Summary of SB 394 - Reinsurance Intermediary Managers

Bill Overview

Bill Number: SB 394

Title: Reinsurance Intermediary Managers

Status: Filed

Introduced: December 14, 2024

Sponsor: Senator Leek

SB 394 is a legislative proposal aimed at amending existing statutes related to reinsurance intermediary managers in Florida. The bill seeks to clarify definitions and exclusions within the framework governing reinsurance intermediaries.

Purpose and Intent

The primary purpose of SB 394 is to refine the definitions associated with reinsurance intermediary managers and controlling persons. By doing so, the bill aims to enhance regulatory clarity and ensure that certain entities are appropriately categorized under Florida law.

Key Provisions

The bill proposes the following significant changes to Section 626.7492 of the Florida Statutes:

1. Definition of "Controlling Person":

   • The term "controlling person" is defined as any individual or entity that has the power to direct the management or activities of a reinsurance intermediary, either directly or indirectly.

2. Revised Definition of "Reinsurance Intermediary Manager":

   • The definition of "reinsurance intermediary manager" is updated to specify that it includes any person who has the authority to bind or manage reinsurance business for a reinsurer.
   • Certain individuals and entities are explicitly excluded from this definition, including:
     • Employees of the reinsurer.
     • Managers of the U.S. branch of an alien reinsurer.
     • Underwriting managers who manage all reinsurance operations under common control with the reinsurer, provided their compensation is not based on premium volume.
     • Managers of groups or organizations engaged in joint underwriting or reinsurance, subject to state regulatory examination.
     • Underwriting managers managing facultative risks, if such risks constitute less than 10% of the reinsurer's annual gross written premium.

3. Reenactment of Related Statutes:

   • The bill reenacts Section 626.022(1)(a) to incorporate the amendments made to Section 626.7492, ensuring consistency across related statutes.

Impact

The changes proposed in SB 394 would primarily affect:
- Reinsurance Intermediary Managers: The bill clarifies who qualifies as a reinsurance intermediary manager, potentially impacting how these entities operate and are regulated.
- Reinsurers: The exclusions may affect how reinsurers manage their operations and relationships with intermediary managers.
- Regulatory Authorities: The bill provides clearer definitions that may streamline regulatory oversight and compliance processes.

Timeline

• Effective Date: The provisions of this act are set to take effect on July 1, 2026.

Conclusion

SB 394 aims to enhance the regulatory framework surrounding reinsurance intermediary managers in Florida by refining definitions and clarifying exclusions. This legislative effort is intended to improve the clarity and efficiency of the regulatory environment for reinsurance practices in the state.