SB 1740 — Insurance

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Florida Senate - 2025 CS for SB 1740 597-02493-25 20251740c1 1.

or Pagee. 4 of 16 CODING:

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Florida Senate - 2025 SB 1740 11-01248B-25 20251740__ e.

The department may conduct criminal record checks of inspectors used byPage wind5 certificationof entities.21 CODING:

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Florida Senate - 2025 CS for SB 1740 597-02493-25 20251740c1 by wind certification entities.

The home must be a dwelling with an insured value of Page$700,000 5or ofless. 16 CODING:

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Florida Senate - 2025 SB 1740 11-01248B-25 20251740__ $700,000 or less.

The homeowner must agree to provide to the department informationPage received6 from the homeowner’s insurer identifying the discounts realized by the homeowner because of the21 mitigationCODING: improvements funded through the program.

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Florida Senate - 2025 CS for SB 1740 597-02493-25 20251740c1 information received from the homeowner’s insurer identifying the discounts realized by the homeowner because of the mitigation improvements funded through the program.

The program’s eligibility requirements for a grant have changed since the original application date, and the applicant Pagereasonably 6believes ofthat 16he CODING:or she is an eligible homeowner under the new requirements.

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Florida Senate - 2025 SB 1740 11-01248B-25 20251740__ reasonably believes that he or she is an eligible homeowner under the new requirements.

(c) All grants must be matched on the basis of $1 provided byPage the7 applicant for $2 provided by the state up to a maximum state contribution of $10,00021 towardCODING: the actual cost of the mitigation project, except as provided in paragraph (h).

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Florida Senate - 2025 CS for SB 1740 597-02493-25 20251740c1 by the applicant for $2 provided by the state up to a maximum state contribution of $10,000 toward the actual cost of the mitigation project, except as provided in paragraph (h).

(g) A grant may be awarded only for each mitigation improvement that, when applied to the home, will result in a Pageproperty 7insurance ofmitigation 16credit, CODING:discount, or other rate differential.

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Florida Senate - 2025 SB 1740 11-01248B-25 20251740__ property insurance mitigation credit, discount, or other rate differential.

(h)Page Low-income8 homeowners,of as21 definedCODING: in s.

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Florida Senate - 2025 CS for SB 1740 597-02493-25 20251740c1 (h) Low-income homeowners, as defined in s.

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Florida Senate - 2025 SB 1740 11-01248B-25 20251740__ d.

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Florida Senate - 2025 CS for SB 1740 597-02493-25 20251740c1 b.

If a homeowner fails to comply with this paragraph, Pagehis 9or ofher 16application CODING:is deemed abandoned and the grant money reverts to the department.

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Florida Senate - 2025 SB 1740 11-01248B-25 20251740__ his or her application is deemed abandoned and the grant money reverts to the department.

(4) EDUCATION, CONSUMER AWARENESS, AND OUTREACH.— (a)Page The10 department may undertake a statewide multimedia public outreach and advertising campaign to inform consumers of the21 availabilityCODING: and benefits of hurricane inspections and of the safety and financial benefits of residential hurricane damage mitigation.

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Florida Senate - 2025 CS for SB 1740 597-02493-25 20251740c1 (a) The department may undertake a statewide multimedia public outreach and advertising campaign to inform consumers of the availability and benefits of hurricane inspections and of the safety and financial benefits of residential hurricane damage mitigation.

including rules governing hurricane mitigation inspections and grants, mitigation contractors, and Pagetraining 10 of 16inspectors CODING:and contractors;

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Florida Senate - 2025 SB 1740 11-01248B-25 20251740__ training of inspectors and contractors;

(8) CONTRACT MANAGEMENT.— (a) The department may contract with third parties for grants management, inspection services, contractor services for low-incomePage homeowners,11 informationof technology,21 educationalCODING: outreach, and auditing services.

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Florida Senate - 2025 CS for SB 1740 597-02493-25 20251740c1 low-income homeowners, information technology, educational outreach, and auditing services.

(10) REPORTS.—The department shall make an annual report on the activities of the program that shall account for the use of Pagestate 11funds and indicate the number of 16inspections CODING:requested, the number of inspections performed, the number of grant applications received, the number and value of grants approved, and the estimated average annual amount of insurance premium discounts and total estimated annual amount of insurance premium discounts homeowners received from insurers as a result of mitigation funded through the program.

The report must be delivered to the President of the Senate and the Speaker of the House of Representatives by February 1 of each year.

