CHAPTER 631

631.001 Title, construction, and purpose. (1) This part constitutes and may be cited as the “Insurers Rehabilitation and Liquidation Act.” (2) This part shall be liberally construed to effect the purposes of this part. (3) The purposes of this part, which are integral elements of the regulation of the business of insurance and are of vital public interest and concern, are to: (a) Protect the interests of policyholders, creditors, and other claimants and the public. (b) Provide a comprehensive scheme for administering insurer receiverships. (c) Detect any potentially dangerous condition in an insurer and promptly apply appropriate corrective measures. (d) Implement improved methods for rehabilitating insurers, which methods involve the cooperation and management expertise of the insurance industry. (e) Enhance the efficiency and economy of the liquidation process by clarifying the law to minimize legal uncertainty and litigation. (f) Establish a system to equitably apportion any unavoidable loss. (g) Administer insurer receiverships more efficiently on an interstate and international basis by facilitating cooperation between states and by extending the scope of personal jurisdiction over debtors of the insurer outside this state. (h) Maximize recovery of assets for the benefit of the insurer’s estate; policyholders, creditors, and other claimants; and the public. History. — s. 737, ch. 59-205; s. 1, ch. 70-27; s. 1, ch. 70-439; s. 809(1st), ch. 82-243; s. 1, ch. 83-38; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 3, ch. 2002-25. Note. — Consolidation of s. 631.001 and former s. 631.211. 631.011 Definitions. For the purpose of this part, the term: (1) “Affiliate” means any entity which exercises control over or is controlled by the insurer, directly or indirectly through: (a) Equity ownership of voting securities; (b) Common managerial control; or (c) Collusive participation by the management of the insurer and affiliate in the management of the insurer or the affiliate. (2) “Ancillary state” means, any state other than a domiciliary state. (3) “Assets,” as used in this section, means only allowed assets as defined in chapter 625. (4) “Bona fide holder for value” means a person who, while not possessing information that would lead a reasonable person similarly situated to believe that the insurer is insolvent or is experiencing an impairment of capital or an impairment of surplus and while unaware of the imminence or pendency of any receivership proceeding against the insurer, has, in the exercise of reasonable business judgment, exchanged his or her own funds, assets, or property for funds, assets, or property of the insurer having an equivalent market value. (5) “Court” refers to the circuit court in which the receivership proceeding is pending. (6) “Delinquency proceeding” means any proceeding commenced against an insurer pursuant to this chapter for the purpose of liquidating, rehabilitating, reorganizing, or conserving such insurer. (7) “Domiciliary state” means the state in which an insurer is incorporated or organized or, in the case of an insurer incorporated or organized in a foreign country, the state in which such insurer, having become authorized to do business in such state, has, at the commencement of a delinquency proceeding, the largest amount of its assets held in trust and assets held on deposit for the benefit of its policyholders or policyholders and creditors in the United States; and any such insurer is deemed to be domiciled in such state. (8) “Fair consideration” means that consideration which is given for property or assets of an insurer when, in exchange for the funds, assets, or property and in good faith, property is conveyed, services are rendered, or an enforceable obligation not invalidated by the receivership proceedings is created having a value to the insurer of not less than the value of the funds, assets, or property given in exchange. (9) “Foreign country” means territory not in any state. (10) “General assets” means all property, real, personal, or otherwise, not specifically mortgaged, pledged, deposited, or otherwise encumbered for the security or benefit of specified persons or a limited class or classes of persons, and as to such specifically encumbered property the term includes all such property or its proceeds in excess of the amount necessary to discharge the sum or sums secured thereby. Assets held in trust and assets held on deposit for the security or benefit of all policyholders or all policyholders and creditors in the United States shall be deemed general assets. (11) “Good faith,” as used in ss. 631.262 and 631.263, means honesty in fact, including, but not limited to, the exercise of reasonable business judgment, in the conduct or transaction concerned, together with the absence of information that would lead a reasonable person in the same position to know that the insurer is insolvent or is experiencing an impairment of capital or an impairment of surplus and together with the absence of knowledge regarding the imminence or pendency of any receivership proceeding against the insurer. (12) “Impairment of capital” means that the minimum surplus required to be maintained in s. 624.408 has been dissipated and the insurer is not possessed of assets at least equal to all its liabilities together with its total issued and outstanding capital stock, if a stock insurer, or the minimum surplus or net trust fund required by s. 624.407, if a mutual, reciprocal, or business trust insurer. (13) “Impairment of surplus” means that the surplus of a stock insurer, the additional surplus of a mutual or reciprocal insurer, or the additional net trust fund of a business trust insurer does not comply with the requirements of s. 624.408. (14) “Insolvency” means that all the assets of the insurer, if made immediately available, would not be sufficient to discharge all its liabilities or that the insurer is unable to pay its debts as they become due in the usual course of business. When the context of any provision of this code so indicates, insolvency also includes and is defined as “impairment of surplus,” as defined in subsection (13), and “impairment of capital,” as defined in subsection (12). (15) “Insurer,” in addition to persons so defined under s. 624.03, also includes persons purporting to be insurers or organizing, or holding themselves out as organizing, in this state for the purpose of becoming insurers and all insurers who have policyholders resident in this state. (16) “Liabilities,” as used in subsections (12) and (14), means all liabilities, including those specifically required in s. 625.041. (17) “Property” includes: (a) All right, title, and interest of the insolvent entity, whether legal or equitable, tangible or intangible, or choate or inchoate, and includes choses in action, contract rights, and any other interest recognized under the laws of this state. (b) Entitlements that existed prior to the entry of an order of conservation, rehabilitation, or liquidation and entitlements that may arise by operation of the provisions of this part or other provisions of law allowing the department to avoid prior transfers or assert other rights in its capacity as receiver. (c) All records and data that are otherwise the property of the insolvent insurer, in whatever form maintained, including, but not limited to, claims and claim files, application files, litigation files, premium records, rate books, underwriting