or deterioration of property in the immediate vicinity of the banking house. The bank may hold, improve, sell, lease, operate, or otherwise exercise the rights of an owner of any such property.

(c) The real estate investment limitations provided by this subsection may not be exceeded except with the prior written approval of the department.

(8) An industrial savings bank may own or lease furniture, fixtures, machinery, and equipment such as may be necessary to the transaction of its banking business, and may be the owner and lessor of personal property which is acquired pursuant to a written contract with a specified lessee.

ance of the loan or investment plus acquisition costs and accrued interest or the appraisal value or market value of the property acquired which shall be determined as near as possible to the date of acquisition.

(b) The bank shall have evidence of ownership of all property acquired and shall maintain subsidiary ledgers adequate to the separate recording of all income and expense attributable to its ownership of such property.

(c) Unless an extension of time is approved in writing by the department, real estate shall be sold or charged off within 5 years of the date of acquisition, and personal property shall be sold or charged off within 6 months of the date of acquisition.

(10) Special provisions: (a) An industrial savings bank may invest up to

1 percent of its unimpaired capital and surplus in the stock of the Florida industrial development corporation, and may thereafter deal in the securities or other evidences of debt ofthat corporation as provided for in chapter 289.

(b) An industrial savings bank may invest in the stock or securities of a community corporation organized to promote the physical, social, or moral well-being of the members of the community in which the bank is located. However, the total of all such investments carried as assets of the bank may not exceed 2 percent of the unimpaired capital and surplus of the bank.

History.-s. 24, ch. 57-351; s. 1, ch. 59.a6; s. 1, ch. 59-aS; ss. 12, 22, 35, ch. 69-106; s. 18, ch. 69-216; s. 1, ch. 69-330; s. 1, ch. 70-410; s. 1, ch. 70.439; s. 3, ch. 76-168; s. 1, ch. 77-457.


1656.25 Security of deposits.-Notwithstanding any provisions of law of this state or any political subdivision thereof requiring security of deposits in the form of collateral, surety bond, or in any other form, security for such deposits shall not be required to the extent that said deposits are insured under the provisions of section 12-B ofthe Federal Reserve Act as amended, or any amendments thereto.



1656.26 Sale of assets in ordinary course.-A bank may sell any asset in the ordinary course of business or with the approval of the department in any other circumstances.

Hlstory.-s. 26, ch. 57-351; ss. 12, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457.

'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective July 1, 1980, except for the possible effect of Ia ws affecting this section prior to that date.

1656.27 Borrowing.-A bank may borrow money and issue evidences of indebtedness for a loan for temporary purposes in the usual course of its busi-

(9) An industrial savings bank may acquire property of any kind to secure, protect, or satisfy a loan or investment previously made in good faith, and such property shall be entered on the bank's books, held, and disposed of subject to the following condi- ness. t o d 1" "t t" Hlstory.-s. 27, ch. 57-351; s. 3, ch. 76-168; s. 1, ch. 77-457.

lOllS an 1m1 a 10ns: 'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective (a) The book entry shall be the lesser of the hal- July 1, 1980, except for the possible effect·of laws affecting this section prior

740


to that date.

'656.28 Depositories of public moneys and pledge of assets.-

(1) Banks shall be depositories of public moneys under such regulations as may be prescribed by the department and they may also be employed as financial agents of the state and they shall perform such reasonable duties as depositories of public moneys and financial agents of the state as may be required ofthem. The department shall require banks so designated to give satisfactory security by the deposit of bonds of the United States, the state or political subdivisions or other satisfactory security for the safekeeping and prompt payment of the public moneys deposited with them and for the faithful performance of their duties as financial agents of the state. A bank or trust company may also pledge its assets to:

(a) Enable it to act as agent for the sale of obligations of the United States.

(b) Secure borrowed funds. (c) Secure deposits when the depositor is re

quired to obtain such security by the laws of the United States or the laws ofthis state.

(2) Notwithstanding any provisions oflaw ofthis state or any political subdivision thereof requiring security of deposits in the form of collateral, surety bond, or in any other form, security for such deposits shall not be required to the extent that such deposits are insured under the provisions of Federal Deposit Insurance, as amended, or any amendments thereto.



'656.29 Rights of minority stockholders.-No bank and no director, officer .or employee thereof, shall permit any stockholder other than a qualified director, officer or employee thereof to have access to or to examine or inspect any of the books or records of such bank other than its general statement book showing its general assets and liabilities.

Hlstory.-s. 29, ch. 57-351; s. 3, ch. 76-168; s. 1, ch. 77-457. 'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective


1656.32 Deposit of minors.-Bank deposits by a minor or made in his name, other than by a courtappointed guardian, may be withdrawn by the minor in the absence of an agreement to the contrary made between the bank and the depositor at the time the account is opened, and in case of any such agreement, such moneys, until the minor's disabilities are removed, may be withdrawn by the person. or persons designated in such agreement.



'656.33 Deposits in two or more names.-Bank deposits, or any part thereof, or any interest therein made in the names of two or more persons, payable to either, or payable to either or the survivor, may be paid to either of said persons whether the other be living or not; and the receipt or acquittance of the

person so paid shall be a valid and sufficient release and discharge to the bank for any payment so made.



1656.34 Deposits in trust.-Bank deposits made by any person describing himself and making such deposit as trustee for another, and no other or fur~ ther notice of the existence and terms of a legal and valid trust than such description shall have been given in writing to such bank, in the event of the death of the person so described as trustee, such deposit, or any part thereof, together with the interest thereon may be paid to the person for whom the deposit was thus stated to have been made.

Hlstory.--<0. 34, ch. 57-351; s. 3, ch. 76-168; s. 1, ch. 77-457. 'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective


'656.35 Adverse claim to bank deposit.-Notice to bank of an adverse claim to a deposit standing on its books to the credit of any person shall not be effectual to cause said bank to recognize said adverse claimant unless said adverse claimant shall also either:

(1) Procure a restr.aining order, injunction or other appropriate process against said bank from a court in a cause therein instituted by him wherein the person to whose credit the deposit stands is made a party and served with process, or

(2) Execute to said bank in form and with sureties acceptable to it, a bond, indemnifying said bank from any and all liability, loss, damage, costs and expenses, for and on account of the payment of such adverse claim or the dishonor of the check or other order of the person to whose credit the deposit stands on the books of said bank.



