CS for CS for SB 468                             First Engrossed
       
       
       
       
       
       
       
       
       2013468e1
       
    1                        A bill to be entitled                      
    2         An act relating to property and casualty insurance
    3         rates, fees, and forms; amending s. 215.555, F.S.;
    4         postponing the date that repeals the Florida Hurricane
    5         Catastrophe Fund emergency assessment exemption for
    6         medical malpractice insurance premiums; amending s.
    7         627.062, F.S.; exempting medical malpractice insurance
    8         that covers certain providers and practitioners from
    9         specified rate filing requirements; revising
   10         provisions relating to notification of rate changes to
   11         codify the amendments made to s. 627.062(3)(d)3.,
   12         F.S., by s. 1, ch. 2011-160, Laws of Florida, in lieu
   13         of the amendments made by s. 12, ch. 2011-39, Laws of
   14         Florida, and making editorial changes; amending s.
   15         627.410, F.S.; conforming provisions to changes made
   16         by the act; creating s. 627.4102, F.S.; providing for
   17         an informational filing of certain forms that are
   18         exempt from the Office of Insurance Regulation’s
   19         approval process; requiring an informational filing to
   20         include a notarized certification from the insurer and
   21         providing a statement that must be included in the
   22         certification; authorizing the office to require prior
   23         review and approval of a form that is not in
   24         compliance; requiring a Notice of Change In Policy
   25         Terms form to be filed with a changed renewal policy;
   26         providing for construction and applicability;
   27         providing an effective date.
   28  
   29  Be It Enacted by the Legislature of the State of Florida:
   30  
   31         Section 1. Paragraph (b) of subsection (6) of section
   32  215.555, Florida Statutes, is amended to read:
   33         215.555 Florida Hurricane Catastrophe Fund.—
   34         (6) REVENUE BONDS.—
   35         (b) Emergency assessments—
   36         1. If the board determines that the amount of revenue
   37  produced under subsection (5) is insufficient to fund the
   38  obligations, costs, and expenses of the fund and the
   39  corporation, including repayment of revenue bonds and that
   40  portion of the debt service coverage not met by reimbursement
   41  premiums, the board shall direct the Office of Insurance
   42  Regulation to levy, by order, an emergency assessment on direct
   43  premiums for all property and casualty lines of business in this
   44  state, including property and casualty business of surplus lines
   45  insurers regulated under part VIII of chapter 626, but not
   46  including any workers’ compensation premiums or medical
   47  malpractice premiums. As used in this subsection, the term
   48  “property and casualty business” includes all lines of business
   49  identified on Form 2, Exhibit of Premiums and Losses, in the
   50  annual statement required of authorized insurers by s. 624.424
   51  and any rule adopted under this section, except for those lines
   52  identified as accident and health insurance and except for
   53  policies written under the National Flood Insurance Program. The
   54  assessment shall be specified as a percentage of direct written
   55  premium and is subject to annual adjustments by the board in
   56  order to meet debt obligations. The same percentage applies
   57  shall apply to all policies in lines of business subject to the
   58  assessment issued or renewed during the 12-month period
   59  beginning on the effective date of the assessment.
   60         2. A premium is not subject to an annual assessment under
   61  this paragraph in excess of 6 percent of premium with respect to
   62  obligations arising out of losses attributable to any one
   63  contract year, and a premium is not subject to an aggregate
   64  annual assessment under this paragraph in excess of 10 percent
   65  of premium. An annual assessment under this paragraph continues
   66  shall continue as long as the revenue bonds issued with respect
   67  to which the assessment was imposed are outstanding, including
   68  any bonds the proceeds of which were used to refund the revenue
   69  bonds, unless adequate provision has been made for the payment
   70  of the bonds under the documents authorizing issuance of the
   71  bonds.
   72         3. Emergency assessments shall be collected from
   73  policyholders. Emergency assessments shall be remitted by
   74  insurers as a percentage of direct written premium for the
   75  preceding calendar quarter as specified in the order from the
   76  Office of Insurance Regulation. The office shall verify the
   77  accurate and timely collection and remittance of emergency
   78  assessments and shall report the information to the board in a
   79  form and at a time specified by the board. Each insurer
   80  collecting assessments shall provide the information with
   81  respect to premiums and collections as may be required by the
   82  office to enable the office to monitor and verify compliance
   83  with this paragraph.