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Florida Senate - 2025 CS for SB 1740 11-01248B-25597-02493-25 20251740__20251740c1 stateSection funds2. and indicate the number of inspections requested, the number of inspections performed, the number of grant applications received, the number and value of grants approved, and the estimated average annual amount of insurance premium discounts and total estimated annual amount of insurance premium discounts homeowners received from insurers as a result of mitigation funded through the program.

The report must be delivered to the President of the Senate and the Speaker of the House of Representatives by February 1 of each year.

Section 2.

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Florida Senate - 2025 SB 1740 11-01248B-25 20251740__ 1.

or (g) Notwithstanding paragraphs (a), (d), and (e), for an insurerPage that13 only transacts residential property insurance in the form of renter’s21 insurance,CODING: tenant’s coverage, cooperative unit owner insurance, or any combination thereof, $12.5 $10 million.

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Florida Senate - 2025 CS for SB 1740 597-02493-25 20251740c1 insurer that only transacts residential property insurance in the form of renter’s insurance, tenant’s coverage, cooperative unit owner insurance, or any combination thereof, $12.5 $10 million.

(2) Any person who was an officer or director of an insurer doing business in this state, was the attorney in fact of a reciprocal insurer doing business in this state, or was an Pageofficer 13or director of 16an CODING:attorney in fact of a reciprocal insurer doing business in this state and who served in that capacity within the 5-year period before the date such insurer or reciprocal insurer became insolvent, for any insolvency that occurs on or after July 1, 2025, may not thereafter do any of the following:

(a) Serve as an officer or a director of an insurer authorized in this state.

(b) Serve as an officer or a director of a managing general Page 14 of 21 CODING:

Florida Senate - 2025 CS for SB 1740 11-01248B-25597-02493-25 20251740__20251740c1 officeragent or director of an attorney in fact of a reciprocal insurer doingauthorized business in this statestate. and who served in that capacity within the 5-year period before the date such insurer or reciprocal insurer became insolvent, for any insolvency that occurs on or after July 1, 2025, may not thereafter do any of the following:

(a) Serve as an officer or a director of an insurer authorized in this state.

(b) Serve as an officer or a director of a managing general agent of an insurer authorized in this state.

(b) For any violation of paragraph (2)(b), paragraph (2)(c), or paragraph (2)(d), the office shall prohibit an Pageinsurer 14or ofreciprocal 16insurer CODING:authorized in this state from paying any compensation to a managing general agent, affiliate, or attorney in fact that has an officer or director or is an attorney in fact that engaged in such violation until the office determines the violation has been remedied.

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Florida Senate - 2025 SB 1740 11-01248B-25 20251740__ insurer or reciprocal insurer authorized in this state from paying any compensation to a managing general agent, affiliate, or attorney in fact that has an officer or director or is an attorney in fact that engaged in such violation until the office determines the violation has been remedied.

current insurers.— (1) To maintain a certificate of authority to transact any onePage kind15 or combinations of kinds21 ofCODING: insurance, as defined in part V of this chapter, an insurer in this state must at all times maintain surplus as to policyholders at least the greater of:

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Florida Senate - 2025 CS for SB 1740 597-02493-25 20251740c1 one kind or combinations of kinds of insurance, as defined in part V of this chapter, an insurer in this state must at all times maintain surplus as to policyholders at least the greater of:

on Pageor 15after ofJuly 161, CODING:2030, and until June 30, 2035, $8.75 million;

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Florida Senate - 2025 SB 1740 11-01248B-25 20251740__ or after July 1, 2030, and until June 30, 2035, $8.75 million;

For such an insurer holding a certificate of authority beforePage July16 1,of 2025,21 andCODING: until June 30, 2030, $10 million;

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Florida Senate - 2025 CS for SB 1740 597-02493-25 20251740c1 before July 1, 2025, and until June 30, 2030, $10 million;

Paragraph (a) of subsection (2) of section 627.062, Florida Statutes, is amended to read:

627.062 Rate standards.— (2) As to all such classes of insurance:

(a) Insurers or rating organizations shall establish and use rates, rating schedules, or rating manuals that allow the insurer a reasonable rate of return on the classes of insurance written in this state.

A copy of rates, rating schedules, rating manuals, premium credits or discount schedules, and surcharge schedules, and changes thereto, must be filed with the office under one of the following procedures:

1.

If the filing is made at least 90 days before the proposed effective date and is not implemented during the office’s review of the filing and any proceeding and judicial review, such filing is considered a “file and use” filing.