1656.36 Death or incompetency of depositor. -Any bank may pay any item made, drawn or accepted by a person who has funds on deposit to meet the same, notwithstanding the death or incompetency of the drawer, if presentation is made within 30 days after receipt of notice of the death or adjudication of incompetency of said depositor, and at any time if the bank has not received the written notice of the death or adjudication of incompetency of said depositor. No bank shall be liable for damages, or penalty, by reason of any payment made pursuant to this section.



1656.37 Powers of attorney.-(1) A bank may continue to recognize the author.

ity of an attorney authorized in writing to operate, in whole or in part, the account of a depositor, until it receives written notice of the revocation of his authority.

(2) Written notice of the death or adjudication of incompetency of such depositor shall constitute written notice of revocation of the authority of his attor-

741


ney; provided, however, bank may, until30 days after receipt of such notice, pay any item made, drawn, accepted or endorsed by such attorney prior to such death or incompetency, provided that such item is otherwise properly payable.



1656.38 Definitions, ss. 656.38-656.46.-As used in ss. 656.38-656.46:

(1) "Lessee" means a person contracting with a lessor for the use of a safe-deposit box.

(2) "Lessor" means a bank renting safe-deposit facilities.

(3) "Safe-deposit box" means a safe-deposit box, vault, or other safe-deposit receptacle maintained by a lessor and the rules relating thereto apply to property or documents kept in safekeeping in the bank's vault.



1656.39 Authority to engage in leasing safedeposit facilities.-An industrial savings bank may maintain and lease safe-deposit boxes and may accept property or documents for safekeeping if, except in the case of night depositories it issues a receipt therefor.



1656.40 Access by fiduciaries.-Where a safedeposit box is made available by a lessor to one or more persons acting as fiduciaries, the lessor may, except as otherwise expressly provided in the lease or the writings pursuant to which such fiduciaries are acting, allow access thereto as follows:

(1) By any one or more of the persons acting as executors or administrators.

(2) By any one or more of the persons otherwise acting as fiduciaries when authorized in writing signed by all other persons so acting.

(3) By any agent authorized in writing signed by all of the persons acting as fiduciaries.



1656.41 Effect of lessee's death or incompetence.-Where a lessor without knowledge of the death or of an adjudication oflegal incompetence of the lessee, deals with his agent pursuant to a written power of attorney signed by such lessee, the transaction binds the lessee's estate and the lessee.



1656.42 Search procedure on death of lessee. -Provided satisfactory proof of the death ofthe lessee is presented, a lessor shall permit the person named in a court order for the purpose, or if no order has been served upon the lessor, the spouse, a parent, an adult descendant, or a person named as an

executor in a copy of a purported will procured by him, to open and examine the contents of a safedeposit box leased by a decedent, or any documents delivered by a decedent for safekeeping, i~ the presence of an officer of the lessor; and the lEls&o:df s.Q'· . requested by such person, must deliver:

(1) Any writing purporting to be a will of the decedent to the court having probate jurisdiction in the county wherein the bank is located.

(2) Any writing purporting to be a deed to a burial plot or to give burial instructions to the person making the request for a search; and

(3) Any document purporting to be an insurance policy on the life of the decedent to the beneficiary named therein; but no other contents shall be removed pursuant to this section.



1656.43 Lease to minor.-A bank may lease a safe-deposit box to and in connection therewith deal with a minor with the same effect as ifleasing to and dealing with a person of full legal capacity.



1656.44 Delivery of safe-deposit box contents or property held in safekeeping to personal representative.-

(1) The lessor shall immediately deliver to a resident personal representative, upon presentation of a certified copy ofhis letters of authority, all property deposited with it by the decedent for safekeeping, and shall grant him access to any safe-deposit box in the decedent's name and permit him to remove from such box any part or all of the contents thereof.

(2) After 3 months from the death of a lessee, if a personal foreign representative of such lessee has been appointed by a court of any other state and the lessor has not received written notice of the appointment of a personal representative in this state, a lessor may, in its discretion, deliver to a foreign personal representative all properties deposited with it for safekeeping and the contents of any safe-deposit box in the name of the decedent. Such a foreign personal representative shall furnish the lessor with an affidavit setting forth facts showing the domicile of the deceased lessee to be other than this state, and stating that there are no unpaid creditors of the deceased lessee in this state, together with a certified copy of his letters of authority. A lessor making delivery pursuant to this subsection shall maintain in its files a receipt executed by such foreign personal representative which itemizes in detail all property so delivered,.

(3) No lessor shall be liable for damages or penalty by reason of any delivery made pursuant to this section.



742

F.S.I979 INDUSTRIAL SAVINGS BANKS Ch. 656

to that date.

1656.45 Access to safe-deposit boxes leased in two or more names.-

(1) When specifically provided in the lease or rental agreement covering safe-deposit boxes heretofore or hereafter rented or leased in the names of two or more persons that access to said safe-deposit box shall be granted to either lessee or to either or the survivor, access to said safe-deposit box shall be granted by lessor to either of said persons, whether the other person or persons be living or not, and the receipt or acquittance of such person so granted access shall be a valid and sufficient release and discharge to the lessor for granting access thereto.

(2) No lessor shall be liable for damages or penalty by reason of any delivery made pursuant to this section.

History.-s. 45, ch. 57·351; s. 3, ch. 76-168; s. 1, ch. 77-457. 'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective

July 1, 1980 •. except for the possible effect of laws affecting this section prior to that date.