manuals, personnel records, or financial records, or similar records within the possession, custody, or control of a managing general agent, third-party administrator, management company, accountant, attorney, affiliate, or other person. (18) “Receiver” means a receiver, liquidator, rehabilitator, reorganizer, or conservator, as the context may require. (19) “Receivership” means the placement of an insurer under the control of a receiver pursuant to a delinquency proceeding under this part. (20) “Reciprocal state” means any state other than this state in which in substance and effect the provisions of the Insurers Rehabilitation and Liquidation Act are in force, including the provisions requiring that the commissioner of insurance or equivalent insurance supervisory official be the receiver of a delinquent insurer. (21) “Secured claim” means any claim secured by mortgage, trust deed, pledge, deposit as security, escrow, or otherwise but does not include a special deposit claim, a claim against general assets, or a claim based on mere possession. The term also includes a claim which more than 4 months before the commencement of a delinquency proceeding in the state of the insurer’s domicile has become a lien upon specific assets by reason of judicial process. (22) “Special deposit claim” means any claim secured by a deposit made pursuant to statute for the security or benefit of a limited class or classes of persons, but not including any general assets. (23) “State” is as defined in s. 624.08. History. — s. 717, ch. 59-205; ss. 13, 35, ch. 69-106; s. 2, ch. 70-27; s. 1, ch. 70-439; s. 809(1st), ch. 82-243; s. 2, ch. 83-38; s. 1, ch. 87-350; s. 5, ch. 89-360; ss. 82, 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 26, ch. 93-410; s. 4, ch. 2002-25. 631.015 Reciprocity; treatment of policyholders. Reciprocity in the treatment of policyholders in receivership is extended to those states which, in substance and effect, enact the National Association of Insurance Commissioners Rehabilitation and Liquidation Model Act, the Uniform Insurers Liquidation Act, or the Insurer Receivership Model Act. History. — s. 5, ch. 2002-25; s. 1, ch. 2017-143. 631.021 Jurisdiction of delinquency proceeding; venue; change of venue; exclusiveness of remedy; appeal; construction. (1) The circuit court shall have original jurisdiction of any delinquency proceeding under this chapter, and any court with jurisdiction is authorized to make all necessary or proper orders to carry out the purposes of this chapter. Any delinquency proceeding in this chapter is in equity. (2) The venue of a delinquency proceeding or summary proceeding against a domestic, foreign, or alien insurer shall be in the Circuit Court of Leon County. (3) A delinquency proceeding pursuant to this chapter constitutes the sole and exclusive method of liquidating, rehabilitating, reorganizing, or conserving an insurer. A court may not entertain a petition for the commencement of such a proceeding unless the petition has been filed in the name of the state on the relation of the department. The Florida Insurance Guaranty Association, Incorporated, the Florida Workers’ Compensation Insurance Guaranty Association, Incorporated, the Florida Health Maintenance Organization Consumer Assistance Plan, and the Florida Life and Health Guaranty Association, Incorporated, shall be given reasonable written notice by the department of all hearings that pertain to an adjudication of insolvency of a member insurer. (4) An appeal shall lie to the District Court of Appeal, First District, from an order granting or refusing rehabilitation, liquidation, or conservation and from every order in a delinquency proceeding having the character of a final order as to the particular portion of the proceeding embraced therein. (5) No service of process against the department in its capacity as receiver shall be effective unless served upon a person designated by the receiver and filed with the circuit court having jurisdiction over the delinquency proceeding. The designated person shall refuse to accept service if acceptance would violate a stay against legal proceedings involving an insurer that is the subject of delinquency proceedings or would violate any orders of the circuit court governing a delinquency proceeding. The person denied service may petition the circuit court having jurisdiction over the delinquency proceeding for relief from the receiver’s refusal to accept service. This subsection shall be strictly construed, and any purported service on the receiver or the department that is not in accordance with this subsection shall be null and void. (6) The domiciliary court acquiring jurisdiction over persons subject to this chapter may exercise exclusive jurisdiction to the exclusion of all other courts, except as limited by the provisions of this chapter. Upon the issuance of an order of conservation, rehabilitation, or liquidation, the Circuit Court of Leon County has exclusive jurisdiction over all assets or property of the insurer, wherever located, including property located outside the territorial limits of the state. (7) This chapter constitutes this state’s insurer receivership laws, and these laws must be construed as consistent with each other. If there is a conflict between this chapter and any other law, this chapter prevails. History. — s. 718, ch. 59-205; s. 29, ch. 63-559; ss. 13, 35, ch. 69-106; s. 8, ch. 77-227; s. 809(1st), ch. 82-243; s. 3, ch. 83-38; s. 1, ch. 85-339; s. 6, ch. 89-360; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 11, ch. 97-262; s. 1341, ch. 2003-261; s. 28, ch. 2004-374; s. 2, ch. 2017-143. 631.025 Persons subject to this part. Delinquency proceedings authorized by this part may be initiated against any insurer, as defined in s. 631.011(15), if the statutory grounds are present as to that insurer, and the court may exercise jurisdiction over any person required to cooperate with the department and office pursuant to s. 631.391 and over all persons made subject to the court’s jurisdiction by other provisions of law. Such persons include, but are not limited to: (1) A person transacting, or that has transacted, insurance business in or from this state and against whom claims arising from that business may exist now or in the future. (2) A person purporting to transact an insurance business in this state and any person who acts as an insurer, transacts insurance, or otherwise engages in insurance activities in or from this state, with or without a certificate of authority or proper authority from the department or office, against whom claims arising from that business may exist now or in the future. (3) An insurer with policyholders resident in this state. (4) All other persons organized or in the process of organizing with the intent to transact an insurance business in this state. History. — s. 6, ch. 2002-25; s. 1342, ch. 2003-261. 