In such case, the office shall finalize its review by issuance of a notice of intent to approve or a notice of intent to disapprove within 90 days after receipt of the filing.

If the 90-day period ends on a weekend or a holiday under s.

110.117(1)(a)-(i), it must be extended until the conclusion of the next business day.

The notice of intent to approve and the notice of intent to Page 17 of 21 CODING:

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Florida Senate - 2025 CS for SB 1740 597-02493-25 20251740c1 disapprove constitute agency action for purposes of the Administrative Procedure Act.

Requests for supporting information, requests for mathematical or mechanical corrections, or notifications notification to the insurer by the office of its preliminary findings do does not toll the 90-day period during any such proceedings and subsequent judicial review.

The rate is shall be deemed approved if the office does not issue a notice of intent to approve or a notice of intent to disapprove within 90 days after receipt of the filing.

The office may not request that an insurer waive such deemed approval for any residential property insurance rate filing in which the insurer proposes a rate decrease, provided that the decrease is not solely due to a reduction in coverage or changes to policy forms.

The office may not issue a notice of intent to disapprove a residential property insurance rate filing in which the insurer proposes a rate decrease unless it has completed a finalized review.

2.

If the filing is not made in accordance with subparagraph 1., such filing must be made as soon as practicable, but within 30 days after the effective date, and is considered a “use and file” filing.

An insurer making a “use and file” filing is potentially subject to an order by the office to return to policyholders those portions of rates found to be excessive, as provided in paragraph (h).

3.

For all property insurance filings made or submitted after January 25, 2007, but before May 1, 2012, an insurer seeking a rate that is greater than the rate most recently approved by the office shall make a “file and use” filing.

For purposes of this subparagraph, motor vehicle collision and Page 18 of 21 CODING:

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Florida Senate - 2025 CS for SB 1740 597-02493-25 20251740c1 comprehensive coverages are not considered property coverages.

The provisions of this subsection do not apply to workers’ compensation, employer’s liability insurance, and motor vehicle insurance.

Section 6.

Section 627.4263, Florida Statutes, is created to read:

627.4263 Use of algorithms, artificial intelligence systems, and machine learning systems in claims handling.— (1) As used in this section:

(a) “Algorithm” means a clearly specified mathematical process for computation that uses rules designed to give prescribed results.

(b) “Artificial intelligence system” means a machine-based system that may have varying levels of autonomy and that can, for a given set of objectives, generate outputs such as predictions, recommendations, content, or other outputs influencing decisions made in real or virtual environments.

(c) “Machine learning system” means an artificial intelligence system that has the ability to learn from provided data without being explicitly programmed.

(d) “Qualified human professional” means an individual who, under the Florida Insurance Code, may have authority to adjust or deny a claim or a portion of a claim and has such authority over a particular claim.

(2) An insurer’s decision to deny a claim or any portion of a claim must be made by a qualified human professional.

(3) A qualified human professional must also:

(a) Analyze the facts of the claim and the terms of the Page 19 of 21 CODING:

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Florida Senate - 2025 CS for SB 1740 597-02493-25 20251740c1 insurance policy independently of any system or algorithm.

(b) Review the accuracy of any output generated by such a system or algorithm.

(c) Conduct any review of a claim adjustment or claim decision that was made by another qualified human professional.

(4) An insurer shall maintain detailed records of the activities of qualified human professionals that are required under this section, including:

(a) The name and title of the qualified human professional who made the decision to deny the claim or a portion of the claim and of any qualified human professional who reviewed the claim adjustment or claim decision.

(b) The date and time of the claim decision and of any review of the claim adjustment.

(c) Documentation of the basis for the denial of the claim or a portion of the claim, including any information provided by an algorithm, artificial intelligence system, or machine learning system.

(5) An artificial intelligence system, a machine learning system, or an algorithm may not serve as the sole basis for determining whether to deny a claim.

(6) In all denial communications to a claimant, an insurer shall:

(a) Clearly identify the qualified human professional who made the decision to deny the claim or a portion of the claim.

(b) Include a statement affirming that an algorithm, an artificial intelligence system, or a machine learning system did not serve as the sole basis for determining whether to deny the claim.

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Florida Senate - 2025 CS for SB 1740 597-02493-25 20251740c1 (7) An insurer that uses an algorithm, an artificial intelligence system, or a machine learning system as part of its claims handling process must detail in its claims handling manual the manner in which such systems are used and the manner in which the insurer complies with this section.

(8) The office may conduct market conduct examinations and investigations or use any method it deems necessary to verify compliance with this section.

Section 7.

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