1656.46 Adverse claims to contents of safe-deposit box.-

(1) An adverse claim to the contents of a safedeposit box, or to property held in safekeeping, is not sufficient to require the lessor to deny access to its lessee unless:

(a) The lessor is directed to do so by a court order issued in an action in which the lessee is served with process and named as a party by a name which identifies him with the name in which the safe-deposit box is leased or the property held; or

(b) The safe-deposit box is leased or the property is held in the name of a lessee with the addition of words indicating that the contents or property are held in a fiduciary capacity, and the adverse claim is supported by a written statement of facts disclosing that it is made by or on behalf of a beneficiary and that there is reason to know that the fiduciary will misappropriate the trust property.

(2) A claim is also an adverse claim where one of several lessees claims, contrary to the terms of the lease, an exclusive right of access, or where one or more persons claim a right of access as agents, or officers of a lessee to the exclusion of others as agents, or officers, or where it is claimed that a lessee is the same person as one using another name.


July 1, 1980, except for the possible effect of Jaws affecting this section prior to that date.

1656.47 Special remedies for nonpayment of rent.-

(1) If the rental due on a safe-deposit box has not been paid for 6 months, the lessor may send a notice by registered mail to the last known address of the lessee stating that the safe-deposit box will be opened and its contents stored at the expense of the lessee unless payment of the rental is made within 30 days. If the rental is not paid within 30 days from the mailing of the notice, the box may be opened in the presence of an officer ofthe lessor and of a notary public who is not a director, officer, employee or stockholder of the lessor. The contents shall be sealed in a package by a notary public who shall write on the outside the name of the lessee and the

date of the opening. The notary public shall execute a certificate reciting the name of the lessee, the date of the opening of the box and a list of its contents. The certificate shall be included in the package and a copy of the certificate shall be sent by registered mail to the last known address of the lessee. The package shall then be placed in the general vaults of the lessor at a rental not exceeding the rental previously charged for the box.

(2)(a) If the contents of the safe-deposit box have not been claimed within 1 year of the mailing of the certificate, the lessor may send a further notice to the last known address of the lessee stating that, unless the accumulated charges are paid within 30 days, the contents of the box will be sold at public auction at a specified time and place, or in the case of securities listed on a stock exchange, will be sold upon the exchange on or after a specified date and that unsalable items will be destroyed. The time, place and manner of sale shall also be posted conspicuously on the premises of the lessor and advertised once in a newspaper of general circulation in the community. Ifthe articles are not claimed, they may then be sold in accordance with the notice.

(b) The balance of the proceeds, after deducting accumulated charges, including the expenses of advertising and conducting the sale, shall be deposited to the credit of the lessee in any account maintained by him, or if none, shall be deemed a deposit account with the bank operating the safe-deposit facility, and shall be identified on the books of the bank as arising from the sale of contents of a safe-deposit box.

(3) Any documents or writings of a private nature, and having little or no apparent value need not be offered for sale, but shall be retainedj unless claimed by the owner, for the period specified for unclaimed contents, after which they may be destroyed.

( 4) The remedies provided for ·in this section shall apply to rental accrued or contents of safedeposit boxes held by banks prior to the enactment of chapter 28016, Laws ofFlorida, 1953, chs. 656-661, Florida Statutes.


July 1, 1980, except for the possible effect of Jaws affecting this section prior to that date. cf.-s. 1.01 Defines registered mail to include certified mail with return receipt

requested.

1656.48 Miscellaneous offenses.-(1) Any director, officer or employee of a bank

who asks for or receives, consents or agrees to receive any commission, emolument or gratuity or any money, property or things of value for his own personal benefit, or of personal advantage for procuring or endeavoring to procure for any person any loan from such bank or the purchase or discount of any note, draft, check, bill of exchange or other obligation by such bank or for permitting any person to overdraw any account with such bank shall be guilty of a felony.

(2) Any director, officer, agent, or employee of any bank who knowingly receives or possesses himself of any of its property otherwise than in payment of a just demand, and with intent to defraud, omits to make or cause to be made a full and true entry thereof in its books and accounts, or concurs in omit-

743


ting to make any material entry thereof, shall be guilty of a felony.

(3) Any director, officer, agent or employee of a bank who without authority from the board of directors of such bank makes, draws, issues, puts forth or assigns any certificate of deposit, draft, order, bill of exchange, acceptance, note, debenture, bond or other obligation, or mortgage, judgment or decree or makes any false entry in any book, report or statement of such bank with intent to defraud such bank or any other person, firm, or corporation, or to deceive any officer of such bank, or the department or any examiner appointed to examine the affairs of such bank .shall be guilty of a felony.

(4) No bank shall purchase any real property or any contract arising from the sale of real property, or any note or bond in which any director, officer, or controlling stockholders of such bank, is personally or financially interested, directly or indirectly for his own account, for himself, or as a partner or agent of others without first obtaining the approval of the majority of the board of directors, excluding his own vote.

(5) No officer or _director without prior approval of the board of a bank shall purchase directly or indirectly or be interested in the purchase of any of the bank's assets.

Hlstory.-'-8. 48, ch. 57-351; ss. 12, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457.

'Note.-Repealed by s. 3, ch. 76-:168, as amended by s. 1, ch. 77-457, effective July 1, 1980, except for the possible effect of laws affecting this section prior to that date. · cf.-s. 775.081 Classifications of felonies.

1656.49 Unlawful service as an officer.-It shall be unlawful for any person to serve as an officer or director of a bank who:

(1) Has been convicted of an offense constituting a violation of the banking laws, involving moral turpitude, or a breach of trust.

(2) Is indebted to the bank for more than 30 days upon a judgment that has become final.

(3) Has any interest adverse to the bank unless such interest is promptly and fully disclosed in writing to the board of directors of the bank.



1656.50 Criminal penalties.-Any person responsible for an act or omission expressly declared to be unlawful or a criminal offense by this chapter shall be guilty of a misdemeanor of the first degree, punishable as provided ins. 775.082 or s. 775.083, or, if the act or omission was intended to defraud, of a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

Hlstory.-s. 50, ch. 57-351; s. 670, ch. 71-136; s. 3, ch. 76-168; s. 1, ch. 77-457. 'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective


to that date.

