Florida Surplus Lines Service Office.

(1) There is hereby created a nonprofit association to be known as the Florida Surplus Lines Service Office. The Legislature hereby finds and declares that the establishment of a surplus lines self-regulating organization is necessary to establish a system that will permit better access by consumers to approved unauthorized insurers. Accordingly, the Legislature declares that this section shall be liberally construed and applied to promote its underlying purposes, which will protect consumers seeking insurance in this state, permit surplus lines insurance to be placed with approved surplus lines insurers, establish a self-regulating organization which will promote and permit orderly access to surplus lines insurance in this state, enhance the number and types of insurance products available to consumers in this state, provide a source of advice and counsel for the benefit of consumers, surplus lines agents, insurers, and government agencies concerning the operation of the surplus lines insurance market, and protect the revenues of this state.

(2) All surplus lines agents shall, as a condition of holding a license as a surplus lines agent in this state, be deemed to be members of this association and shall report to and file with the service office a copy of or information on each surplus lines insurance policy or document as provided in the plan of operation adopted under subsection (5). The service office shall immediately report the particulars of any unfiled policy to the department for enforcement of compliance with the Florida Surplus Lines Law.

(3) The association shall perform its functions under a plan of operation adopted under subsection (5). It shall exercise its powers through a board of governors established under subsection (4). The association shall be regulated by the office and is subject to the applicable provisions of this code and the rules of the commission and, with respect to surplus lines agents, rules of the department. The service office shall conduct the following activities provided in the plan of operation adopted under subsection (5):

(a) Receive, record, and review all surplus lines insurance policies or documents.

(b) Maintain records of the surplus lines policies reported to the service office and prepare monthly reports for the office in such form as the commission may prescribe.

(c) Prepare and deliver to each surplus lines agent quarterly reports of each surplus lines agent’s business in such form as the commission may prescribe, and collect and remit to the department the surplus lines tax as provided for in s. 626.932.

(d) Perform a reconciliation of the policies written in the nonadmitted market, as provided by nonadmitted insurers, with the policies reported to the service office by the surplus lines agents, and prepare and deliver to the office a report on the results of the reconciliation in such form as the commission may prescribe.

(e) Submit to the office for review and approval an annual budget for the operation of the service office.

(f) Collect from each surplus lines agent a service fee of up to 0.3 percent, as determined by the office, of the total gross premium of each surplus lines policy or document reported under this section, for the cost of operation of the service office. The service fee shall be paid by the insured.

(g) Employ and retain such personnel as are necessary to carry out the duties of the service office.

(h) Borrow money, as necessary, to effect the purposes of the service office.

(i) Enter into contracts, as necessary, to effect the purposes of the service office.

(j) Perform such other acts as will facilitate and encourage compliance with the surplus lines law of this state and rules adopted thereunder.

(k) Provide such other services as are incidental or related to the purposes of the service office.

(4) The association shall operate under the supervision of a board of governors consisting of:

(a) Five individuals nominated by the Florida Surplus Lines Association and appointed by the department from the regular membership of the Florida Surplus Lines Association.

(b) Two individuals appointed by the department, one from each of the two largest domestic agents’ associations, each of whom shall be licensed surplus lines agents.

(c) The Insurance Consumer Advocate.

(d) One individual appointed by the department, who shall be a risk manager for a large domestic commercial enterprise.

Each board member shall be appointed to serve beginning on the date designated by the plan of operation and shall serve at the pleasure of the department for a 3-year term, such term initially to be staggered by the plan of operation so that three appointments expire in 1 year, three appointments expire in 2 years, and three appointments expire in 3 years. Members may be reappointed for subsequent terms. The board of governors shall elect such officers as may be provided in the plan of operation.

(5)(a) The association shall submit to the office a plan of operation, and any amendments thereto, to provide operating procedures for the administration of the service office. The plan of operation and any amendments thereto shall become effective upon approval by order of the office. The association shall submit to the department an agent’s manual, and any amendments thereto, which shall provide administrative procedures that surplus lines insurance agents must follow with respect to their duties to the service office. The manual shall be prepared in cooperation with the department, and any changes, updates, or amendments shall be submitted to the department before distribution. The manual shall be approved by order of the department.

(b) If the association fails to submit a suitable plan of operation within 180 days following the effective date of this act, or if at any time thereafter the association fails to submit suitable amendments to the plan of operation, the office shall, after notice and hearing, adopt by order a plan of operation, or amendments to a plan of operation, and the commission shall adopt such rules as are necessary or advisable to effectuate the provisions of this section. Such rules shall continue in force until modified by the commission or superseded by a plan of operation submitted by the association and approved by order of the office.

(c) All surplus lines agents licensed in this state must comply with the plan of operation and the agent’s manual.

(6) The office shall, at such times deemed necessary, make or cause to be made an examination of the association. The costs of any such examination shall be paid by the association. During the course of such examination, the governors, officers, agents, employees, and members of the association may be examined under oath regarding the operation of the service office and shall make available all books, records, accounts, documents, and agreements pertaining thereto.

(7) There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member or its agents or employees, agents or employees of the association, the commission, the office, members of the board of governors of the association, or the department or its representatives, for any action taken by them in the performance of their duties or responsibilities under this subsection. Such immunity does not apply to actions for breach of any contract or agreement pertaining to insurance, or any willful tort.

(8)(a) Information furnished to the department under s. 626.923 or contained in records subject to examination by the department under s. 626.930 is confidential and exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution if disclosure would reveal information specific to a particular policy or policyholder. The exemption does not apply to any proceeding instituted by the department or office against an agent or insurer.

(b) Information furnished to the Florida Surplus Lines Service Office under the Surplus Lines Law is confidential and exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution if disclosure would reveal information specific to a particular policy or policyholder. The Florida Surplus Lines Service Office may provide such information to the department in the furtherance of its duties and responsibilities. The exemption does not apply to any proceeding instituted by the department or office against an agent or insurer.