631.031 Initiation and commencement of delinquency proceeding. (1) Upon a determination by the office that one or more grounds for the initiation of delinquency proceedings exist pursuant to this chapter and that delinquency proceedings must be initiated, the Director of the Office of Insurance Regulation shall notify the department of such determination and shall provide the department with all necessary documentation and evidence. If the director must notify the department of a determination regarding a property insurer, the notification must include an affidavit that identifies the grounds for rehabilitation pursuant to s. 631.051; the date that each insurer was deemed impaired of capital or surplus, as the terms impairment of capital and impairment of surplus are defined in s. 631.011, or insolvent, as the term insolvency is defined in s. 631.011; a concise statement of the circumstances that led to the insurer’s delinquency; and a summary of the actions taken by the insurer and the office to avoid delinquency. The department shall then initiate such delinquency proceedings. (2) The department may commence any such proceeding by application to the court for an order directing the insurer to show cause why the department should not have the relief prayed for. On the return of such order to show cause, and after a full hearing, the court shall either deny the application or grant the application, together with such other relief as the nature of the case and the interests of the policyholders, creditors, stockholders, members, subscribers, or public may require. The department may also commence any such proceeding by application to the court by petition for the entry of a consent order of conservation, rehabilitation, or liquidation. (3) An insurer subject to an order to show cause entered pursuant to this chapter must file its written response to the order, together with any defenses it may have to the department’s allegations, no later than 20 days after service of the order to show cause, but no less than 15 days before the date of the hearing set by the order to show cause. (4) A hearing held pursuant to this chapter to determine whether cause exists for the department to be appointed receiver must be commenced within 60 days after an order directing an insurer to show cause. History. — s. 719, ch. 59-205; ss. 13, 35, ch. 69-106; s. 213, ch. 77-104; s. 809(1st), ch. 82-243; s. 38, ch. 88-166; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 1343, ch. 2003-261; s. 3, ch. 2017-143; s. 20, ch. 2022-268. 631.041 Automatic stay; relief from stay; injunctions. (1) An application or petition under s. 631.031 operates as a matter of law as an automatic stay applicable to all persons and entities, other than the receiver and the office, which shall be permanent and survive the entry of an order of conservation, rehabilitation, or liquidation, and which shall prohibit: (a) The commencement or continuation of judicial, administrative, or other action or proceeding against the insurer or against its assets or any part thereof; (b) The enforcement of a judgment against the insurer or an affiliate obtained either before or after the commencement of the delinquency proceeding; (c) Any act to obtain possession of property of the insurer; (d) Any act to create, perfect, or enforce a lien against property of the insurer, except that a secured claim as defined in s. 631.011(21) may proceed under s. 631.191 after the order of liquidation is entered; (e) Any act to collect, assess, or recover a claim against the insurer, except claims as provided for under this chapter; and (f) The setoff or offset of any debt owing to the insurer, except offsets as provided in s. 631.281. (2) Upon written request of a person or entity subject to the stay against obtaining or enforcing a judgment against an insurer or affiliate provided in paragraph (1)(b) the court, with notice to the department and upon hearing, may grant relief from the stay provided the movant, who has the burden of proof, establishes by clear and convincing evidence that the judgment is not voidable or void by a receiver and that property from which the judgment would be satisfied does not constitute premium funds or another asset which belongs to the insurer. (3) Upon application by the department pursuant to this part for an order to show cause or upon petition, or at any time thereafter, the court may without notice issue an injunction restraining the insurer and its officers, directors, stockholders, members, subscribers, and agents and all other persons from the transaction of its business or the waste or disposition of its property until the further order of the court. (4) The court may without notice at any time during a proceeding under this chapter issue such other injunctions or orders as may be deemed necessary to prevent interference with the department or the proceeding; waste of the assets of the insurer; the commencement or prosecution of any actions; the obtaining of preferences, judgments, attachments, or other liens; or the making of any levy against the insurer or against its assets or any part thereof. (5) Notwithstanding any other provision of law, no bond shall be required of the department as a prerequisite for the issuance of any injunction or restraining order pursuant to this section. (6) The estate of an insurer in rehabilitation or liquidation which is injured by any willful violation of an applicable stay or injunction shall be entitled to actual damages, including costs and attorney’s fees, and, in appropriate circumstances, the receivership court may impose additional sanctions. History. — s. 720, ch. 59-205; ss. 13, 35, ch. 69-106; s. 809(1st), ch. 82-243; s. 4, ch. 83-38; s. 39, ch. 88-166; ss. 83, 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 7, ch. 2002-25; s. 29, ch. 2004-374; s. 4, ch. 2017-143. 631.042 Extension of time. (1) With respect to any action by or against an insurer, no statute of limitations or defense of laches shall run between the date the department files a petition for a delinquency proceeding against an insurer and the date the court enters an order granting or denying that petition. If the petition is denied, any action against the insurer that might have been commenced when the petition was filed may be commenced no later than 60 days after the order denying such relief or the remaining unexpired time under the applicable statute of limitations or defense of laches that was available on the day the petition was filed, whichever is longer. (2) The running of any unexpired statute of limitations, as to any claims brought by the administrator, a receiver, or an official or agency exercising powers pursuant to this chapter seeking damages or other recoveries on behalf of an insurer, its policyholders, its creditors, or its estate, shall be tolled for a period of 4 years from the date the court enters an order placing the insurer in receivership. If the delinquency proceedings against the insurer terminate in fewer than 4 years, tolling shall cease at the time the proceedings are final, including all appeals. (3) A cause of action does not accrue, and the limitations period for any such action does not run, during the time the insurer is controlled by parties acting contrary to the company’s interests or when facts giving rise to the claim are concealed fraudulently from regulatory authorities or from any members of company management. The provisions of chapter 95 shall be construed to be consistent with the provisions of this section. The receiver may institute any action or proceeding authorized under this part while any statute of limitation is tolled pursuant to this section. This tolling provision shall be in addition to any other applicable tolling provision. (4) For actions not covered by subsection (2), if any unexpired time period is fixed by any agreement or in any proceeding for doing any act for the benefit of the estate, the receiver shall have 180 days, or for good cause shown more than 180 days as allowed by the court, from the date the court enters the order granting the department’s petition for a delinquency proceeding. History. — s. 8, ch. 2002-25. 