1656.51 lnjunction.-Whenever a violation of this chapter is threatened or impending, and will cause substantial injury to a bank or to the depositors, creditors, or stockholders thereof, the circuit court is hereby granted jurisdiction to hear any complaint filed by the department or any interested party, and, upon proper showing, to issue an injunction restraining such violation or granting such other appropriate relief



1656.52 Fictitious or fraudulent assets; past due paper.-

(1) Any bank shall not carry as an asset of said company any note, obligation, or security which it does not own absolutely or which is known by the bank to be fraudulent or otherwise worthless, and no bank shall carry as an asset in any report to the department or any published report any note or other obligation which is past due or upon which no interest has been paid for.l year or longer, provided, however, that such past due paper may be carried to the extent of the reasonable value of any lien or other collateral given to secure such obligation; and provided further that if suit has been filed to enforce the collection of any such past due obligation, it may be carried at its reasonable value as determined by the board of directors. The .department may after investigation order the revision of any value so determined hereunder.

(2) Any officer of a bank who knowingly places among the assets of said bank any note, obligation or security which it does not own or which to his knowledge is fraudulent or otherwise worthless or who represents to the department or an examiner that any note, obligation, or security carried, or an asset of such bank is the property of the bank and is genuine when it is known to such officers that such representation is false or that such note, obligation or security is fraudulent or otherwise worthless, such officer shall be guilty of a felony.



1656.53 Applicability of chapter 661.-All provisions of chapter 661 shall be applicable to industrial savings banks operating under this chapter.

Hlstory.-s. 53, ch. 57-351; s. 3, ch. 76-168; s. 1, ch. 77-457. 'Note.-Repealed by s. 3, ch. 76-168, as amended hY s. 1, ch. 77-457, effective


744

F.S.1979 CREDIT UNIONS Ch. 657

CHAPTER 657

CREDIT UNIONS

PART I GENERAL PROVISIONS (ss. 657.01-657.247)

PART II FLORIDA CREDIT UNION GUARANTY CORPORATION, INC. · (ss. 657.25-657.268)

657.01 657.02 657.03 657.04 657.05 657.06

657.061 657.07 657.08 657.09 657.10 657.11 657.12 657.13 657.14 657.15 657.16 657.161 657.17 657.18 657.19 657.20 657.21 657.22

657.23

657.24

657.245 657.246 657.247

PART I

GENERAL PROVISIONS

Organization and definition. Amendments. Use of name "credit union." Powers. Membership. Reports to department; examinations;

fees; revocation of certificate of approval.

Disclosure of credit union records. Fiscal year; meetings. Board of directors and committees. Election of officers; duties of directors. Credit committee. Supervisory committee. Capital. Minors. Interest rates. Borrowing power. Loans. Investments. Reserves.

· Dividends. Expulsion; withdrawal. Dissolution. Place of business. Destruction of certain credit union

records. Conversion of credit unions from state to

federal and vice versa. Rental of office space in government-

owned buildings. Central credit unions; definition. Powers of central credit unions. Insurance activities.

1657.01 Organization and definition.-(!) Any seven resident persons of the state who

represent a potential membership of at least 200 persons having a common bond, as defined in this chapter, may apply to the Department of Banking and Finance for permission to organize a credit union. A "credit union" is a cooperative society incorporated for the twofold purpose of promoting thrift among its members and creating a source of credit for them at legitimate rates of interest for provident purposes. A credit union is organized in the following manner:

(a) The applicants execute in duplicate a certificate of organization by the terms of which they agree to be bound. The certificate shall state:

1. The name and location of the proposed credit union.

2. The names and addresses of the subscribers to the certificate and the number of shares subscribed by each.

3. The par value of the shares of the credit union which shall not exceed $10 each.

(b) They next prepare and adopt bylaws for the general governance of the credit union consistent with the provisions of this chapter, and execute the same in duplicate.

(c) The certificate and the bylaws, both executed in duplicate, are forwarded to the department with a filing fee of $5 and an investigation fee of $15 for the use of the state.

(d) The department shall, within 30 days of the receipt of the certificate and bylaws, determine whether they conform with the provisions of this chapter, and whether or not the organization of the credit union in question would benefit the members of it and be consistent with the purposes of this chapter.

(e) Thereupon the department shall notify the applicants of its decision. If it is favorable the department shall issue a certificate of approval, attached to the duplicate certificate of organization and return the same, together with the duplicate bylaws, to the applicants.

(f) The applicants shall thereupon file the duplicate of the certificate of organization, with the certificate of approval attached thereto, with the clerk of the circuit court of the county within which the credit union is to do business, who shall make a record of the certificate and return it, with his certificate of record attached thereto, to the Department of Banking and Finance for permanent record.

(g) Thereupon the applicants shall become and be a credit union, incorporated in accordance with the provisions of this chapter.

(2) In order to simplify the organization of credit unions the department shall cause to be prepared an approved form of certificate of organization and a form of bylaws, consistent with this chapter which may be used by credit union incorporators for . their guidance, and on written application of any seven resident persons of the state, shall supply them without charge with a blank certificate of organization and a copy of said form of suggested bylaws.

History.-s. 1, ch. 14499, 1929; CGL 1936 Supp. 6494(1); s. 1, ch. 59-56; ss. 12, 35, ch. 69-106; s. 1, ch. 75-17i; s. 3, ch. 76-168; s. 1, ch. 77-457. 'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective


745

Ch. 657 CREDIT UNIONS F.S.1979

to that date.

1657.02 Amendments.-Any and all amend· ments to the bylaws must be approved by the Department of Banking and Finance before they become operative.

History.-s. 2, ch. 14499, 1929; CGL 1936 Supp. 6494(2); ss. 12, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457.


1657.03 Use of name "credit union."-lt shall be a misdemeanor of the second degree, punishable as provided ins. 775.082 or s. 775.083, for any person, association, copartnership or corporation (except corporations organized in accordance with the provisions of this chapter) to use the words "credit union" in its name or title. Associations organized under the provisions of this chapter shall include in their corporate names or titles the words "credit union."

