The 2023 Florida Statutes (including Special Session C)

Title XXXVII
INSURANCE

Chapter 631
INSURER INSOLVENCY; GUARANTY OF PAYMENT

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F.S. 631.011

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.

F.S. 631.011 on Google Scholar

F.S. 631.011 on Casetext

Amendments to 631.011

Arrestable Offenses / Crimes under Fla. Stat. 631.011

Level: Degree
Misdemeanor/Felony: First/Second/Third

Current data shows no reason an arrest or criminal charge should have occurred directly under Florida Statute 631.011.

Annotations, Discussions, Cases:

Cases from cite.case.law:

DEVONSHIRE AT PGA NATIONAL, LLC, v. STATE DEPARTMENT OF FINANCIAL SERVICES OF THE STATE OF FLORIDA,, 103 So. 3d 1060 (Fla. Dist. Ct. App. 2013)

. . . .” § 631.011(14). . . . .

STATE DEPARTMENT OF FINANCIAL SERVICES v. BRANCH BANKING AND TRUST COMPANY, v., 40 So. 3d 829 (Fla. Dist. Ct. App. 2010)

. . . See § 631.011(21), Fla. . . .

OCEAN BANK, v. STATE DEPARTMENT OF FINANCIAL SERVICES, Co., 902 So. 2d 833 (Fla. Dist. Ct. App. 2005)

. . . automatic stay applicable to all persons and entities, except that a secured claim as defined in section 631.011 . . . A secured claim under section 631.011(21) includes “any claim secured by mortgage.” . . .

GRUBER, v. CAREMARK, INC., 853 So. 2d 540 (Fla. Dist. Ct. App. 2003)

. . . Pennsylvania is Legion’s domiciliary state under section 631.011(7), Florida Statutes (2002), and arguably . . . is a reciprocal state under section 631.011(20), Florida Statutes (2002). . . .

FRONTIER INSURANCE COMPANY, v. AMERICAN TITLE SERVICES,, 838 So. 2d 1178 (Fla. Dist. Ct. App. 2003)

. . . . § 631.011(20), Fla. Stat. (2002). . . . insurer "for the purpose of liquidating, rehabilitating, reorganizing, or conserving” the insurer. § 631.011 . . . See § 631.011(7), Fla. Stat. (2002); N.Y. Insurance Law § 7408(4) (McKinney 2002). . . .

In BLACKBURN. STATE OF FLORIDA DEPARTMENT OF INSURANCE, AS RECEIVER OF GUARANTEE SECURITY LIFE INSURANCE COMPANY, v. BLACKBURN, STATE OF FLORIDA DEPARTMENT OF INSURANCE, AS RECEIVER OF ATLANTIC GENERAL LIFE INSURANCE COMPANY, v. BLACKBURN,, 209 B.R. 4 (Bankr. M.D. Fla. 1997)

. . . Section 631.011(1), Florida Statutes, defines the term “affiliate” for purposes of the Insurers Rehabilitation . . . which exercises control over or is controlled by the insurer, directly or indirectly through____” § 631.011 . . .

AMERICAN BONDING COMPANY, v. COASTAL METAL SALES, INC., 679 So. 2d 1250 (Fla. Dist. Ct. App. 1996)

. . . See § 631.011(6), Fla. Stat. (1993); Ariz.Rev.Stat. Ann. § 20-611(3) (1990). . . . . § 631.011(16), Fla.Stat. (1993); Ariz.Rev.Stat. Ann. § 20-611(10) (1990). . . .

PROVIDENT CAPITAL INDEMNITY, LTD. v. STATE DEPARTMENT OF INSURANCE OF STATE OF FLORIDA,, 677 So. 2d 363 (Fla. Dist. Ct. App. 1996)

. . . .” § 631.011(5), Fla. Stat. (1993). . . .

FLORIDA DEPARTMENT OF INSURANCE, v. CYPRESS INSURANCE COMPANY,, 660 So. 2d 1177 (Fla. Dist. Ct. App. 1995)

. . . to apply for the order to show cause because Cypress was insolvent within the meaning of subsection 631.011 . . . The petition alleged that Cypress also met the definition of insolvency under subsection 631.011(11) . . . liabilities and pay its debts, and that Cypress was not statutorily impaired within the meaning of subsection 631.011 . . . indicate that, as of that date, Cypress was solvent based on the definition of “insolvency” in subsection 631.011 . . .

R. HOBBS, Co. v. DON MEALEY CHEVROLET, INC., 642 So. 2d 1149 (Fla. Dist. Ct. App. 1994)

. . . . § 631.011(5), Fla. Stat. (1993). . . .

NOVA INSURANCE GROUP, INC. v. FLORIDA DEPARTMENT OF INSURANCE,, 606 So. 2d 429 (Fla. Dist. Ct. App. 1992)

. . . that Puerto Rico, Central’s domiciliary state, is a “reciprocal state” within the meaning of section 631.011 . . . argument that its suit is an act to create, perfect or enforce a secured claim as defined in section 631.011 . . .

