Legislation to more tightly constrain insurers and their executives in Florida while safeguarding consumers from judgments based solely on artificial information is advancing in the Legislature’s upper chamber.

Members of the Senate Banking and Insurance Committee just voted 7-0 for SB 1740, which Naples Republican Sen. Kathleen Passidomo described as a “pro-consumer insurance bill” designed to reduce premiums, decrease insurer insolvency and “hold insurers accountable for (their) prior, poor decisions.”

Spring Hill Republican Sen. Blaise Ingoglia filed the measure, but left the Banking and Insurance Committee meeting, which he chairs, before the bill was heard. Passidomo presented the measure in his absence.

SB 1740 would prohibit an insurance executive whose company went insolvent from holding an executive position in another insurance company for five years. The current prohibition is only for two years.

The bill would more than double the amount of capital needed to start a domestic insurance company in Florida from $15 million to $35 million, among other increases.

It would also require that any money given through Florida’s house-hardening My Safe Florida Home program must be used for a project that results in a mitigation credit from insurers to homeowners that reduce their premiums.

Passidomo introduced — and the committee approved — an amendment to the bill to provide that artificial intelligence cannot be used as the sole determination to deny an insurance claim. An “actual human being” would have to be involved in the process, Passidomo said, crediting Fleming Island Republican Sen. Jennifer Bradley’s bill on AI in health insurance (SB 794) for inspiring the proposed change.

Adam Basford of Associated Industries of Florida told the panel Monday that his group has been working to assemble a coalition of its members and business partners to examine AI and its implications on Florida industries. He urged lawmakers to focus on striking a balance between ensuring safety in “high-risk areas” while being mindful to not obstruct innovation.

“We need to be very careful about allowing for those efficiencies while making sure we regulate it the right way,” he said.

Insurance rates have skyrocketed in recent years, outpacing inflation and driving lawmakers to hold Special Sessions and carry numerous bills to address the issue. Last month, Gov. Ron DeSantis announced premium rate reductions in some areas of the state, but many others still await relief.

Massive costs after severe storms like last year’s Hurricane Milton saw some insurance companies leave the state as Florida’s state-run insurer, Citizens Property Insurance Corporation, canceled residents’ policies as part of its “depopulation” program.

But the situation may not be as dire for insurance companies as they’ve led on.

A 2022 study the Tampa Bay Times obtained after a two-year wait for public records found that as Florida insurers claimed to be losing money, their parent companies and affiliates made billions, including $680 million in shareholder dividends. The study’s author concluded most insurance executives in Florida violated state regulations.

The report was never given to state lawmakers.

SB 1740, which Davie Democratic Sen. Barbara Sharief is co-sponsoring, will next go to the Appropriations Committee on Agriculture, Environment and General Government. It has one more committee stop after that before reaching a floor vote.

Its House companion (HB 1433) by Marco Island Republican Rep. Yvette Benarroch awaits a hearing before the first of three committees to which it was referred.

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