History.-s. 3, ch. 14499, 1929; CGL 1936 Supp. 6494(3), 7977(1); s. 671, ch. 71-136; s. 3, ch. 76-168; s. 1, ch. 77-457.


1657.04 Powers.-A credit union shall have the following powers:

(1) To receive the savings of its members either as payment on shares or as deposits (including the right to conduct Christmas clubs, vacation clubs, and other such thrift organizations within the membership.)

(2) To make loans t.o members for provident or productive purposes.

(3) To make loans to a cooperative society or other organization having membership in the credit union.

(4) To deposit its funds in state and national banks.

(5) To invest its funds as hereinafter in this chapter provided.

(6) To borrow money as hereinafter in this chapter indicated.

(7) To make contracts, to sue and be sued, and to incur and pay such operating expenses as are necessary or incidental to the operation thereof, including such membership fees in organizations of credit unions as may be approved by the board of directors, such expenses to be borne by the credit union from current earnings and unallocated surplus.

(8) To exercise such incidental powers as shall be deemed necessary or requisite to carry on effectively the business for which it is incorporated, pursuant to rules of the department.

(9) To purchase reasonable disability insurance, including accidental death benefits, for directors and committee members through insurance companies licensed to do business in this state.

(10) To reimburse directors and committee members for reasonable and necessary expenses incurred in the performance of their duties, under a policy to be determined by a majority vote of the membership at any annual or special meeting.

(11) To amend its bylaws to accept into the field

of membership individuals of a similar common bond of a liquidating credit union.

History.-s. 4, ch. 14499, 1929; CGL 1936 Supp. 6494(4); s. 1, ch. 29739, 1955; s. 2, ch. 59-56; s. 1, ch. 67-186; s. 2, ch. 75-171; s. 3, ch. 76-168; s. 1, ch. 78-457.


1657.05 Membership.-Credit union membership shall consist of the incorporators and such other persons as may be elected to membership and subscribe to at least one share, pay the initial installment thereon, and the entrance fee. Organizations (incorporated or otherwise) composed for the most part of the same general group as the credit union membership may be members. Credit union organization shall be limited to groups (of both large and small membership) having a common bond of occupation, or association or to groups within a welldefined neighborhood, community or rural district.

History.-s. 5, ch. 14499, 1929; CGL 1936 Supp. 6494(5); s. 3, ch. 76-168; s. 1, ch. 77-457.


1657.06 .Reports to department; examinations; fees; revocation of certificate of approval.-

(1) Credit unions shall be under the supervision of the Department of Banking and Finance, hereinafter referred to as the department. They shall report to it at least annually on or before January 31 on blanks supplied by the said department for that purpose. Additional reports may be required. For failure to file reports when due, unless excused for cause, the credit union shall pay to the treasurer of the state $5 for each day of its delinquency. If the department determines that the credit union is violating the provisions of this chapter or is insolvent, the department may suspend the operation of the credit union or may serve notice on the credit union of its intention to revoke the certificate of approval. If, for a period of 15 days after said notice, the violation continues, the department may revoke the certificate and take possession of the business and property of said credit union and maintain possession until such time as the department shall permit it to continue business or its affairs are finally liquidated in the same manner as state banks are liquidated. It may take similar action if the report remains in arrears for more than 15 days.

(2) Credit unions shall be examined at least annually by the department or its agent, except that if a credit union has assets ofless than $25,000, it may accept the audit of a practicing public accountant in place of such examination. The board of directors and supervisory committee shall review the examination report. The recommendations to the board to eliminate violations or exceptions noted therein shall be enforced by the board.

(3)(a) An examination fee shall be paid to the department based on the total amount of resources held by the credit union as follows:

1. With resources up to $10,000, $25; 2. With resources up to $15,000, $50; 3. With resources up to $25,000, $75; 4. With resources up to $50,000, $100; 5. With resources up to $75,000, $125; 6. With resources up to $100,000, $150;

746


7. With resources over $100,000 but less than $1,-000,000, $150 plus $50 for each additional $100,000 or fractional part thereof;

8. With resources over $1,000,000 but less than $5,000,000, $600 plus $45 on each additional $100,-000 or fractional part thereof;

9. With resources over $5,000,000, $2,400 plus $40 on each additional $100,000 or fractional part thereof.

(b) Fees collected under part I of this chapter shall be deposited in the state treasury in a special Bank and Trust Company Trust Fund under the Department of Banking and Finance, and the same are hereby appropriated to the department to be used in administering this chapter. The department shall from time to time formulate and promulgate reasonable rules and regulations governing the conduct of state credit unions doing business in this state.

History.-s. 6, ch. 14499, 1929; CGL 1936 Supp. 6494(6); s. 1, ch. 20312, 1941; s. 1, ch. 23662, 1947; s. 1, ch. 28232, 1953; s. 3, ch. 59·56; s. 1, ch. 63·289; s. 2, ch. 67·186; ss. 12, 35, ch. 69·106; s. 1, ch. 70-216; s. 1, ch. 70-439; s. 138, ch. 71·355; s. 3, ch. 73-326; s. 1, ch. 76-119; s. 3, ch. 76-168; s. 1, ch. 77457.

'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77·457, effective July 1, 1980, except for the possible effect of Jaws affecting this section prior to that date.

657.061 Disclosure of credit union records.(1) All credit union charter applications filed

with the department pursuant to chapter 657, including related information obtained or prepared by the department, shall be open to the public pursuant to chapter 119 and the rules of the department. However, the classes of records and information mentioned in subsection (3) shall be confidential and shall not be disclosed by the department or any of its officials, employees, or agents, except pursuant to an order of a court or a hearing ·officer under chapter 120, or legislative subpoena, as provided by law. Materials supplied to the department by other governmental agencies, federal or state, shall remain the property of the submitting agency and shall be made public only with the consent of such agency or pursuant to appropriate court order or legislative subpoena, as provided by law.