631.051 Grounds for rehabilitation; domestic insurers. The department may petition for an order directing it to rehabilitate a domestic insurer or an alien insurer domiciled in this state on any one or more of the following grounds, that the insurer: (1) Is impaired or insolvent; (2) Has failed to comply with an order of the office to make good an impairment of capital or surplus or both; (3) Is found by the office to be in such condition or is using or has been subject to such methods or practices in the conduct of its business, as to render its further transaction of insurance presently or prospectively hazardous to its policyholders, creditors, stockholders, or the public; (4) Has failed, or its parent corporation, subsidiary, or affiliated person controlled by either the insurer or the parent corporation has failed, to submit its books, documents, accounts, records, and affairs pertaining to the insurer to the reasonable inspection or examination of the office or its authorized representative; or any individual exercising any executive authority in the affairs of the insurer, or parent corporation, or subsidiary, or affiliated person has refused to be examined under oath by the office or its authorized representative, whether within this state or otherwise, concerning the pertinent affairs of the insurer, or parent corporation or subsidiary or affiliated person; or if examined under oath refuses to divulge pertinent information reasonably known to her or him; or officers, directors, agents, employees, or other representatives of the insurer or parent corporation, subsidiary, or affiliated person have failed to comply promptly with the reasonable requests of the office or its authorized representative for the purposes of, and during the conduct of, any such examination; (5) Has concealed or removed records or assets or otherwise violated s. 628.271 or s. 628.281; (6) Through its board of directors or governing body is deadlocked in the management of the insurer’s affairs and that the members of a mutual, reciprocal, or any other type of organization or stockholders are unable to break the deadlock and that irreparable injury to the insurer, its creditors, its policyholders, its members or subscribers, or the public is threatened by reason thereof; (7) Has transferred or attempted to transfer substantially its entire property or business, or has entered into any transaction the effect of which is to merge substantially its entire property or business into that of any other insurer or entity without having first obtained the written approval of the office under the provisions of s. 628.451, s. 628.461, or s. 628.4615, as the case may be; (8) Has willfully violated its charter or certificate of incorporation or any law of this state; (9) Is in such a position that control of it, whether by stock ownership or otherwise, and whether direct or indirect, is in one or more persons found by the office after notice and hearing to be dishonest or untrustworthy; or that the insurer has failed, upon order of the office and expiration of such reasonable time for such removal as the office shall specify in the order, to remove any person who in fact has executive authority, directly or indirectly, in the insurer, whether as an officer, director, manager, agent, employee, or otherwise, and if such person has been found by the office after notice and hearing, to be incompetent, dishonest, untrustworthy, or so lacking in insurance company managerial experience as to be hazardous to the insurance-buying public; (10) Has been or is the subject of an application for the appointment of a receiver, trustee, custodian, or sequestrator of the insurer or its property otherwise than pursuant to the provisions of this code, but only if such an appointment has been made or is imminent; (11) Has consented to such an order through a majority of its directors, stockholders, members, or subscribers; (12) Has failed to pay a final judgment rendered against it in this state upon any insurance contract issued or assumed by it, within 60 days after the judgment became final, within 60 days after the time for taking an appeal has expired, or within 30 days after dismissal of an appeal before final determination, whichever date is the later; (13) Has been the victim of embezzlement, wrongful sequestration, conversion, diversion, or encumbering of its assets; forgery or fraud affecting it; or other illegal conduct in, by, or with respect to it, which if established would threaten its solvency; or that the office has reasonable cause to so believe any of the foregoing has occurred or may occur; (14) Is engaging in a systematic practice of reaching settlements with and obtaining releases from policyholders or third-party claimants and then unreasonably delaying payment of, or failing to pay, the agreed-upon settlements; or (15) Within the previous 12 months has systematically attempted to compromise with creditors on the ground that it is financially unable to pay its claims in full. History. — s. 721, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 70-27; s. 1, ch. 70-439; s. 809(1st), ch. 82-243; ss. 3, 17, ch. 86-250; s. 4, ch. 87-50; s. 10, ch. 90-248; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 397, ch. 97-102; s. 1344, ch. 2003-261. 631.0515 Appointment of receiver; insurance holding company. A delinquency proceeding pursuant to this chapter constitutes the sole and exclusive method of dissolving, liquidating, rehabilitating, reorganizing, conserving, or appointing a receiver of a Florida corporation which is not insolvent as defined by s. 607.01401; which through its shareholders, board of directors, or governing body is deadlocked in the management of its affairs; and which directly or indirectly owns all of the stock of a Florida domestic insurer. The department may petition for an order directing it to rehabilitate such corporation if the interests of policyholders or the public will be harmed as a result of the deadlock. The department shall use due diligence to resolve the deadlock. Whether or not the department petitions for an order, the circuit court shall not have jurisdiction pursuant to 1 s. 607.271, 1 s. 607.274, or 1 s. 607.277 to dissolve, liquidate, or appoint receivers with respect to, a Florida corporation which directly or indirectly owns all of the stock of a Florida domestic insurer and which is not insolvent as defined by s. 607.01401. However, a managing general agent or holding company with a controlling interest in a domestic insurer in this state is subject to jurisdiction of the court under the provisions of s. 631.025. History. — s. 2, ch. 86-86; s. 2, ch. 87-50; s. 181, ch. 90-179; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 45, ch. 99-3; s. 83, ch. 2000-154; s. 30, ch. 2004-374; s. 289, ch. 2019-90. 1 Note. — Repealed by s. 189, ch. 90-179. 631.061 Grounds for liquidation. The department may apply to the court for an order appointing it as receiver (if its appointment as receiver is not then in effect) and directing it to liquidate the business of a domestic insurer or of the United States branch of an alien insurer having trusteed assets in this state, regardless of whether or not there has been a prior order directing it to rehabilitate such insurer, upon any of the grounds specified in s. 631.051, or if such insurer: (1) Is or is about to become insolvent. (2) Is an insolvent insurer and has commenced or is attempting to commence voluntary liquidation or dissolution except under this code. (3) Has not completed its organization and obtained a certificate of authority as an insurer within the time allowed therefor under any applicable law. History. — s. 722, ch. 59-205; ss. 13, 35, ch. 69-106; s. 4, ch. 70-27; s. 809(1st), ch. 82-243; s. 5, ch. 83-38; ss. 184, 187, 188, ch. 91-108; s. 4, ch. 91-429. 