Florida Senate - 2011 SB 178
By Senator Oelrich
14-00267-11 2011178__
1 A bill to be entitled
2 An act relating to commercial insurance rates;
3 amending s. 627.062, F.S.; exempting certain liability
4 and property insurance lines from specific rate
5 standards and filing requirements; revising certain
6 reporting and recordkeeping requirements for such
7 exempt insurers and certain rating organizations
8 regarding rate changes; deleting a provision that
9 permits the Office of Insurance Regulation of the
10 Financial Services Commission to require such insurers
11 to provide certain information regarding rates at the
12 insurer’s expense; amending s. 627.0651, F.S.;
13 exempting certain commercial motor vehicle insurance
14 from specific rate standards and filing requirements;
15 revising certain reporting and recordkeeping
16 requirements for such exempt insurers and certain
17 rating organizations regarding rate changes; deleting
18 a provision that permits the Office of Insurance
19 Regulation of the Financial Services Commission to
20 require such insurers to provide certain information
21 regarding rates at the insurer’s expense; providing an
22 effective date.
23
24 Be It Enacted by the Legislature of the State of Florida:
25
26 Section 1. Subsection (3) of section 627.062, Florida
27 Statutes, is amended to read:
28 627.062 Rate standards.—
29 (3)(a) For individual risks that are not rated in
30 accordance with the insurer’s rates, rating schedules, rating
31 manuals, and underwriting rules filed with the office and which
32 have been submitted to the insurer for individual rating, the
33 insurer must maintain documentation on each risk subject to
34 individual risk rating. The documentation must identify the
35 named insured and specify the characteristics and classification
36 of the risk supporting the reason for the risk being
37 individually risk rated, including any modifications to existing
38 approved forms to be used on the risk. The insurer must maintain
39 these records for a period of at least 5 years after the
40 effective date of the policy.
41 (b) Individual risk rates and modifications to existing
42 approved forms are not subject to this part or part II, except
43 for paragraph (a) and ss. 627.402, 627.403, 627.4035, 627.404,
44 627.405, 627.406, 627.407, 627.4085, 627.409, 627.4132,
45 627.4133, 627.415, 627.416, 627.417, 627.419, 627.425, 627.426,
46 627.4265, 627.427, and 627.428, but are subject to all other
47 applicable provisions of this code and rules adopted thereunder.
48 (c) This subsection does not apply to private passenger
49 motor vehicle insurance.
50 (d)1. The following categories or kinds of insurance and
51 types of commercial lines risks are not subject to paragraph
52 (2)(a) or paragraph (2)(f):
53 a. Excess or umbrella.
54 b. Surety and fidelity.
55 c. Boiler and machinery and leakage and fire extinguishing
56 equipment.
57 d. Errors and omissions professional liability.
58 e. Directors and officers, employment practices, fiduciary
59 liability, and other management liability.
60 f. Intellectual property and patent infringement liability.
61 g. Advertising injury and Internet liability insurance.
62 h. Property risks rated under a highly protected risks
63 rating plan.
64 i. General liability.
65 j. Nonresidential property.
66 k. Nonresidential multiperil.
67 l. Excess property.
68 m.i. Any other commercial lines categories or kinds of
69 insurance or types of commercial lines risks that the office
70 determines should not be subject to paragraph (2)(a) or
71 paragraph (2)(f) because of the existence of a competitive
72 market for such insurance, similarity of such insurance to other
73 categories or kinds of insurance not subject to paragraph (2)(a)
74 or paragraph (2)(f), or to improve the general operational
75 efficiency of the office.
76 2. Insurers or rating organizations shall establish and use
77 rates, rating schedules, or rating manuals to allow the insurer
78 a reasonable rate of return on insurance and risks described in
79 subparagraph 1. which are written in this state.
80 3. An insurer must notify the office of any changes to
81 rates for insurance and risks described in subparagraph 1. no
82 later than 30 days after the effective date of the change. The
83 notice must include the name of the insurer, the type or kind of
84 insurance subject to rate change, total premium written during
85 the immediately preceding year by the insurer for the type or
86 kind of insurance subject to the rate change, and the average
87 statewide percentage change in rates. Actuarial data
88 Underwriting files, premiums, losses, and expense statistics
89 with regard to rates for insurance and risks described in
90 subparagraph 1. written by an insurer shall be maintained by the
91 insurer for 2 years after the effective date of changes to rates
92 and are subject to examination by the office. Upon examination,
93 the office shall, in accordance with generally accepted and
94 reasonable actuarial techniques, consider the rate factors in
95 paragraphs (2)(b), (c), and (d) and the standards in paragraph
96 (2)(e) to determine if the rate is excessive, inadequate, or
97 unfairly discriminatory.
