Senate Bill sb3050

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    Florida Senate - 2004                                  SB 3050

    By Senator Alexander





    17-1924A-04

  1                      A bill to be entitled

  2         An act relating to insurance ratemaking;

  3         amending s. 627.062, F.S.; providing that

  4         specified commercial insurance rate filings are

  5         not subject to a determination of

  6         excessiveness; providing that such filings may

  7         be rejected for unlawful use of unfairly

  8         discriminatory rating factors; amending s.

  9         627.0651, F.S.; providing that certain rate

10         filings for private passenger motor vehicle

11         insurance may take effect upon filing and are

12         deemed to be in compliance with state law;

13         requiring the Legislative Auditing Committee to

14         enter into a contract for an analysis of the

15         market and consumer impact of insurance rate

16         modernization; providing for funding; providing

17         an effective date.

18  

19  Be It Enacted by the Legislature of the State of Florida:

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21         Section 1.  Paragraph (j) is added to subsection (2) of

22  section 627.062, Florida Statutes, to read:

23         627.062  Rate standards.--

24         (2)  As to all such classes of insurance:

25         (j)1.  Notwithstanding any other provision of this

26  section, a rate filing for any line of commercial insurance

27  coverage otherwise subject to this section is not subject to a

28  determination that the rate is excessive or unfairly

29  discriminatory, except as provided in subparagraph 3.

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    Florida Senate - 2004                                  SB 3050
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 1         2.  This paragraph does not apply to filings for

 2  commercial lines residential insurance, medical malpractice

 3  insurance, or workers' compensation insurance.

 4         3.  This paragraph does not affect the power of the

 5  office to determine that a rate is inadequate or to disapprove

 6  a filing for unlawful use of unfairly discriminatory rating

 7  factors that are prohibited by Florida law.

 8  

 9  The provisions of this subsection shall not apply to workers'

10  compensation and employer's liability insurance and to motor

11  vehicle insurance.

12         Section 2.  Subsection (14) is added to section

13  627.0651, Florida Statutes, to read:

14         627.0651  Making and use of rates for motor vehicle

15  insurance.--

16         (14)  With respect to private passenger automobile

17  insurance, notwithstanding any provision of this section to

18  the contrary:

19         (a)1.  A filing made by an insurer under this section

20  which provides for an overall statewide rate increase or

21  decrease of no more than 12 percent in the aggregate for all

22  coverages that are subject to the filing may take effect the

23  date it is filed. The 12-percent limitation does not apply on

24  an individual insured basis.

25         2.  An insurer may not make multiple filings under this

26  subsection in any 12-month period with respect to private

27  passenger motor vehicle insurance if the cumulative effect of

28  all of the insurer's filings is that the rate changes exceed

29  the amounts specified in this subsection. An insurer may

30  proceed under the other provisions of this section if it seeks

31  to exceed the rate limitations of this subsection.

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    Florida Senate - 2004                                  SB 3050
    17-1924A-04




 1         (b)  Rate filings falling outside of the limitations

 2  provided for in paragraph (a) are subject to all of the other

 3  provisions of this section, unless they are otherwise made

 4  specifically exempt.

 5         (c)  A filing submitted pursuant to paragraph (a) is

 6  deemed to comply with state law. However, if the office

 7  determines that the filing is inadequate or unfairly

 8  discriminatory, the office shall issue a written order

 9  specifying in detail the provisions of the insurance code

10  which the insurer has violated and the reasons the filing is

11  inadequate or unfairly discriminatory and stating a reasonable

12  future date on which the filing is to be considered no longer

13  effective. An order of the office under this paragraph which

14  is issued more than 30 days after the date on which the office

15  received the rate filing is prospective only and does not

16  affect any contract issued or made effective on or before the

17  date of the order. For the purposes of this subsection, the

18  term "unfairly discriminatory" means a rate for a risk that is

19  classified in whole or in part on the basis of race, color,

20  creed, or national origin.

21         Section 3.  Analysis of the market and consumer impact

22  of insurance rate modernization.--

23         (1)  The Legislative Auditing Committee shall enter

24  into a contract with a national actuarial consulting firm to

25  provide, no later than March 1, 2006, a detailed analysis of

26  the market and consumer impact of this act and of the

27  potential impact of similar legislation on other lines of

28  insurance. The analysis shall include a year-by-year

29  comparison of the number of companies participating in the

30  market for each class of insurance and relative rate levels

31  and shall also specify:

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    Florida Senate - 2004                                  SB 3050
    17-1924A-04




 1         (a)  The number of rate filings made under section

 2  627.0651(14), Florida Statutes, and the market share affected

 3  by those filings.

 4         (b)  The number of rate filings made under the other

 5  provisions of section 627.0651, Florida Statutes, and the

 6  market share affected by those filings.

 7         (c)  Such other information as may be useful to the

 8  Legislature in determining whether this act has fulfilled its

 9  intent of promoting competition and increasing both

10  availability and affordability of coverage in the lines of

11  insurance subject to this act.

12         (d)  An evaluation of the state of competition in the

13  property/casualty lines of insurance not addressed by this act

14  and an analysis of the potential impact of expanding the

15  public policy expressed in this act to other lines of

16  insurance.

17         (e)  Recommendations to promote competition in the

18  Florida insurance marketplace and to protect consumers.

19         (2)  The Legislature shall provide adequate funding for

20  the analysis from moneys in the Insurance Regulatory Trust

21  Fund.

22         (3)  The Department of Financial Services and the

23  Office of Insurance Regulation shall cooperate with the

24  actuarial firm conducting the analysis and shall provide such

25  information as the actuarial firm may request.

26         Section 4.  This act shall take effect upon becoming a

27  law.

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    Florida Senate - 2004                                  SB 3050
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 2                          SENATE SUMMARY

 3    Provides that rate filings for certain lines of
      commercial insurance coverage are not subject to
 4    determination by the Office of Insurance Regulation or
      whether the rate is excessive or unfairly discriminatory.
 5    Exempting certain base rate filings for private passenger
      motor vehicle insurance from determinations of being
 6    excessive or unfairly discriminatory. Requires an
      analysis of the market and consumer impact of rate
 7    modernization.

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