631.071 Grounds for conservation; foreign insurers. The department may apply to the court for an order appointing it as receiver or ancillary receiver, and directing it to conserve the assets within this state, of a foreign insurer upon any of the following grounds: (1) Upon any of the grounds specified in s. 631.051 or s. 631.061, or (2) Upon the ground that its property has been sequestrated in its domiciliary sovereignty or in any other sovereignty. History. — s. 723, ch. 59-205; ss. 13, 35, ch. 69-106; s. 809(1st), ch. 82-243; ss. 184, 187, 188, ch. 91-108; s. 4, ch. 91-429. 631.081 Grounds for conservation; alien insurers. The department may apply to the court for an order appointing it as receiver or ancillary receiver, and directing it to conserve the assets within this state, of any alien insurer upon any of the following grounds: (1) Upon any of the grounds specified in s. 631.051 or s. 631.061; (2) Upon the ground that the insurer has failed to comply, within the time designated by the office, with an order made by it to make good an impairment of its trusteed funds; or (3) Upon the ground that the property of the insurer has been sequestrated in its domiciliary sovereignty or elsewhere. History. — s. 724, ch. 59-205; ss. 13, 35, ch. 69-106; s. 809(1st), ch. 82-243; ss. 184, 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 1345, ch. 2003-261. 631.091 Grounds for ancillary liquidation; foreign insurers. The department may apply to the circuit court for an order appointing it as ancillary receiver of, and directing it to liquidate the business and assets of, a foreign insurer which has assets, business, or claims in this state upon the appointment in the domiciliary state of such insurer of a receiver, liquidator, conservator, rehabilitator, or other officer by whatever name called for the purpose of liquidating the business of such insurer. History. — s. 725, ch. 59-205; ss. 13, 35, ch. 69-106; s. 809(1st), ch. 82-243; s. 6, ch. 83-38; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429. 631.101 Order of rehabilitation; termination. (1) An order to rehabilitate a domestic insurer shall direct the department forthwith to take possession of the property of the insurer and to conduct the business thereof, and to take such steps toward removal of the causes and conditions which have made rehabilitation necessary as the court may direct. (2) If at any time the department deems that further efforts to rehabilitate the insurer would be useless, it may apply to the court for an order of liquidation. (3) The department, or any interested person upon due notice to the department, at any time may apply to the court for an order terminating the rehabilitation proceedings and permitting the insurer to resume possession of its property and the conduct of its business, but no such order shall be made or entered except when, after a hearing, the court has determined that the purposes of the proceeding have been fully accomplished. History. — s. 726, ch. 59-205; ss. 13, 35, ch. 69-106; s. 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429. 631.111 Order of liquidation; domestic insurers. (1) An order to liquidate the business of a domestic insurer shall direct the department forthwith to take immediate possession of the property of the insurer, to marshal all the assets of the insurer, to liquidate its business, to deal with the insurer’s property and business in its own name or in the name of the insurer, as the court may direct, and to give notice to all creditors who may have claims against the insurer to present such claims, as the court may direct. (2) The order of liquidation shall authorize and direct the department to take immediate possession of all the property, assets, and estate, including, but not limited to, all offices maintained by the insurer and all rights of action, books, documents, papers, evidences of debt, and all other property of every kind whatsoever and wheresoever located belonging to the insurer, including, but not limited to, all bank accounts, stocks, bonds, debentures, mortgages, all premiums collected by premium finance companies or any person otherwise engaged in premium financing, agents, subagents, producing agents, brokers, service representatives, or others and not paid to the insurer, furniture, fixtures, equipment, office supplies, and all real property of the insurer and to hold all such assets pending further orders of the court. (3) The department may apply for and secure an order dissolving the corporate existence of a domestic insurer upon its application for an order of liquidation of such insurer or at any time after such order has been granted. History. — s. 727, ch. 59-205; ss. 13, 35, ch. 69-106; s. 5, ch. 70-27; s. 1, ch. 70-439; s. 809(1st), ch. 82-243; s. 7, ch. 83-38; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 92, ch. 2003-1. 631.112 Subordination of claims for noncooperation. If an ancillary receiver or another person performing the duties associated with an ancillary receiver in another state or foreign country fails to transfer to the domiciliary liquidator in this state any assets within her or his control other than special deposits, diminished only by the expenses of the ancillary receivership, if any, the claims filed in the ancillary receivership, other than special deposit claims or secured claims, shall be deemed class 9 claims as defined in s. 631.271(1)(i). History. — ss. 84, 188, ch. 91-108; s. 4, ch. 91-429; s. 398, ch. 97-102; s. 46, ch. 99-3. 631.121 Order of liquidation; alien insurers. An order to liquidate the business of a United States branch of an alien insurer having trusteed assets in this state shall be in the same terms as those prescribed for domestic insurers, save and except only that the assets of the business of such United States branch shall be the only assets included therein. History. — s. 728, ch. 59-205; s. 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429. 631.131 Order of conservation or ancillary liquidation of foreign or alien insurers. (1) An order to conserve the assets of a foreign or alien insurer shall require the department forthwith to take possession of the property of the insurer within this state and to conserve it, subject to the further direction of the court. (2) An order to liquidate the assets in this state of a foreign insurer shall require the department forthwith to take possession of the property of the insurer within this state, to take all steps necessary to prevent wasting of the assets, to marshal all assets in accordance with s. 631.111(2), insofar as that subsection does not conflict with the rights of the domiciliary receiver, and to liquidate it subject to the orders of the court and with due regard to the rights and powers of the domiciliary receiver as provided in this chapter. History. — s. 729, ch. 59-205; ss. 13, 35, ch. 69-106; s. 6, ch. 70-27; s. 1, ch. 70-439; s. 809(1st), ch. 82-243; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429. 