In INTERNATIONAL MEDICAL CENTERS, INC. a STATE DEPARTMENT OF INSURANCE v. STATE MUTUAL LIFE ASSURANCE CO. OF AMERICA. In SUNSHINE HEALTH PLAN, INC. STATE DEPARTMENT OF INSURANCE, d b a v. PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY,, 604 So. 2d 505 (Fla. Dist. Ct. App. 1992)

. . . Although the term "affiliate” was used in section 631.011, Florida Statutes (1986), a fraudulent conveyance . . . life insurance companies,” that provision does not render section 641.201 meaningless or make section 631.011 . . .

O REILLY, v. CEULEERS, E., 912 F.2d 1383 (11th Cir. 1990)

. . . Appeal, Item 13) The order was based upon a finding that IMC was “statutorily insolvent under Section 631.011 . . .

A. SIERRA, M. D. E. f k a v. INTERNATIONAL MEDICAL CENTERS, INC. a, 538 So. 2d 102 (Fla. Dist. Ct. App. 1989)

. . . perfect, or enforce a lien against property of the insurer, except a secured claim as defined in s. 631.011 . . . (15); _ (emphasis added) Section 631.011(15) states: (15) “Secured claim” means any claim secured by . . .

C. RAMOS v. JACKSON,, 510 So. 2d 1241 (Fla. Dist. Ct. App. 1987)

. . . The trial court held that pursuant to Section 631.011(10), Florida Statutes (1985), Ch. 631, Florida . . . Section 631.011 Florida Statutes (1985) (10) "Insurer,” in addition to persons so defined under s. 624.03 . . .

URICH SHENKMAN, P. A. v. HORIZON INSURANCE COMPANY,, 491 So. 2d 1195 (Fla. Dist. Ct. App. 1986)

. . . holding, in part, that a lawyer’s retaining lien is not a secured claim as contemplated under Section 631.011 . . .

D. R. MERTENS, INC. v. STATE DEPARTMENT OF INSURANCE,, 478 So. 2d 1132 (Fla. Dist. Ct. App. 1985)

. . . Subsequently, on December 11, 1978, the lower court found Florida Home impaired within the meaning of Section 631.011 . . .

In GUARANTEED INSURANCE UNDERWRITERS, INC., 33 B.R. 582 (Bankr. S.D. Fla. 1983)

. . . . § 631.011(6). . . .

INSURANCE COMMISSIONER OF STATE OF CALIFORNIA, v. STATE DEPARTMENT OF INSURANCE OF STATE, 411 So. 2d 269 (Fla. Dist. Ct. App. 1982)

. . . . §§ 631.011(12) and 631.211, Fla.Stat. (1979). California, the domiciliary state, has not. . . .

FLORIDA INSURANCE GUARANTY ASSOCIATION, INC. v. STATE DEPARTMENT OF INSURANCE, 400 So. 2d 813 (Fla. Dist. Ct. App. 1981)

. . . After a hearing, the trial court entered an order finding Main insolvent under Section 631.011(5), Florida . . . Section 631.011(2). . . .

FLORIDA INSURANCE GUARANTY ASSOCIATION, INC. v. W. DOLAN,, 355 So. 2d 141 (Fla. Dist. Ct. App. 1978)

. . . Financial Fire had become and was declared insolvent pursuant to § 631.011(5), Florida Statutes (1975 . . .

V. JOHNSON v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, a, 333 So. 2d 542 (Fla. Dist. Ct. App. 1976)

. . . “The plaintiffs rely in support of their position upon Chapter 631.011(5) of the Florida Statutes which . . . “It should be noted that the definition of ‘insolvency’ as contained in Section 631.011 of the Florida . . .

BARTHOLOMEW, v. GLENS FALLS INSURANCE GROUP, a, 241 So. 2d 698 (Fla. Dist. Ct. App. 1970)

. . . ascertained under the definition of ‘insolvency’ embraced by the Florida Insurance Code, i. e., Section 631.011 . . . company became insolvent, i. e., when there was an actual impairment of capital as defined by Section 631.011 . . . “Section 631.011 Definitions. “(1) ‘Impairment’ or ‘insolvency’ means the capital of a stock insurer . . . It can be contended that the appropriate meaning of insolvency is found in F.S.1967, section 631.011, . . . It can only be presumed that the Legislature’s failure to incorporate Section 631.011 into F.S.1967, . . .

D. SPRINGER, v. COLBURN, a, 162 So. 2d 513 (Fla. 1964)

. . . . §§ 631.011(2-3), 631.031, 631.-041, 631.141-631.211 (1961), F.S.A. . 153 So.2d 731 (Fla.App.2nd 1963 . . .