(2)(a) Orders of courts or of hearing officers for the production of confidential records and information shall provide for in camera inspection by the court or the hearing officer and shall be subject to further orders by the court or the hearing officer to protect the confidentiality thereof, except to the extent deemed necessary by the court or the hearing officer to protect the interests of all parties and affected persons or the soundness of individual credit unions or the credit union movement. However, any such order directing the release of information relating to the soundness of individual credit unions or the credit union movement shall be immediately reviewable. A petition filed by the department for review of such order directing the release of information relating to the soundness of individual credit unions or the credit union movement shall automatically stay further proceedings in the trial court or the administrative hearing until the disposition of said petition by the reviewing court; if any other party files such a petition for review, it shall operate as a stay of such proceedings only upon order of the reviewing court.

(b) Confidential records and information furnished in compliance with or in response to a legisla-

tive subpoena shall be confidential communications and shall retain their confidential status while in the possession of any legislative body or committee receiving the same and shall not be made public, and such confidential status shall continue after the legislative body or committee has returned such records and information to the department or other source from which they came. No member of the Legislature or member of the legislative body or committee, or any employee thereof, or any other person shall disclose or make public any of the information found in such records and information furnished in compliance with, or in response to, any such subpoena, except in cases involving investigation or charges against an officer subject to impeachment, and then only to the extent determined by the legislative body or committee to be necessary.

(3) The following records and information of the department are confidential, except such portions thereof which are otherwise matters of public record or general public knowledge:

(a) Personal financial statements or information; personnel, medical, or similar records or information; records or information obtained or prepared by the department with reference to the character or reputation of any person; transaction and application records of a person's share, deposit, or loan accounts; and any record or information which would constitute a clearly unwarranted invasion of personal privacy.

(b) Investigatory records compiled for civil or criminal law enforcement purposes, including investigatory records relating to the process of involuntary liquidation under s. 657.20(2), but only to the extent that the disclosure of such records would:

1. Interfere with enforcement proceedings; 2. Deprive a person or an institution of a right to

a fair trial or an impartial adjudication; 3. Tend to impair the safety or soundness of any

credit union; 4. Constitute an unwarranted invasion of per

sonal privacy; 5. Disclose the identity of a confidential source,

or, in the case of a record compiled by a criminal law enforcement authority in the course of a criminal investigation, confidential information furnished only by the confidential source;

6. Disclose investigative techniques or procedures; or

7. Endanger the life or physical safety oflaw enforcement or department personnel.

(c) Reports of examination or operation and records, or a portion thereof, containing or relating to an examination, operation, or condition report prepared by, or on behalf of or for the use of, the department or any other agency, state or federal, responsible for the regulation or supervision of credit unions, relating to the affairs of any credit union. Reports of examination and operation prepared by, or on behalf of or for the use of, the department shall be the property of the department, but copies thereof may be furnished to the credit union examined for its confidential use. No credit union director, officer, committee members, or employee or any other person, shall disclose in any manner such report or any portion thereof, except such portions thereof which

747


are otherwise matters of public record or general public knowledge, to any person or organization not officially connected with the credit union as an officer, director, committee member, employee, attorney, auditor, or independent auditor.

(4) This section shall not prevent or restrict: (a) ·The publication of reports required to be sub

mitted to the department by s. 657.06(1), or required to be published by applicable federal statutes or regulations.

(b) The furnishing of records or information to any federal agency responsible for the regulation, supervision, or insuring of credit unions.

(c) The disclosure or publication of summaries of condition of the financial institutions and the disclosure or publication of general economic and similar statistics and data, provided any of the foregoing are in such form that the identity of particular financial institutions cannot reasonably be expected to be ascertained therefrom.

(d) The reporting of any suspected criminal activity to appropriate law enforcement agencies.

(5) Every credit union shall cause to be kept, at all times, full and correct records of the names and residences of all the members ofthe credit union, in the principal office where its business is transacted. Such records shall be subject to the inspection of all the members of the credit union and the officers authorized to assess taxes under state authority, during business hours of each business day. A current list of members shall be made available to the department's examiners for their inspection and, upon the request of the department, shall be transmitted to the department, but the department shall not disclose or make public said list or any part thereof. ·

(6) Willful violation of any of the proVisions of this section relating to an unlawful disclosure of confidential information is a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(7) Reports of examinations, investigations, and related information of existing credit unions made by the department, or photographic copies thereof, shall be retained for a period of at least 10 years.

(8) A copy of any document on file with the department which is certified by the department as being a true copy may be introduced in evidence as if it were the original. The department shall establish a schedule of fees for preparing copies of documents.

(9) The department shall have the authority to adopt rules pursuant to this chapter.

History.-s. 1, ch. 77-156; s. 254, ch. 79-400.

1657.07 Fiscal year; meetings.-The financial year of all credit unions shall end December 31. Special meetings may be held in the manner indicated in the bylaws. At all meetings a member shall have but a single vote whatever his share holdings. There shall be no voting by proxy, and a member other than a natural person shall cast a single vote through a delegated agent. Any amendment to the bylaws of a credit union shall be approved by the

department before such amendment shall be effective.

History.-s. 7, ch. 14499, 1929; CGL 1936 Supp. 6494(7); s. 2, ch. 20312, 1941; s. 3, ch. 67-186; ss. 12, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457.


1657.08 Board of directors and committees.At the annual meeting (the organization meeting shall be the first annual meeting) the credit union shall elect a board of directors of not less than five members, a credit committee of not less than three members and a supervisory committee of three members, all to hold office for such terms respectively as the bylaws provide and until successors qualify. However, the board of directors may appoint the credit committee if authorized by the· bylaws of the credit union. A record of the names and addresses of the members of the board and committees and the officers shall be filed with the department within 10 days of their election.

History.-s. 8, ch. 14499, 1929; CGL 1936 Supp. 6494(8); ss. 12, 35, ch. 69-106; s. 1, ch. 71-106, s. 3, ch. 76-168, s. 1, ch. 77-457.