631.141 Conduct of delinquency proceeding; domestic and alien insurers. (1) Whenever under this chapter a receiver is to be appointed in a delinquency proceeding for a domestic or alien insurer, the court shall appoint the department as such receiver. The court shall order the department forthwith to take possession of the assets of the insurer and to administer the same under the orders of the court. (2) As a domiciliary receiver, the department is vested by operation of law with the title to all of the property, contracts, and rights of action, and all of the books and records, of the insurer, wherever located, as of the date of entry of the order directing it to rehabilitate or liquidate a domestic insurer or to liquidate the United States branch of an alien insurer domiciled in this state; and it shall have the right to recover the same and reduce the same to possession; except that ancillary receivers in reciprocal states shall have, as to assets located in their respective states, the rights and powers which are herein prescribed for ancillary receivers appointed in this state as to assets located in this state. (3) The receiver may assume or reject any executory contract or unexpired lease of the insurer. (4) The filing or recording of the order directing possession to be taken, or a certified copy thereof, in any office where instruments affecting title to property are required to be filed or recorded imparts the same notice as would be imparted by a deed, bill of sale, or other evidence of title duly filed or recorded. (5) The department as domiciliary receiver is responsible for the proper administration of all assets coming into its possession or control. The court may at any time require a bond from it or its agents if deemed desirable for the protection of such assets. (6) Upon taking possession of the assets of an insurer, the domiciliary receiver shall, subject to the direction of the court, immediately proceed to conduct the business of the insurer or to take such steps as are authorized by this chapter for the purpose of rehabilitating, liquidating, or conserving the affairs or assets of the insurer. (7) In order to preserve as much as possible the right and interest of the policyholders whose insurance policies or similar contracts are affected by the receivership proceedings, the department as a domiciliary receiver may: (a) Use the property of the estate of the insurer to transfer the insurer’s book of business, policies, or similar contracts of coverage, in whole or in part, to a solvent assuming insurer or insurers. (b) Notwithstanding s. 631.195, share records of the insurer with the prospective solvent assuming insurer or insurers, but only to the extent necessary to undertake due diligence for a transfer contemplated under this section. (8) The department as domiciliary receiver may pay any expenses under contracts, leases, employment agreements, or other arrangements entered into by the insurer before receivership as the department deems necessary for the purposes of this chapter. The department is not required to pay any such expenses that it determines are not necessary and may reject any contract pursuant to subsection (3). (9) The department may assert all rights belonging to third parties, including, but not limited to, policyholders, creditors, and other claimants, except to the extent an individual claim is personal and unique to the claimant and could not inure to the benefit of the estate or to policyholders, creditors, or other claimants. (10)(a) In connection with a delinquency proceeding, the department may appoint one or more special agents to act for it, and it may employ such counsel, clerks, and assistants as it deems necessary. The compensation of the special agents, counsel, clerks, or assistants and all expenses of taking possession of the insurer and of conducting the proceeding shall be fixed by the receiver, subject to the approval of the court, and shall be paid out of the funds or assets of the insurer. Such expenses are administrative expenses and are recoverable by the receiver in any actions in which the receiver is authorized or entitled to recover its administrative expenses. Within the limits of duties imposed upon them, special agents shall possess all the powers given to and, in the exercise of those powers, shall be subject to all duties imposed upon the receiver with respect to such proceeding. (b) In the event that initiation of delinquency proceedings does not result in appointment of the department as receiver, or in the event that the funds or assets of an insurer for which the department is appointed as receiver are insufficient to cover the cost of compensation to special agents, counsel, clerks, or assistants and all expenses of taking, or attempting to take, possession of the insurer, and of conducting the proceeding, there is appropriated, upon approval of the Chief Financial Officer and of the Legislative Budget Commission pursuant to chapter 216, from the Insurance Regulation Trust Fund to the Division of Rehabilitation and Liquidation a sum that is sufficient to cover the unreimbursed costs. (11) The department as domiciliary receiver may take such action as it deems necessary or appropriate to reform and revitalize the insurer. The department shall have all the powers of the directors, officers, and managers, whose authority shall be suspended, except as they are redelegated by the receiver. The receiver shall have full power to direct and manage the affairs of the insurer, to hire and discharge employees, and to deal with the property and business of the insurer. In the event of the liquidation of an insurer domiciled in this state, and notwithstanding any provision of chapter 605, chapter 607, chapter 617, chapter 620, or chapter 621, all officers, directors, and managers of the insurer are permanently discharged and have no further authority of any kind over the affairs or assets of the insurer, except as may be redelegated by the department. (12) If the department as domiciliary receiver determines that reorganization, consolidation, conversion, reinsurance, merger, or other transformation of the insurer is appropriate, it shall prepare a plan to effect such changes. Upon application of the receiver for approval of the plan, and after such notice and hearings as the court may prescribe, the court may either approve or disapprove the plan proposed or may modify it and approve it as modified. Any plan approved under this section must be, in the judgment of the court, fair and equitable to all parties concerned. If the plan is approved, the receiver shall carry out the plan. (13) Records created by the entity in receivership shall be disposed of in accordance with the order of the court at such time as the receiver determines that the records are not needed for the administration of the estate. History. — s. 730, ch. 59-205; ss. 13, 35, ch. 69-106; s. 809(1st), ch. 82-243; s. 8, ch. 83-38; ss. 85, 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 9, ch. 2002-25; s. 10, ch. 2003-267; s. 31, ch. 2004-374; s. 56, ch. 2005-152; s. 5, ch. 2017-143; s. 38, ch. 2023-144. 