   84         4. With respect to assessments of surplus lines premiums,
   85  each surplus lines agent shall collect the assessment at the
   86  same time as the agent collects the surplus lines tax required
   87  by s. 626.932, and the surplus lines agent shall remit the
   88  assessment to the Florida Surplus Lines Service Office created
   89  by s. 626.921 at the same time as the agent remits the surplus
   90  lines tax to the Florida Surplus Lines Service Office. The
   91  emergency assessment on each insured procuring coverage and
   92  filing under s. 626.938 shall be remitted by the insured to the
   93  Florida Surplus Lines Service Office at the time the insured
   94  pays the surplus lines tax to the Florida Surplus Lines Service
   95  Office. The Florida Surplus Lines Service Office shall remit the
   96  collected assessments to the fund or corporation as provided in
   97  the order levied by the Office of Insurance Regulation. The
   98  Florida Surplus Lines Service Office shall verify the proper
   99  application of such emergency assessments and shall assist the
  100  board in ensuring the accurate and timely collection and
  101  remittance of assessments as required by the board. The Florida
  102  Surplus Lines Service Office shall annually calculate the
  103  aggregate written premium on property and casualty business,
  104  other than workers’ compensation and medical malpractice,
  105  procured through surplus lines agents and insureds procuring
  106  coverage and filing under s. 626.938 and shall report the
  107  information to the board in a form and at a time specified by
  108  the board.
  109         5. Any assessment authority not used for a particular
  110  contract year may be used for a subsequent contract year. If,
  111  for a subsequent contract year, the board determines that the
  112  amount of revenue produced under subsection (5) is insufficient
  113  to fund the obligations, costs, and expenses of the fund and the
  114  corporation, including repayment of revenue bonds and that
  115  portion of the debt service coverage not met by reimbursement
  116  premiums, the board shall direct the Office of Insurance
  117  Regulation to levy an emergency assessment up to an amount not
  118  exceeding the amount of unused assessment authority from a
  119  previous contract year or years, plus an additional 4 percent
  120  provided that the assessments in the aggregate do not exceed the
  121  limits specified in subparagraph 2.
  122         6. The assessments otherwise payable to the corporation
  123  under this paragraph shall be paid to the fund unless and until
  124  the Office of Insurance Regulation and the Florida Surplus Lines
  125  Service Office have received a notice from the corporation and
  126  the fund a notice, which shall be conclusive and upon which they
  127  may rely without further inquiry, that the corporation has
  128  issued bonds and the fund has no agreements in effect with local
  129  governments under paragraph (c). On or after the date of the
  130  notice and until the date the corporation has no bonds
  131  outstanding, the fund shall have no right, title, or interest in
  132  or to the assessments, except as provided in the fund’s
  133  agreement with the corporation.
  134         7. Emergency assessments are not premium and are not
  135  subject to the premium tax, to the surplus lines tax, to any
  136  fees, or to any commissions. An insurer is liable for all
  137  assessments that it collects and must treat the failure of an
  138  insured to pay an assessment as a failure to pay the premium. An
  139  insurer is not liable for uncollectible assessments.
  140         8. If When an insurer is required to return an unearned
  141  premium, it shall also return any collected assessment
  142  attributable to the unearned premium. A credit adjustment to the
  143  collected assessment may be made by the insurer with regard to
  144  future remittances that are payable to the fund or corporation,
  145  but the insurer is not entitled to a refund.
  146         9. If When a surplus lines insured or an insured who has
  147  procured coverage and filed under s. 626.938 is entitled to the
  148  return of an unearned premium, the Florida Surplus Lines Service
  149  Office shall provide a credit or refund to the agent or such
  150  insured for the collected assessment attributable to the
  151  unearned premium before prior to remitting the emergency
  152  assessment collected to the fund or corporation.
  153         10. The exemption of medical malpractice insurance premiums
  154  from emergency assessments under this paragraph is repealed May
  155  31, 2016 2013, and medical malpractice insurance premiums shall
  156  be subject to emergency assessments attributable to loss events
  157  occurring in the contract years commencing on June 1, 2016 2013.