1657.09 Election of officers; duties of directors.-At their first meeting the directors shall elect from their own number a president, vice president, treasurer and clerk, of whom the last two named may be the same individual. The directors shall have general management of the affairs of the credit un-ion, particularly: ·

(1) To act upon all applications for membership, except to the extent that it may have authorized the approval of such applications by an executive com-mittee or by a membership officer. ·

(2) To determine interest rates on loans and on deposits.

(3) To fix the amount of the surety bond which shall be required of all officers, directors, committeemen and employees handling or having access to money, bank accounts or securities owned by or pledged with the credit union, or having power to disburse, or, power to authorize disbursement of funds of the credit union; such bond for each such officer, director, committeeman and employee, or blanket bond for all such officers, directors, committeemen and employees, shall not be less than that shown in the following schedule, based upon the assets of the credit union:

With assets up to $ 5,000 bond of $ 1,000 , " , , 10,000 " " 2,000 " " " " 20,000 " " 4,000 .. .. .. " 35,000 .. 50,000 .. " " " 7 5,000 " " " " 100,000 " " " " 150,000

" 200,000 with assets up to $ 300,000 " " ;, " 500,000 " ,, " " 750,000 " " " " 1,000,000 " " " over 1,000,000

.. 7,000 .. " 10,000 " " . 15,000 " " 20,000 " " 30,000

" 40,000 bond of $ 60,000

" " 80,000 " " 90,000 " " 100,000 " " 100.000

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plus $5,000 for each additional $100,000 of assets. (4) To declare dividends, as provided under s.

657.18. (5) To fill vacancies in the board and in the credit

committee until successors are chosen and qualify. (6) To determine the maximum individual share

holdings and the maximum individual loan which can be made with and without security.

(7) To have charge of investments other than loans to members.

(8) To appoint an executive committee of not less than three directors to act for it in the purchase and sale of securities or the making of loans to other credit unions, or both.

The duties of the officers shall be as determined in the bylaws, except that the treasurer shall be the general manager. No-member ofthe board or of either committee shall, as such, be compensated.

Hlstory.-s. 9, ch. 14499, 1929; CGL 1936 Supp. 6494(9); s. 2, ch. 28232, 1953; s. 3, ch. 29739, 1955; s. 4, ch. 59-56; ss. 2, 3, ch. 63-289; s. 4, ch. 67-186; s. 3, ch. 75-171; s. 3, ch. 76-168; s. 1, ch. 77-457.


1657.10 Credit committee.-(!) The credit committee shall have the general

supervision of all loans to members. Applications for loans shall be on a form prepared by the credit committee, and all applications shall set forth the purpose for which the loan is desired, the security, if any, offered, and such other data as may be required. Within the meaning of this section an assignment of shares or deposits or the endorsement of a note may be deemed security. At least a majority of the members of the credit committee shall pass on all loans and approval must be unanimous. The credit committee shall meet as often as may be necessary after due notice to each member.

(2) The credit committee may appoint one or more loan officers and delegate to them the power to approve loans. Each loan officer shall furnish the credit committee a record of each loan approved or not approved within 7 days after the filing of the application therefor. All loans not acted upon by the loan officer shall be acted upon by the credit committee. No individual shall have authority to disburse funds of the credit union for any loan which has been approved by him in his capacity as a loan officer. Not more than one member of the credit committee may be appointed a loan officer.

Hlstory.-s. 10, ch. 14499, 1929; CGL 1936 Supp. 6494(10); s. 4, ch. 63-289; s. 1, ch. 73-22; s. 3, ch. 76-168; s. 1, ch. 77-457.

'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective July 1, 1980, except for the possible effect of laws affeeting this section prior to that date.

1657.11 Supervisory committee.(!) The supervisory committee shall: (a) Make an examination of the affairs of the

credit union at least quarterly, including an audit of its books and, in the event said committee feels such action to be necessary, it shall call the members together thereafter and submit to them its report.

(b) Make an annual audit and report and submit the same at the annual meeting of the members; such audits shall include verification of accounts of members from time to time and not less than every 2 years.

(c) By unanimous vote, if it deem such action to be necessary to the proper conduct of the credit union, suspend any officer, director or member of the committee and call the members together to act on such suspension. The members at said meeting may sustain such suspension and remove such officer permanently or may reinstate said officer.

(2) By majority vote the supervisory committee may call a special meeting of the members to consider any matter submitted to it by said committee. The said committee shall fill vacancies in its own membership.

History.-s. 11, ch. 14499, 1929; CGL 1936 Supp. 6494(11); s. 5, ch. 63-289; s. 3, ch. 76-168; s. 1, ch. 77-457.


1657.12 Capital.-The capital of a credit union shall consist of the payments that have been made to it by several members thereof on shares. The credit union shall have a lien on the shares and deposits of a member for any sum due to the credit union from said member or for any loan endorsed by him. A credit union may charge an entrance fee as may be provided by the bylaws.

Hlstory.-s. 12, ch. 14499, 1929; CGL 1936 Supp. 6494(12); s. 3, ch. 76-168; s. 1, ch. 77-457.


1657.13 Minors.-Shares may be issued and deposits received in the name of a minor or in trust in such manner as the bylaws may provide. The name of the beneficiary must be disclosed to the credit union.

Hlstory.-s. 13, ch. 14499, 1929; CGL 1936 Supp. 6494(13); s. 3, ch. 76-168; s. 1, ch. 77-457.


1657.14 Interest rates.-Interest rates on loans made by a credit union shall not exceed 1.5 percent a month on unpaid balances.

History.-s. 14, ch. 14499, 1929; CGL 1936 Supp. 6494(14); s. 3, ch. 76-168; s. 1, ch. 77-457; s. 8, ch. 79-274.

'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective July 1, 1980, except for the possible effect of laws affecting this section prior to that date. This section as amended by ch. 79-274 applies "only to loans or advances of credit made on or subsequent to" July 1, 1979, "and shall not be construed as diminishing the force and effect of any laws applying to loans or advances of credit completed prior to that date." cf.-s. 687.01 Interest and usury.