631.152 Conduct of delinquency proceeding; foreign insurers. (1) Whenever under this chapter an ancillary receiver is to be appointed in a delinquency proceeding for an insurer not domiciled in this state, the court shall appoint the department as ancillary receiver. The department shall file a petition requesting the appointment on the grounds set forth in s. 631.091: (a) If it finds that there are sufficient assets of the insurer located in this state to justify the appointment of an ancillary receiver; (b) If 10 or more persons resident in this state having claims against such insurer file a petition with the department or office requesting the appointment of such ancillary receiver; or (c) If it finds it is necessary to obtain records to adjudicate the covered claims of Florida policyholders. (2) The domiciliary receiver for the purpose of liquidating an insurer domiciled in a reciprocal state shall be vested by operation of law with the title to all of the property (except statutory deposits, special statutory deposits, and property located in this state subject to a security interest), contracts, and rights of action, and all of the books and records of the insurer located in this state, and it shall have the immediate right to recover balances due from local agents and to obtain possession of any books and records of the insurer found in this state. It shall also be entitled to recover the property subject to a security interest, statutory deposits, and special statutory deposits of the insurer located in this state, except that upon the appointment of an ancillary receiver in this state, the ancillary receiver shall during the ancillary receivership proceeding have the sole right to recover such other assets. The ancillary receiver shall, as soon as practicable, liquidate from their respective securities those special deposit claims and secured claims which are proved and allowed in the ancillary proceeding in this state, and shall pay the necessary expenses of the proceeding. It shall promptly transfer all remaining assets to the domiciliary receiver. Subject to the foregoing provisions, the ancillary receiver and its agents shall have the same powers and be subject to the same duties with respect to the administration of such assets as a receiver of an insurer domiciled in this state. (3) The domiciliary receiver of an insurer domiciled in a reciprocal state may sue in this state to recover any assets of such insurer to which it may be entitled under the laws of this state. (4) Section 631.141(10)(b) applies to ancillary delinquency proceedings opened for the purpose of obtaining records necessary to adjudicate the covered claims of Florida policyholders. History. — s. 731, ch. 59-205; ss. 13, 35, ch. 69-106; s. 809(1st), ch. 82-243; ss. 86, 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 1346, ch. 2003-261; s. 5, ch. 2011-226; s. 79, ch. 2016-10; s. 6, ch. 2017-143; s. 73, ch. 2023-144. 631.1521 Actions by and against the receiver. (1) An allegation by the receiver of improper or fraudulent conduct against any person may not be the basis of a defense by a third party to the enforcement of a contractual obligation owed to the insurer. This section does not bar a third party from the right to raise a defense that the conduct was materially and substantially related to the contractual obligation for which enforcement is sought. (2) A prior wrongful or negligent action of any present or former officer, manager, director, trustee, owner, employee, or agent of the insurer may not be asserted as a defense to a claim by the receiver under a theory of estoppel, comparative fault, intervening cause, proximate cause, reliance, mitigation of damages, or otherwise. However, the affirmative defense of fraud in the inducement may be asserted against the receiver in a claim based on a contract; and a principal under a surety bond or a surety undertaking is entitled to credit for the value of any property pledged to secure the reimbursement obligation against any reimbursement obligation to the receiver, to the extent that the receiver has possession or control of the property, or that the insurer or its agents misappropriated such property, which includes, but is not limited to, the commingling of such property. Evidence of fraud in the inducement is admissible only if it is contained in the records of the insurer. (3) An action or inaction by an insurance regulatory authority may not be asserted as a defense to a claim by the department. History. — s. 7, ch. 2017-143. 631.1522 Unrecorded obligations and defenses and claims of affiliates. (1) In any proceeding or claim by the receiver, an affiliate, a controlled or controlling person, or a present or former officer, manager, director, trustee, or shareholder of the insurer may not assert any defense unless: (a) Evidence of the defense was recorded in the books and records of the insurer at or about the time the events giving rise to the defense occurred; and (b) If required by statutory accounting practices and procedures, such events were timely reported on the insurer’s official financial statements filed with the office. (2) An affiliate, a controlled or controlling person, or a present or former officer, manager, director, trustee, or shareholder of the insurer may not assert any claim unless: (a) The obligations were recorded in the books and records of the insurer at or about the time the obligations were incurred; and (b) If required by statutory accounting practices and procedures, the obligations were timely reported on the insurer’s official financial statements filed with the office. (3) This section does not bar claims based on unrecorded or unreported transactions by the receiver against any affiliate, controlled or controlling person, or present or former officer, manager, director, trustee, or shareholder of the insurer. History. — s. 8, ch. 2017-143. 631.153 Intervention; exclusiveness of claims procedure. No person shall be allowed to intervene in any delinquency proceeding in this state brought under this chapter for the purpose of seeking or obtaining payment of any judgment, lien, or other claim of any kind. The claims procedure set out in ss. 631.161, 631.171, 631.181, 631.182, 631.191, 631.192, and 631.193 constitutes the exclusive means for obtaining payment of claims from the receivership estate. History. — s. 2, ch. 85-339; s. 1, ch. 86-286; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429. 631.154 Funds, assets, or other property in the possession of third person. (1) If the receiver determines that funds, assets, or property in the possession of another person are rightfully the property of the estate, the receiver shall deliver to such person a written demand for immediate delivery of the funds, assets, or property to the receiver, referencing this section by number, referencing the court and docket number of the receivership action, and notifying the person that any claim of right to the funds, assets, or property by her or him must be presented to the court within 20 days after the date of the written demand. Any person who holds funds, assets, or other property belonging to an entity placed in receivership under this chapter shall deliver the funds, assets, or other property to the receiver on demand. Should the person allege any right to retain the funds, assets, or other property pursuant to s. 631.155, s. 631.191, s. 631.261, s. 631.262, s. 631.263, or s. 631.281, a pleading setting out the right shall be filed with the court within 20 days after the receipt of the receiver’s demand that the funds, assets, or property be delivered to the receiver. The person shall serve a copy of the pleading on the receiver. The pleading of the person shall inform the court as to the nature of the claim to the property, the alleged value