98 4. A rating organization must notify the office of any
99 changes to loss cost for insurance and risks described in
100 subparagraph 1. no later than 30 days after the effective date
101 of the change. The notice must include the name of the rating
102 organization, the type or kind of insurance subject to a loss
103 cost change, loss costs during the immediately preceding year
104 for the type or kind of insurance subject to the loss cost
105 change, and the average statewide percentage change in loss
106 cost. Actuarial data Loss and exposure statistics with regard to
107 changes to loss cost for risks applicable to loss costs for a
108 rating organization not subject to paragraph (2)(a) or paragraph
109 (2)(f) shall be maintained by the rating organization for 2
110 years after the effective date of the change and are subject to
111 examination by the office. Upon examination, the office shall,
112 in accordance with generally accepted and reasonable actuarial
113 techniques, consider the rate factors in paragraphs (2)(b)-(d)
114 and the standards in paragraph (2)(e) to determine if the rate
115 is excessive, inadequate, or unfairly discriminatory.
116 5. In reviewing a rate, the office may require the insurer
117 to provide at the insurer’s expense all information necessary to
118 evaluate the condition of the company and the reasonableness of
119 the rate according to the applicable criteria described in this
120 section.
121 Section 2. Subsection (14) of section 627.0651, Florida
122 Statutes, is amended to read:
123 627.0651 Making and use of rates for motor vehicle
124 insurance.—
125 (14)(a) Commercial motor vehicle insurance covering a fleet
126 of 20 or more self-propelled vehicles is not subject to
127 subsection (1), subsection (2), or subsection (9) or s.
128 627.0645.
129 (b) The rates for insurance described in this subsection
130 may not be excessive, inadequate, or unfairly discriminatory.
131 (c) Insurers shall establish and use rates, rating
132 schedules, or rating manuals to allow the insurer a reasonable
133 rate of return on commercial motor vehicle insurance written in
134 this state covering a fleet of 20 or more self-propelled
135 vehicles.
136 (d) An insurer must notify the office of any changes to
137 rates for type of insurance described in this subsection no
138 later than 30 days after the effective date of the change. The
139 notice shall include the name of the insurer, the type or kind
140 of insurance subject to rate change, total premium written
141 during the immediately preceding year by the insurer for the
142 type or kind of insurance subject to the rate change, and the
143 average statewide percentage change in rates. Actuarial data
144 with regard to rates for risks Underwriting files, premiums,
145 losses, and expense statistics for the type of insurance
146 described in this subsection shall be maintained by the insurer
147 for 2 years after the effective date of changes to rates and are
148 subject to examination by the office. Upon examination, the
149 office shall, in accordance with generally accepted and
150 reasonable actuarial techniques, consider the factors in
151 paragraphs (2)(a)–(l) and apply subsections (3)-(8) to determine
152 if the rate is excessive, inadequate, or unfairly
153 discriminatory.
154 (e) A rating organization must notify the office of any
155 changes to loss cost for the type of insurance described in this
156 subsection no later than 30 days after the effective date of the
157 change. The notice shall include the name of the rating
158 organization, the type or kind of insurance subject to a loss
159 cost change, loss costs during the immediately preceding year
160 for the type or kind of insurance subject to the loss cost
161 change, and the average statewide percentage change in loss
162 cost. Actuarial data Loss and exposure statistics with regard to
163 changes to loss cost for risks applicable to loss costs for a
164 rating organization not subject to subsection (1), subsection
165 (2), or subsection (9) shall be maintained by the rating
166 organization for 2 years after the effective date of the change
167 and are subject to examination by the office. Upon examination,
168 the office shall, in accordance with generally accepted and
169 reasonable actuarial techniques, consider the rate factors in
170 paragraphs (2)(a)-(l) and apply subsections (3)-(8) to determine
171 if the rate is excessive, inadequate, or unfairly
172 discriminatory.
173 (f) In reviewing the rate, the office may require the
174 insurer to provide at the insurer’s expense all information
175 necessary to evaluate the condition of the company and the
176 reasonableness of the rate according to the applicable criteria
177 described herein.
178 Section 3. This act shall take effect July 1, 2011.