  158         Section 2. Paragraph (d) of subsection (3) and paragraph
  159  (e) of subsection (7) of section 627.062, Florida Statutes, are
  160  amended to read:
  161         627.062 Rate standards.—
  162         (3)
  163         (d)1. The following categories or kinds of insurance and
  164  types of commercial lines risks are not subject to paragraph
  165  (2)(a) or paragraph (2)(f):
  166         a. Excess or umbrella.
  167         b. Surety and fidelity.
  168         c. Boiler and machinery and leakage and fire extinguishing
  169  equipment.
  170         d. Errors and omissions.
  171         e. Directors and officers, employment practices, fiduciary
  172  liability, and management liability.
  173         f. Intellectual property and patent infringement liability.
  174         g. Advertising injury and Internet liability insurance.
  175         h. Property risks rated under a highly protected risks
  176  rating plan.
  177         i. General liability.
  178         j. Nonresidential property, except for collateral
  179  protection insurance as defined in s. 624.6085.
  180         k. Nonresidential multiperil.
  181         l. Excess property.
  182         m. Burglary and theft.
  183         n. Medical malpractice for a facility that is not a
  184  hospital licensed under chapter 395, a nursing home licensed
  185  under part II of chapter 400, or an assisted living facility
  186  licensed under part I of chapter 429.
  187         o. Medical malpractice for a health care practitioner who
  188  is not a dentist licensed under chapter 466, a physician
  189  licensed under chapter 458, an osteopathic physician licensed
  190  under chapter 459, a chiropractic physician licensed under
  191  chapter 460, a podiatric physician licensed under chapter 461, a
  192  pharmacist licensed under chapter 465, or a pharmacy technician
  193  registered under chapter 465.
  194         p.n. Any other commercial lines categories or kinds of
  195  insurance or types of commercial lines risks that the office
  196  determines should not be subject to paragraph (2)(a) or
  197  paragraph (2)(f) because of the existence of a competitive
  198  market for such insurance, similarity of such insurance to other
  199  categories or kinds of insurance not subject to paragraph (2)(a)
  200  or paragraph (2)(f), or to improve the general operational
  201  efficiency of the office.
  202         2. Insurers or rating organizations shall establish and use
  203  rates, rating schedules, or rating manuals to allow the insurer
  204  a reasonable rate of return on insurance and risks described in
  205  subparagraph 1. which are written in this state.
  206         3. An insurer shall must notify the office of any changes
  207  to rates for insurance and risks described in subparagraph 1.
  208  within 30 days after the effective date of the change. The
  209  notice must include the name of the insurer, the type or kind of
  210  insurance subject to rate change, total premium written during
  211  the immediately preceding year by the insurer for the type or
  212  kind of insurance subject to the rate change, and the average
  213  statewide percentage change in rates. Actuarial data
  214  Underwriting files, premiums, losses, and expense statistics
  215  with regard to rates for such insurance and risks written by an
  216  insurer must be maintained by the insurer for 2 years after the
  217  effective date of changes to those rates and are subject to
  218  examination by the office. The office may require the insurer to
  219  incur the costs associated with an examination. Upon
  220  examination, the office, in accordance with generally accepted
  221  and reasonable actuarial techniques, shall consider the rate
  222  factors in paragraphs (2)(b), (c), and (d) and the standards in
  223  paragraph (2)(e) to determine if the rate is excessive,
  224  inadequate, or unfairly discriminatory.
  225         4. A rating organization shall must notify the office of
  226  any changes to loss cost for insurance and risks described in
  227  subparagraph 1. within 30 days after the effective date of the
  228  change. The notice must include the name of the rating
  229  organization, the type or kind of insurance subject to a loss
  230  cost change, loss costs during the immediately preceding year
  231  for the type or kind of insurance subject to the loss cost
  232  change, and the average statewide percentage change in loss
  233  cost. Actuarial data with regard to changes to loss cost for
  234  risks not subject to paragraph (2)(a) or paragraph (2)(f) must
  235  be maintained by the rating organization for 2 years after the
  236  effective date of the change and are subject to examination by
  237  the office. The office may require the rating organization to
  238  incur the costs associated with an examination. Upon
  239  examination, the office, in accordance with generally accepted
  240  and reasonable actuarial techniques, shall consider the rate
  241  factors in paragraphs (2)(b)-(d) and the standards in paragraph
  242  (2)(e) to determine if the rate is excessive, inadequate, or
  243  unfairly discriminatory.