of the assets or property, or the amount of funds held, and what action has been taken by the person to preserve and protect the assets or property or to preserve any funds pending determination of the dispute. (2) If requested by the receiver, a hearing shall be held to determine where and under what conditions the property, assets, or funds shall be held by the person pending determination of the dispute. The court may impose conditions as it may deem necessary or appropriate for the preservation of the property until the court can determine the validity of the person’s claim to the property, assets, or funds. If any property, assets, or funds are allowed to remain in the possession of the person after demand made by the receiver, that person shall be strictly liable for any waste, loss, or damage of the property, assets, or funds retained. (3) If a person has filed a pleading alleging any right to retain funds, assets, or property, the court shall hold a subsequent hearing to determine entitlement to the funds, assets, or property claimed by the receiver. (4) If a person fails to file the pleading required by subsection (1) within the 20-day period, the court may, upon petition of the receiver and upon a copy of the petition being served by the petitioner to such person, issue its summary order directing the immediate delivery of the funds, assets, or property to the receiver and finding that the person has waived all claims of right to the funds, assets, or property. (5) This section shall apply to all proceedings brought by the receiver to recover funds, assets, or property believed by the receiver under this chapter to be assets of the entity subject to an order of conservation, rehabilitation, or liquidation. The receiver shall be exempt from the provisions of s. 57.111. (6) Should the receiver be successful in establishing its claim or any part thereof, the receiver shall be entitled to recover judgment for the following: (a) The property or its cash value as of the date of the order of conservation, rehabilitation, or liquidation, whichever is applicable. (b) Rental for the use of the property to run from the date of the order of conservation, rehabilitation, or liquidation, whichever is applicable, to the date the property is delivered to the receiver. (c) In the case of funds, interest at the statutory rate to run from the date of the order of conservation, rehabilitation, or liquidation, whichever is applicable, to the date the funds are delivered to the receiver. (d) All costs, investigative and other expenses, including, but not limited to, those for department staff, incurred in the recovery of the property, assets, or funds, and reasonable attorney’s fees. Department staff costs and expenses include staff salaries. It is the intent of this section that a person found to be holding receivership assets fully reimburse the receiver for any and all efforts made to recover those assets. History. — s. 7, ch. 89-360; s. 1, ch. 90-192; ss. 87, 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 399, ch. 97-102; s. 10, ch. 2002-25. 631.155 Agents’ balances; premiums and unearned commissions. Premiums and unearned commissions which have been collected on behalf of an insurer by an agent, agency, or other entity or person constitute an asset of the insurer for which the agent, agency, or other entity or person has a duty to account to the receiver and to pay over amounts as may be due. The duty to account to the receiver shall encompass all persons or entities involved in the handling and transmittal of premium funds. An accounting shall be provided to the receiver within 20 days after receipt of a written demand for an accounting. If there is a dispute regarding the accounting, the court shall hear and decide the matter upon petition of the receiver. Compliance with this section and payment of sums determined to be owed by the court within 30 days of judgment, or within other payment terms approved by the court, shall constitute requirements for continued licensure of a person holding a license under the Florida Insurance Code, and failure to comply with this section shall be sufficient grounds for the license revocation. History. — s. 8, ch. 89-360; s. 1, ch. 90-192; ss. 88, 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 67, ch. 2002-206. 631.156 Investigation by the department; scope of authority; sharing of materials. (1) The department may, under the direction and supervision of the receivership court, conduct an investigation to determine the causes of the insolvency, including whether false statements filed with the department contributed to the insolvency and if any laws of this state, any other state, or the Federal Government relating to the solvency of the insurer were violated; to discover assets for recovery; and to determine the location of assets and their manner of recovery. The department may take statements under oath and examine and review the books, records, and documents of the insurer or any affiliate, controlling person, officer, director, manager, trustee, agent, adjuster, employee, or independent contractor of any insurer or affiliate and any other person possessing any executive authority over, or exercising or having exercised any control over, any segment of the affairs of the insurer or affiliate. Contracts of reinsurance between an insurer and a reinsurer do not constitute the exercise of control by the reinsurer over the insurer for purposes of this section. (2) The department may provide documents, books, and records; other investigative products, work product, and analysis; and copies of any or all of such materials to the Division of Criminal Investigations or any other appropriate government agency. The sharing of these materials does not waive any work product or other privilege otherwise applicable under law. (3) The receivership court, upon motion of the department, shall enter an order expediting compliance with the requirements of subsection (1). The court may impose appropriate penalties and sanctions for noncompliance with such order, including penalties and sanctions for the loss, destruction, or spoliation of any evidence that occurs after entry of such order. History. — s. 11, ch. 2002-25; s. 25, ch. 2016-165; s. 21, ch. 2025-4. 631.157 Civil action by the receiver. (1) Any person who is engaged in the business of insurance, is or acts as an officer, director, agent, or employee of any person engaged in the business of insurance, or is involved in a transaction relating to the conduct of affairs of such a business, other than as an insured or beneficiary under a policy of insurance, and who willfully obtains or uses, as defined in s. 812.012(3), any funds, assets, or property, including, but not limited to, moneys, funds, premiums, credits, or other property of an insurer, shall be liable to the department as receiver for the use and benefit of an insolvent insurer’s estate, claimants, creditors, and policyholders, as follows: (a) If the funds, assets, or property obtained or used did not jeopardize the safety and soundness of an insurer and was not a significant cause of such insurer being placed in receivership, the person shall be liable only for the full amount of any funds, assets, or property obtained or used, plus prejudgment interest provided by law. (b) If the funds, assets, or property obtained or used jeopardized the safety and soundness of an insurer or was a significant cause of the insurer being placed