- House Bill 1185 aims to protect consumers in various financial areas, including mortgage lending, insurance, and check-cashing businesses.
- The legislation introduces new layers of protection for crowdfunding, distributed energy generation systems, annuities, and service agreements.
- The bill also permits loan originators to work remotely, targets check-cashing establishments, tightens financial regulations for certain entities, and makes provisions for crowdfunding campaigns related to disasters.
- Financial regulations for certain entities have also been tightened, including changes to notification requirements for insurance agents and adjusting firms.
- The measure has received public endorsement from Florida Chief Financial Officer Jimmy Patronis.
House Bill 1185, a piece of legislation targeting consumer protection, cleared its final committee stop in the House Commerce Committee this week. The measure addresses financial areas of concern including mortgage lending, insurance, and check-cashing businesses while adding new layers of protection to crowd-funding, distributed energy generation systems, annuities, and service agreements.
One aspect of the bill, introduced by Rep. Mike Giallombardo, reduces the time insurers have to cancel policies for reasons other than material misstatement or non-payment of premiums. It additionally revises laws related to public adjusters and requires additional disclosures and record-keeping for public adjusters.
The measure also targets check-cashing establishments, requiring that if a cashed legal tender exceeds $1,000, the vendor would be required to maintain copies of the payment methods and customer files, including their photo identification and thumbprint.
In an effort to combat workers’ compensation fraud, HB 1185 prohibits check-cashing businesses from cashing corporate checks when the total amount of all checks cashed for each payee exceeds 200 percent of the payee’s workers’ compensation policy coverage.
The bill also makes provisions for crowd-funding campaigns related to disasters, mandating that a crowdfunding organizer must provide accounting records to the hosting platform that shows all donations received and expended by the campaign. Moreover, the hosting platform would be required to publish all received accountings on its website.
The crowdfunding component received a public endorsement from state Chief Financial Officer Jimmy Patronis, who previously made attempts to tackle similar scams. In 2021, he wrote a letter to the Federal Trade Commission requesting assistance in managing fraudulent GoFundMe campaigns that emerged following the Surfside condo collapse in Miami.
“Enough is enough,” said Patronis. “This year, I’m calling on the Florida Legislature to help pass meaningful consumer protections to crack down on crowdsourced fraud by adding much-needed transparency. Unfortunately, tragedy will strike Florida again, and we must step up and stop these scams from using disasters to defraud well-meaning Floridians to line their own pockets.”
The bill further amends service agreements and distributed energy generation system disclosures to reflect the most recent updates to the National Association of Insurance Commissioners’ Annuity Transactions Model Regulation. Giallombardo’s legislation provides an exception to the unearned premium reserve requirements for service agreement companies and revises solvency requirements for manufacturers who sell service warranties.
Financial regulations for certain entities have also been tightened, including changes to notification requirements for insurance agents and adjusting firms. Insurance agents are now required to notify the Department of Financial Services (DFS) of any changes to their contact information within five days of the change, rather than the previous 30-day requirement. Adjusting firms are not subject to the same name disapproval standards as insurance agencies, but the new legislation does prohibit the use of certain words that could mislead customers into believing they are doing business with a governmental entity.
The legislation also permits loan originators to work remotely if they meet certain criteria. Previously, mortgage brokers and lenders were required to maintain a physical office, which made it difficult for businesses to operate efficiently. The new legislation allows greater flexibility in operations and may lead to cost savings.