  244         (7) The provisions of this subsection apply only to rates
  245  for medical malpractice insurance and control to the extent of
  246  any conflict with other provisions of this section.
  247         (e) For medical malpractice rates subject to paragraph
  248  (2)(a), the each medical malpractice insurer shall must make a
  249  rate filing under this section, sworn to by at least two
  250  executive officers of the insurer, at least once each calendar
  251  year.
  252         Section 3. Subsection (1) of section 627.410, Florida
  253  Statutes, is amended to read:
  254         627.410 Filing, approval of forms.—
  255         (1) A No basic insurance policy or annuity contract form,
  256  or application form where written application is required and is
  257  to be made a part of the policy or contract, or group
  258  certificates issued under a master contract delivered in this
  259  state, or printed rider or endorsement form or form of renewal
  260  certificate, may not shall be delivered or issued for delivery
  261  in this state, unless the form has been filed with the office by
  262  or on in behalf of the insurer that which proposes to use such
  263  form and has been approved by the office or filed pursuant to s.
  264  627.4102. This provision does not apply to surety bonds or to
  265  policies, riders, endorsements, or forms of unique character
  266  that which are designed for and used with relation to insurance
  267  on upon a particular subject, (other than as to health
  268  insurance), or that which relate to the manner of distributing
  269  distribution of benefits or to the reservation of rights and
  270  benefits under life or health insurance policies and are used at
  271  the request of the individual policyholder, contract holder, or
  272  certificateholder. For As to group insurance policies
  273  effectuated and delivered outside this state but covering
  274  persons resident in this state, the group certificates to be
  275  delivered or issued for delivery in this state shall be filed
  276  with the office for information purposes only.
  277         Section 4. Section 627.4102, Florida Statutes, is created
  278  to read:
  279         627.4102 Informational filing of forms.—
  280         (1) Property and casualty forms, except workers’
  281  compensation and personal lines forms, are exempt from the
  282  approval process required under s. 627.410 if:
  283         (a) The form has been electronically submitted to the
  284  office in an informational filing made through I-File 30 days
  285  before the delivery or issuance for delivery of the form within
  286  this state; and
  287         (b) At the time the informational filing is made, a
  288  notarized certification is attached to the filing that certifies
  289  that each form within the filing is in compliance with all
  290  applicable state laws and rules. The certification must be on
  291  the insurer’s letterhead and signed and dated by the insurer’s
  292  president, chief executive officer, general counsel, or an
  293  employee of the insurer responsible for the filing on behalf of
  294  the insurer. The certification must contain the following
  295  statement, and no other language: “I, ...[name]..., as
  296  ...[title]... of ...[insurer name]..., do hereby certify that
  297  this form filing has been thoroughly and diligently reviewed by
  298  me and by all appropriate company personnel, as well as company
  299  consultants, if applicable, and certify that each form contained
  300  within the filing is in compliance with all applicable Florida
  301  laws and rules. Should a form be found not to be in compliance
  302  with Florida laws and rules, I acknowledge that the Office of
  303  Insurance Regulation shall disapprove the form.”
  304         (2) If the filing contains a form that is not in compliance
  305  with state laws and rules, the form filing, at the discretion of
  306  the office, is subject to prior review and approval pursuant to
  307  s. 627.410, and the period for review and approval established
  308  under s. 627.410(2) begins to run on the date the office
  309  notifies the insurer of the discovery of the noncompliant form.
  310         (3) A Notice of Change in Policy Terms form required under
  311  s. 627.43141(2) shall be filed as a part of the informational
  312  filing for a renewal policy that contains a change. If a renewal
  313  policy that was certified requires such form, the insurer must
  314  provide a sample copy of the form to the named insured’s agent
  315  before or upon providing the form to the named insured.
  316         (4) This section does not preclude an insurer from electing
  317  to file any form for approval under s. 627.410 that would
  318  otherwise be exempt under this section.
  319         (5) The provisions of this section supersede and replace
  320  the existing order issued by the office exempting specified
  321  property and casualty forms from the requirements of s. 627.410.
  322         Section 5. This act shall take effect July 1, 2013.