1657.15 Borrowing power.-A credit union may borrow from any source in total a sum not exceeding 50 percent of its unimpaired capital.

Hlstory.-s. 15, ch. 14499, 1929; CGI~ 1936 Supp. 6494(15); s. 4, ch. 29737, 1955; s. 6, ch. 63-289; s. 3, ch. 76-168; s. 1, ch. 77-457. 'Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective


1657.16 Loans.-A credit union may loan to members, subject to the conditions contained in the bylaws. Loans may be secured by a first or a second mortgage on real property. A borrower may repay his loan in whole or in part any day the office of the credit union is open for business. A director, officer, or committeeman may borrow from the credit union in which he holds office, provided the combined loans to aH directors, officers, and committeemen, except share loans, shall not exceed 10 percent ofthe

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capital and deposits of the credit union, and provided, further, that all loans to directors, officers, and committeemen (except share loans) must be approved by the credit committee and the board of directors without said director, officer, or committeeman having a vote on his loan. No directors, officers, or committeemen may be comakers or endorsers on loans obtained from the credit union in which they hold office. The department shall have the authority to adopt rules pursuant to this section. Such rules shall be designed to promote and preserve the liquidity and soundness of the credit union.

History.-s. 16, ch. 14499, 1929; CGL 1936 Supp. 6494(16); s. 7, ch. 63-289; s. 1, ch. 69-30; s. 4, ch. 75-171; s. 3, ch. 76-168; s. 1, ch. 77-151; s. 1, ch. 77-457.


1657.161 Investments.-A credit union, after taking care of the provident and productive borrowing needs of its members, may invest its surplus funds in only the following:

(1)(a) Obligations of the United States, including bonds and securities upon which payment of principal and interest is fully guaranteed by the United States;

(b) In loans to other credit unions in the state provided that no such loan may exceed 25 percent of the unimpaired capital of the lending credit union nor be made for a period in excess of 1 year.

(2) General obligations of states and general obligations of counties, municipalities or county road, school, hospital and other public purpose districts of the state; provided, that such securities shall not be eligible for investment if they have been in default either as to principal or interest within 5 years prior to date of purchase.

maturity of any corporation within the United States if such bonds are rated by at least two nationally recognized rating services in any one of the three highest classifications approved by the department of the currency for the investment of the funds of national banks; provided, however, that if only one nationally recognized rating service shall rate such obligations, then such rating service must have rated such obligations in any one of the two highest classifications heretofore mentioned. Not more than 10 percent of the total assets of the credit union shall be so invested, and not more than $15,000 or 1 percent of the total assets of the credit union, whichever is greater, shall be invested in any one corporation's bonds.

(8) A credit union may invest in securities, obligations, participations, or other instruments of, issued by, or fully guaranteed as to principal and interest by, the United States Government or any agency thereof or any trust or trusts established for investing directly or collectively in the same.

(9) Certificates of deposit or time deposits of other credit unions, state and national banks, and savings and loan associations.

(10) Capital stock of credit union services corporations in an amount not to exceed 3 percent of their unimpaired capital and surplus. For the purposes of this subsection, "credit union services corporation" means a corporation organized to perform only business administration services for two or more credit unions, at least one of which is subject to supervision by the department.

(11) The assets ofliquidating credit unions within the state.

(12) Shares and other savings accounts of the United States Central Credit Union and the Southeast Corporate Federal Credit Union.

History.-s. 5, ch. 29739, 1955; s. 1, ch. 57-346; ss. 8, 9, ch. 63-289; s. 2, ch. 69-30; ss. 12, 35, ch. 69-106; s. 3, ch. 71-106; s. 5, ch. 75-171; s. 3, ch. 76-168; s. 1, ch. 76-192; s. 1, ch. 77-457.

' Note.-Repealed by s. 3, ch. 76-168, as amended by s. 1, ch. 77-457, effective July 1, 1980, except for the possible effect of laws affecting this section prior to that date.

(3) First mortgage bonds of railroad and public service corporations; provided, that the investment in bonds of any such corporations shall not exceed $15,000, or 1 percent of the assets of the credit union, whichever is greater; and provided further that such securities shall not be eligible for investment if they have been in default either as to principal or interest within 5 years prior to date of purchase. 1657.17 Reserves.-

(4) Shares of building and loan associations, sav- (1) All entrance fees (which may be provided by ings and loan associations and other credit unions; the bylaws), and, each year, before the declaration of provided that the investment in any credit union a dividend, but after an interest refund, if any, is shall not exceed $15,000 or 1 percent of the assets of declared, 20 percent of the net earnings, shall be set the credit union, whichever is greater, and that the aside as a reserve fund, which reservation of earnaggregate of all such investments shall not exceed 25 ings shall continue until the reserve fund equals $3,percent of the unimpaired capital of the investing 000. After the reserve has reached $3,000 the credit credit union. union shall continue each year, before the declara-

(5) Real estate and improvements thereon that tion of a dividend, but after an interest refund, if may be required for its accommodation in the trans- any, is declared, to place 10 percent of the net earnaction of its business; provided, that before any such ings in a reserve fund, which reservation of earnings investment is made, the proposal to make it shall be shall continue until the reserve fund equals 10 persubmitted to the Department of Banking and Fi- cent of the total ofthe outstanding loans of the credit nance and its approval obtained and, provided fur- union. ther that it shall not grant such approval until it is (2) A credit union which purchases federal share satisfied that the proposed investment is necessary, insurance may elect to use the following reserve rethat the amount thereof is commensurate with the quirement. Immediately before the payment of each size and needs of the credit union, and that it will be dividend, the gross earnings of the credit union shall beneficial to the members. be determined. From this amount there shall be set

(6) Furniture, fixtures, and equipment that may aside, as a regular reserve against losses on loans be required in the transaction of its business. and against such other losses as may be specified in

(7) With the approval of the department, credit regulations prescribed under this chapter, sums in unions may invest in corporation bonds with a fixed accordance with the following schedule: 10 percent

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